2024
Annual report
Unless otherwise specified, references in this annual report
to other documents, including but not limited to other
reports and websites, including our own, are for information
purposes only. If the contents of such other documents and
websites refer to this annual report, they are not nor should
be considered part of it.
Unless the context suggests otherwise, 'Banco Santander'
means Banco Santander, S.A., and 'Santander', 'the Group'
and 'Grupo Santander' mean Banco Santander, S.A. and
subsidiaries.
384
Consolidated directors’ report
BUSINESS MODEL AND STRATEGY
7
THE SANTANDER WAY
OUR BUSINESS MODEL
2024 RESULTS
LOOKING AHEAD
SUSTAINABILITY STATEMENT
Consolidated non-financial information and sustainability
information statement
1. SUSTAINABILITY AT SANTANDER
(General information)
2. OUR CLIMATE TRANSITION PLAN
(Environmental information)
3. SUPPORTING EMPLOYEES, COMMUNITIES
AND CUSTOMERS
(Social information)
4. BUSINESS CONDUCT
(Governance information)
SUSTAINABILITY NOTES
INDEPENDENT VERIFICATION REPORT
OTHER SUSTAINABILITY INFORMATION
CORPORATE GOVERNANCE
1. 2024 OVERVIEW
2. OWNERSHIP STRUCTURE
3. SHAREHOLDERS AND GENERAL MEETING
4. BOARD OF DIRECTORS
5. SENIOR MANAGEMENT TEAM
6. REMUNERATION
7. GROUP STRUCTURE AND INTERNAL GOVERNANCE
8. INTERNAL CONTROL OVER FINANCIAL REPORTING
(ICFR)
9. OTHER CORPORATE GOVERNANCE INFORMATION
8
9
10
17
18
22
32
75
100
107
218
224
232
235
241
247
255
305
307
336
339
346
ECONOMIC AND FINANCIAL REVIEW
1. ECONOMY, REGULATION AND COMPETITION
387
2. GROUP SELECTED DATA
392
3. GROUP FINANCIAL PERFORMANCE
394
4. FINANCIAL INFORMATION BY SEGMENT
437
5. RESEARCH, DEVELOPMENT AND INNOVATION
478
(R&D&I)
6. SIGNIFICANT EVENTS SINCE YEAR END
481
7. TREND INFORMATION 2025
482
8. ALTERNATIVE PERFORMANCE MEASURES (APMs)
492
RISK MANAGEMENT AND COMPLIANCE
502
1. RISK MANAGEMENT AND CONTROL MODEL
505
2. CREDIT RISK
512
3. MARKET, STRUCTURAL AND LIQUIDITY RISK
524
4. CAPITAL RISK
535
5. OPERATIONAL RISK
537
6. COMPLIANCE RISK
543
7. MODEL RISK
549
8. STRATEGIC RISK
551
Auditor's report and consolidated financial statements
AUDITOR'S REPORT
562
NOTES TO THE CONSOLIDATED FINANCIAL
588
STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS
572
APPENDIX
824
GENERAL INFORMATION
868
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
2024 consolidated
directors’ report
This report was approved unanimously by our board
of directors on 25 February 2025
Our approach to this document
We changed the layout of our consolidated directors’ report in
2018 to include the contents previously provided in these
documents, which we no longer prepare separately:
• Annual report
• Consolidated directors’ report
• Annual corporate governance report (CNMV format document)
• Board committee reports
• Sustainability report
• Annual report on our directors’ remuneration (CNMV format
document)
Auditors’ reviews
As required by law, our 2022 consolidated directors’ report was
subject to three reviews by our independent statutory auditors,
PricewaterhouseCoopers Auditores, S.L. They can be summarized
as follows:
• PricewaterhouseCoopers Auditores, S.L. verified that the
information in this report is consistent with our consolidated
financial statements and that its contents comply with applicable
regulation. For more details, see 'Other information:
Consolidated management report section of the 'Auditor’s report'
within 'Auditor's report and consolidated annual accounts'.
• PricewaterhouseCoopers Auditores, S.L., issued a verification
report, with limited assurance, on the Consolidated Non-
The consolidated directors’ report also includes all information
required by Spanish Act 11/2018 on non-financial information and
diversity and the information on sustainability prepared by the
Group in accordance with the European Standards of Sustainability
Reporting (ESRS). It can be found in the 'Sustainability statement'
chapter, which constitutes the consolidated non-financial
information statement and sustainability information.
Financial Information statement and the information on
sustainability required under Act 11/2018 and under the
European Standards of Sustainability Reporting (ESRS) included
in this consolidated directors' report. To read the verification
report, see the 'Independent verification report' in the
'Sustainability statement' chapter.
• PricewaterhouseCoopers Auditores, S.L. issued an independent
reasonable assurance report on the design and effectiveness of
Banco Santander's internal control over financial reporting,
which can be found in section 8.6 'External auditor report' of the
'Corporate governance' chapter.
Non-IFRS and alternative performance measures
This report contains financial information prepared according to
International Financial Reporting Standards (IFRS) and taken from
our consolidated financial statements, as well as alternative
performance measures (APMs) as defined in the Guidelines on
Alternative Performance Measures issued by the European
Securities and Markets Authority (ESMA) on 5 October 2015, and
other non-IFRS measures. The APMs and non-IFRS measures were
calculated with information from Grupo Santander; however, they
are neither defined or detailed in the applicable financial reporting
framework nor audited or reviewed by our auditors.
We use the APMs and non-IFRS measures when planning,
monitoring and evaluating our performance. We consider them to
be useful metrics for our management and investors to compare
operating performance between accounting periods.
Nonetheless, the APMs and non-IFRS measures are supplemental
information; their purpose is not to substitute the IFRS measures.
Furthermore, companies in our industry and others may calculate
or use APMs and non-IFRS measures differently, thus making them
less useful for comparison purposes. APMs using environmental,
social and governance labels have not been calculated in
accordance with the Taxonomy Regulation or with the indicators
for principal adverse impact in SFDR.
For more details on APMs and non-IFRS measures, see section 8.
'Alternative performance measures (APMs)' of the 'Economic and
financial review' chapter and section SN 9 'Alternative performance
measures (APMs)' of the 'Sustainability statement' chapter.
Annual report 2024
4
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Sustainability information
This report contains, in addition to financial information,
sustainability-related information, including environmental, social
and governance-related metrics, statements, goals, targets,
commitments and opinions. The sustainability information can be
found throughout the report but mostly in the 'Sustainability
statement' chapter.
The sustainability information is provided in accordance with
Directive 2022/2464 on corporate sustainability reporting (CSRD)
and Law 11/2018 on non-financial and diversity reporting.
Sustainability information is not audited nor, save as expressly
indicated under ‘Auditors’ reviews’, reviewed by an external
auditor. Sustainability information is prepared following various
external and internal frameworks, reporting guidelines and
measurement, collection and verification methods and practices,
Forward-looking statements
Banco Santander hereby warns that this annual report contains
'forward-looking statements', as defined by the US Private
Securities Litigation Reform Act of 1995. Such statements can be
understood through words and expressions like 'expect', 'project',
'anticipate', 'should', 'intend', 'probability', 'risk', 'VaR', 'RoRAC',
'RoRWA', 'TNAV', 'target', 'goal', 'objective', 'estimate', 'future',
'ambition', 'aspiration', 'commitment', 'commit', 'focus', 'pledge'
and similar expressions. They include (but are not limited to)
statements on future business development, shareholder
remuneration policy and NFI. However, risks, uncertainties and
other important factors may lead to developments and results that
differ materially from those anticipated, expected, projected or
assumed in forward-looking statements.
The important factors below (and others described elsewhere in
this report), as well as other unknown or unpredictable factors,
could affect our future development and results and could lead to
outcomes materially different from what our forward-looking
statements anticipate, expect, project or assume:
• general economic or industry conditions (e.g., an economic
downturn; higher volatility in the capital markets; inflation;
deflation; changes in demographics, consumer spending,
investment or saving habits; and the effects of the wars in
Ukraine and the Middle East or the outbreak of public health
emergencies in the global economy) in areas where we have
significant operations or investments;
• climate-related conditions, regulations, targets and weather
events;
• exposure to market risks (e.g., risks from interest rates, foreign
exchange rates, equity prices and new benchmark indices);
• potential losses from early loan repayment, collateral
depreciation or counterparty risk;
• political instability in Spain, the UK, other European countries,
Latin America and the US;
• legislative, regulatory or tax changes (including regulatory
capital and liquidity requirements), especially in view of the UK's
exit from the European Union and greater regulation prompted
by financial crises;
• acquisition integration and challenges arising from deviating
management’s resources and attention from other strategic
opportunities and operational matters;
which may materially differ from those applicable to financial
information and are in many cases emerging and evolving.
Sustainability information is based on various materiality
thresholds, estimates, assumptions, judgments and underlying
data derived internally and from third parties. Sustainability
information is thus subject to significant measurement
uncertainties, may not be comparable to sustainability information
of other companies or over time or across periods and its inclusion
is not meant to imply that the information is fit for any particular
purpose or that it is material to us under mandatory reporting
standards. The sustainability information is for informational
purposes only, without any liability being accepted in connection
with it except where such liability cannot be limited under
overriding provisions of applicable law.
• uncertainty over the scope of actions that may be required by us,
governments and other to achieve goals relating to climate,
environmental and social matters, as well as the evolving nature
of underlying science and industry and governmental standards
and regulations;
• our own decisions and actions, including those affecting or
changing our practices, operations, priorities, strategies, policies
or procedures; and
• changes affecting our access to liquidity and funding on
acceptable terms, especially due to credit spread shifts or credit
rating downgrade for the entire group or core subsidiaries.
Forward looking statements are based on current expectations and
future estimates about Santander’s and third-parties’ operations
and businesses and address matters that are uncertain to varying
degrees, including, but not limited to developing standards that
may change in the future; plans, projections, expectations, targets,
objectives, strategies and goals relating to environmental, social,
safety and governance performance, including expectations
regarding future execution of Santander’s and third parties’ energy
and climate strategies, and the underlying assumptions and
estimated impacts on Santander’s and third-parties’ businesses
related thereto; Santander’s and third-parties’ approach, plans and
expectations in relation to carbon use and targeted reductions of
emissions; changes in operations or investments under existing or
future environmental laws and regulations; and changes in
government regulations and regulatory requirements, including
those related to climate-related initiatives.
Forward-looking statements are aspirational, should be regarded
as indicative, preliminary and for illustrative purposes only, speak
only as of the date of approval of this annual report and are
informed by the knowledge, information and views available on
such date and are subject to change without notice. Banco
Santander is not required to update or revise any forward-looking
statements, regardless of new information, future events or
otherwise, except as required by applicable law.
Annual report 2024
5
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Past performance does not indicate future outcomes
Statements about historical performance or growth rates must not
be construed as suggesting that future performance, share price or
earnings (including earnings per share) will necessarily be the
XHTML electronic format and XBRL tags
This annual report was prepared in eXtensible HyperText Markup
Language (XHTML) format. The consolidated financial statements
and the notes to the consolidated financial statements that it
includes, have been tagged with eXtensible Business Reporting
Language (XBRL), in accordance with Directive 2004/109/EC and
Commission Delegated Regulation (EU) 2019/815.
Not a securities offer
This annual report and the information it contains does not
constitute an offer to sell, nor a solicitation of an offer to buy any
securities.
same or higher than in a previous period. Nothing in this annual
report should be taken as a profit and loss forecast.
To view the XBRL tags, you must open this document with an
appropriate viewer. You can find this document with an XBRL
viewer on Banco Santander's corporate website.
Glossary of terms, acronyms and abbreviations
To facilitate a better understanding of this annual report, a
glossary of terms, acronyms and abbreviations has been included
at the end of the consolidated directors' report.
Annual report 2024
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Contents
Business model
and strategy
Sustainability
statement
Corporate
governance
Economic and
financial review
Risk management
and compliance
BUSINESS MODEL
AND STRATEGY
Annual report 2024
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Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
THE SANTANDER WAY
Our purpose
To help people
and businesses prosper
Our aim
To be the best open financial
services platform by acting
responsibly and earning the
lasting loyalty of our people,
customers, shareholders
and communities
Our how
Everything we do should be
Simple, Personal and Fair
Annual report 2024
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Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
OUR BUSINESS MODEL
Generating value for our stakeholders
Building a digital bank with branches
CUSTOMER FOCUS
→Customer focus is the essence of our strategy. Our multichannel
offering enables us to fulfil all our customers' financial needs,
making us their global, trusted and responsive partner.
→Our customer growth investments are centred around three basic
things: provide great products at competitive prices, a frictionless
digital experience and being a trusted financial partner.
Total customers (mn)
2023
2024
165
173
→We are building a digital bank with branches to make our
customers' lives easier. By merging technology with human
Active customers (mn)
100
103
touch, we offer fully-digital products while ensuring our branches
provide support and advice. This blend of innovation and
personalization ensures our customers get the best of both
worlds.
Global & in-market scale
SCALE
→Santander has a unique combination of global scale and local
leadership (top 3 in lending, deposits and mutual funds in most of
our markets).
→Our activities are organized under five global businesses: Retail &
Commercial Banking, Digital Consumer Bank, Corporate &
Investment Banking, Wealth Management & Insurance and
Payments.
→These five global businesses support value creation based on the
profitable growth and operational leverage that ONE Santander
provides.
→Our global approach to technology and development of global
platforms is helping us to provide our customers with cost
competitive products and the best digital experience.
Global businesses
Retail
Retail & Commercial Banking
Consumer
Digital Consumer Bank
CIB
Corporate & Investment Banking
Wealth
Wealth Management & Insurance
Payments
Payments
•
•
•
ONE
Santander
•
•
DIVERSIFICATION
Business, geographical and balance sheet
→Our simple and well-targeted range of products and services
meets the needs of a wide spectrum of customers: individuals,
SMEs, mid-market companies, large corporates, Wealth
Management customers, first-time banking customers, auto
customers and dealers, and card customers.
→Santander has a strong, simple and diversified balance sheet,
with a low exposure to market risk and is highly collateralized
and made up mainly of loans.
→Diversification and a medium-low risk profile deliver recurrent
pre-provision profit, with among the lowest volatility across
peers.
Group net operating income (pre-provision profit)
EUR billion
18
23 24 24 24 20 23 24 23 25 26 26 24 25 28 32 36
2008 '09
'10
'11
'12
'13
'14
'15
'16
'17
'18
'19
'20
'21
'22
'23
'24
Annual report 2024
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
2024 RESULTS
Record results for the third consecutive year, creating value for shareholders
→ Record profit on the back of 8mn new customers
YoY and strong revenue growth
→ A groundbreaking year in our transformation,
driving strong operating performance and
profitable growth
→ Solid balance sheet with sound credit quality
and capital ratio, reflecting all-time high organic
generation
→ Delivering double-digit value creation and higher
shareholder remuneration
FY’24 Attributable Profit
FY’24 Revenue
€12.6bn
+14%
€62.2bn
+8%
41.8%
–226bps
16.3%
+121bps
1.15%
-3bps
12.8%
+51bps
+14%
+39%
Efficiency
RoTE
CoR
FL CET1
TNAVps + DPS
Cash DPS
paid in 2024
Note: Based on underlying P&L. YoY changes in euros. In constant euros: FY'24 attributable profit +15% vs. FY’23; FY'24 revenue +10% vs. FY’23. For more information on
figures presented in constant euros and the alternative performance measures presented above and across this chapter, see section 8. 'Alternative performance measures'.
TNAVps + Cash dividend per share (DPS) includes the €9.50 cent cash dividend per share paid in May 2024 and the €10.00 cent interim cash dividend per share paid in
November 2024. Growth in Cash DPS corresponds to the total cash dividend per share paid during 2024 compared to the cash dividends per share paid during 2023. For more
details, see section 3.3 ‘Dividends and shareholder remuneration’ in the ‘Corporate governance’ chapter. Implementation of the shareholder remuneration policy is subject to
future corporate and regulatory decisions and approvals.
We delivered on all our financial targets, which we upgraded in the
Q2'24 earnings presentation
A
2024 targets
A
2024 achievements
Revenue
B
High-single digit growth
+10%
ü
Efficiency ratio
c.42%
41.8%
ü
CoR
c.1.2%
1.15%
ü
FL CET1
>12%
12.8%
ü
RoTE
>16%
16.3%
ü
A. Some targets were upgraded in the Q2'24 results presentation: i) revenue from mid-single digit growth to high-single digit growth; ii) efficiency ratio from <43% to
c.42%; iii) RoTE from 16% to >16%. FL CET1 target >12% after FL Basel III implementation, FL definition as of 1 January 2025.
B.
YoY change in constant euros.
Annual report 2024
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Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Over the last 10 years our transformation and unique business model have
consistently delivered profitable growth
A. Total shareholder remuneration charged against the results corresponding to the calendar year: cash dividend + share buybacks excluding scrip dividends. Implementation
of 2024 shareholder remuneration policy is subject to future corporate and regulatory decisions and approvals.
We are in a phase of value creation, driven by higher profitability
underpinned by three tenets:
Think Value
Delivering double-digit value creation, on average through-the-cycle
Think Customer
Building a digital bank with branches with well-targeted products and
services to grow our customer base
Think Global
Leveraging global and in-market scale, network and tech to deliver
world class-services and accelerate profitable growth
Annual report 2024
11
2023
2024
Customer
centric
Total customers (mn)
165
173
Simplification
& automation
Efficiency ratio (%)
44.1
41.8
Customer
activity
Active customers (mn)
100
103
2024 vs. ID targets for 2025
FL CET1
RWAs with RoRWA > CoE
12.8%
87%
>12%
c.85%
Profitability
Shareholder remuneration
Payout
RoTE
50%
16.3%
Cash dividend + SBB
15-17%
50% annually
Strength
Disciplined capital allocation
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Think Value
Delivering double-digit value creation, on average through-the-cycle
→ We are entering the last year of our strategic cycle well ahead of all our key Investor Day targets for 2025
Note: target payout defined as c.50% of Group reported profit (excluding non-cash, non-capital ratios impact items), distributed approximately 50% in cash dividend and 50% in
share buybacks. Execution of the shareholder remuneration policy is subject to future corporate and regulatory decisions and approvals. For more details, see section3.3
‘Dividends and shareholder remuneration’ in the ‘Corporate governance’ chapter.
Think Customer
Building a digital bank with branches with well-targeted products and services to grow our customer
base
→ We are committed to delivering simple, lovable, life-centric products and experiences for customers
Annual report 2024
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Think Global
Leveraging global and in-market scale, network and tech to deliver world class-services
and accelerate profitable growth
→Our transformation and five global businesses deliver higher revenue with lower costs structurally, supporting our ambition to
become the most profitable bank in every market where we operate
Our five global businesses
We are a global Retail and Consumer powerhouse with 173 million customers
Strong results underpinned by growth across our five global businesses
2024 vs. 2023
Revenue
(€bn)
Contribution to
Group revenue
Efficiency
Profit
(€bn)
RoTE
Retail
Consumer
CIB
Wealth
Payments
32.5
+11%
12.9
+6%
52%
20%
39.7%
-3.4pp
40.1%
-2.7pp
7.3
+29%
1.7
-12%
18.8%
+3.7pp
9.8% -1.8pp
12.0% excluding CHF and
Motor Finance
8.3
+14%
13%
45.6%
+0.6pp
2.7
+16%
18.0%
+0.5pp
3.7
+15%
5.5
+9%
6%
9%
35.9%
-2.0pp
45.0%
+0.7pp
1.6
+14%
0.7
A
+18%
78.7%
+6.5pp
PagoNxt
EBITDA margin
27.5% +2.7pp
Note: YoY changes in constant euros. Contribution to Group revenue as a percentage of total operating areas, excluding the Corporate Centre. Global businesses’ RoTEs are
adjusted based on Group’s deployed capital. For more information, see section 8 'Alternative performance measures' of the 'Economic and financial review' chapter.
A. Payments profit and YoY profit growth exclude the write-downs of our investments related to our merchant platform in Germany and Superdigital in Latin America.
Annual report 2024
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Retail & Commercial Banking
Delivering operational leverage with a groundbreaking year in our transformation
Note: data and YoY changes in constant euros.
A. Metrics cover all products and employees in the branch network in our 10 main countries.
Digital Consumer Bank
Openbank roll out demonstrates the benefits of our strategy to deliver the best solutions to
customers and transform our operating model
Note: data and YoY changes in constant euros.
ANEAs: average net earning assets, including renting.
Annual report 2024
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Corporate & Investment Banking
Leveraging our strengths to serve our corporate customers and institutions better
Note: data and YoY changes in constant euros.
Wealth Management & Insurance
Accelerating our customers’ connectivity with our global product platforms
Note: data and YoY changes in constant euros.
Assets under management includes deposits and off-balance sheet assets. Revenue including ceded fees includes all fees generated by Santander Asset Management and
Insurance, even those ceded to the commercial network, which are reflected in Retail’s P&L.
Annual report 2024
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Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Payments
Seizing a growing opportunity by capturing scale through global platforms
Note: data and YoY changes in constant euros.
Transactions include merchant payments, cards and electronic A2A payments. Payments volume includes PagoNxt Total Payments Volume (TPV) in Getnet (PagoNxt) and
Cards turnover.
Network effects and global tech approach: unlocking our Group's potential
We are managing technology globally, implementing the best and most innovative common
platforms across the Group, so that we develop the best technology once and operate it centrally
→We are leveraging Artificial Intelligence (AI) to enhance efficiency, customer experience and agility. We aim to place AI at the core of
every process and customer interaction.
Annual report 2024
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
LOOKING AHEAD
Our consistent track record and the implementation of ONE Santander
gives us the confidence to aim higher for 2025
2025 Group targets
Revenue
c.€62bn
Fees
Mid-high single
digit growth
Cost base
Down vs.
2024
in euros
CoR
c.1.15%
CET 1
13%
operating range:
12%-13%
RoTE
c.16.5% post-AT1
A
>17% pre-AT1
Return up to €10bn to our shareholders through share buybacks cumulative for 2025-26
Our existing c.50% payout ratio (half cash dividend) will be supplemented with exceptional SBBs using excess capital
B
Double-digit growth of TNAV per share + dividend per share through-the-cycle
Note: Targets presented in this chapter are market dependent and do not represent guidance. Actual results may vary materially.
A.
RoTE post-AT1: Group attributable profit – cost of AT1s / average of: net equity (excluding minority interests) – intangible assets (including goodwill).
B.
Share buyback target corresponding to 2025-26 including: i) the buybacks resulting from application of our existing shareholder remuneration policy plus; ii) additional
buybacks to distribute excesses of our CET1.
Existing shareholder remuneration policy defined as c.50% of Group reported profit (excluding non-cash, non-capital ratios impact items), distributed approximately 50%
in cash dividends and 50% in share buybacks. The implementation of the shareholder remuneration policy and any share buybacks to distribute CET1 surpluses are
subject to future corporate and regulatory decisions and approvals.
We are creating value for our shareholders by focusing on delivering
profitable growth in a responsible way
2023
2024
2025 targets
Green finance raised and facilitated (since 2019)
€115.3bn
€139.4bn
€120bn
Socially responsible investments (AuMs)
€67.7bn
€88.8bn
€100bn
Financial inclusion (# People)
1.8mn
4.3mn
5mn
Note: information has been verified with limited assurance by PricewaterhouseCoopers Auditores, S.L. For more details, see the 'Sustainability statement' chapter and metrics
definitions see section SN 9. 'Alternative Performance Measures' of the same chapter.
Not taxonomy. Financial inclusion (# people, mn): starting Jan-23. Does not include financial education.
Annual report 2024
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Business model
and strategy
Sustainability
statement
Corporate
governance
Economic and
financial review
Risk management
and compliance
Contents
SUSTAINABILITY
STATEMENT
Consolidated non-financial information statement and
sustainability information
Annual report 2024
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
SUSTAINABILITY AT SANTANDER
IN 2024
10 highlights
Our activity helps people and businesses prosper and contributes
to address global challenges
1
EUR 350.5 billion to help people buy homes, enabling 3.7 million families to access housing.
EUR 214.2
A
billion to purchase other goods.
2
EUR 330 billion to help set up or grow companies (including more than 530 thousand SMEs and self-
employed).
B
3
206,753 employees. EUR 14.3 billion paid in wages and benefits.
4
EUR 11.6 billion paid to suppliers. 89% are local and account for 88% of total procurement turnover.
5
EUR 10.9 billion in taxes paid by the Group and EUR 11.5 billion in third party taxes channelled to tax
authorities.
6
EUR 139 billion in green Finance raised and facilitated since 2019, reaching our EUR 120 billion
target 18 months early and maintaining our leadership position in the financing of renewable
energy projects.
7
Additionally, our credit stock in green mortgages and auto (EU taxonomy aligned) grew 27% year
over year, supporting the alignment of our portfolios.
8
We continue to make progress towards our target of EUR 100 billion of assets under management in
SRI (Socially Responsible Investment), reaching EUR 89 billion in 2024.
9
4.3 million people financially included since 2023, getting closer to our 5 million target until 2025.
Our microfinance propositions in Latin America reached 1.3 million underbanked entrepreneurs with
EUR 1.27 billion in credit disbursed.
10
EUR 166 million in community support, including EUR 104 million to promote higher education,
employability and entrepreneurship.
A. Credit stock and mortgage holdings as at 31 December 2024.
B. Credit stock as at 31 December 2024. Data for Small and Medium Enterprises (SMEs) and the self-employed covers individual customers with an outstanding loan at 2024
year end.
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ABOUT THIS CHAPTER
Scope
This chapter covers the core activities of Banco Santander and its
subsidiaries from 1 January to 31 December 2024 (for more
details, see Notes 1, 2, 3 and 53 to the consolidated financial
statements and sections 3 and 4 in the 'Economic and financial
review' chapter). The scope of information and changes in criteria
applied with respect to the 2023 Sustainability Report, when
significant, are reflected in each relevant section and generally in
the 'Sustainability note 1' of this chapter.
Regulation, reporting standards and other references
that this chapter addresses
This chapter contains the 'Consolidated non-financial information
statement and sustainability information' of Grupo Santander, in
compliance with Directive (EU) 2022/2464, with regard to the
presentation of information on sustainability by companies,
prepared in accordance with Law 11/2018, EU guidelines 2017/
C215/01 on non-financial reporting, Delegated Regulation (EU)
2023/2772 supplementing Directive 2013/34/EU of the European
Parliament and of the Council with regard to sustainability
reporting rules, and the Regulation on European Taxonomy
(Regulation (EU) 2020/852 and Commission Delegated Regulations
2021/2139 and 2021/2178 as amended by Delegated Regulations
(EU) 2022/1214, 2023/2485 and 2023/2486). This report shows
the performance of Grupo Santander in those environmental, social
and governance issues that have been identified as material from a
double materiality perspective. Its purpose is to provide
stakeholders with a fair and balanced picture of the most relevant
aspects, objectives, practices and results of the 2024 exercise.
External validation
PricewaterhouseCoopers Auditores, S.L., an independent firm
charged with auditing the financial statements of Banco Santander
S.A., issued a verification report, with limited assurance, on the
Consolidated Non-Financial Information and sustainability
statement required under Act 11/2018 and the European
Sustainability Reporting Standards (ESRS). The report’s conclusion
can be found in the 'Independent verification report' at the end of
this chapter. For more details on the preparation and levels of
control of sustainability information, see the 'Sustainability
information' section in the introductory pages of this consolidated
management report 2024, and the 'Sustainability note 1 and 2' in
this chapter.
For more details, see 'Sustainability information' in the introduction of
this Annual report
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CONTENTS
SUSTAINABILITY AT SANTANDER IN 2024
ABOUT THIS CHAPTER
1. SUSTAINABILITY AT SANTANDER
(General information)
1.1 Sustainability strategy
1.2 Stakeholder engagement
1.3 Materiality assessment
1.4 Sustainability governance
2. OUR CLIMATE TRANSITION PLAN
(Environmental information)
2.1 Strategy
2.2 Supporting our customers in their transition
goals
2.3 Embedding ESG in risk management
2.4 Aiming to align our activity with the Paris
Agreement Goals
2.5 Further actions and enablers
3. SUPPORTING EMPLOYEES, COMMUNITIES
AND CUSTOMERS
(Social information)
3.1 Our employees
3.1.1 Talent and skills development
3.1.2 Working conditions
3.1.3 Inclusive culture
3.1.4 Employee feedback and experience
3.2 Communities' sustainable development
3.2.1 Supporting the economic and social
development of our communities
3.2.2 Responsible investment and social finance
3.2.3 Environmental, social and climate change
management
3.2.4 Community Support
3.3 Our customers
3.3.1 Conduct with customers
3.3.2 Financial inclusion and financial health
3.3.3 Privacy, data protection and cybersecurity
19
4. BUSINESS CONDUCT
100
(Governance information)
20
4.1 Corporate culture
100
22
4.2 Ethical conduct
101
4.3 Ethical channels
104
22
4.4 Our suppliers
105
24
SUSTAINABILITY NOTES
107
27
29
SN 1. Introduction, basis of presentation of the
Sustainability statement and other information
107
32
SN 2. Sustainability governance
SN 3. Materiality assessment – Detailed
117
121
32
35
methodology
SN 4. Our transition plan
SN 5. EU Taxonomy
129
131
40
59
SN 6. Sustainable finance and investment
classification system (SFICS)
SN 7. Our progress in figures
133
134
72
SN 8. Additional metrics to comply with Spanish
Act 11/2018
200
75
SN 9. Alternative performance measures (APMs)
202
SN 10. Non-financial information Act 11/2018
205
content index
75
SN 11. Commission Delegated Regulation (EU)
210
75
2023/2772 on sustainability reporting
standards content index
77
80
INDEPENDENT VERIFICATION REPORT
218
82
83
OTHER SUSTAINABILITY INFORMATION
224
83
1. Our progress in relation to UN (United Nations)
Global Compact Principles
224
83
2. Our contribution to United Nations Sustainability
226
86
Development Goals
3. Our progress in relation to the Principles
227
88
for Responsible Banking UNEP FI
91
4. GFANZ transition planning content index
228
92
94
97
5. Task Force on Climate related Financial
Disclosure (TCFD) content index
6. Table of equivalence between CSRD and ISSB
229
230
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1. SUSTAINABILITY
AT SANTANDER
(General information)
1.1 Sustainability strategy
Grupo Santander’s purpose is to help people and businesses
prosper. We aim to be the best open financial services platform by
acting responsibly and earning the lasting loyalty of our
employees, customers, shareholders and communities.
Grupo Santander serves more than 173 million customers
worldwide through our unique combination of global scale and
local leadership. We are among the top 3 in lending, deposits and
mutual funds in most of our core markets. Our diverse customer
base includes individuals, SMEs, large corporates, high net worth
clients and others, all with varying financial needs and
expectations. Our simple, tailor-made products and services,
coupled with our multichannel proposition, seek to meet those
needs.
Santander has over 200 thousand employees and our activities are
organized under five global businesses: Retail and Commercial
Banking; Digital Consumer Bank; Corporate and Investment
Banking; Wealth Management and Insurance; and Payments.
We deliver our multichannel customer proposition in the following
core markets (some mature, some emerging) in Europe, North
America and South America: Spain, Portugal, United Kingdom,
Poland, United States, Mexico, Brazil, Chile and Argentina.
For more details on the value chain, see SN 1.
For more details on the distribution of employees by geographical area,
see table 1. Employees by region in SN 7.3. Our progress in figures.
Employees
Our sustainability strategy focuses on issues that are material to
Santander, i.e. those that pose the biggest risks to, and create the
best opportunity for, and where we can have the biggest impact.
This strategy, which is consistent with our double materiality
assessment (see section 1.3 'Materiality assessment'), has five pillars:
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.
Our sustainability strategy embeds the Group’s three action lines:
Think Value, Think Customer and Think Global to drive business
growth and become more resilient to increasing environmental,
governance and social risks.
→ Think Value: Profitable growth makes us resilient and able to
withstand shocks, invest in our employees and customer value
proposition, support our communities, and create value for our
shareholders.
→ Think Customer: Be the partner of choice for our customers by
offering the best products and helping them in their transition to
a low-carbon economy and support their financial inclusion and
financial health (including financial education).
→ Think Global: Use our scale and local leadership to tackle global
sustainability challenges.
The Group’s sustainability policy is embedded in the strategies of
the five global businesses, with metrics and targets that form part
of our remuneration schemes.
For more details, see chapter 1.4 'Sustainability governance'
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Retail and Commercial Banking
Our ambition is to be a driver of growth and to provide value-added
solutions for our customers.
Our sustainable value propositions uphold high standards of
integrity for all customer and user segments (from individuals to
SMEs, large corporates and institutions).
We also collaborate with multilateral development banks, aligning
our financial activity with support for countries' sustainable and
energy transition.
We measure the emissions of the relevant portfolios of
commercial and residential properties in Spain and the United
Kingdom (UK) or Agriculture in Brazil, identifying alignment levers
towards the transition.
We also provide financial inclusion solutions and have a target to
financially include five million people between 2023 and 2025.
This includes helping underbanked through microfinance and
access initiatives. We also run financial education activities to
bolster our financial inclusion programmes.
Santander is also aiming to invest EUR 400 million in education,
employability and entrepreneurship between 2023 and 2026,
while increasing the number of people engaged in these
programmes, including through platforms such as Santander Open
Academy.
Digital Consumer Bank
Our ambition is to bolster our sustainable finance proposition by
tapping into potential opportunities in both, the auto finance
market where we are global leader in auto financing with more
than 20 million customers, and the consumer finance market.
We are supporting the green transition through electric vehicle
financing — EUR 6.8 billion in loans in the year, with a market
share of over 12% in electric vehicle sales in Europe. An increased
share of electric vehicles contributes to the alignment of the auto
financing portfolio in Europe and to our 2030 alignment target.
Corporate and Investment Banking
Our ambition is to be a strategic partner for our customers by
helping them achieve their low-carbon transition and sustainability
goals.
We support our customers in pursuing their transition to a low
carbon economy and sustainable objectives by offering them
value-added products and services that follow the strictest
integrity standards without compromising profitability. We are
focused on capturing business opportunities around (i) clean
energy and ClimateTech advisory services, (ii) structured finance,
and (iii) risk management solutions.
We continue to strengthen our leadership in sustainable finance,
which enables us to harness opportunities to finance the green
transition. Santander has been a leader in renewable energy
project finance for the past decade. In 2024, we exceed our target
of EUR 120 billion in green finance raised or facilitated (between
2019 and 2025) 18 months early. We also acted as adviser on
several of the globe’s biggest renewable energy transactions.
Through our initiatives, we help our customers draw up their
transition plans and progress towards achieving our climate
objectives in high-emitting sectors.
Wealth Management and Insurance
Our ambition is to foster sustainability through our leading global
private banking platform and best-in-class funds and insurance
product factories.
We’re boosting our sustainable product proposition while moving
towards our target of EUR 100 billion in assets under management
in socially responsible investment (SRI) by 2025. Our products
include a wide range of fixed income, equity, mixed and alternative
funds, as well as themed products focused on climate, energy
transition and natural capital. In addition, we have SRI life-savings
portfolios and products, as well as the ability to build customized
mandates around specific sustainability preferences.
Moreover, Santander Asset Management is strengthening
engagement and voting initiatives through dialogue on climate
change issues with portfolio companies and considering climate
criteria in voting at shareholder meetings of companies under the
scope of its Voting policy.
Payments
We are working on lowering the footprint of our cards by issuing
more cards made of sustainable material and recycling more cards.
We’re also looking to offer our customers the possibility of
calculating and offsetting the footprint of their transactions.
In 2024, we acquired 39 million cards (84% of the year's total)
made of sustainable materials (recycled PVC or PLA).
1
Embedding our sustainability strategy
Santander’s sustainability strategy forms part of the Group’s
strategic plan, three-year financial plans and annual budget (every
year). Our Chief Executive Officer (CEO) leads the preparation of
our financial plan every year. The plan includes sustainability
targets and priorities that are consistent with our long-term
strategy. The strategy committee, executive committee and the
Group board of directors review the plan’s outcome. Furthermore,
all global businesses and each subsidiary has its own financial plan
that we review so that it aligns with the Group plan.
The risk area conducts an analysis and challenge of the strategic
plan (Risk Challenge) to identify potential threats that may
compromise the achievement of the Group's objectives. The risk
control committee discusses the outcome of this analysis and
reports to the board's risk supervision, regulation and compliance
committee. Additionally, Santander has a risk management control
model to identify, assess, mitigate, monitor and report all material
risks, including Environmental, Social and Governance (ESG), that
we may face and that may affect our strategy or business model.
We base this model on the Group's risk principles and culture; a
clear governance structure; and advanced risk management tools
and procedures.
Likewise, Santander regularly conducts an emerging risks exercise
to identify key threats to our strategic plan under theoretical stress
scenarios with low likelihood of occurrence. We aim to detect,
assess and monitor risks that may have a significant impact on our
business model, profitability and solvency to promote our strategy
remains robust.
1 PVC: Polyvinyl Chloride; PLA: biodegradable plastic made from renewable sources.
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1.2 Stakeholder engagement
Santander remains in constant dialogue with its stakeholder
groups, particularly employees, customers, shareholders and
communities, who we engaged as part of our materiality
assessments and human rights due diligence, as we outline in this
report. Grupo Santander is committed to the principles of
transparency, honesty and impartiality in its engagement with
stakeholders. We believe that working with our stakeholders is key
to understanding their concerns, setting priorities, and when
possible, spotting opportunity and areas for improvement.
Stakeholders’ views help us develop key processes such as
drawing up our strategy, financial plans and definition of goals.
Group, subsidiary and global business senior management and
executive committees as well as to the Board, when presenting the
conclusions of the double materiality analysis, review, debate and
agree on implications. The outcome of these listening exercises has
helped drive our customer-centric focus, creation of new business
teams to help meet customers' needs, and the reinforcement of
operational procedures on service quality, security and agility.
We adapt our stakeholder engagement objectives for each group:
• Employees. We run three main listening exercises:
• Your Voice: a tool to collect employee feedback and measure
employee engagement. An independent third party manages
this feedback confidentially and provides us with aggregated
information only to preserve the anonymity of employees and
their responses. In 2024, a global survey took place, followed
by local pulses to analyse and address specific topics.
For more details on the results and actions stemming from 'Your
Voice', see section 3.1 'Our employees’.
• Canal Abierto: an anonymous and confidential channel for
employees to report unethical conduct and breaches of the
General code of conduct. This channel also receives reports
from third parties, such as vendors, customers and investors.
For more details, see section 4.3 'Ethical channels'
• Dialogue with employees’ legal representatives: on top of the
above mechanisms, we believe that employees’ legal
representatives play a key role as a spokesperson for our
workforce. That's why we encourage and maintain permanent,
fluid and direct dialogue, engagement and negotiation with
them through trade unions and works councils. We also
channel discussions on industrial relations through these
representatives in the markets where they exist.
In order that the relationship between the bank and
employees’ legal representatives remains productive and fluid,
we engage with them through:
- Santander's bodies for engagement with employees’ legal
representatives and through formal councils and committees
set up for this purpose;
- Through meetings to address specific matters, direct contact
and information exchange platforms.
The Labor Relations function also facilitates mechanisms for
communication between employees’ legal representatives and
the people they represent and those affiliated to trade unions
according to the regulations and agreements that apply in each
market.
• Customers. The listening process varies according to customer
type:
• Retail customers: the aim is to measure their satisfaction and
experience in each of our core markets through regular Net
Promoter Score (NPS) surveys following customer interactions.
We also run a customer experience benchmark to help us
identify our competitive positioning, with results twice a year.
Both exercises aim to spot areas for improvement that we pull
together in action plans with unit´s management committee
oversight.
For more details on our complaints handling system, see section
3.3 'Our customers'
• Wholesale customers: we identify needs and areas for
improvement as part of our customer relations and dialogue on
an ad hoc basis. Bankers escalate the insights gain that either
need management or provoke actions to adjust our commercial
strategy.
Customer feedback is collected by customer interaction teams
(customer experience and customer service team, among others)
and fed back into key bank processes overseen by governance
bodies and thus integrated into the 'Think Costumer' pillar of the
strategy.
• Shareholders and investors. We engage with our shareholders
and investors to strengthen ties and offer a value-added
proposition that sets us apart. We use surveys, events, direct
contact and other channels (with digital channels gaining
traction) to enable close dialogue that helps this group
understand the business better and communicate with senior
management.
• Communities. The aim is to understand the needs and challenges
of the communities where we operate by gathering information
from several sources:
• Individuals: the customer experience function runs mass
surveys to learn about how the communities we serve perceive
our actions.
• Non-governmental organizations (NGOs): the Sustainability
and Social Action functions engage in two-way communication
with the leading civil organizations in our markets.
• Under our Environmental, social and climate change risk
(ESCC) policy and the Equator Principles, we conduct analyses
on the environmental and social risks that our operations might
have on our communities.
For more details, see section' 3.2.3 Environmental, social and
climate change management'
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Our 2024 engagement in numbers
Employees
83% participation in our Your
Voice survey
A
4,437 complaints received
through ethical channels
A 151,726 employees answered the
survey based on the total number of
employees eligible to participate, i.e.
employees who have been with the
organization for less than 3 months,
long-term absentees, employees
without access to the corporate
intranet, and employees without
access to the corporate intranet are
excluded.
Customers
Over 9.9 million surveys to
customers
681,636 complaints received;
resolved or under
management
Shareholders & Investors
9,136 responses by retail
shareholders on the
perception of Santander as
Simple, Personal and Fair
157,632 responses by retail
shareholders and institutional
investors through quality
surveys and studies
229 events with retail
shareholders
1,269 interactions with
institutional investors (109 on
ESG matters)
Communities
158 interactions with NGO
enabled us to gather and
address the needs of the
communities where we
operate and to understand
the impact of our activities
Santander also engages with other stakeholders, including
suppliers, ESG ratings agencies, regulators and supervisors,
political parties and authorities:
• Suppliers: we want our value chain to be more sustainable while
increasing the Group’s resilience to environmental and social
risks. We include ESG standards in tenders for certain services
and support vendors in assessments and certification procedures.
For more details, see section 4.4 Our suppliers
• ESG ratings agencies: the aim is to convey our developments,
assess our progress and spot areas for improvement. In 2024, we
maintained our position in MSCI (AA) and at Carbon disclosure
project (CDP) level A . We scored 17.1 points in Sustainalytics,
remaining in its ‘Low Risk’ category, and reached the C+ category
in ISS.
Evol.
AA
CCC
AAA
=
AA
19.7
100
0
é
17.1
A
D-
A
é
A
C-
55.6
0
A+
é
C+ 58.5
2023
2024
• Regulators: as part of the policy debate we engage with
regulators (local and European) and international standard
setters on the initiatives that are most important to the bank, our
employees, our customers and the communities we serve.
Santander works with the Basel Committee, the Financial
Stability Board, the European Banking Authority, the European
Central Bank, EU institutions, Banco de España, the Bank of
England, and other key actors to set out the sustainable financing
framework that boosts support for the United Nations
Sustainable Development Goals and the Paris Climate
Agreement targets. As part of this engagement, at the corporate
level, the Group responded to 53 consultations during 2024. In
addition, Brazil’s presidency of the G20 and the COP30 to be held
in Belém in 2025 will provide greater opportunity to work with
stakeholders on common solutions to ramp up the transition in
emerging and developing economies.
• Supervisors: we remain in open dialogue with supervisors so we
can understand their priorities and expectations, and meet all
pertinent regulatory requirements and recommendations.
• Political parties: we also interact with political parties in their
role as policymakers on key topics that affect our sector, broader
society and the environment
2.
• Within our sector: we work closely with industry bodies
(including the Institute of International Finance, the Association
for Financial Markets in Europe and the European Banking
Federation) and think tanks. We work together to find common
ground on issues such as the implementation of the EU
Taxonomy, the framework for sustainability disclosure and
reporting, and ongoing efforts to pinpoint and manage climate
related risks. We take part in these debates through
consultations, workshops and other channels, and by facilitating
the exchange of views between key stakeholders, in events such
as the International Banking Conference and other events that
Banco Santander organizes every year.
2 In line with our principles of transparency, honesty and impartiality, Grupo Santander may only finance political parties on an exceptional and arm's length basis, and with
approval from the Group executive committee. These standards prohibit making monetary or in-kind donations and contributions to elections. Total or partial debt
cancellation for political parties and their affiliates is strictly prohibited. While Grupo Santander may negotiate the terms of any political party debt, the interest rate charged
must never fall below the market rate.
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Main sustainability initiatives where Santander is a member or participant
Linked to General Sustainability Frameworks and partnerships
→United Nations Global Compact: We have been part of the Global Compact network since 2022 and a member of
the gender equality programme since 2020. We also took part in the 'sustainable suppliers' programme.
→Santander has been a member of the United Nations Environment Programme Finance Initiative (UNEP FI) since
1992 and a founding member of the Principles for Responsible Banking since its launch in 2019. A Santander
representative co-chairs the global management committee and in 2024 took part in a review of the 2030 principles.
We are also signatory, through Santander Asset Management and since 2008, in the Principles for Responsible
Investment (PRI), which offer a menu of possible actions for incorporating ESG issues into investment practice.
→World Business Council for Sustainable Development (WBCSD): Having become a WBCSD member in 2015, in
2024 we took part in the Banking for Impact on Climate in Agriculture (B4ICA) initiative, the CFO Network, LEAP
project, and other programmes.
→Equator Principles. Voluntary framework for financial institutions to identify, assess and manage environmental and
social risks when financing projects. We have been a signatory since 2009.
→International Capital Market Association (ICMA). ICMA Principles champion global green, social and sustainability
bond (and related) markets to finance progress towards environmental and social sustainability. The Principles were
established in 2014 and Santander has been a member since then.
Linked to Sustainability Disclosure
→International Sustainability Standards Boad (ISSB). Santander joined the IFRS Corporate Champions initiative at the
end of 2024, with the aim of strengthening the positioning of the ISSB standards as the global standard for
sustainability reporting.
→Task Force on Climate-Related Financial Disclosures (TCFD). The TCFD, which we support since 2017, has
developed a framework to help public companies and other organizations more effectively disclose climate-related
risks and opportunities through their existing reporting processes.
Linked to Advocacy Forums
→Instituto Internacional de Finanzas (IIF): Grupo Santander's Executive Chair is the current IIF Chair and has sat on its
board since 2014. The bank participates in several sustainability-related working groups, including the Sustainable
Finance Policy Expert Group and the Sustainable Finance Data, Disclosure and Classification Expert Group.
→European Banking Federation (EBF): Santander is a member of several working groups, such as the ESG risk group,
which a Santander director chairs; the Sustainable Finance Steering Committee; and the Chief Sustainability Officers
Roundtable.
→Association for Financial Markets in Europe (AFME). Santander is part of AFME´s Sustainable Finance SteerCo.
AFME works with members, policymakers and other stakeholders on a wide range of important priorities including
sustainability disclosures, taxonomies, sustainable financing products, sustainability due diligence and carbon
markets. Santander is part of AFME´s Sustainable Finance SteerCo.
Additionally, in each of the sections, specific initiatives or collaborations for each topic are mentioned.
For more details on climate-related initiatives and working groups in
which we are participate, see section 2.5.1 'Strategy for engagement
with other key stakeholders' in the Transition Plan.
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Impact
Financial
Sustainability matters (ESRS)
+
–
Risk
Opportunity
ÿ
E1: Climate Change
E2: Pollution
E3: Water and marine resources
E4: Biodiversity and ecosystems
E5: Resource use & circular economy
ÿ
S1: Own workforce
S2: Workers in the value chain
ÿ
S3: Affected Communities
ÿ
S4: Consumers & end-users
ÿ
G1: Business conduct
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1.3 Materiality assessment
Double materiality assessment underpins our sustainability
strategy. For more details, see section 1.1 ‘Sustainability strategy’.
In 2023, we shifted our focus slightly to meet the new
requirements of the EU Corporate Sustainability Reporting
Directive. This report shows the culmination of our work to comply
with this Directive.
The analysis developed in 2024 redefines, in line with the
regulation, the sustainability matters that pose risks to, and
create opportunity for, Santander; and where we can have an
impact on the environment and broader society.
We identified 32 impacts, risks and opportunities (IROs) that form
part of the five sustainability matters that are material to Grupo
Santander: E1) Climate change, S1) Own workforce, S3) Affected
communities, S4) Consumers and end users, and G1) Business
conduct. The table below breaks down the impacts (positive and
negative), risks and opportunities of each matter.
• Material Thresholds:
• Critical
• Significant
• Informative
• Minimal
As a global, retail and commercial bank, the material IROs relate
mainly to the retail and commercial business (business conduct,
customer practices and safeguarding privacy) and to our scale
(contributing to global challenges such as climate change and
financial inclusion, and managing our 200,000-plus employees).
We conduct this assessment for the entire Group, including our
own operations and our value chain, using the available
information and tools; and by engaging our key stakeholders.
We also conducted a materiality assessment in all our subsidiaries,
the findings of which provided feedback on the Group's materiality,
while the Group's materiality informed local materiality.
The results reflect a short to medium-term time horizon (~1-5
years) for which most of the information is available. However, a
qualitative analysis suggests that if we used a long-term horizon,
there would be no changes to the results and IROs that are
material.
The materiality assessment is connected to key risk management
processes across the Group. It provides input for the top and
emerging risks exercise and is connected to other internal risk
exercises.
For more details, see section 2.3 'Embedding ESG in risk
management'
The responsible banking, sustainability and cultural committee
approved the bank’s double materiality assessment, material
impacts, risks and opportunities, and sustainability strategy.
Below are details of the material IROs under each sustainability
matter. In this Sustainability statement, we outline how we
manage each one through policies, actions, metrics and targets (as
required by the Corporate Sustainability Reporting Directive-CSRD)
in several sections under this chapter.
For more details, see SN 3. 'Materiality assessment methodology'
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E1
Climate change
I+ Contribution to protecting the environment by driving an increase in the use of renewable energy and other low-carbon
technologies.
I+ Contribution to reducing the Group’s scope 1 and 2 greenhouse gas emissions.
I- Adverse impact on climate and the environment due to the bank’s financing of, or investment in, certain non-sustainable
assets and activities.
O Growth in the financing of renewable energy and other energy transition solutions.
O Revenue growth by providing our customers with sustainable solutions in such sectors as construction, mobility or
agriculture.
R Reputational risk based on the perception of bank’ progress with climate-related policies and objectives.
S1
Own workforce
I+ Promote the health, well-being and security of our employees in a safe and inclusive workplace; facilitate a positive
work-life balance through flexible working when possible.
I+ Promote a workforce that reflects the society we live in and encourages collaboration and the same opportunities for all
our employees, irrespective of personal characteristics and in compliance with the law.
I+ Promote continuous career development and personal growth through learning and development programmes.
I+ Promote the general well-being of employees and provide appropriate remuneration under equal conditions based on
merit and market rates.
I- Harm employees through unlawful discriminatory conduct, inadequate working conditions, harassment or corruption.
R Potential risk of conflict with employees based on excessive working hours, corruption or the infringement of their rights.
S3
Affected communities
I+ Drive economic growth and job creation in the regions where we operate and provide credit to people and businesses.
I+ Contribution to sustainable development through financing and investment that promotes sustainable performance in
companies, addresses societal challenges, mitigates a specific issue, or pursues better societal outcomes.
I+ Contribution to education, employability and entrepreneurship, as well as to community development through support
programmes.
I- Finance activities (in any customer segment) that breach the bank’s policies and jeopardize the well-being of present and
future generations.
I- Potentially negative impact on the environment or society by failing to sufficiently involve appropriate stakeholders or
use suitable customer identification and management mechanisms when providing finance to a customer or project.
S4
Consumers and end users
I+ Positive impact on customers due to the bank’s offer of products and services that adapt to their needs and expectations
and promote financial inclusion and health.
I+ Education on, and awareness of, cyber security to understand potential threats and ways to repel them.
I- Negative impact on the customer if they do not have access to complaints channels or if, after making a complaint, the
bank fails to take the necessary action.
I- Negative impact on the customer if the bank fails to provide sufficient information on the product or service they are
signing up for.
I- Potential infringement of customers’, employees’ or shareholders’ rights due to a lack of appropriate technical or
organizational measures to protect their personal data according to law and the practices set by the Group.
I- Negative impact on the customer by failing to guarantee access to, or the use of, products and services that may present
certain obstacles or weak spots.
R Potential losses due to fines or a reduction in the number of customers because of a failure to detect or respond
effectively to breaches of privacy.
R Potential losses due to claims or a reduction in the number of customers because of substandard customer practices
throughout their life cycle.
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G1
Business conduct
I+ Act responsibly and consider investors’ interests and the impact on employees, broader society and the environment; pay
taxes to support the distribution of wealth.
I+ Protect the confidentiality of users of the bank’s ethical channel and have an effective reporting system in place that
follows robust principles and procedures.
I+ Promote responsible practices among vendors; engage with them, assess their ESG performance and give them
recommendations and tools to improve.
I- Negative impact on the environment or broader society by failing to implement measures to resolve incidents through
complaints or reporting channels or due to a lack of continuous improvement actions.
I- Harm broader society through bribery or corruption.
R Potential risk from failing to ensure the operational resilience of the value chain by assessing vendors’ solvency,
reputation and compliance with the law.
R Risk stemming from improper conduct that makes illicit funds or assets appear legitimate and, therefore, facilitates
illegal activity or to benefit from it.
Key: I+ Positive impact I- Negative impact R Risk O Opportunity
There are five sustainability topics that we consider non-material,
given none of the impacts, risks and opportunities connected to
them reach the materiality threshold: pollution, water and marine
resources, biodiversity and ecosystems, resource and circular
economy, and workers in the value chain.
1.4 Sustainability governance
We manage and review progress with sustainability at the highest
level of the business. The board of directors is responsible, among
other things, for approving the sustainability agenda and setting
the sustainability strategy.
The responsible banking, sustainability and cultural committee
proposes and oversees the development and implementation of
the Group's sustainability strategy and policies, in support of the
board of directors.
Other board committees also analyse specific sustainability topics.
The audit committee is responsible for supervising and reviewing
However, we address aspects of nature and biodiversity that are
most closely related to climate objectives within our transition
plan.
For more information, see section 2.3.5 'Our approach to nature
and biodiversity'.
the financial and non-financial information process, as well as the
internal control systems, to meet the most demanding
international standards and complies with the guidelines
established by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO).
The overseeing of material sustainability issues, as well as the
main lines of action for their management, are periodically
reviewed through the bodies shown below, which together form
the governance of the function:
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é
é
é
é
Board of directors
Prepares annual accounts and management report, which shall include sustainability statement,
and is presentation to the general shareholders' meeting
Responsible banking, sustainability and
Audit committee
Risk supervision, regulation
culture committee
Reviews company and Group financial
statements, monitor legal requirements
and compliance committee
A
Assists the board in fulfilling its oversight of the
Reviews risk appetite statement
compliance and assesses information
responsible business strategy and sustainability issues
proposals prior to board approval
and internal control systems
(company and Group)
é
é
é
Executive & management level (main bodies & functions)
Accounting & financial management
Sustainability, risk, reporting and ESG businesses
Risk control committee
information corporate committee
function
Financial accounting & control function
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Contents
Defence lines:
1
st line of defence
2
nd line of defence
3
rd line of defence
(Business owners, general accounting and
(Risk & compliance)
(Internal Audit)
management and sustainability function)
• Overall responsibility • Supervisory oversight • Reporting • Risk • Impact • Opportunities
A. The BRC works with the RBSCC (Responsible Banking, Sustainability and Cultural Committee) to review ESG-related conduct risk, data protection risk, customer vulnerability,
reputational issues, risk policies and how business units adopted these policies.
For more details on sustainability governance, see note
'SN 2. Sustainability governance'.
1.4.1 Integration of sustainability-related
performance in incentive schemes
Grupo Santander’s remuneration policy reflects our strategic and
long-term sustainability objectives. Variable pay is based on pre
determined, specific and quantifiable financial, sustainability-based
and value-creation targets.
For more details, see section 6.1 'Remuneration policy' in the
Corporate Governance chapter.
Our long-term incentives (LTI) scheme applies to our top 36 Groups'
executives, including the Executive Chair and the CEO.
Sustainability has formed part of the last three LTI schemes, with a
20% weighting. The proposal for 2025-2027 will be subject to vote
at the Annual General Meeting in 2025.
For more details, see section 6.3 'Remuneration of directors for
executive duties' in the Corporate Governance chapter.
Short-term variable remuneration has a qualitative and quantitative
component. Under the qualitative component, sustainability has
had a ±5% weighting in the Group, global businesses and
subsidiaries since 2020. Short-term incentives apply to our top 236
Groups' executives and global and subsidiary corporate centre
employees.
In 2024, 8% of the variable remuneration received by the
Chairwoman and the CEO has been linked to sustainability, while
2% of their total remuneration has been linked to climate actions.
The responsible banking, sustainability and cultural committee,
remuneration committee, and board of directors approve these ESG
incentive schemes.
The proposed parameters to assess ESG performance aim to reward
progress with our main ESG metrics and embedding ESG in our
management, as shown below:
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Inclusive Culture
Progress with inclusive culture and other initiatives such as accessibility.
Financial inclusion
Progress with financial inclusion targets and other key initiatives in the social agenda
(financial education, community investment, etc.).
Sustainable finance
Progress with sustainable finance and socially responsible investment.
Climate
Progress with our transition plan and the key levers to fulfil our net zero ambition.
Governance and cross cutting
matters
Conducting our double materiality assessment, implementing sustainability policies, and
enhancing data efficiency and quality.
1.4.2 Human rights due diligence
We strive to foster that our operations uphold and protect the
human rights of our stakeholders in the countries where we
operate.
The CSRD requires the findings of human rights due diligence
exercises to inform the double materiality assessment.
Human rights are integrated into management and governance
based on the process type, focusing on monitoring adverse impacts
and implementing measures, such as:
• looking after our employees’ health and promoting decent
employment, the preservation of freedom of association and
collective bargaining and the prohibition of slavery and child
labour.
For more details, see section 3.1 'Our employees'
• protecting our customers’ human rights through responsible
business practices and the protection of their data.
For more details, see section 3.3 'Our customers'
• assessing the human rights impact on transactions with
customers through environmental, social and climate change
(ESCC) analysis.
For more details, see section 2. 'Our climate transition plan'
• embedding environmental and social aspects, including human
rights, in our supply chain management.
For more details, see section 4. 'Business conduct'
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.
For more details, see section 4.3 'Ethical channels'
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
3 and covered all of our global businesses’
units and activities.
The findings of the human rights due diligence exercise are
embedded into the strategy and governance, informing the double
materiality assessment. Additionally, we engaged stakeholders as
part of our analysis of these findings.
For further detail regarding the 'Materiality assessment
methodology', see Sustainability Note 3
For more details on our human rights due diligence, visit the
website santander.com/en/our-approach/policies
3 For instance: the Universal Declaration of Human Rights, the International Labour Organisation Declaration on Fundamental Principles and Rights at Work, the United Nations
Guiding Principles on Business and Human Rights, the OECD (Organization for Economic Cooperation and Development) Due Diligence Guidance for Responsible Business
Conduct, and others.
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2. OUR CLIMATE
TRANSITION PLAN
(Environmental information)
2.1 Strategy
2.1.1 Our approach
Santander considers climate a material topic, having identified impacts, risks and opportunities in the double materiality assessment. Per
legal requirements, below we disclose our transition plan, based on three pillars. The purpose of each pillar is to support our customers and
the communities we serve in their transition objectives; assess our customers’ climate-related risks to manage the impact on their business
and on our operations; and make progress with the alignment of our portfolios:
1
Supporting our customers in
their transition goals
Supporting our customers in pursuing
their transition to a sustainable economy.
Having achieved our target of raising or
facilitating EUR 120 bn in green finance
between 2019 and 2025 18 months
early, we’re making headway with our
next milestone of achieving EUR 220 bn
by 2030. We are offering our customers
guidance, advice and specific business
solutions; and a wide range of products
to invest in according to their
sustainability preferences, with the
target of reaching EUR 100 bn assets
under management (AuM) in Socially
Responsible Investments (SRI) by 2025.
2
Embedding climate
in risk management
Embedding climate and environmental
aspects in risk management implies
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 double materiality
assessment and our sustainability
strategy.
3
Aiming to align our activity with
the Paris Agreement Goals
Aiming to align our portfolio with the
Paris Agreement goals to help limit
global warming. We are setting sector
portfolio alignment targets for 2030 in
high-emissions portfolios. The progress
on these targets is expected to reflect the
progress of the economies we serve. We
currently have seven targets in five
sectors and alignment targets for our
asset management activity.
Meanwhile, we continue to reduce our
impact on the environment by
implementing efficiency measures in our
own operations and sourcing all our
electricity from renewable sources
by 2025.
To achieve this, we engage with our different stakeholders:
• Customers and investors: developing products/services adapted
to their needs; participating in a collaborative network of
institutions to create financing opportunities; and developing
assessment tools to better manage performance and monitor
progress towards their transition goals.
• Key climate actors: participating in local and international
organizations, alliances and working groups to progress with
global goals.
• Authorities: participating in debates regarding the climate
agenda with regulators, policy makers and supervisors on the
developments that are most relevant to the bank, its employees,
customers and the communities in which we operate.
• Communities: supporting a number of local initiatives to tackle
climate change, protect biodiversity, and generate positive social
impact.
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2.1.2 Our ambition
We continue working towards our ambition of net zero carbon
emissions by 2050 by progressively setting specific actions to
make headway with our three-pillar strategy.
Incentive policies and frameworks are key to driving the energy
transition. The challenge goes beyond increasing the flow of
capital from the regulated financial sector to funding the energy
transition. We need to scale transition activity and the demand for
solutions, which will require better risk-profitability profiles.
Achieving climate objectives depends largely on the
macroeconomic landscape and public policy.
2.1.3 Our objectives
2019
2020
2021
2022
2023
2024
2025/2030 target
Green finance raised and facilitated (accumulated
EUR bn)
A
AuM in Socially Responsible Investments
(accumulated EUR bn)
Thermal coal-related power & mining phase out
(EUR bn)
Emissions intensity of power generation portfolio
B
Absolute emissions of oil & gas portfolio
B
Emissions intensity of aviation portfolio
B
Emissions intensity of steel portfolio
B
Emissions intensity of auto-manufacturing portfolio
B
Emissions intensity of auto-lending portfolio
B,C
19.0
0.21
23.84
92.47
1.58
33.8
0.17
22.58
93.05
1.40
149
65.7
27.1
7.0
0.19
27.43
97.21
1.36
138
94.5
53.2
5.9
0.16
20.94
81.09
1.24
133
137
115.3
67.7
4.9
0.15
20.27
82.99
1.38
134
133
139.4
88.8
4.8
120 bn by 2025
220 bn by 2030
100 bn by 2025
0 by 2030
0.11 tCO2e/MWh
in 2030
16.98 mtCO2e
in 2030
61.71 grCO2e/RPK in
2030
1.07 tCO2e/tS
in 2030
103 gCO2/vkm
in 2030
75-89 gCO2e/vkm
in 2030
Electricity from renewable sources
D
50%
57%
75%
88%
97%
96%
100% by 2025
In 2024:
→we continued progressing with aligning key portfolios, including
→we continued managing our own operations emissions from
adding the disclosure of emissions for our mortgages portfolio in
scopes 1 and 2, setting new reductions plans and offsetting
Spain and our commercial real estate portfolio in Spain and the
remaining ones; and we kept our offices and buildings in our
UK;
core markets free of single-use plastics to meet our target.
A. Includes Grupo Santander's contribution to green finance: project finance; green bonds; export finance and advisory services to help customers transition to a low-carbon
economy.
B. The figures displayed are the latest available given limited data availability from customers to assess financed emissions. We used Banco Santander's internal calculation
methodology, which is based on the Partnership for Carbon Accounting Financials (PCAF).
C. Consumer lending for the purchase of passenger cars in Europe.
D. In countries where we can verify electricity from renewable sources at Banco Santander properties. It considers the 10 core markets where we operate.
For more details of the scope of targets, see section 2.1.4.
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2.1.4 Key milestones
We continue to work towards our ambition of net zero carbon emissions by 2050 by progressively setting specific actions to align our
portfolios:
Net zero ambition
and first alignment
targets (thermal
coal, power
generation and
Santander Asset
Management-
SAM)
Alignment targets
disclosed for oil &
gas, steel and
aviation
In 2024 we achieved our
2025 target to raise or
facilitate EUR 120 billion in
green finance 18 months
early
Alignment targets
disclosed for automotive
sectors (manufacturing
and lending)
Financed emissions
disclosed for residential
mortgages (Spain) and
commercial real estate
(Spain and UK)
Use 100% of electricity
from renewable
sources
A in all Santander
buildings
SAM target to halve net
emissions for 50% of in
scope AuM
B
Alignment targets for
power generation, oil &
gas, steel, aviation, auto
manufacturing and auto
lending
2021
2022
2024
2025
2030
Cut unnecessary
Development of
single-use plastics
first Sustainable
Finance
Classification
System, including
transition finance
criteria
Financed emissions
disclosed for residential
Mortgages (UK) and
Agriculture (Brazil)
EUR 100 billion in
Socially Responsible
Investment AuM
Raise or facilitate EUR
220 billion in green
finance from 2019
Thermal coal-related
power & mining phase
out
A. In countries where we can verify electricity from renewable sources at Banco Santander properties. Target considers the 10 core markets in which we operate.
B. Assets in scope are 54% of SAM’s total assets, which currently have a set Net Zero methodology. This objective might be revised upwards at least every five years, depending
on data availability
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2.2 Supporting our customers in their transition goals
In this section we cover how Santander manages the following
IRO:
Contribution to protecting the environment by driving
I+
an increase in the use of renewable energy and other
low-carbon technologies
Growth in the financing of renewable energy and other
O
energy transition solutions
Revenue growth by providing our customers with
O
sustainable solutions in such sectors as construction,
mobility or agriculture.
To achieve our net-zero ambition, our main lever as a bank is
supporting our customers in their efforts to transition to a low
carbon economy.
As a large financial institution, we have an opportunity to support
our customers in their ambition to transition to low carbon
business models. To this end, we continue enhancing our
sustainable finance and advisory proposition, and financing in our
global businesses.
To achieve this, we are:
1. growing the green finance business, which entails drawing up a
green finance strategy for the Group's businesses and delivering
a strong value proposition for our customers;
2. building the infrastructure that support green finance across the
Group. This means implementing the sustainable finance and
investment classification system (SFICS); strengthening the
controls to assess and manage greenwashing risk; and
executing the data strategy to measure and monitor green
finance results; and
3. deploying well-trained commercial teams to capture
opportunity.
In Corporate & Investment Banking (CIB), we have already reached
EUR 139 billion in green finance raised and facilitated since 2019,
achieving our EUR 120 billion target 18 months early and are
working towards reaching EUR 220 billion by 2030.
Climate opportunities
Working with customers to support their transition objectives and
carbon reduction emissions goals is key to progressing towards a
low-carbon economy. To do this we identify business opportunities
for transition financing assessing key sectors, working closely with
our clients and with the knowledge of our sustainability experts.
These opportunities inform our materiality assessment.
In addition, the Group calculates the ratio of green assets aligned
with the European Taxonomy. In 2024, it amounts to 3.28% (vs.
2.6% in 2023). The volume of assets as at December 2024 aligned
with the European taxonomy for mortgages is EUR 28.1 bn and
auto is EUR 8.8 bn. For more details, see SN 5. European
Taxonomy.
Also, from investment through our assets management business
SAM, the top three climate-related opportunities are:
• new climate solutions involving products and services that boost
diversification, competitive advantage and revenue;
• lower-emission energy sources that benefit from less exposure
to Greenhouse Gases (GHG) emissions, lower costs, policy
incentives; and
• efficient production and distribution of resources to lower
operational costs and raise both production capacity and the
value of fixed assets.
Transition finance and just transition
The regulatory framework must support growth, which is key to a
stable and orderly transition.
We want to help achieve sustainable development and pledge to
play an active role in supporting the green transition. It is vital that
the transition is just and inclusive, taking into account regional and
sector specificities to avoid isolating communities and stranding
assets.
We aim to embed and promote the just transition through our
engagement approach, our risk management policies and
processes, and our sustainable and investment products. We
consider this approach when devising our policies and reviewing
our SFICS (Sustainable Finance and Investment Classification
System), which covers activities aimed at addressing or mitigating
social and environmental issues; bringing focus on specific matters
such as protecting the Amazon biome (given our operations in
Brazil) and helping local communities; and supporting initiatives
like the Just Transition Alliance, led by the Grantham Research
Institute at the London School of Economics.
2.2.1 Corporate and investment banking (CIB)
CIB has raised and mobilized globally EUR 139.4 billion in green
finance between 2019 and December 2024. This target focuses on
green use of proceeds, such as renewable energy, across products
where well-recognized public information is available.
GREEN FINANCE VOLUMES FROM 2019 TO 2024
Raised or facilitated. EUR bn.
139.4
220
2019
2030
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2024 GREEN FINANCE VOLUMES
SPLIT BY PRODUCT
Raised or facilitated. EUR bn.
5.7
5.0
6.9
6.0
0.3
0.2
0.0
Project finance
(Lending)
M&A
Green bonds (DCM)
Financial advice
Export finance (ECAs)
Project bonds
Equity capital markets
DCM (Debt capital markets); M&A (Mergers and Acquisitions)
Information obtained from public sources, such as Infralogic, TXF, Bloomberg or
Mergermarket league tables. All roles undertaken by Banco Santander in the
same project are accounted for. Other sustainable finance components, such as
financial inclusion and entrepreneurship, are excluded. Green Finance raised and
facilitated is not a synonym of EU Taxonomy. Information from League Tables
extracted by January 15
th, 2025, latest.
Our sustainable finance proposition includes expertise in
renewable energies, as demonstrated by our long-standing global
leadership in this field. We also provide a range of sustainable
finance structuring solutions and advice across multiple products
and geographies. Our client climate tiering approach is designed to
aid in the identification of customer-level priority areas and provide
transition benchmarking to support our customers in financing
their transition. Our corporate finance advisory proposition, led by
our global team of experts in green and transition technologies,
enables us to provide bespoke strategic and corporate finance
advice on opportunities to accelerate the adoption of low-carbon
technologies to meet their sustainability ambitions. For more
details, see below select case studies that demonstrate how we
support our customers in the energy transition.
During 2024, Santander remained active in corporate finance
transactions in the renewable energy sector across different
technologies and geographies. In Europe, CIB supported Enel in a
landmark transaction which is among the largest deals closed in
the region: the sale of a 49% stake in a 2GW portfolio of
operational solar PV assets in Spain to Masdar. Santander also
supported Canadian Solar in the sale of a minority stake in its
global development platform Recurrent Energy to BlackRock in
March 2024 with a project pipeline totalling 26GW of solar PV and
56 GWh of Battery Energy Storage Systems.
Santander also acted as Financial Adviser to Sonnedix to raise a
EUR 2.5 billion debt package to refinance 1.1 GW portfolio of
renewable energy assets in Spain, Italy, and France, with the ability
to expand the facility with new assets across Europe and the UK.
The financing package provided an innovative blend of project
finance-like debt structuring with more corporate-style
documentation flexibility.
Santander acted as Sole Financial Advisor and LC (Letter of Credit)
Provider in 3.16 billion Brazilian reals (BRL) long term financing to
the renewable energy Babilonia Central project in Brazil. The
project, controlled by a joint-venture between ArcelorMittal Brasil
(55%) and Casa dos Ventos (45%), will have a capacity of 554 MW
of renewable energy to be used by ArcelorMittal to align its steel
operations in Brasil (estimated 40% of its electricity needs by
2030).
In electric mobility, Santander acted as financial advisor, sole
underwriter, and green loan coordinator in the concession of a EUR
225 million green loan to Zunder to help their expansion plan that
aims to deploy more than 3,000 ultra-fast charging stations across
Europe.
In Debt Capital Markets, Santander helped place several landmark
sustainability labelled transactions, including a EUR 1 billion, six
year inaugural green bond issuance by Saint-Gobain, a global
leader in light and sustainable construction; a EUR 1 billion, dual
tranche green deal for A.P. Møller-Mærsk, an integrated logistics
company; and a EUR 750 million, nine-year debut sustainability
linked bond issued by Gatwick Airport, with targets related to their
CO2 emissions reduction. Santander was recognized as ESG Bond
House of the Year at the 2024 Global Banking & Markets Latin
America Awards, which also selected COFIDE’s USD 300 million,
five-year social bond as ESG Bond Deal of the Year, where
Santander acted as active joint bookrunner and ESG Structurer.
Notable ESG deals in Latin America also include our sole
sustainability structurer and sole bookrunner role for the Republic
of Guatemala, which issued a USD 800 million, 12.5-year inaugural
sustainability bond; a bookrunner position for the Republic of
Honduras’ USD 700 million, 10-year debut sustainability bond; and
our sole ESG structurer role in the first Mexican taxonomy-aligned
bond issuance from Acueducto Cuchillo 2 (6.6 billion Mexican
pesos senior unsecured sustainability bond).
In Export Finance, we participated as a Pathfinder, Mandated Lead
Arranger and Lender in EUR 1.3 billion green financing partially
covered by BPI Assurance Export for Verkor. These funds are
allocated to Verkor's first battery gigafactory in Dunkirk, with an
initial production capacity of 16Gwh/year.
We also acted as a Senior Mandated Lead Arranger (SMLA) for the
construction of H2GS Boden AB’s fully integrated, digitalized and
automated greenfield steel plant in the North of Sweden for a total
debt of EUR 3.3 billion. Euler Hermes and Riksgalden, the German
and Swedish ECAs (Export Credit Agencies), participated in this
financing by covering part of the debt. The steel-making process
will be powered by hydrogen produced from renewable energy,
making it the first European large-scale steel producer based on
fossil-free manufacturing. CIB won the PFI Sustainability Deal of
the Year for this transaction, as well as 12 other awards, including
Europe's Bank of the year.
In Trade Finance, we participated in a EUR 1.2 billion green
guarantee line with coverage from Spanish export credit agency
Cesce for Siemens Gamesa. The technical guarantees issued under
this line will support Siemens Gamesa in its wind projects
worldwide.
In Supply Chain Finance, we signed a sustainability-linked
confirming program with Vestas in Brazil, the first supply chain
finance program of its kind for the energy sector in the country.
Santander was also awarded both Best Provider of Sustainable
Finance Solutions in Trade Finance and Best Sustainable Supply
Chain Finance Program by Global Finance in 2024.
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Financing renewable energy
Grupo Santander has been a leader in renewable energy finance
for more than 10 years. In 2024, we were among the top banks in
number of transactions and deal value globally, with 82
transactions closed and a 4.54% market share according to
Infralogic:
Vol. (EUR
No.
Market
Rank
Loan Provider
million)
transactions
Share
1
Bank 1
8,009
79
4.95%
2
Banco Santander
7,346
82
4.54%
3
Bank 2
7,175
94
4.44%
4
Peer 1
5,641
80
3.49%
5
Bank 3
4,930
66
3.05%
6
Peer 2
4,126
59
2.55%
7
Peer 3
4,044
49
2.50%
8
Bank 4
3,978
41
2.46%
9
Bank 5
3,538
44
2.19%
10
Bank 6
3,411
46
2.11%
Peers are BBVA, BNP Paribas, Citi, Crédit Agricole, HSBC, ING, Itaú, Scotia Bank and
UniCredit. Data extracted by January 15
th, 2025, latest.
The greenfield renewable energy projects that we financed or
advised on in 2024 have a total installed capacity of 10.2 GW. We
also helped expand, enhance and sustain renewable energy
brownfield projects that have a total installed capacity of 28.2 GW.
The greenfield renewable energy projects Santander participated
as financier or advisor in 2024 can power 6.5 million households
per year.
2.2.2 Retail and Commercial Banking
In 2024, Retail and Commercial Banking continued to enhance its
proposition with solutions that help customers transition to a low
carbon economy, most notably in such sectors as real estate,
mobility and agriculture, as well as in the circular economy (water
and waste management). These solutions include sustainability
linked loans (SLL) that complement the products that help
customers align production to the transition.
Managing greenwashing risk is one of the Group’s priorities,
particularly through compliance with operational guidelines for
green finance teams and meeting supervisors’ expectations on
climate matters. ESG certification forums review products and
transactions to validate that they are consistent with the SFICS
before labelling them as green. The SFICS is an automated tool
that we implemented in our core markets to provide traceability of
decisions and supporting documents.
In addition, we created Green Product Inventories in our core
markets where we have implemented standards and established
robust control and approval procedures.
These were the core activities we performed in 2024:
• Santander España launched the “Eficiencia Energética” loan for
owners associations looking to fund building renovations or
boost energy efficiency. This will enable our customers to save
on energy bills while helping the environment.
Moreover, through the new Recovery and Resilience Mechanism
line of credit, we promote and boost access to sustainable
finance mainly for electric vehicles, renewable energy, the
circular economy and social housing development.
• Banco Santander Brasil continue to broaden its sustainable
finance proposition, especially in renewable energy, agriculture
and electric mobility. We worked with Holu Solar to create
Energía Plus, a platform to help retail customers and SMEs
install solar panels.
• We also launched FIT Energía services for retail and SME
customers. FIT Energía is a platform that connects consumers
with producers of renewable energy to encourage the use of
cleaner and cheaper energy.
• Santander Polska continues to help SME and corporate
customers obtain sustainable finance through the “My electric
car” programme and a green loan backed by Bank Gospodarstwa
Krajowego (BGK). We also launched the Santander New Energy
platform, a tool to educate and support SMEs in boosting the
efficiency of their production models.
• Santander UK signed an agreement with Scottish Power to offer
customers solar panels and heat pumps. Moreover, we also
entered into partnership with Octopus Energy to offer customers
discount on solar panels and batteries.
• Santander Portugal joined interbank services association SIBS,
which developed a platform to help SMEs centralize, report on
and share sustainability data, as well as to simplify disclosures
on ESG requirements.
• Santander Argentina launched Tienda GRO, an online
marketplace to help retail customers finance sustainable
products. We also increased the technical and financial solutions
for renewable energy projects available to retail customers
through our partnerships with leading solar energy providers.
• Santander Chile signed its first real estate loan (USD 25 million)
based on the Edge Advanced certificate and under its partnership
with the International Finance Corporation (IFC). The bank
continues to promote these deals to bolster sustainable
development in Chile. We also entered into an agreement with
Tesla to broaden our clean mobility proposition.
• In July, Santander Uruguay and Buquebus announced the
financing of the world’s biggest electric ferry, which will connect
Buenos Aires (Argentina) with Colonia del Sacramento (Uruguay),
through a USD 107 million loan granted by the bank and partially
backed (USD 67 million) by the IFC. This loan saw Santander and
the IFC close the world’s first electric maritime transport deal.
• In October, Banco Santander Perú financed foreign trade deals
worth USD 14 million for Exportadora Frutícola del Sur (Grupo
Athos), a Peru-based company that holds the Global Gap
certificate.
• Santander Colombia was the main lender in Jungheinrich
Colombia’s (German logistics multinational) acquisition of
electric fork-lift trucks. We also signed an agreement with Enel X
to offer our customers solar panel solutions.
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Working with multilateral institutions
Santander continues to work on aligning sales activities with the
objectives and opportunities that multilateral development banks
(MDBs) drive in the countries where the Group operates.
In 2024, Santander España and Portugal took part in a Green
Gateway Advisory Programme coordinated by the Invest EU
Advisory Hub to boost the role of banks in the transition to a low
carbon, resilient economy. The purpose of this programme, which
EIB (European Investment Bank) and PwC advisors lead on, was to
assess Santander's, the EIB’s, and the EIF’s eligibility criteria,
uncover the key trends and opportunities in the sustainable finance
market, and explore core MDB tools that the Group can use to drive
green production among customers.
As part of a synthetic securitization with the EIB, Santander
Portugal agreed a line of credit for residential and commercial real
estate transactions of new buildings with almost zero emissions
and renovation of existing homes according to sustainable
standards. This enables us to offer significant discount on the loan
spread of customers whose transactions meet EIB’ sustainability
standards.
2.2.3 Wealth Management & Insurance
(Wealth)
Most socially responsible investment (SRI) products with ESG
aspects (registered as Article 8 SFDR-Sustainable Finance
Disclosure Regulation) that Santander Asset Management (SAM)
manages have a sustainable investment objective ranging from 1%
to 50%. Some investment products registered as Article 9 have a
100% sustainable investment objective (excluding cash and
derivatives).
As part of our SRI product range, we have thematic funds that focus
on renewable energy (Santander Iberia Renewable Energy), social
objectives (Santander Prosperity), agriculture (Atgro), and climate
(Santander GO Global Environmental Solutions, Santander
Innoenergy Climate, and Santander Sostenible Bonos).
The Santander Sostenible Bonos fund, launched in 2019, was a
trailblazer in Spain for investing in green bonds to finance clean
energy, emissions reduction and other green initiatives. The fund
also invests in social, climate change, environmental and other
sustainable bonds.
In private markets, Santander Alternative Investments (SAI) offers
two solutions to address climate change: Santander Iberia
Renewable Energy, a private equity strategy that invests in solar
and wind energy projects in Spain and Portugal; and Santander
Innoenergy Climate Fund, a venture capital strategy that invests in
climate technology startups that work on renewable energy, smart
grids, energy efficiency, storage systems, green energy batteries,
mobility and the circular economy.
SAM has an advisory mandate for LA Green, a blended finance fund
to boost the SME green bond market in Latin America, mobilize
large-scale capital and make a positive contribution to society and
the environment.
Moreover, SAM’s SRI products include solidarity funds that donate
a portion of their fees to NGOs. In 2024, we boosted our
proposition by making changes to two equity funds: Santander
Sostenible Bonos and Santander Sostenible Renta Fija Ahorro, and
two profiled funds: Santander Sostenible Crecimiento and
Santander Sostenible Evolución a solidarios. These funds donated
to several NGOs to educate young people at risk of exclusion and
help vulnerable women search for jobs, among other causes. Our
Santander Responsabilidad Solidario fund won 'Best solidarity
fund' at the Expansión-Allfunds Awards.
For more details on Socially responsible investment, see section 5. 2
'Responsible investment and social finance'.
2.2.4 Digital Consumer Bank (Consumer)
At Digital Consumer Bank, we have the opportunity to help our
customers in their transition to more sustainable mobility and a
low-carbon economy. Enhancing our sustainable finance
proposition is key to achieving our climate transition targets. We
split this proposition into auto and non-auto.
Auto
Santander Consumer Finance (SCF) is Europe’s leading auto lender.
Our ambition is to boost our sustainable finance proposition while
remaining number one. Our leadership enabled us to support the
green transition with EUR 6.8 billion in finance for electric vehicles
and reach a market share of 12% in Europe, as well as contributing
to the alignment of our auto lending portfolio and 2030 target in
Europe.
EU regulation is carving out the path for the automobile industry to
align through two key measures:
• Emissions targets for manufacturers in relation to new vehicles
sold in a year, with progressive, more restrictive targets for
passenger vehicles of 95gCO2/km in 2020-2024 down to
49.5gCO2/km in 2030-2034. The penalty for a failure to meet
these targets will amount to EUR 95 for each CO2 g/km of excess
per vehicle sold. Most manufacturers in Europe are currently
above this threshold, which could lead to penalties across the
industry or the need to restrict sales of combustion-engine
vehicles, but also establishing commercial policies to encourage
the sale of low-emission vehicles, or the creation of pools with
other brands.
• Prohibition to sell combustion-engine vehicles (unless powered
by e-fuels) from 2035.
In 2024, hybrid vehicles saw the highest growth in sales in Europe,
with an increase in market share of 31.4%. This suggests only a
partial shift in consumers’ mindset towards more sustainable
mobility, with perceived barriers to electric vehicles remaining
(largely due to a lack of charging infrastructure).
For the first time in several years, electric vehicle registrations fell
in Europe in 2024. An end to electric vehicle subsidies in Germany
triggered a 27.4% drop in sales compared to 2023. Markets where
policy measures have been discontinued have seen electric
vehicles become less popular, which once again highlights the link
between the sale of these vehicles and government aid.
SCF continued increasing electric vehicle lending, with a market
share in Europe of 12% (above the total Auto market share off 8%).
This further reflects SCF’s leadership in the electric vehicle market.
In 2024, SCF financed 243,315 vehicles (17% of its total business)
worth EUR 6.8 billion (13% of the total Auto portfolio). Electric
vehicles account for 24% of SCF’s new car business (number of
agreements), which outlines its success in this area.
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This progress has been helped by signing new financing
agreements with electric vehicle manufacturers; and extending
partnerships with traditional manufacturers that have set a
roadmap and strategic plan to electrify their fleet (and who,
therefore, are showing a solid objective to the sustainable mobility
transition).
SCF has also come up with innovative, holistic financing solutions
to aid customers’ energy transition, such as home bundles that
include charging points and solar panels.
We will continue working on building partnerships with new
electric vehicle manufacturers that enter the European market as
well as with startups that show vast potential in terms of new
sustainable mobility ideas such as battery swapping.
Nonetheless, the effectiveness of all these measures in the
medium and long term and SCF’s growth in electric vehicle lending
will depend on external factors that include regulation; the
technological developments needed to reduce production costs
and ensure access to key materials to manufacture green vehicles;
the infrastructure to expand capacity and boost efficiency; and
customer demand and market trends.
Non-auto
On top of Santander Consumer Finance’s leadership in auto
lending, it is also a reference in Europe in other consumer finance
sectors, with prominent partnerships and a presence at over
75,000 points of sale throughout the continent.
This vast footprint requires a strong social and environmental
objective to drive a more sustainable economy. With specific,
measurable actions, SCF is working on a green finance model that
promotes environmentally-friendly projects and products for
responsible consumption.
Our sustainable finance value proposition for the Consumer
business covers these sectors:
• Real estate: Solar panel installation, upgrade to sustainable
home heating and cooling systems, and energy efficient devices.
• Sustainable mobility: Electric vehicle charging points, emission
free vehicles such as bicycles and scooters, and conversions of
combustion engines to less polluting alternatives such as liquid
natural gas and hydrogen.
• Other activities: Sustainable fashion, second-hand clothes, used
mobile phone buybacks and the issue of cards made of
sustainable materials (recycled PVC/PLA) as part of the circular
economy.
Our value proposition is also complemented with financing
programmes for education so that students can access the tools
they need to achieve greater inclusion.
We run other initiatives such as “Hazte ECO” (SCF España) where
we invite customers to join projects to protect the environment
when they use their cards. SCF contributes 1% of purchases to
these projects and makes twice-yearly donations to Fundación
Global Nature to help restore Spain’s wetlands.
The EUR 155 million in green finance disbursed by the Consumer
units in 2024 is a key sign of our objective through this value
proposition.
However, consumers continue to face several obstacles such as:
• Solar panels: A product with a specific shelf life (10-15 years)
requires significant investment and a lengthy repayment plan,
which coupled with more stable electricity prices has caused
customers’ appetite to wane.
• Electric bicycles: Electric bicycles are growing in popularity in
Europe, especially in crowded cities, where they are a practical
alternative to passenger cars. Despite being cheaper than electric
vehicles, these bicycles are expensive and require significant
investment (depending on the model).
The high level of investment that most sustainable initiatives
require government subsidies. Lack of such subsidies and
bureaucratic obstacles to aid has an impact on customer appetite.
2.2.5 Payments
In 2024, 84% of the cards we acquired (39 million) were made
from sustainable materials (recycled PVC/PLA) and we have
continued to make progress in providing 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.
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2.3 Embedding ESG in risk management
ESG factors risk management
Due to our ESG strategy, the scrutiny from stakeholders and the
regulatory, reporting and disclosure requirements, we continue to
work on embedding and monitoring ESG aspects in risk
management. We consider ESG risk factors, especially climate
related and environmental, cross-cutting and likely to have an
impact on credit, market, liquidity, operational, reputational,
strategic risks, among others.
The management of these factors adopts a risk-based approach
prioritizing climate and environmental aspects based on the
relevance and materiality in the Group and in the current
landscape. We keep improving the consideration of the elements
that stem from the transition to a low-carbon economy, the
physical effects of climate change and biodiversity loss, and actions
to consider negative impacts on nature.
Transition risk (TR)
Market sentiment
Changes in the supply and demand of certain
commodities, products and services which are
considered climate risks and opportunities, pose
a reputational risk among other potential issues.
Policy action
Implementing carbon pricing mechanisms to
reduce greenhouse gas emissions; using energy
sources with lower emissions; adopting energy
efficient solutions; and promoting water
efficiency measures and more sustainable land
use practices.
Technology
The need to build and innovate to support the
transition to an energy efficient financial system
with lower CO2 emissions. This can have a
significant impact on companies as new
technology displaces obsolete systems and
disrupts some components of the financial
system as we know it.
We manage social risk based on internal policies and frameworks,
which draw on international principles and sector standards, and it
adapts to the legal framework of the jurisdictions in which we are
present.
Additionally, governance risk is analysed from a dual perspective,
both the internal governance in Grupo Santander and the
assessment of our customers’, considering proportionality and
relevance criteria.
We identify below the typologies of climate and environmental
risks:
Physical risk (PR)
Acute
Intense extreme weather events, such as
wildfires, hurricanes or floods.
Chronic
Changes in rainfall patterns, extreme weather
variability, average temperature rises, severe
heatwaves, droughts and rising sea levels.
Beyond climate
Natural risk
Negative impact of nature degradation (including
its biodiversity and the loss of ecosystem
services) on economies, financial institutions and
financial systems; and/or the lack of alignment of
economic players with actions to protect, restore
and reduce negative impacts on nature.
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We measure the potential impact of the climate and environmental factors of each risk type across several time horizons, based on the
average maturity of the portfolios analysed. The following table shows the potential impacts and our progress against the climate and
environmental matters in 2024, and next steps:
Climate
1 and
Time
environmental
horizon
Potential Impact of climate and
What we’re doing to manage climate
Risk type
drivers
analysed
environmental risk factors
and environmental risk
Next steps
Credit
Present day
- short
medium
long term
→ Extreme weather can lead to higher
retail and corporate loan default and
lower collateral value It can also lead to
lower incomes, harm agriculture, and
increase insurance coverage and
premiums. Moreover, changes in wind
patterns that reduce energy production
can lead to higher operating costs and
hamper productivity. The degradation of
nature can affect productivity in the
agricultural sector and the value of
collaterals. This may increase loans
repayments and early disposal due to
property damage in 'high risk' locations.
→ Adverse weather conditions can cause
significant financial losses, endanger
communities, harm the environment
and affect the value of collaterals.
→ The failure of borrowers to adapt their
business models to a low-carbon
economy could heighten credit risk and,
therefore rise the risk of an income or
activity reduction that may increase
default or lead to a loss of business
value.
→ Market sentiment that influences
demand; obsolete technology; customer
preferences.
→ Higher operating costs for carbon
intensive customers; information
requirements (data gathering),
especially on emissions (e.g. Scope 3)
and green taxonomy disclosures; and
new EU financial information directives
stemming from government measures.
→ Conducting materiality assessments to
identify physical and transition risk in
our portfolios.
→ Monitoring of climate concentration
risks by sector and region in the short-,
medium- and long-term.
→ Creating vulnerability heatmaps for the
analysis of climate risks in the present
day, short, medium and long term via
Orderly, Disorderly and Hot House
World scenario analyses.
→ Implementing mitigation measures
such as policies, thresholds and
insurance to combat risks and their
impact.
→ Conducting scenario analyses and
measuring sensitivities to forecast
changes in ratings, the probability of
default (PD) and loss given default
(LGD) considering physical and
transition risk.
→ Monitoring portfolios through metrics
to control E&CC
2 risk factors in BAU
processes.
→ Measuring E&CC factors across
customer and transaction analysis and
embed into ratings.
→ Monitoring risk appetite limits and
alerts to manage climate-related
sectors.
→ Monitor the progress
of the subsidiaries
against The Climate
Race (our credit risk
target operating
model for climate and
environmental
factors) to validate
the successful
inclusion of E&CC
factors across the end
to end credit risk
cycle, to allow the
identification and
mitigation physical
and transition risk.
→ Calculate financial
impacts through
internal climate
models for the short,
medium and long
term.
→ Continue to develop
and enhance tools to
monitor E&CC factors
that consider physical
and transition risk in
each segment.
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Climate
1 and
Time
environmental
horizon
Potential Impact of climate and
What we’re doing to manage climate
Risk type
drivers
analysed
environmental risk factors
and environmental risk
Next steps
Market
Short term
→ High volatility in market factors under
stress scenarios.
→Changes in market perception leading
to wider credit spreads for business in
impacted sectors.
→Extreme weather conditions could raise
concerns about the business plans of
companies operating in the impacted
sectors and widen their credit spreads.
Liquidity
Short term
→ Market impacts on the value of high
quality liquid assets in Santander's
liquidity buffer.
→More frequent extreme weather that
stifles economic growth in countries
susceptible to climate change, causing
sovereign debt to rise and limiting
access to capital markets.
→Cash outflows from companies trying to
boost their reputation in the market or
solve problems with climate scenarios.
→Extreme weather conditions could cause
financial impact on companies
operating in the affected sectors
impacting the funds deposited in the
bank.
Operational
Short
medium
long term
→Severe climate events can cause
damage to our assets, including
branches, data centers, headquarters
and other owned or rented properties.
Impacts on our own or our suppliers’
premises can also affect business
continuity.
→ Climate and environmental - related
factors can also lead to operational risk
losses from litigation, claims due to
inadequate sales or non-compliance
with ESG standards.
→ Regular reviews of climate stress
scenarios and the subsidiaries that
apply them.
→ Stress testing using physical and
transition risk scenarios.
→ Trading portfolio analysis of current
exposure to climate-sensitive business
activities.
→Enhance stress testing
by reviewing new
scenarios to include in
the exercise.
→Adapt stress testing to
market practices.
→Qualitative and quantitative climate
scenario analyses of impacts on highly
liquid assets (HQLAs) and financing of
exposed companies.
→Analysis of higher outflows due to
changes in market perception of
corporations in climate-sensitive
business activities.
→Conducting operational risk and self
assessment controls that include ESG
related risks to evaluate our exposure.
→Conducting mandatory operational risk
scenario analysis that cover extreme
physical and transition risk events.
→Including an ESG flag in the operational
risk events database to identify events
and losses from climate-related and
environmental risks.
→Including an assessment of climate
threats in business continuity
scenarios.
→Conducting a materiality assessment
on climate-related operational risk.
→Updating documentation and
delivering training relating to the
embedding of ESG factors across
operational risk management, as well
as sharing best practices throughout
the Group.
→Enhance stress testing
and reviewing new
scenarios to include
them in the exercise.
→Adapt stress testing to
best market practices,
including new
liquidity scenarios to
measure their impact.
→Enhance operational
risk reporting on
climate and
environmental
related factors.
→Promote cooperation
within the industry to
share data, scenarios
and best practices on
climate-related
operational risk
management.
→Work with the
Corporate Insurance
team to conduct
analyses on the
insurability of
climate-related
losses.
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Climate
1 and
Time
environmental
horizon
Potential Impact of climate and
What we’re doing to manage climate
Risk type
drivers
analysed
environmental risk factors
and environmental risk
Next steps
Reputational
Short
medium
long term
→Customers, investors and other
stakeholders could believe that banks
aren't doing enough to meet low
carbon targets, that they could be acting
against their policies, or that their
objectives do not meet stakeholders’
expectations.
→Stakeholders’ potential perception of
inadequate financing and investment in
climate and environment-related
sectors, including activities linked to
deforestation and/or biodiversity loss.
→ Possible misinterpretation by
customers, investors and other
stakeholders of institutional disclosures
or statements, actions, announcements,
policies and the sustainability features
of products.
→ Implementing preventative measures
to manage reputational risk and
disclose risk data so that governance
bodies can make informed decisions
when assessing or sanctioning
sensitive transactions that involve
climate and environmental risk.
→ Regularly monitoring reputational
issues and disputes (including climate
and environmental matters) via
working groups, involving functions
such as legal, sustainability, investor
relations, public policy, supervisory
and regulatory affairs, risk, among
others.
→ Development and update of
greenwashing risk management
guides that define the roles and
responsibilities of key processes, and
subsequently set specific training
programmes.
→ Enhancing materiality assessments to
measure climate-related and
environmental reputational risk.
Developing a methodology to quantify
the reputational impact of climate and
environmental risk.
→ Continue to
strengthen
collaboration
between business and
support areas as well
as risk and
compliance functions
to embed climate and
environment-related
reputational risk in
our operations.
→Continue bolstering
greenwashing risk
prevention,
identification,
management and
control.
→ Continue managing
ESG events that pose
material reputational
risk and anticipate
these events through
early detection
measures.
Strategic
Short -
→Our strategy could be affected if we fail
medium -
to achieve our climate and
long term
environmental targets, including those
related to the activities we fund and
those related to our own operations.
→Regulatory divergence between climate
change and ESG requirements in the
markets where we operate, including a
possible new regulatory cycle and
slowdown in the implementation of the
Paris agreement.
1. Though all climate drivers impact on risk factors, we have only included the key ones in this table.
2. E&CC: environmental and climate change.
→Challenging ESG targets in the Group’s
strategic planning.
→Monitoring the Group’s ESG indicators
regularly.
→Monitoring ESG indicators as part of
our regular competitor analysis.
→Identification of emerging ESG risks,
including analysis of the potential
impact under stressed scenarios on the
Group’s strategic targets so that action
plans can be implemented in the event
such risks materialize.
→Monitoring of ESG aspects in initiatives
presented at the corporate product
governance forum (CPGF) and
investors’ forum.
→Regularly review ESG
indicators to support
alignment with the
Group’s strategy.
→Monitoring of Key
Performance
Indicators (KPIs)
related to Business
Model Performance.
→Monitor climate and
environmental threats
as part of emerging
risk identification.
Chronic
Acute
Market sentiment
Policy action
Technology
Natural risk
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Risk management in SAM
SAM considers that climate-related factors can pose risks
and opportunities for companies and have an impact on
the long-term risk and return profile of investment
portfolios. By analysing climate risk, we can better
understand the assets we invest in, identify the issuers
best positioned to overcome future challenges, seize new
opportunities and create value for businesses and
broader society.
The climate-related risks that SAM’s ESG analysis model
considers are:
• regulatory risks related to greenhouse gas (GHG)
emissions, such as higher prices;
• the risk of new, more efficient low-carbon technology
alternatives that may render existing technologies
obsolete; and
• market risks stemming from increased costs and
shifting consumer demand, which could result in
stranded assets; higher operating costs; lower demand
for products and services; and the higher cost of, and
limited access to, capital.
2.3.1 Resilience of our strategy and business
model to climate change
Managing climate and environmental risk factors is key to continue
strengthening the resilience of the Group's strategy and business
model for climate change.
To enhance such resilience, we embed climate and environmental
risk factors in each stage of the risk management cycle through
which we analyse our own facilities and customer's financing
process. The risks derived from these factors is also included in our
policies, procedures, tools, metrics, governance and culture.
Embedding climate and environmental factors in our risk
management includes the identification, planning, assessment,
monitoring, mitigation and reporting, across different climate
scenarios and time horizons defined, see further detail in the next
section.
Additionally, the risk function works to strengthen our strategy via
the following processes:
• We carry out an analysis and challenge of the strategic plan (Risk
Challenge) to identify potential threats that may compromise the
achievement of the Group's objectives.
• We have a risk management control model to identify, assess,
mitigate, monitor and report all material risks, including ESG,
that could materialize and affect our strategy and/or business
model.
• Santander regularly conducts an emerging risks exercise to
identify key threats to our strategic plan under theoretical stress
scenarios with low likelihood of occurrence.
In this sense, we aim to identify, assess and monitor physical,
transition and regulatory risks that may have an impact on our
business model, profitability or solvency, improving the resilience
of our strategy.
The monitoring of the material issues related to the ESG risks
identified in the described processes, as well as the main lines of
action for their management, are periodically reviewed through the
corresponding risk governance bodies which participate in the
definition of the business model and the Group's strategy in this
matter.
Santander understands how climate-related and environmental
risks affect our business environment across the short, medium
and long term to inform their business strategy process. The way
that we strategically respond to changes and uncertainties in our
business environment stemming from climate-related and
environmental risks will impact the resilience of the business
model over time. We are explicitly considering climate-related and
environmental changes in macroeconomic and regulatory
environment and the competitive landscape, in particular, and
reflected in Santander’s business strategy processes, and
demonstrated by documented management body meetings and
discussions.
2.3.2 Risk management cycle
At Grupo Santander, we manage climate and environmental
factors with a special focus on those that are most material for the
different risk types.
Below we describe how we integrate these factors into the risk
management cycle.
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Identification of ESG drivers: we use recognized
sources including but not limited to: TCFD
A, UNEP
FI, ENCORE
B, SBTN
C, NGFS
D , to identify climate
and environmental aspects that can impact
several risk types. We also use several tools for
this exercise, including heatmaps, sectoral
climate and environmental classification,
historical information, idiosyncratic scenarios and
forward-looking scenario projection to aid
continuous monitoring.
Assessment of the materiality of the potential
impact on the main risks: in this stage, we
analyse the potential impacts that could arise
from the materialization of the risk factors
previously identified through the transmission
channels described, based on qualitative and/or
quantitative approaches.
A. Task Force on Climate-related Financial Disclosures.
Analysis of the transmission channels: we
analyse how the factors identified in the previous
stage can materialize and impact on the risk
types included in our risk management
framework. They can be macroeconomic (e.g.
socioeconomic, productive) and microeconomic
(e.g. affecting household wealth and/or income)
in nature.
Overview of a consolidated materiality: for
internal and external disclosure of the materiality
of ESG factors analysed, we aggregate the results
of the impacts for each risk type in a consolidated
report (detailed on the following pages), based
on a five-point RAG
E status (from Low to Very
High) across the short, medium, and long term.
B. A materiality database of dependencies between production processes and ecosystem services.
C. Science Based Targets Network.
D. Network for Greening the Financial System.
E. Red, amber and green.
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1. Identification
We conduct regular risk identification exercises to assess events
that could threaten the Group's strategic plan. These exercises
consider ESG risk factors — including mainly climate factors —
with additional consideration of other factors such as
greenwashing, environmental risks that go beyond climate (nature
and biodiversity), social risks, among others.
Risk identification helps us understand the internal and external
threats posed by the environment and climate change to our
business model, profitability, solvency and strategy.
Moreover, our internal risk taxonomy, heatmaps and materiality
assessments form the basis for identifying and classifying the
material environmental and climate-related risks in our portfolios.
2. Planning
We include risk management into the strategic planning process
that has different time horizons, in addition to the ad-hoc analysis
at each moment:
• One year for the short term (this is the standard time horizon for
the short term in the Group).
• One to five years for the medium term (financial planning).
• More than five years for the long term (strategic plan).
3. Assessment
We consider ESG aspects as factors that may impact existing risks
across different time horizons. We assess these factors regularly
according to regulatory frameworks and practices.
The assessment of the ESG factors that could be material due to
their potential impact on Santander's risk profile is conducted
considering the following aspects:
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The following table shows the consolidated results of the materiality
assessment by risk type and time horizon as of year-end 2024:
Transition Risk
Physical Risk
ST
MT
LT
ST
MT
LT
Credit risk
A
CIB
l
l
l
l
l
l
Corporate & SME
l
l
l
l
l
l
Individuals
l
l
l
l
l
l
Auto Consumer
l
l
l
l
l
l
Operational risk
B
l
l
l
l
l
l
Market risk
l
l
l
l
l
l
Liquidity risk
l
l
l
l
l
l
Reputational risk
l
l
l
l
l
l
l Low l Moderately low l Medium l High l Very high
Short term (ST): 2025 | Medium term (MT): >2030 | Long term (LT): >2050
A. Assessment as of September 2024.
B. Assessment as of November 2024
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In 2024, we continued to develop and enhance our materiality
assessment approach in order to strengthen the resilience of our
strategy. We have incorporated regulatory aspects, industry best
practices, further homogenization, and synergy among different
risk types in terms of sources, thresholds and scenarios.
The above table shows the final outcome of several procedures by
risk type. These procedures use various tools and methodologies to
assess the potential impact of climate factors. We use the above
mentioned risk factor materiality assessment to underpin climate
risk identification and assessment as part of our double materiality
procedure.
For more details, see section 1.3. 'Materiality Assessment'.
The materiality assessment's rationale for each risk type is as
follows:
→3.1 Credit risk:
We conduct a materiality assessment every quarter to identify,
assess and monitor the Group’s climate-related and
environmental credit risks by sector and geography. This
assessment involves a review of the present day and other time
horizons based on climate scenarios.
We use in-house scenario analysis techniques and climate stress
test models to calculate and monitor climate impacts on key
credit risk metrics, such as the probability of default (PD) and
loss given default (LGD), across several time horizons, scenarios
and at all geography, sector and unit levels.
We complete this assessment with three further initiatives,
among others:
a. Customer assessment for the corporate portfolios that
analyze the key aspects of transition, physical, social and
environmental risk. This assessment is conducted locally.
b. Deep dives into key portfolios such as the collaterals in real
estate and auto loans.
c. Geographical assessment of physical risk (acute and chronic)
that uses information from expert models across different
scenarios and time horizons.
The findings of our materiality assessments are key to defining
our strategy, risk appetite, the identification of emerging risks
and even for other stress test exercises (such as the ICAAP-
Capital adequacy assessment process).
Materiality assessment enhancements in 2024
In 2024, we enhanced our credit materiality assessment to
reflect the latest industry and regulatory developments by:
a. Enhancing geographic granularity of physical risk (acute and
chronic) information in our European portfolio, from
Nomenclature of territorial units for statistics at level 3
(NUTS3) to postcode in our core markets of Poland, Portugal,
Spain and the United Kingdom;
b. The development of a new real estate module in Klima tool,
which includes physical and transition risks;
c. Improved how we manage and assess collateral through the
efficiency performance certificates (EPC) by obtaining data,
developing estimation models and drawing up plans to
gather such information during customer onboarding
processes.
d. Implemented concentration metrics to monitor physical and
transition risk management in our subsidiaries; and
e. Used internal climate stress test models (included in the
ICAAP) to calculate financial impacts (customer 'bottom-up'
approach for the CIB portfolio and 'top-down' approach at
sector and geography level for the rest of the portfolios).
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Klima
We run our materiality assessments through our ESCC Credit Risk
Management tool Klima, where we aggregate, manage and
monitor ESCC risks at local and Group level, with focus by sector
and geography. It also includes an analysis of the physical risks of
several economic activities and collateral.
We continue to work on enhancing climate information,
methodologies and use cases:
1. Climate materiality:
Though the findings by sector of our 2024 credit risk materiality
assessment (see table below) follow a similar pattern to 2023,
transition risk exposure in CIB to most vulnerable sectors
decrease slightly. On the other hand, our portfolios continue to
show less vulnerability to physical risk, given the concentration
in low-risk locations.
Materiality assessment -
Climate risk analysis and portfolio heatmap
September 2024 (pre-mitigation) - EUR billion
Other
TR
PR
CIB
segments
2. Vulnerability heatmaps
We analyze materiality assessment findings through heatmaps
that show our vulnerability to climate risk. These heatmaps rate
climate risks on a scale from 1 to 5 (low to very high).
These heatmaps are based on the present day and on scenario
analysis methods and models that complement our qualitative
methodology and provide a forward-looking and geography-based
analysis of portfolios across the medium and long term,
considering impacts based on their probability, relevance and
duration. Although we illustrate these in the table below according
to the statistical classification of economic activities in the
European Community at level 1 (NACE 1, from the French
'Nomenclature statistique des Activites economiques dans la
Communaute Europeenne'-Statistical classification of economic
activities in the European Community) breakdown, our sector
analysis in risk management goes up to NACE level 4 to monitor
the composition of our portfolios, capturing most of our value
chain.
Power (conventional)
26
2
Power (renewables)
13
0
Oil & Gas
20
1
Mining y metals
13
7
Transport
29
12
Auto Consumer
0
162
Real Estate
7
386
Other climate-
related sectors
Agriculture
3
9
Construction
18
15
Manufacturing
44
25
Water & Waste
3
1
Climate sectors
175
621
Other sectors
65
212
Total portfolio
241
833
• Low • Moderately Low • Medium • High • Very High
TR: transition risk. PR: physical risk.
CIB: REC (on and off-balance sheet lending + guarantees + derivatives PFE:
Potential Future Exposure).
Other segments: Drawn amount; includes individuals, SCF, Auto US, Corporates
and Institutions, and SMEs.
Other sectors: considered as low risk; include: CIB, Corporate and SMEs outside
the risk taxonomy perimeter // Individuals and SCF: cards and other consumer
credit // Private Banking (excl. mortgages).
Exposure 0 represents exposure below EUR 500 million.
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Transition Risk
Physical Risk
Current
Orderly
Disorderly
Current
Hot House World
2030
2040
2050
2030
2040
2050
2030
2040
2050
Oil & Gas
Mining & Metals
Power (Conventional)
Power (Renewables)
Transport
Auto Consumer
Agriculture
Manufacturing
Water & Waste
Construction
Real Estate
Risk level: ¢ Very high ¢ High
¢ Medium
¢ Moderately low
¢ Low
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3. Internal climate models
Detailed below is an overview of our internal climate model:
Our climate internal models enable us to quantify the financial
impact
4 of transition and physical risks that we monitor through
changes in PD and LGD metrics. Our model estimates the direct
and indirect impact of macroeconomic and climate variables,
market trends and regulatory expectations. This model takes a
bottom-up approach by considering each client's financial situation
and technology. Where we don’t have specific customer
information, we use a top-down approach by sector and
geographical location.
The development of internal models allows us a high degree of
flexibility and capacity for analysis and adaptation to our portfolios,
including its characteristics and maturities, to new economic and
regulatory requirements. The main features are briefly described
below:
A. Scenarios are based on those published by the NGFS
5 and
Representative Concentration Pathways (RCP), developed by
the Intergovernmental Panel on Climate Change (IPCC), which
are references in the sector. Moreover, our Research
department embeds and broadens external scenarios to more
specific variables by country and sector to achieve thorough
vision aligned to our portfolios.
4 According to Note 54 "Risk Management": Based on internal models and results from regulatory and supervisory climate stress exercises, the Group does not believe that
additional environmental or climate change risk has had a substantial impact on its equity, financial situation and results in 2024
5 NGFS scenarios provide the common and up-to-date reference point for understanding the evolution of climate risks and trends in climate policy and technologies over
different time horizons. For this reason, they are used as a basis for showing impacts on our portfolios by calculating a range of outcomes.
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B. Physical risk impact considers the financial impact of acute and
chronic risks, as well as long-term changes in weather patterns
to give us a wide range of events that we assess at regional
level. For these financial impacts, we use data from an expert
reinsurance company, considering scenarios across different
time horizons. We include physical risk impact through:
- Chronic: Impact on companies' revenue due to chronic
physical effects (e.g. change in productivity).
- Acute: Increase in costs due to damages to companies' assets
from extreme weather events.
C. The impact of transition risk, relates to changes in drivers such
as climate policies, technology and investor and consumer
NGFS scenarios
Physical and transition risks
Orderly, assumes ambitious climate policies implemented
early, which gradually become stricter. Therefore, both
physical and transition risks are relatively moderate.
Disorderly, climate policies are not introduced until 2030
and may differ between countries and sectors..
Hot house world (current policies), it is considering that
some climate policies are implemented in some
jurisdictions, but that global efforts are insufficient to stop
significant global warming. Serious physical risks and
irreversible changes, including rising sea levels.
4. Customer assessment
For corporate customers within climate sectors according to our
risk taxonomy, the materiality assessment is complemented with
analysis performed at local level that considers key physical,
transition, social and environmental aspects.
We consider their findings in loan approvals and customer rating
procedures.
Challenges and next steps:
Santander continues to work on embedding ESCC factors in our
processes by upgrading our data, estimations, tools and models. In
particular:
i.
Implementing models to assess the impact of climate on credit
risk metrics (PD and LGD) by using scenario analyses and
models, and including customers' ESCC assessments in
corporate portfolios ratings.
ii. Localizing CIB customers’ production sites to obtain more
accurate results in physical risk assessments.
iii. Calculating financial impacts across the short, medium and long
term through the climate stress test models already included in
the ICAAP.
sentiment that can affect demand, which affects customers on
an individual basis. Therefore, depending on the level of
information available, we carry out a bottom-up or top-down
approach.
D. Counterparty forecasts, which reflect the changes in the
financial ratios included in the credit risk rating models and are
based on forecasted revenues and costs under the different
scenarios, including physical and transition risk impacts. The
projected ratings give us the associated PD to the counterparty.
Lastly, the LGD is estimated using the Frye-Jacobs relationship
between PD and LGD.
RCP climate scenarios
Physical risk
RCP 2.6: stringent mitigation scenario with the aim to keep
global warming below 2ºC. This is associated with orderly
scenarios.
RCP 4.5: intermediate scenario where emissions reach
their peak in 2040 and then decrease. This is associated
with disorderly scenarios.
RCP 8.5: very high GHG emissions. It is a business as usual
scenario where emissions keep increasing throughout the
whole century. This is associated with Hot house world
scenarios.
Auto consumer
We conduct an in-depth analysis of this portfolio given the
weighting of the Consumer Auto in Santander's portfolio and its
specific characteristics and regulations. We consider key risk
factors such as products evolution, residual value risk, portfolio
average maturity, shifts in market sentiment and technology
developments adapted to different markets. Moreover, we
review other characteristics such as product type, borrowers'
credit risk profile, engine type (internal combustion engine,
hybrid or electric vehicle).
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Physical risk
To assess physical risk by geographical location, we work with a
leading provider in the reinsurance industry, which enables us to
measure the risk of 13 physical hazards (eight acute and five
chronic). We analyse the markets where we operate, with a
breakdown of over 1,250 regions (NUTS 3 or equivalent), and
cover all economic activities in our Risk Taxonomy, as well as the
business lines (such as mortgages and automobiles).
We assess each region (NUTS3) to measure the associated
physical risks by rating them on our five-point RAG (Red, Amber
and Green) scale (low to very high).
To assess the frequency and intensity of natural hazards, we use
RCP scenarios across different time horizons (present day, 2030,
2040, 2050 and 2100).
Our analysis, based on a conservative approach, uses RCP 4.5
scenario and time horizons of 2030 for economic activity sectors
and 2050 for collaterals at Group level. The results are included in
our materiality assessment at Group level, by region (Europe,
North America and South America) and by subsidiary. The results
show that while certain sectors are more exposed to physical risks,
such as agriculture, conventional energy and mining, their
concentration in the Group is very low (between 1% and 2%). The
collateralized portfolios have the lowest impact, albeit with very
high concentration of exposure in the Group.
The granular, forward-looking physical risk assessment enables us
to actively manage these risks through monitoring, metrics and
mitigation measures.
Finally, to measure and quantify physical risks more accurately,
we increased the granularity of physical risks for the European
portfolio (Poland, Portugal, Spain and the UK, as we now have
information at postcode level).
Real estate
Santander’s real estate portfolio accounts for a large proportion of
Santander's balance sheet, which is why we developed a specific
module within the Klima tool with a detailed overview of the
portfolio’s transition and physical risk.
Regarding transition risk, we increased the quality and quantity of
EPC data by obtaining information, developing estimation models
and defining plans to gather information during the customer
onboarding process. This internal model consists of a machine
learning algorithm that applies a combination of variables related
to the real estate guarantee (type of property, geographic
location, etc.), learning from observations made from actual data
available. These enhancements give our analysis a broader scope,
covering the corporate and retail segments.
This chart shows the EPC coverage of our balance sheet and
distribution of actual and estimated EPC labels based on the
standards and regulation in each market where this information
exists:
Residential and commercial real estate EPC data (December
2024):
Actual EPC
51%
Estimated EPC
22%
No data
27%
Distribution of exposure to residential and commercial real
estate portfolios by EPC (December 2024):
Distribution based on Portfolio with EPC information. (RAG according EPC Standards)
We made considerable progress with physical risk through a
review of acute and chronic risks in several scenarios and time
horizons, broken down geographically at NUTS3 level. Considering
a forward-looking view across different time horizons, the
percentage of exposure to high and very high physical risks is not
material compared to our total portfolio.
Nonetheless, we continue working on conducting a more granular
assessment in Europe, where portfolio concentration is higher.
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→ 3.2 Operational risk:
We assess the potential impact of physical risk through a
combination of specific location-based risk scores, data on the
bank’s own facilities and insurance, and internal scenario
analysis for certain physical risks. We assess the potential impact
of transition risk through operational risk tools and external ESG
related events.
We assess physical risk as low in the short term and moderately
low in the medium and long term, mainly due to exposure to
more frequent and severe weather events in the regions where
we operate.
For transition risk exposure, the most affected time horizon is the
medium term, owing to legal and compliance risk arising from
adaptation to new regulation in each jurisdiction, an increase in
the number of greenwashing-related sanctions, an increase in
the volume of green business, and greater awareness of climate
change among external stakeholders.
→ 3.3 Market risk:
To assess the potential impact of climate factors, we conduct
regular analysis of our trading portfolios to identify the
materiality of positions with potential exposure to market risk
climate factors. We then compare the findings from climate
stress scenarios (both physical and transition risk) to those from
internal, stressed and budget scenarios. This analysis concludes
that the materiality is low or moderately low depending on the
time horizon, due to the low exposure to climate sensitive
sectors both in the bond and equity portfolios.
→ 3.4 Liquidity risk:
To assess the potential impact of climate factors, Santander
compares the findings of climate stress scenarios with liquidity
stress scenarios. We have a suite of physical and transition risk
scenarios (disorderly transition scenarios, extreme climate
events, historical events, etc.) whose impacts on liquidity are
well below current internal and regulatory stresses due to their
limited effect on high quality liquid assets (HQLA) and stable
retail deposits.
→ 3.5 Reputational risk:
We conducted a reputational risk materiality assessment in 2023
(and updated it in 2024) to assess the potential impact on
reputation of the key climate-related and environmental levers
across the short, medium and long term under several scenarios.
As with our strategy, policies and management models, we
consider the environment collectively. Thus, the materiality
assessment includes identifying and assessing climate change
and other environmental impacts.
The assessment is a complex procedure that considers several
sources of information and criteria across these phases: i)
definition of reputational risk levers related to physical and
transition risk; ii) assessment of risks by country and by portfolio
exposure in sensitive sectors; iii) climate scenarios according to
the Network for Greening the Financial System (NGFS); and iv)
time horizons (short, medium and long term).
The reputational risk materiality assessment findings show that
transition risks would have a greater reputational impact than
physical risks, as transition risks tend to relate more to
stakeholder scrutiny over time, which are the main grounds for
reputational risk exposure.
It is our aim to have clear climate and environmental risk
objectives, policies and procedures, and solid governance to
manage them correctly. Even if extreme climate events occur,
and based on the experience of several of them recently, from a
reputational risk management standpoint, we believed that
Santander has demonstrated its strength and robustness in this
regard and its ability to react to a given event.
In 2024, we updated our reputational risk materiality
assessment approach based on official reports and studies from
recognized organizations. Additionally, we have continued
working on further homogenization and synergy between risks
in terms of information sources, thresholds, scenarios and
others.
4. Monitoring
In addition to the processes described above, we carry out a
continuous monitoring of ESG aspects based on:
• At Grupo Santander, we constantly monitor the risk profile and
our compliance with risk appetite limits through control
functions that report to the board.
Since 2021, we have been enhancing our risk appetite
statement with quantitative metrics for thermal coal and
mining and power related customers.
In 2024, we implemented the metrics approved in 2023 for oil
and gas, steel, and aviation. We also approved two new
metrics, one for the automotive sector and the other for
Santander Consumer Finance's Auto business which will be
implemented in 2025.
• We are in permanent contact with our customers to monitor
and support their transition plans. We continue to embed ESG
risk factors in credit risk granting and monitor processes
through our target operating model, The Climate Race.
This model is supported by the following pillars: strategic
planning, risk management, loan approval and tracking,
models and systems, and culture and governance. The timeline
to implement was defined for 2023 and 2024 considering the
supervisory expectations and Group's strategy. During 2025,
we will continue with a more granular implementation.
• Our ESG Regulatory Radar enables us to monitor updates to
ESG and other regulatory frameworks, as well as the potential
efforts and financial impacts that the implementation of these
changes may entail.
• Moreover, the Risk, Compliance & Conduct function monitors
ESG initiatives (including acquisitions and divestitures)
presented to the investment forum — whose delegated
authorities come from the board executive committee —, as
well as from the corporate product governance forum (CPGF).
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• During 2024, we continued working on our Climate Community
as an additional lever for a proper integration of ESCC risk
factors in the Group in a collaborative manner. This community
keeps the units up to date, shares best practice, sets guidelines
to support homogeneous implementation and provides a clear
governance structure and allocation of responsibilities. For
more details, see the following chart:
5. Mitigation
We have various internal policies and frameworks that integrate
climate and environmental factors into our risk management
processes. These elements are key to mitigating and adapting
climatic and environmental factors.
Our ESCC risk management policy establishes the standards for
investing, and providing financial products and services to
companies and customers in oil & gas, power generation and
distribution, mining and metals, and soft commodities (especially
retail customers dedicated to farming and ranching in the
Amazon). It dictates prohibited activities and those that require
special attention for the aforementioned sectors
6.
Our credit granting policies consider climate and environmental
factors such as, among others, our internal taxonomy (SFICS),
credit committees conclusions, corporate clients' ratings and
collateral management.
To mitigate the risk of greenwashing, we reviewed key processes
and responsibilities to facilitate the appropriate development,
management and disclosure of our sustainability strategy,
products and practices, while monitoring regulatory developments
in this area.
We also mitigate this type of risk through client engagement for
the most material sectors according to the climate materiality
assessment.
This enables us to support customers in their transition to a more
sustainable economy, offering them tailor-made solutions and
generating business opportunities. Engaging with customers gives
us access to data on ESG risk that we can use for internal risk
management and reporting. Obtaining and cross-checking data
directly from our customers is one way to mitigate ESG risks,
including greenwashing.
Additionally, we consider ESG aspects in customer assessments to
determine whether they have an impact on credit quality.
We launched several projects so that credit analysts have all the
information and tools necessary to perform this assessment.
• Sector guidelines are followed to identify the major transition
and physical risks each sub-sector is exposed to and how to
pinpoint them in customer engagement. We delivered training
sessions in several markets to build on these guidelines.
• ESG assessment guidelines with different levels of detail
depending on the risk. In some instances, we conduct an
automated assessment at different levels for physical,
transitional and reputational risk, with higher risk levels
undergoing a more comprehensive and contextual assessment in
material cases. We’re implementing this assessment model for
our retail banking portfolio across several markets.
• Survey library (EQAL
7): we developed a global tool to customize
and store our numerous ESG surveys and assist in their
identification and review. This will enable us to compile
historical ESG data and conduct more aggregated analysis based
on wider criteria. EQAL is now operational in Portugal and is
currently being implemented in Spain. For Brazil, the system will
be customized to replace the existing tool currently in use in the
country.
Lastly, we continue working on other mitigation levers:
i. Credit committees, which embed environmental, social and
climate change factors in transaction reviews.
6 To the extent required by applicable law, customers and transactions involving activities enumerated in this section will be subject to an enhanced due diligence process to
determine the unique risks presented prior to decisioning.
7 EQAL: ESCC Questionnaires & Assessments Library.
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ii. CIB customer ratings, including qualitative environmental,
social and climate change assessments for material sectors.
iii. Special prices for certain products.
iv. Collateral management (EPC), based on enhanced data
acquisition, estimation model development, and information
collection during the customer onboarding process.
v. Specific procedures to analyse environmental, social and
climate change risk. The board and its committees verify that
decisions are made according to our ESCC and reputational risk
policies. The first line of defence conducts a due diligence with
special sector-based questionnaires for credit approval. The
reputational risk assessment also forms part of decision
making contributing to compliance and preventing from risk of
false accusations (with particular focus on greenwashing). The
due diligence consists of assessing the CIB's project finance
transactions according to the Equator Principles.
vi. Lastly, we have a multidisciplinary working group, where,
among others, ESG issues are considered. This group is
coordinated by the reputational risk function and discusses
actions needed to mitigate any matter that may have a
reputational impact.
ESG classification meetings
Throughout 2024, we worked on extending our
sustainable operations identification model to all global
businesses, amending existing processes accordingly.
We created local and global commercialization
committees and ran ESG classification meetings as the
governance bodies tasked, analysing and monitoring
products and transactions with an ESG component,
ensuring that these bodies have experts to interpret and
demonstrate ESG standards through centers of excellence
as well as seeking input from business, risk and
sustainability teams.
We began working to implement the updated sustainable
classification model by identifying the affected processes
and the changes to be made across markets.
Main activities in 2024
→ Advances in risk appetite, establishing new metrics and limits to
support our strategy.
→ Development of internal climate models that enable us to
enhance how we quantify the financial impact of transition and
physical risks on credit risk variables.
→ Increased geographical granularity in physical risk information
(acute and chronic) for the European portfolio, from NUTS3 to
postcode in Spain, Portugal, UK and Poland.
→ Improvements on how we manage and assess collateral
through the EPC by obtaining data, developing estimation
models and development plans to gather information.
6. Reporting
Transparent and regular reports to senior managers and
stakeholders help us manage climate and environmental factors
and comply with the law and supervisors’ expectations.
We work so that the information available to our stakeholders is
complete and consistent, conveys adequately Santander's
sustainability strategy and management, and mitigates potential
risks.
Our reporting on climate and environmental risk management
includes our Annual Report, the ICAAP exercise, and our Pillar 3
disclosures report.
→ In order to mitigate the risk of greenwashing, we have reviewed
the most relevant processes and responsibilities to validate the
correct definition, management and disclosure of our strategy,
products and practices.
→ Progress in the implementation of the climate risk management
model through the Climate Race initiative to integrate ESCC
factors into the credit risk granting process.
→ Advances in materiality assessments in terms of biodiversity
through an internal methodology to assess both nature-related
impacts and its dependencies.
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2.3.3 Reputational risk
This section outlines how we manage this IRO, considered a
climate-related transition risk:
Reputational risk based on the perception of bank
R
progress with climate-related policies and objectives.
Banco Santander manages reputational risk through the
Reputational Risk Model, which sets out the principles to identify,
manage, prevent and control reputational risk in every procedure,
including related ESG factors.
We conduct the reputational risk impact assessment through key
ESG procedures. These include setting objectives; taking part in
2.3.4 Potential financial effects
To cover the CSRD requirements related to financial effects (E1-9),
in this report we include information of the exposure affected by
material physical risks. Since this is a phased-in requirement, we
will expand the information in the next reports to provide full
coverage of the Regulation.
To comply with the requirements, we use the information
disclosed in the Pillar 3 ESG report according to the 'Implementing
Technical Standards on prudential disclosures on ESG risks' defined
by the EBA (European Banking Authority).
This report covers information of the banking book portfolio,
including loans and advances, debt securities and equity
instruments. The Group guarantees that the information included
is aligned with other reports (mainly accounting reports).
Physical risk:
We report below our exposures sensitive to impacts from relevant
acute and chronic physical risks (collateralized and non
collateralized).
To assess the physical risk of our portfolio, we sourced information
from an external provider on acute and chronic physical risks to
cover over 1,250 regions in our core markets.
To assess the physical risk of our portfolio, we implement the
methodology of our external provider.
Based on the information provided, we make the following
assumptions to determine the Group’s sensitive exposures to the
impact of physical risk:
i.
An activity in a region is considered as sensitive to the impact of
physical risk when at least one hazard is assessed as 4 or higher
on the scale provided.
ESG working groups and governance bodies, the structuring of
transactions that may be ESG sensitive and in reporting.
To evaluate the performance and effectiveness of these actions,
Banco Santander has implemented a metric
8 based on the number
of very high-impact reputational risk events that have materialized
and have affected various interested parties.
To manage this risk, across short, medium and long term horizons,
we identify in the table of section 2.3. the possible impact of the
risk factors, the actions we’re performing to manage them and
next steps we have in mind.
ii. We use the RCP 4.5 scenario, which is between a scenario that
considers that the Paris Agreement objectives are met (RCP 2.6)
and a more specific stress exercise scenario (RCP 8.5).
iii. We consider time horizons that are consistent with the average
maturities of our portfolios, under a conservative approach.
Thus, for non-collateralized exposures, we considered a time
horizon of 2030 and for collateralized portfolios, with longer
time horizons, we used 2050.
iv. Regarding the location considered for the physical risk
assessment, we analyse the location of collateral and the
headquarters of our customers for non-collateralized loans at
postcode level for exposures in Poland, Portugal, Spain and the
UK. NUTS3 level is used for the remaining geographical
locations.
According to the assumptions described, our exposure to material
physical risks is EUR 54 billion as of December 2024, which
accounts less than a 3% over Group’s total assets.
EUR bn
Chronic
Acute
Both
Total
Total
29
20
5
54
In the Pillar 3 ESG report, the information related to physical risk is
disclosed at the regional level (Europe, South America and North
America), identifying higher concentration of relevant physical risks
in Europe (44%).
2.3.5 Our approach to nature and biodiversity
Climate change is inextricably linked to biodiversity and nature.
Climate change is one of the main drivers of nature and biodiversity
loss and impacts the resilience of ecosystems, limiting their ability
to regulate climate and serve as carbon sinks.
While our materiality assessment considers 'Biodiversity and
ecosystems' an informative topic, we continue to oversee our
8 Monthly metric. Banco Santander has zero tolerance for very high impact events, including ESG-related ones. The reputational risk function puts forward events with ‘very
high’ impact, which the compliance committee verifies. Circumstances that could lead to a ‘very high’ impact event are: i) events that trigger silver or gold crisis management
committees; ii) regulatory requirements that uncover significant weaknesses or shortcomings: very high financial penalties (above EUR 10 million), permanent cessation of
economic activity, capital aggregation, loss of banking licence, restrictions on dividend distribution, etc.; iii) events with a very high impact on public opinion: with widespread
and sustained negative media and TV coverage in a single market and/or in other markets for over one week or very high impact on social media; and iv) suspension of shares
trading or a drop in share price of over 5% in one day on the back of the issue in question.
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operations and impact on biodiversity and nature in view of our
climate objectives.
Given our financial activity, and the location of our buildings and
offices, mainly in urban areas, no sites located in or near
biodiversity sensitive areas are identified
9. We are conducting an
analysis to determine whether any of them could be in or near
biodiversity sensitive areas.
We conducted an assessment on our corporate portfolio, which
considers the country in which our customers operate, to learn of
the direct impact and dependency of their business on nature and
biodiversity.
We followed the Task Force on Nature-related Financial
Disclosures’ (TNFD) LEAP
10 approach. We used two tools:
• ENCORE: A materiality database of dependencies (physical risks)
between production processes and ecosystem services. For our
core markets, we complemented the database with internal
localization criteria based on ENCORE’s hotspot depletion maps.
These criteria cover three natural capital assets: soil and
sediment, water, and biodiversity.
• UNEP FI Impact Analysis Tool: This tool provides an in-built
impact (transition risks) mapping that, combined with our
internal data and context, enables us to identify the most
significant impact areas of the portfolio.
The ENCORE database helps us to begin to understand how the
deterioration of natural assets could cause a loss of production
processes, and the financial consequences it could have.
This methodology enabled us to analyse their dependencies
(physical risks
11) on over 20 ecosystem services in more than 10
sub-segments of our corporate lending portfolio.
Additionally, in 2024, Santander Brasil participated with various
organizations in TNFD pilots to explore how to tackle nature
impacts and dependencies more effectively. We used the LEAP
approach and focused on the Locate phase. We gained important
insight into how data gaps and a lack of methodologies tailored to
highly biodiverse tropical countries limit private companies’ ability
to account for those factors accurately. Addressing these issues
will require further work and collaboration throughout the sector
to align with stakeholders’ expectations.
Nature and biodiversity heatmap
Based on the above mentioned approach, we use a 'heatmap' to
aggregate nature-related dependencies and show the level of
threat of potential events that may affect our corporate portfolio at
Group level.
We used this exercise as an input to meet disclosure requirements
ESRS E2 (Pollution), ESRS E3 (Water and marine resources), ESRS
E4 (Biodiversity and ecosystems) and ESRS E5 (Resource use and
circular economy) in relation to ESRS 2 IRO-1. We rate our
dependencies on a scale of 1 (very low dependence) to 5 (very high
dependency). These are the results:
Corporate
portfolio
Pollution
Pollution of air
l
Pollution of water
l
Pollution of soil
l
Pollution of living organisms &
food resources
l
Substance of concern and very
high concern
l
Water & marine
resources
Water withdrawals, consumption
and use
l
Habitat degradation & intensity of
pressure on marine resources
l
Biodiversity &
ecosystems
Direct drivers of biodiversity loss
l
Impacts on the state of species
and on the extent and conditions
of ecosystems
l
Impacts & dependencies on
ecosystem services
l
Circular
economy
Resource inflows, including
resource use
l
Resource outflows related to
products and services
l
Waste
l
• Very low • Low
• Medium • High
• Very high
No nature-related topic or sub-topic was considered material at
Group level. We monitor these and other sectors closely as part of
regular updates to our nature materiality assessment.
Nature and biodiversity in our ESCC policy
Santander embeds nature and biodiversity conservation measures
in financing and investment policies. Our global environmental,
social and climate change (ESCC) risk policy
12 dictates prohibited
activities that Santander will not directly invest in, or provide
financial products or services to, regarding biodiversity matters:
• Any projects or activities in areas classified as Ramsar Sites,
13
World Heritage Sites, or categories I, II, III or IV by the
International Union for Conservation of Nature
14 (IUCN).
• Any projects or expansion of existing oil & gas facilities north of
the Arctic Circle.
9 The main environmental impact of our offices stems from their maintenance and how we manage the waste we generate. So far, we have not deemed it necessary to adopt
biodiversity mitigation measures in our operations. Nonetheless, on certain occasions we have considered corrective or mitigation measures as part of our customer lending
due diligence and in application of our ESCC policy.
10 LEAP approach: locate, Evaluate, Assess and Prepare.
11 This analysis does not consider systemic risks since no tools have been identified that include them.
12 To the extent required by applicable law, customers and transactions involving activities enumerated in this section will be subject to an enhanced due diligence process to
determine the unique risks presented prior to decisioning.
13 The Convention on Wetlands (known as the Ramsar Convention) is an intergovernmental treaty that provides the framework for the conservation and wise use of wetlands
and their resources.
14 The International Union for Conservation of Nature (IUCN) (iucn.org) classifies protected areas according to their environmental management objectives: Category I: Nature
Reserve and Wilderness Areas, Category II: National Park, Category III: Natural Monument or Feature, Category IV: Habitat/Species Management Area.
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• Extraction and sale of native tropical wood species not certified
by the Forest Stewardship Council (FSC).
• Palm oil processors that are not members of the Roundtable on
Sustainable Palm Oil (RSPO).
• Developments in forested peatlands in 'High Risk
Geographies'.
15
The assessment of the client's ESCC risks in the applicable sectors
16
is first completed by the financial manager before a team of
analysts conducts an overall assessment. The ESCC risk and
compliance departments delve deeper into cases that uncover red
flags. We usually conduct this extended due diligence exercise
with the client to deepen our understanding of the risk profile and
determine the existence (or not) of corrective or remediation
measures.
As our global ESCC risk management policy dictates, we consider
environmental, social and climate change risks and also conduct
annual reviews of our customers and pay particular attention to
potential deforestation risk with agribusiness customers in the
Amazon biome.
For more details on our ESCC risk management policy, see
section 3.2.3 'Environmental, social and climate change
risk management'.
Nature-based solutions are key to carbon storage and
climate resilience. Santander supports several initiatives
that foster these solutions:
• Biomas, an ecosystem restoration enterprise that seeks
to plant two billion native trees to reforest and protect
two million hectares of degraded lands in Brazil over
the next 20 years, removing 900 million tonnes of CO2e
from the atmosphere.
• Santander España — through Motor Verde — will
finance three new forests of over 300 hectares to
absorb 82,000 tonnes of CO2e. Two of them have
already been registered with the Spanish Office of
Climate Change and the third is in the initial phase.
• Santander UK continues to form part of the Net Zero
With Nature UK national parks initiative by helping
develop a platform to secure private financing for
nature-based solutions. We’re also supporting the
restoration of peatlands in the Cairngorms and the
improvement of water quality at Lake Windemere.
• Since 2021, Santander México — through “LikeU” —
has been helping customers contribute to reforestation
in collaboration with Reforestamos México, which has
been operating for 19 years.
Santander and the Brazilian biomes
Santander promotes the protection and sustainable development
of Brazil’s biomes, which is critical to tackling climate change and
conserving biodiversity. We need economic growth, but it must be
sustainable.
Brazil accounts for approximately 3% of the world’s greenhouse
gas (GHG) emissions. According to Observatório do Clima the main
sources of emissions are land-use change (46%), particularly
deforestation, followed by the agricultural sector (25%), a sector
that plays a crucial role in the national economy and is vital for
global food security. A significant part of the deforestation is illegal
and driven by property speculation in public lands. According to
Amazon Environmental Research Institute (IPAM), 50% of the
Brazilian Amazon deforestation occurs on public land, especially in
undesignated public forests. These forests are easy targets for land
grabbers and illegal exploitation due to poorly defined tenure
rights.
In recognizing the importance of its biomes, the Brazilian
government created and passed the Brazilian Forest Code in 1965
and revised it in 2012. It is one of the world’s strictest
environmental laws, establishing the necessary protection
percentage for each of the country's biomes.
As strict as the Code is, the main challenge lies in its
implementation. A lack of effective adherence and enforcement
has led to illegal deforestation and environmental degradation
over the years.
Addressing GHG emissions and biodiversity protection in Brazil
requires a multilateral approach that includes strengthening the
implementation of environmental laws, continuously promoting
sustainable agricultural practices, and improving monitoring and
transparency.
15 High risk geographies are every country in Africa, plus Argentina (Chaco, Formosa, Santiago del Estero, Salta and Tucumán only), Bolivia, Brazil (the Legal Amazon and the
north east of the country only), Cambodia, China, Colombia, Ecuador, Estonia, Guatemala, Honduras, India, Indonesia, Laos, Latvia, Lithuania, Madagascar, Malaysia, Myanmar,
Nicaragua, Panama, Papua New Guinea, Paraguay, Peru, Russia, the Solomon Islands, Thailand, Vietnam and any customer declared 'unknown'. This list will be subject to
review based on the expansion of agribusiness to new geographies.
16 Sectors covered by the ESCC Risk management policy and additional tactical sectors included in the CIB Procedure, as well as other material businesses and sectors
depending on the geography and local legal requirements.
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According to the 2022 MapBiomas report, a significant
portion of Brazil’s deforestation is illegal. Illegal activity
has a major environmental impact and undermines
efforts to control emissions. The MapBiomas platform
uses pixel-by-pixel classification of Landsat images
processed through machine learning algorithms in
Google Earth Engine. Despite its limitations, such as the
inability to identify areas with deforestation permits
issued by state-level governments, it is a highly effective
tool for monitoring deforestation.
We’ve been working with our customers to promote sustainable
development in Brazil for years. In 2002, Santander became the
first private-sector bank in Brazil to run credit analysis on
environmental and social risk. In 2016, we were the first bank to
formally incorporate a sustainability score into our corporate
customers’ credit rating.
Risk management
Environmental and social reviews of companies
Santander Brasil conducts annual reviews by analysing the socio
environmental practices of wholesale companies and main
customers of SMEs with credit limits or risk exceeding BRL 7
million and that belong to one of the 14 priority social,
environmental and climate sectors (including all TCFD sectors,
depending on their level of risk). In the past decade, we have
analysed approximately 2,000 corporate and retail customers on a
yearly basis to determine whether they comply with the law and
follow best practice. This procedure begins with a standardized
public questionnaire that we send to customers. A team of ESCC
risk specialists reviews the returned questionnaire by cross
referencing it against government permits, fines, embargoes,
lawsuits, contaminated land reports, press reports and other public
information.
The analysis may require additional questions. Upon completion of
the analysis, the ESCC risk specialist compiles a report with a score
of 1 to 5 that covers environmental, social and climate factors
separately, including such aspects as water stress, climate
resilience, contaminated land, human rights, environmental
sanctions and supplier control. We have further procedures for
customers in mining, sugar and beef production.
Farmers and ranchers
A significant portion of illegally deforested lands does not have a
clear owner or is government-owned property. For this reason,
Santander verifies the land ownership or lease before financing
farmers and ranchers.
As part of the credit approval process, we work with a satellite
imaging firm to monitor the properties that we finance or take as
collateral throughout the entire loan term. We receive daily
information on government embargoes against production on
illegally deforested land; modern slavery; and incursions into
government protected indigenous land, parks and conservation
areas. We monitor approximately 19,000 properties for
deforestation alerts.
If we identify any issues, we request an explanation from the
customer. If we uncover a material breach of environmental laws
and regulations, our standard contracts allow us to demand the
early repayment of loans.
Santander also uses Internet-based satellite-imaging tools Global
Forest Watch and MapBiomas to track the detailed loss of tree
cover on customers’ farms and ranches over time.
Collaborating with initiatives to stop deforestation
Febraban Protocol for livestock in the Amazon
Santander actively collaborates with customers, governments,
regulators and NGOs to tackle illegal deforestation. Santander
Brasil is a member of Febraban’s committee on forestry and
agribusiness.
We have been seeking commitments from beef processing
customers in the Amazon since 2020. In 2021, Santander Brasil
began engaging with more than a dozen of these customers to
tackle illegal deforestation linked to their supply chain by 2025.
Santander Brasil, along with other banks, shared lessons learnt
with Febraban, which lead to the creation of the sectorial protocol
SARB 026/2023 - in March 2023, which sets the standards for
managing the risk of illegal deforestation in the bovine meat chain.
The protocol defined guidelines to be adopted by its signatories.
By signing the protocol, Santander has aligned its objective with
that of the Brazilian financial industry, and has been engaging with
its meatpacking customers. This requires beef processing
customers with slaughterhouses in the Brazilian Legal Amazon
region to end illegal deforestation by December 2025, both from
direct suppliers of cattle and Tier 1 indirect suppliers, and
demonstrate progress against. They also must meet mid-term
milestones.
Signatory banks must monitor the implementation of actions by
the deadlines stipulated by the regulation, reviewing customers'
public reports on the dates established by the protocol and taking
measures based on the content published by beef processing
customers.
Since the objective was established, Santander has actively
engaged with all beef processing customers affected by the
protocol, leveraging our technical expertise to assist in developing
their traceability plans and reports. We monitored their progress
reports throughout 2024, and by the December 2023 deadline
100% of eligible customers had been verified for protocol
compliance. For those who did not initially present the required
plans, credit limits were temporarily suspended and reinstated
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only upon compliance. We will continue to act accordingly and
monitor compliance with the milestones set by the Febraban
protocol, checking adherence to the implementation timeline.
RTRS and MBPS
Santander Brasil takes part in two other external initiatives that
propose solutions to stop deforestation; it was a co-founder of the
Roundtable on Responsible Soy (RTRS), and chaired it from 2006 to
2009. The bank also co-founded the Brazilian Roundtable on
Sustainable Livestock (MBPS, in Portuguese).
IFACC
We were the first bank to join Innovative Finance for the Amazon,
Cerrado and Chaco (IFACC), an initiative coordinated by Nature
Conservancy, the Tropical Forest Alliance and UNEP FI (a United
Nations environmental programme that focuses on sustainable
financing). The aim is to accelerate sustainable production finance
through the structuring of mechanisms such as loans to rural
producers, land investment funds, and corporate debt and capital
market instruments.
Nature-Based Solutions Investment Collaborative
In 2024, we were the first bank to join the NBS Investment
Collaborative, a platform with 10 members and 11 partners, led by
Capital for Climate, focused on mobilizing BRL 5 bn for nature
based solutions in Brazil by 2025.
Amazon Finance Network
To protect the most important and diverse biome, in late 2023 we
joined the Amazon Finance Network, an alliance launched during
COP 28 that aims to generate sustainable impact throughout the
Amazon region. It brings together 52 financial institutions with the
aim of increasing investment flows, mobilizing capital, promoting
financial inclusion, sharing knowledge on innovative financial
solutions, and generating synergy with the public sector.
Social impact
We understand that supporting the socioeconomic development of
the Amazon and other biomes and their residents is fundamental
for their preservation and for the development of the country.
Helping local people maintain their livelihoods is key to preserving
this ecosystem. We want communities and entrepreneurs to
develop further and count on our support as they do.
We joined forces with other banks and entities to help launch
Jornada Amazônia, a platform that Fundação Certi runs. Its aim is
to stimulate the Amazon’s innovation and entrepreneurship
ecosystem, with a focus on bioeconomy solutions for forest
conservation. The platform’s core objectives include training 3,000
talented people and creating 200 startups by the end of 2025.
Jornada Amazônia continues to progress and gain the support of
other partners, including the Inter American Development Bank
(IDB) and Instituto Itaúsa (the ESG arm of the Itausa holding
company). Progress so far includes:
• 2,134 people given entrepreneurship training (71.1% of the
target for 2025), 55% of which were women;
• 71 startups created and structured (35.5% of the target for
2025), with a cycle to create more startups under way; and
• 22 startups classified and ramped up (22% of the target for
2025), with a new acceleration cycle under way with 45
entrepreneurs.
We gathered 15 Santander executives to act as mentors in the
Synergy programme to help entrepreneurs in such areas as people
management, legal issues, investor access, network building and
strategic vision and direction of the company.
For more details on Santander and the Brazilian Amazon, visit our
corporate website santander.com.
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2.4 Aiming to align our activity with the Paris Agreement Goals
In this section we cover how Santander manages the following
IRO:
Adverse impact on climate and the environment due to
I
the bank’s financing of, or investment in, certain non
sustainable assets and activities.
We continue working towards our ambition of net zero carbon
emissions by 2050 by progressively setting specific actions to
support our customers in their climate objectives and to align those
climate sectors identified as most material regarding lending,
which is our most material financial activity.
Regarding our own operations, we disclose our direct and indirect
emissions (scopes 1, 2 and 3) data as well as other climate
relevant metrics such as energy consumption. We report on our
targets for renewable electricity
17 and the compensation of our
scope 1 and scope 2 emissions. Since 2021, we have also been
disclosing financed scope 3 emissions (category 15) related to our
alignment objectives.
We announced our ambition to work to achieve net zero carbon
emissions by 2050 in February 2021.
We are constantly reviewing our strategy and targets to
incorporate the latest science insights and changes in local
regulation.
We use internal methodologies that take input and
recommendations from the NZBA (Net Zero Banking Alliance)
guidelines, the PCAF standard, Glasgow Financial Alliance for Net
Zero (GFANZ) publications, the Science Based Targets initiative
(SBTi) and other references. We also use external data and models
from third parties with recognized market reputation and
expertise. We rely on financial and non-financial information from
our customers.
Though the non-financial information required is becoming more
available as more companies begin to report GHG emissions, it still
falls short in certain sectors and regions. And, where available, it
might not be the most suitable or accurate. In many cases, data is
only available with a significant time lag. If no emissions data exist,
we estimate them based on a proxy (average emissions by
industry, country, etc.). Once we obtain our customers' total
emissions, we apply our attribution factor in line with the PCAF
approach to determine Santander’s financed emissions.
2.4.1 Alignment targets
As part of our climate ambition, we prioritize the high-emitting
sectors (which also bear high and very high transition risk
according to our climate materiality) to which we have material
exposure and must support the transition to a low-carbon
economy.
In 2021 and 2022 we set targets for the wholesale segment in the
power generation, thermal coal, oil & gas, aviation, and steel
portfolios. In 2023, we focused on the automotive sector from two
perspectives: auto manufacturing (wholesale segment) and auto
lending (consumer loans for the purchase of passenger cars in
Europe).
Within the sectorial climate approach described above, cement,
shipping and aluminium are deemed not material given their low
level of exposure. Agriculture, mortgages and commercial real
estate (CRE) are considered material in the retail segment.
We are monitoring the materiality of the capital markets emissions
(facilitated emissions) for the bank, and for the moment we
consider them not material.
The climate performance dynamics of all these sectors are heavily
dependent on their regulatory and policy framework, technology
changes and customers behaviours. For example, the International
Energy Agency (IEA) estimates that one third of the reductions
needed to meet the Paris objectives need to come from
technologies that are currently at the demonstration or prototype
phase.
In sectors where corporate clients are making progress, we have
set targets while acknowledging these external dependencies.
For the sectors that are heavily dependent on further regulation to
align, and where most of the customers are retail, we are
monitoring their alignment; but we will refrain from setting targets
until the regulatory and policy framework is clear, consistent and
supportive of consumer behaviour changes.
We have been sharing our understanding and experience of these
policy gaps with authorities and other sectors, and plan to keep
doing so. Given our footprint, we see markedly different regulatory
frameworks in the regions where we operate.
Governments' approach to the transition should reflect several,
simple points. First, economic growth is essential to finance the
transition - and to ensure it is affordable and fair in both developed
and developing economies. Policies to support the transition
should, therefore, not undermine growth, nor the provision of
reliable and affordable energy. Next, we believe the transition is a
journey – not a moment in time – for companies, sectors and
countries and that governments' policies or regulations to affect
sudden change are therefore likely to undermine growth and
decrease investor confidence. Third, a “one size fits all approach” to
the transition ignores the economic, social and political reality
facing different sectors in different regions and we need a more
pragmatic, flexible approach to support green growth. Finally, the
financial sector should be considered as an enabler of the
transition, but not as the solution.
We believe governments' policies for the transition should reflect
this by establishing clear policy pathways for critical sectors to
achieve a low-carbon economy, with measures and incentives to
support businesses' transition. Frameworks should be transparent
and provide certainty for each sector. Today, according to IEA, there
is still a large gap between the Stated Policies Scenario
18
projections and Net Zero Emissions by 2050 Scenario. This gap also
exists in Santander's core markets.
17 For 2025, in countries where we can verify electricity from renewable sources at Banco Santander properties. Target considers the 10 core markets in which we operate.
18 The Stated Policies Scenario (STEPS) is designed to provide a sense of the prevailing direction of energy system progression, based on a detailed review of the current policy
landscape.
Annual report 2024
59
Downstream /
Homeowners
}
Monitoring of other portfolios
Absolute emissions
Scope of
Sector
(2023)
emissions
Value chain in scope
Commercial
D
0.19 mtCO2e
1 + 2
Upstream / Suppliers }
Midstream / Construction
Downstream / Owners
Real Estate
}
}
Mortgages
1.93 mtCO2e
E
1 + 2
Upstream / Suppliers }
Midstream / Construction }
Midstream / On Farm
Downstream /
Agriculture
9.83 mtCO2e
F
1 + 2
Upstream / Suppliers
}
End product
}
}
Details on our progress on alignment available in the following pages.
Part of the sector value chain in-scope, due
chain out of scope
Part of the sector value
emissions materiality and/or actionability
-
Alignment targets
Sector
Scenario
Metric
Baseline
2020
2021
2022
2023
2030
Scope of
targets
emissions Value chain in scope
Power
generation
IEA Net
Zero
2050
tCO2e/
MWh
0.21
(2019
baseline year)
0.17
0.19
0.16
0.15
0.11
(-46%)
1
Upstream / Generation
}
Midstream /
Distribution
}
Downstream / End
product
}
Oil & gas
mtCO2e
23.84
(2019
baseline year)
22.58 27.43 20.94 20.27
16.98
(-29%)
1 + 2 + 3
A
Integrated / Diversified
}
Upstream / Extraction
}
Midstream /
Distribution
}
Downstream /
Trading
}
Aviation
gCO2e/
RPK
92.47
(2019
baseline year)
93.05 97.21 81.09 82.99
61.71
(-33%)
1 + 2
Upstream / Suppliers
}
Midstream /
Manufacturing
}
Downstream /
Airliners
}
Steel
tCO2e/
tS
1.58
(2019
baseline year)
1.40
1.36
1.24
1.38
1.07
(-32%)
1 + 2
Upstream /
Materials extraction
}
Manufacturing
}
Downstream / End
product
}
Auto
manufacturing
gCO2/
vkm
149
(2020
baseline year)
149
138
133
134
103
(-31%)
B
3
A
Upstream /
Suppliers-Materials }
Midstream /
Manufacturing }
Midstream /
Dealers
}
Auto lending
Europe
C
gCO2e/
vkm
137
(2022
baseline year)
N/A
N/A
137
133
75-89
(-35-45%)
1 + 2
Downstream /
End users }
Thermal coal
Phase-out targets to eliminate exposure by 2030 to power generation customers with a revenue dependency on coal of over 10% and thermal coal mining.
Details on targets' scope are available in the following pages.
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Our efforts to pursue our transition targets also involve engaging
with public bodies whose policy decisions and actions are critical if
companies - including banks like Santander - are to make progress
towards net zero carbon by 2050. If policies (or the lack of them)
remain as they are today, a significant gap will persist between net
zero scenario pathways and what will actually happen.
We also monitor technological, economic and geopolitical factors
that bear on transition, from energy security to variability in
approaches in different markets, including those in which we
operate.
Our aim is to help our customers transition and contribute to their
alignment, while understanding the constraints and limitations
they may face in different jurisdictions and the gaps that make
setting targets in certain sectors unfeasible. Weighting the E, the S
and the G appropriately across our strategy is key to avoid
undermining other ESG goals, while we pursue tackling climate
change. The transition must be just and orderly.
Emissions accounting and science-based alignment target
methodologies are still relatively new areas that are improving
quickly to meet climate ambitions. More methodologies need to be
developed so that all financial institutions have the right tools to
effect positive change in the economy.
We set our alignment targets and monitor the most crucial part of
each sector’s value chain, focusing on those that are most
emissions-intensive, actionable and where progress can be
measured as well as considering the availability of quality data and
market practices.
A. Use of sold products.
B. Target reduction is -25% vs. 2021 reference.
C. Consumer lending for acquisition of passenger cars, covering a significant majority of the exposure in Europe.
D. Financed emissions of the UK and Spain CRE portfolios.
E. Financed emissions of the UK and Spain mortgage portfolios.
F. Financed emissions of part of the Brazil agriculture portfolio.
For more details on our alignment targets, see
note SN 4. 'Our transition plan'.
Annual report 2024
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CIB implementation strategy
As part of supporting our customers in their climate objectives and
to achieve our sectoral alignment targets we undertake several
actions. These actions include an assessment of the transition
plans of our customers, customer engagement, and dedicated
portfolio steering governance. We also leverage on data collection
as part of the risk analysis process; as well as conducting ESCC
exclusion policy reviews. Given our actions directly relate to the
activity of our customers, it is not practical to make quantitative
estimates for how each action contributes to achieving each of our
targets. All actions described below cover the CIB business
globally.
Customer Climate Tiering
A key element of our implementation strategy is the customer
climate tiering approach. The outcome of this tiering approach is an
assessment of our customers’ current and expected progress to
align with our climate sector objectives. In 2024 we implemented
this approach for Automotive Manufacturing, in addition to existing
target sectors (power, oil & gas, steel and aviation), and adapted it
where necessary to account for sector differences. We review the
climate tiering assessment for each sector every year to reflect our
customers’ progress.
Our approach aims to facilitate the achievement of our emissions
targets and to develop a strong understanding of our customers’
transition strategies towards low-carbon business models. This
approach is supported by governance processes, involving various
internal stakeholders, such as front office teams, risk reporting
functions, and senior management to guide the potential portfolio
steering actions (for more details, see the Portfolio Steering
section below). It is structured around four main iterative steps:
Collect, Assess, Engage and Review. We have used various
internationally recognized references and the Cambridge Institute
for Sustainability Leadership (CISL) 'Let's Discuss Climate' guide as
inputs and adapted them to our requirements and objectives.
Collect: We collect relevant information as part of regular
customer dialogue and engagement. In addition, we source specific
climate related information through tailored requests that contain
transition-focused elements designed to help us better understand
companies’ alignment strategies. Furthermore, we also seek to
source reliable and consistent information from credible third
parties to complement our understanding.
This information is collected and updated both at the customer
onboarding stage, and as part of the regular business and risk
assessment review with each customer, which is performed at
least once a year.
Assess: Our assessment consists of a two-step approach designed
to categorize our customers according to their emissions pathway
and perceived quality of their transition strategy.
The first step involves assessing how our customers’ emissions
trajectory aligns with our current sectoral portfolio baseline and
future sectoral portfolio targets. The second step assesses the
quality of each customer’s transition plan. Our transition plan
assessment methodology focuses on four pillars:
1. Targets: it focuses on the quality and ambition of the customer’s
quantitative GHG emissions targets. Where possible, we assess
short- and long-term, as well as absolute and intensity
reduction targets.
2. Action plan: it considers the credibility of the customer’s
alignment strategy. We assess the business strategy integration
of climate change risks and opportunities; the existence of
climate scenario planning; as well as time-bound action plans to
achieve alignment targets.
3. Disclosure: it focuses on the transparency of reporting on
historical emissions performance across all relevant scopes, the
level of assurance, as well as the degree of reporting alignment
with the TCFD. Where possible, it also includes assessing
whether or not previous GHG emission targets were achieved.
4. Governance: it considers the level of management oversight
and governance of the customer’s transition strategy. We
assess the level of seniority of executives accountable for
climate strategy, board committee oversight of climate change
issues, and whether executive remuneration is linked to climate
change performance.
We draw on established transition plan assessment
methodologies, such as the Transition Pathway Initiative (TPI),
CDP, ACT (Assessing Low Carbon Transition), TCFD, as well as other
related initiatives including the UK’s Transition Plan Taskforce
(TPT).
Our transition plan assessment methodology includes higher
weightings for assessment criteria deemed to be critical to credible
transition plans, compared to lower weightings for those that are
considered supporting criteria. The more highly weighted criteria
are designed to prioritize focus areas for customer engagement.
Ultimately, our customer climate tiering system leads to four
categories (Leader, Strong, Moderate and Weak).
Annual report 2024
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Tier Categories
Tier 1
Tier 2
Tier 3
Tier 4
Leader
Strong
Moderate
Weak
Description
• Emissions profile fully aligned with
Santander’s pathway
• Strong transition plan
• Emissions profile fully aligned with
Santander’s pathway but
improvement needed in transition
plan; or
• Strong transition plan but emissions
profile partially aligned with
Santander’s pathway
• Emissions profile partially aligned
with Santander’s pathway, but
improvement needed in transition
plan; or
• Emissions profile not aligned with
Santander’s pathway, but strong
transition plan
• Emissions profile not aligned with
Santander’s pathway
• Weak transition plan
Contents
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GHG emissions profile
alignment
-
↓
Transition plan quality
assessment
Transition Pillar
1. Targets
2. Action plan
3. Disclosure
4. Governance
Two step tiering system
• Current GHG emissions profile
• Future targeted GHG emissions
trajectory
• Assessment of alignment with
Santander’s pathway
• Internal methodology to assess
perceived quality of transition plans
• Developed using established transition
plan assessment methodologies
Overview
Quality and ambition of quantitative
targets to reduce GHG emissions
Depth of alignment strategy to achieve
GHG emissions reduction targets
Transparency on GHG emissions reporting
across relevant scopes
Management oversight and governance
of transition strategy
Internally organized training sessions were delivered to sector
specific relationship managers and Environmental Social Climate
Change Risk (ESCC) analysts. These focused on gathering
information to complete the transition plan quality assessment
(the second step in our customer climate tiering system). These
sessions were delivered by senior experts from our ESCC, Portfolio
Alignment and Sustainability Solutions teams.
Expert resources from our global Sustainability Solutions team are
made available for further education and advice on customers'
transition plans assessment.
Engage with customers: Our customer climate tiering system
seeks to facilitate tailored transition dialogue to help lower-tiered
customers move up to higher tiers over time.
In 2024, we focused our customer engagement efforts on oil & gas
as well as lower-tiered customers in other sectors. We developed
internal transition assessment dashboards for relationship
managers, designed to aid the identification of customer-level
priority areas, industry benchmarking, and opportunities to support
our customers in financing their transition. Of the customers that
are in scope of our targets, approximately three quarters included
sustainability-related discussions in 2024.
In addition, on a wider scope of climate-related topics, we are
engaging with various public and private organizations (for more
details, see section 1.2 ‘Stakeholder engagement’).
Review: The customer transition plan assessment is performed by
relationship managers, in cooperation with ESCC risk analysts,
followed by portfolio level reviews by Sustainability Solutions and
Portfolio Alignment teams to determine final tierings. The portfolio
level review is important to help identify key trends and challenges
in each sector, as well as for future transition plan assessment
methodology improvements.
Initial assessments were completed for both steps for all sectors
where targets have been set. Subsequently, transition plan quality
assessments were reviewed and enhanced, drawing on updated
reference methodologies and sector-specific research. This led to
improved guidance, more focused set of questions and the
inclusion of additional sector- specific questions for assessing
transition plan quality.
The figure below shows the breakdown of our climate tiering
system output for all entities in scope of our original sector targets,
by sum of drawn exposures as of the end of 2024. See 'Sector
Considerations' section for further details on each sector’s portfolio
composition and evolution.
Climate tiering aggregated for the sectors for which we had
set targets
A
Leader
Strong
Moderate
Weak
A. Based on 2024 year-end drawn exposure, according to portfolio alignment
methodology, and including project finance, both in operation and under
construction.
Of our corporate customers with drawn exposure where transition
plan assessments were conducted in 2024, approximately:
• two-thirds have set quantitative emissions reduction targets on
sector-material GHG scopes between 2030 and 2039;
• one-third have set, or committed to set, science-based targets
(SBTi), if available for the sector;
• over two-thirds have a time-bound action plan to align their
business, with almost half providing details of the expected
proportional impact of different alignment levers, according to
our assessment;
• over half provide details or commitments for CAPEX alignment
with future low-carbon solutions;
Annual report 2024
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• over two thirds undertake some form of climate scenario
planning; and
• over half have senior management remuneration linked to
progress towards achieving their GHG emissions reduction
targets.
Portfolio steering
CIB’s portfolio steering governance is designed to identify actions
to support our customers’ transition and manage our portfolio to
achieve our climate targets. A quarterly portfolio steering meeting
operates at the core of our governance. Its scope includes
monitoring progress towards the achievement of our portfolio
targets. All relevant CIB functions are represented at this meeting.
In addition, a monthly portfolio alignment meeting provides
technical support by reviewing methodologies and monthly critical
KPI performance.
Contributing to integrity in transition finance
We continue to contribute to furthering knowledge of
transition finance as a key enabler towards net zero. As part of
our long-standing support for education, employability and
entrepreneurship, we are collaborating with the University of
Oxford to fund the development of a Transition Finance
Centre of Excellence. This centre aims to play a prominent role
in defining aspects of transition finance, such as best practice
sectoral transition plans and new tools and insight for
practitioners.
Initial research has focused on developing a deeper
understanding of assessing companies’ transition plans
Sectorial considerations
Power generation
Sector boundaries: For the power generation sector, we assess the
upstream/generation business in the value chain. Our portfolio
includes both corporate customers and project finance
transactions.
Industry dynamics: The industry is reducing carbon intensity by
building renewable power plants, switching off coal power plants
and using combined cycle power plants as transition technology.
Some countries also invest in nuclear power as a low-carbon
electricity source. The IEA estimates that to meet the Paris
objectives, investment in clean energy will need to almost triple
from current levels to around 4.5 trillion USD a year by the early
2030s.
Portfolio composition: The exposure to project finance (both in
operation and under construction) outweighs the exposure to
corporate customers. Within the corporate portfolio, around 80%
of the portfolio is classified as tier 1 and 2 customers, typically
leading power companies with existing or strong objectives to
renewables. We observe clear regional differences in the climate
tiering (with Europe being the leader), while many emerging
market entities are still developing and disclosing their transition
plans.
Our risk appetite and lending policies are important tools for
monitoring and steering the portfolio towards our financed
emissions targets. Our customer climate tiering assessment
informs our risk appetite for each sector where targets have been
set, e.g., new lending business with lower tier customers might be
limited when the sector deviates from the 2030 target.
In addition, Santander’s Environmental, Social and Climate Change
(ESCC) Risk Management Policy sets out the criteria for providing
financial products to customers involved in several of the sectors
within the scope of our financed emissions targets (i.e., power, oil
& gas, metals & mining and soft commodities). For all sectors with
alignment targets, customer climate tiering and engagement
considerations are being incorporated into annual credit risk
reviews. For one-off transactions (e.g., project finance
transactions), we assess a transaction’s impact on the relevant
sector’s portfolio financed emissions targets.
in emission-intensive sectors. Follow up work has explored
external dependencies in corporate transition plans and
assessing transition plans with more granular asset-based
approaches. Research has also included corporate net zero
transition plan implications for loan pricing, the development
of tools to assess sustainability-linked bond pricing (given
the dynamic nature of sustainability performance indicators),
and other topics.
For more details about this collaboration and published
research, visit smithschool.ox.ac.uk.
Power Generation portfolio distribution
A
Corporate
Project finance
A. Based on September 2024 drawn exposure, according to portfolio alignment
methodology, and including corporates and project finance, both in operation and
under construction.
Portfolio evolution: Since 2022, we observe a downward trend in
the physical emission intensity of our portfolio, going from 0.19
tCO2e/MWh in 2021 to 0.16 in 2022 and 0.15 in 2023. One of the
main drivers is an overall improvement in the average emissions
intensities of our corporate portfolio customers during this period.
Supporting our clients in their alignment journey implies investing
in both renewable technologies and transition technologies, which
may still lead to temporary increases in physical emission intensity
in the future.
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Sector
Year
Exposure
(drawn amount
EUR bn)
A
Absolute
emissions
(MtCO2e)
Physical emissions
intensity
(MtCO2e/MWh)
Financial emissions
intensity
(MtCO2e/ EUR bn lent)
PCAF score
2030 target
2019
10.66
5.41
0.21
0.51
2.7
2020
10.31
4.59
0.17
0.45
2.5
Power
generation
2021
2022
10.23
11.88
4.24
3.82
0.19
0.16
0.41
0.32
2.8
3.0
0.11 tCO2e/
MWh
2023
10.75
3.14
0.15
0.29
3.2
A. It includes Corporates and Project Finance in operation.
Oil & gas
Sector boundaries: For the oil & gas sector, we assess upstream
companies, as well as integrated companies undertaking their own
upstream production in oil and gas.
Industry dynamics: Oil & gas companies can reduce their
emissions by reducing operational emissions (e.g. by reducing
flaring and leakages), by shifting their production to less GHG
intensive fuels (e.g., from oil to gas), by investing into CCUS
(Carbon Capture, Utilisation and Storage) or by diversifying from
fossil-fuel combustion related business (e.g., into renewable
energy).
2024 saw a number of elections held in major economies. It
remains to be seen how the outcome of these elections will affect
energy supply and demand. As ever, energy security remains a
critical theme for the sector.
Portfolio composition: To differentiate between oil & gas entities
on a sector specific basis, we apply a physical emissions intensity
comparison and a 2050-time horizon for our climate tiering
analysis in this sector only.
Portfolio evolution: The absolute financed emissions of our
portfolio decreased significantly in the years 2022 and 2023, going
from 27.43 MtCO2e in 2021 to 20.94 and 20.27 in 2022 and 2023
respectively. This was primarily led by the decrease in the exposure
to some low-tiered carbon-intensive clients.
Sector
Year
Exposure
(drawn amount
EUR bn)
Absolute
emissions
(MtCO2e)
Physical emissions
intensity
(tCO2e/TJ)
Financial emissions
intensity
(MtCO2e/ EUR bn lent)
PCAF score
2030 target
2019
7.68
23.84
73.80
3.10
3.4
Oil & gas
2020
2021
2022
6.67
8.25
6.89
22.58
27.43
20.94
73.60
74.36
73.28
3.38
3.33
3.04
3.6
3.9
3.0
16.98
mtCO2e
2023
6.82
20.27
72.97
2.97
3.0
Note on data quality: To improve the quality of timely available data, the data source for this sector has been replaced by Wood Mackenzie for figures from 2022 onwards,
allowing us to analyse upstream companies and their assets in a more granular way and avoid uncertainties related to public company disclosures. Our methodology has been
updated to incorporate this refinement
19 .
19 Scope 1 and 2 are directly retrieved from Wood Mackenzie. Scope 3 is calculated based on Wood Mackenzie production data and combustion emission factors.
Annual report 2024
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Our role in supporting the energy transition
The world needs to ramp up renewable energy capacity to
align the economy. For the global energy sector to align, all
energy-intensive sectors and activities must be
transformed. Our role is to support our customers’ transition
and, as one of the world’s top lenders in renewable energy,
we’re increasing the volume of green finance to support this
transformation.
Aviation
Sector boundaries: For the aviation sector, we focus on
commercial passenger airlines which include both general purpose
lending and aircraft-specific financing. CIB refined the
methodology for the latter for 2022 and 2023, as a result of the
availability of a new specialized data source that allows the
calculation of emissions at the asset level.
Industry dynamics: The IEA's updated Net-Zero by 2050 Scenario
lowers expectation on emissions reductions in the sector due to the
current trends for sustainable aviation fuel (SAF) – high costs and
availability issues - as well the slow adoption of efficiency
measures such as fleet renewal or use of lighter materials, raising
concerns over whether the sector can reach its current 2030
targets.
Portfolio composition: The exposure to this sector reduced
significantly from its peak in 2020 until 2023, driven in particular
Fossil fuels continue to meet the vast majority of global
energy demand. Energy security remains key for an orderly
transition. As a bank, we believe our role is to work with
clients to support and encourage their transition.
by repayments from better climate tiered customers. Current
exposure is significantly below the initial level at the time of target
setting, and is very much concentrated in a small number of
customers and long-term asset financing.
Portfolio evolution: Emissions intensity decreased from 97.21
grCO2/RPK in 2021 to 81.09 in 2022 due to COVID-19 recovery and
increased to 82.99 in 2023 driven by changes in the portfolio
composition (repayments from less carbon-intensive clients). The
emission intensities of individual airlines continue to decline as
airlines improve their efficiency, in addition to a normalization
effect post-COVID in 2022. It is worth noting that absolute
financed emissions have reduced by almost 70% since the baseline
year 2019.
Sector
Year
Exposure (drawn
amount EUR bn)
Absolute
emissions
(MtCO2e)
Physical emissions
intensity
(gCO2e/RPK)
Financial emissions
intensity
(MtCO2e/ EUR bn lent)
PCAF score
2030 target
2019
1.55
1.81
92.47
1.17
3.3
Aviation
2020
2021
2022
2.44
2.02
1.65
1.08
0.84
1.35
93.05
97.21
81.09
0.44
0.42
0.82
3.7
3.2
3.0
61.71
gCO2e/RPK
2023
0.70
0.58
82.99
0.83
3.0
Steel
Sector boundaries: For the steel sector, our analysis covers
companies that attribute over 10% of their revenue to steel
production.
Industry dynamics: The main alignment levers for the steel
industry are: shifting to low-carbon energy sources, -e.g.
renewable energy or hydrogen-, technological improvements, –
e.g. electric-arc-furnaces (EAF), carbon capture, - and material
efficiency and recycling. The latest report by Global Energy Monitor
(GEM) shows that 43% of planned steelmaking capacity is now
based on electric arc furnace (EAF) technology, while 57% would
use coal-based blast furnace-basic oxygen furnaces (BF-BOF).
According to IEA, the direct CO2 intensity of crude steel production
has decreased slightly in the past few years. However, efforts will
likely still need to be accelerated to align with Net Zero Emissions
by 2050 scenarios.
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Portfolio composition: Availability of reliable data has improved
Portfolio evolution: The reduction in emission intensity from 1.36
since our last report, although there are still gaps in certain
to 1.24 tCO2e/tS from 2021 to 2022 was mainly due to the increase
regions. We employ a conservative approach by assigning all
in exposure to less carbon-intensive customers. In 2023, this effect
customers with insufficient data to the lowest climate tier. This is
reversed which is the main driver for the increase to 1.38 tCO2e/tS.
a small and concentrated portfolio, where small changes in
However, we also observed that some clients increased their
composition have a noticeable impact on the overall emission
individual emission intensity.
intensity.
Sector
Year
Exposure (drawn
amount EUR bn)
Absolute
emissions
(MtCO2e)
Physical emissions
intensity
(tCO2e/tS)
Financial emissions
intensity
(MtCO2e/ EUR bn lent)
PCAF score
2030 target
2019
1.51
2.62
1.58
1.74
3.0
Steel
2020
2021
2022
1.31
1.42
1.96
2.14
1.90
1.88
1.40
1.36
1.24
1.63
1.33
0.96
3.1
3.1
3.1
1.07
tCO2e/tS
2023
2.04
1.84
1.38
0.90
3.3
Automotive sector
The automotive sector is one of the key sectors to tackle in the
transition to a low-carbon economy.
According to the IEA, road transport accounts for over 15% of
global energy-related emissions. The switch from internal
combustion engines (ICE) to electric vehicles (EV) and plug-in
hybrid electric vehicles (PHEV) is the most important alignment
lever for this sector.
We are supporting our auto-manufacturer customers in the
adaptation of their business models and product offering towards
EVs and PHEVs. As a leading auto end-user lender in Europe, we
are also helping our retail customers finance purchases of an
increasing number of EVs and PHEVs.
We aim to align our global auto manufacturing and European auto
lending loan portfolios, with a 2030 target and a 2030 target
range, respectively. Our approach is heavily dependent on
supportive public policy frameworks that stimulate consumer
demand.
Auto manufacturing
Sector boundaries: Within the automotive sector, CIB focusses on
the manufacturing of passenger cars, i.e. on Original Equipment
Manufacturers (OEMs). The target metric is scope 3 GHG emissions
from OEMs, measured by the average CO2 intensity per vkm of the
fleet sold in the given year.
Industry dynamics: The switch from ICE to EV and PHEV is the
most important alignment lever for this sector. The uptake of these
technologies depends on multiple external factors.
Portfolio composition: The exposure remains stable at EUR bn
4.02. There are no significant changes in the portfolio composition
in 2022 and 2023 compared to 2021. Aside from pure EV
manufacturers, the carbon intensities of the OEMs’ fleets are
within a relatively narrow band compared to other industries.
Portfolio evolution: The emission intensity improved from 138
gCO2e/vkm in 2021 to 133 in 2022, mainly due to an overall
average reduction in the emissions intensity of our customers
during this period. This reduction continued in 2023, although the
emissions intensity increased slightly to 134 gCO2e/vkm due to
minor portfolio exposure changes.
Sector
Year
Exposure
(drawn amount
EUR bn)
Absolute
emissions
(MtCO2e)
Physical emissions
intensity
(gCO2/vkm)
Financial emissions
intensity
(MtCO2e/ EUR bn lent)
PCAF score
2030 target
2020
4.45
3.49
149
0.79
3.1
Auto
manufacturing
2021
2022
3.90
3.95
2.67
2.74
138
133
0.68
0.70
3.0
3.0
103 gCO2/vkm
2023
4.02
2.74
134
0.68
3.0
Auto lending
Europe
2022
2023
55.27
62.40
5.84
6.78
137
133
0.11
0.11
3.2
2.7
75-89 gCO2e/
vkm
The data source for auto manufacturing has been replaced by JATO Dynamic for figures from 2022 onwards, allowing us to provide more accurate and timely data points.
Accordingly, the methodology has been updated to incorporate this refinement.
Auto lending in Europe
Industry dynamics: The alignment of this sector in Europe is driven
Nonetheless, the rate of alignment will rely on external factors
by regulation and is especially affected by a law that prohibits the
such as government action (e.g. subsidies for electric or low
sale of internal combustion engine vehicles from 2035.
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emissions vehicles), the development of charging infrastructure
and manufacturers’ business objectives.
Portfolio evolution: 2023 emissions were 2% below the lower end
of the target curve. Once we finish automating calculations, we
will monitor all emissions-related metrics (total emissions,
emission intensity, auto lending portfolio exposure, PCAF score,
etc.) monthly.
To support the alignment of the auto lending portfolio SCF plans
to:
• Enter into new agreements and build on existing agreements
with electric vehicle manufacturers.
• Renew and build on existing agreements with traditional
manufacturers that have ambitious electric vehicle transition
targets.
• Offer additional bundles of financial products and solutions for
electric vehicles (e.g. installation and financing of home
chargers, solar panels, etc.).
• Implement new risk management methodologies for electric
vehicles — residual value risk products to support the sale of
electric vehicles under our agreements with manufacturers.
The success of these actions depends entirely on electric vehicle
demand and regulation as well as manufacturers’ transition plans,
not to mention such other external factors as technology,
infrastructure, government incentives and tariffs on electric
vehicles. SCF aims to follow general market trends and help
finance electric vehicles according to the transition to this vehicle
type.
SCF is working on automating the emissions calculations. The
Responsible banking, Business, ESG risk and other teams are
monitoring action plans and emissions performance, while
commercial teams are performing actions to support alignment
plans. Estimating the present and future resources needed to carry
out our action plan is no easy task given the organizational
complexity and scope of targets (13 countries, 16 units and many
areas involved).
Progress on both automotive sector portfolio targets will depend on several external factors such as:
• Regulation and policy: Effective government measures
and policies are needed to reach the EV sales and
alignment levels that the net zero scenario requires.
European countries will need to meet the timelines set to
end sales of new ICEs. The introduction of low emissions
zones would support this change. Further adoption of
subsidies on EV purchases will be key to drive up
penetration, as we have seen in the Nordic countries.
• Technology: A guaranteed supply of the required
materials to produce EVs and PHEVs at scale is needed to
match demand. Also, reducing EV and PHEV production
costs is required to ensure affordability in comparison
with the less clean alternatives (ICEs), and thus ensure a
just transition.
• Infrastructure: Reaching a high penetration of EVs and
PHEVs will require a deep transformation of supply
chains and the infrastructure that powers them
(increasing the number of charging points and their
performance) to shift from a model of predominantly ICE
cars to an EV and PHEV majority. The investment needed
for this infrastructure will require support from
governments and other actors, which could be affected
by conflicting interests such as energy security.
• OEMs commitments: For electric vehicles to become the
market’s number one engine type, manufacturers must
fulfil their commitments regarding their development
and the phasing out of combustion engines.
Thermal coal phase-out
Sector boundaries: For the thermal coal target, we assess
customers for whom coal fired power generation represents
directly more than 10% of revenues on a consolidated basis; and
customers that own thermal-coal mines worldwide.
Industry dynamics: Power utilities can reduce their usage of
thermal coal power plants by replacing them with other
technologies, e.g. CCGT (Combined Cycle Gas Turbine) or
renewables. Thermal coal miners can either responsibly divest
their mine or run down their mining activity, eventually closing the
mine sustainably. According to EIA (Environmental impact
assessment), record highs have been reached in 2023 as a
consequence of the Covid-19 recovery, Ukraine's conflict and the
continuous growth of Indian and Chinese demand. The substitution
of coal by other sources of energy, such as electricity, bioenergy or
natural gas is expected to accelerate in the later years of this
decade.
Portfolio composition: Most of our customers in this group already
have plans in place to comply with our policy in 2030.
Exposure (drawn
Sector
Year
amount EUR bn)
2021
7.0
Thermal coal-related power &
mining phase out (EUR bn)
2022
2023
5.9
4.9
2024
4.8
Portfolio evolution: We have been continuously reducing our
exposure to thermal coal customers in scope of our target. Many of
our customers will need financing to transition away from coal.
Transition finance support to these entities may, therefore,
temporarily increase before declining over the longer term as we
aim to achieve our targets.
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2.4.2 Monitoring of other portfolios
Further to the five existing alignment targets published in 2021,
and the two new targets in the automotive sector in 2023, in 2024
we also worked on monitoring the alignment of other climate
relevant portfolios including mortgages (in the UK and Spain),
commercial real estate (in the UK and Spain) and agriculture (in
Brazil). The selection of sector portfolios for this exercise
considered their materiality both at Group and country level within
the sectorial climate approach.
The objective of these portfolio assessments is to understand the
level of financed emissions in each case, identify levers to drive
alignment and understand their feasibility.
The exercise comprised baseline-financed emissions calculations;
expected trajectory towards 2030; internal and external alignment
levers analysis (considering supply and demand, the regulatory
framework and support for sector alignment); internal governance
to monitor each portfolio’s alignment progress; and identification
of commercial opportunities and initiatives to improve data quality
to help align the customers of these portfolios. Further details on
the Spain and UK mortgage, and Brazil agriculture exercises are
provided below.
Agriculture
The agribusiness sector accounts for over 25% of Brazil’s GDP
(Gross Domestic Product). Measuring the sector's financed
emissions is challenging. Agriculture comprises a complex and
extensive value chain, with varying sources, types and quantities of
GHG emissions. Moreover, agriculture practices and emissions vary
depending on the commodity, management techniques,
geographic location, high portfolios turnover (for instance only 5%
of our 2022 portfolio remained active in 2023) and other factors.
Our measurement focuses on emissions from primary production
activities in the agribusiness sector within Santander Brasil's retail
portfolio. The emissions from primary production are unique to the
agricultural sector, being under its direct management, and
represent a significant portion of the GHG emissions in the
agribusiness value chain. Our initial assessment covered scope 1
and 2 emissions originating from farm-gate activities and the land
use change (LUC) associated with farmland. Guidelines for setting
net zero targets in the agricultural sector are still under
development. To overcome the lack of methodology, Santander
Brasil, in collaboration with WayCarbon, estimated its financed
emissions based on the project finance asset class category from
the PCAF, the GHG Protocol Agriculture Guideline, and Brazil’s
Fourth National Inventory.
Santander Brasil’s on-balance credit exposure to farms with
primary production was EUR 3.58 bn in December 2023. We
estimated financed emissions from that portfolio amount to 9.83
mtCO2e/year: c.80% estimated for land management, c.20% for
LUC emissions (considering 20-year legacy), and less than 1% for
energy consumption. The PCAF quality score is 3.1.
LUC emissions are mainly the result of illegal deforestation in
Brazil, and, as mentioned before, a significant part of the illegal
deforestation is driven by property speculation in public lands.
Santander Brazil has been implementing a robust monitoring
system that uses satellite imagery to monitor and detect illegal
deforestation in all financed farms and farms used as guarantees.
We go above and beyond the local legal requirements and
detecting illegal deforestation before the government had issued
embargoes in those properties. This benchmark practice allow us
to avoid being involved in financing illegal deforestation in our
agriculture portfolio (see more details in ‘Santander and the
Brazilian biomes’).
Our approach to support alignment leans towards a low-carbon
agriculture portfolio. It includes:
• helping customers build a low-carbon agriculture future though
green finance solutions and innovative financial transactions;
• engaging with the government and local and global forums to
share methodologies, open the broader debate to improve data,
and accelerate alignment in agriculture; and
• contributing to the Banking for Impact on Climate in Agriculture
(B4ICA) initiative, led by the World Business Council for
Sustainable Development (WBCSD), through the development of
methodologies to guide the sector in the transition to a low
carbon economy.
Commercial real estate alignment
For the commercial real estate sector we have been progressing in
our alignment analysis, starting with the most material portfolios
with enough information available, the UK and Spain. We are not
setting an alignment target for this sector. As already explained, it
is heavily dependent on further regulation to align. We have
assessed what the 2030 alignment point would be according to the
latest available IEA - Net Zero scenario: 12.8 kgCO2e/m
2.
Commercial real estate and mortgage in Spain
Santander España has been monitoring emissions from the
residential mortgage portfolio since 2021 and for the commercial
real estate (CRE) portfolio since 2022.
80% of Spain’s properties do not have an energy performance
certificate (EPC). This makes harder to calculate financed
emissions.
Since 2020 we have enhanced data availability by:
• Requesting an EPC as part of new loan applications.
• Purchasing databases from an external provider with all
available registers in Spain.
• Estimating non-existent EPCs using an internal, machine learning
model that includes such variables as year of construction,
climate zone, building type and property register information.
By doing this, we obtained actual or estimate EPCs for the entire
real estate portfolio.
To calculate emissions, we use the Partnership for Carbon
Accounting Financials (PCAF) methodology, with the Carbon Risk
Real Estate Monitor initiative (CRREM) emissions factors from the
PCAF database, for each EPC.
Our residential portfolio, which amounts to EUR 60.49 bn, has an
emissions intensity of 21.41 kgCO2e/m² and a PCAF score of 4.0.
Our CRE portfolio, with a scope of EUR 7.22 bn, has an emissions
intensity of 20.02 kgCO2e/m² and a PCAF Score of 4.0.
This methodology was ratified by a specialist consultancy firm and
the results audited both internally and externally.
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Local and global governance forums, including the Santander
España board of directors, regularly monitor these results.
This enables us to gain a greater understanding of our portfolios to
monitor their performance and set actions in motion to align the
least energy efficient buildings.
The alignment of these portfolios stems from progress in achieving
government plans such as the rollout of renewable energy in the
domestic energy mix and the alignment targets set out in Spain’s
National Energy and Climate Plan (PNIEC) and its long-term
strategy for energy efficiency through the renovation of real estate
(ERESSE). Moreover, according to the EU Energy Efficiency
Directive, EPCs are being put up for review with the aim of
achieving greater accuracy and consistency across Europe.
The limited availability of data and sensitivity of calculations to
emissions factors, as well as the heavy dependence on external
levers and the ever-changing regulatory landscape, pose a
challenge when making alignment objectives for these portfolios.
Moreover, we need sound public policy (especially for the
residential portfolio) to support vulnerable groups and guarantee a
just transition.
Santander España works to help customers align their residential
and commercial assets while calling for public policy that supports
this transition.
Santander promotes the energy efficiency of homes under our
residential portfolio through:
• A 10 bp interest rate discount for the most efficient homes.
• Special Banking Environment Initiative (BEI) and European
Investment Fund (EIF) lines of credit with additional discount for
homes with the best energy efficiency.
• Consumer loans with special terms and conditions for energy
related renovation, including the installation of solar panels,
heating and cooling systems, insulation and other items.
• State-backed loans for owners associations to renovate entire
buildings.
• An energy efficiency simulator for customers and non-customers
to estimate the work required to renovate their home, including
projected heating bill savings and emissions avoided.
For our CRE portfolio, which is less granular, we perform these
actions individually with customers:
• Agreement with CBRE to advise institutional and commercial
customers on aligning and enhancing the energy efficiency of
their buildings.
• In 2024, Santander España has joined the commercialization of
the ICO MRR Verde line, with the aim of supporting the green
transition with special terms and conditions and making
buildings more energy efficient through renovation.
• In 2024, we created a new Business Growth team that
specializes in CRE. This enables us to control new origination
better and spot opportunities for energy renovation and green
finance.
Commercial real estate and mortgages in UK
Santander UK adopts the Partnership for Carbon Accounting
Financials (PCAF) framework to calculate financed emissions
associated with the Mortgages portfolio. Financed emissions are
calculated at property level using the value at origination, the
outstanding loan amount as of 31 December 2023, and building
emissions taken from EPC assessment and the PCAF emissions
factors for the property. Where no EPC exists, in mortgages we
used a postcode to infer the EPC or, where this wasn’t possible, a
regression model trained with multiple known property
characteristics. In commercial real estate we used proxy
information from the PCAF database. This resulted in a PCAF score
of 3.2 for mortgages and 4.0 for commercial real estate, with a
portfolio coverage of over EUR 201.96 billion for mortgages and
EUR 11.04 billion for commercial real estate. Emissions intensity
for mortgages as of 31 December 2023 was 20.87 kgCO2e/m² and
25.40 kgCO2e/m² for commercial real estate.
The evolution of the financed emissions associated with our
mortgages portfolio in 2023 compared to last year is mainly
explained by an update of the internal methodology we use for real
estate financed emissions. In line with market practice, we base
our calculations on the Carbon Risk Real Estate Monitor (CRREM)
emission factors, resulting in lower attributed financed emissions.
Our initial assessment of Commercial Real estate highlights the
challenge of having sufficient coverage of asset level EPC data. We
were heavily reliant on use of proxy data which is reflected in the
overall PCAF score. We will continue to focus on improving data
quality for this portfolio and will streamline the process.
We also refreshed levers analysis to understand how the change in
UK government might impact on the alignment of our mortgage
lending and alignment pathways. Key levers identified within this
analysis include the implementation of the Future Homes Standard
for new buildings and minimum energy efficiency standards for
buy to let properties. Wider grid alignment also materially
supports our alignment.
During 2024 we also conducted research into the barriers facing
consumers and have launched several pilot propositions intended
to build our understanding of the role Santander UK can play in
supporting our customers. This analysis continues to be used to
inform our ongoing green finance strategy and public policy
engagement over the coming years. Converging towards net zero
pathways by 2030 will be challenging to achieve, particularly given
the dependency on external factors such as policy and demand.
Considering this analysis (and while we will continue to advocate
for policy change) we have made further progress in supporting
our customers to reduce their emissions. We do not focus solely on
increasing our exposure to new build lending and have a range of
test and learn proposition products that support homeowners with
a range of EPC rating in improving energy efficiency. These
propositions also build our knowledge and capability.
The test and learn propositions launched in 2024 are:
• Octopus Energy – a solar panel installation partnership for
existing customers offering 500 pounds discount.
• Vibrant – an enhanced EPC and home energy efficiency advice
partnership available to existing customers.
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• Home Energy Cashback to incentivize customers to make green
home improvements.
• Bidirectional partnership with Scottish Power including an
unsecured product that would be available in Scottish Power’s
customer journey.
• Green mortgage offering for customers with an A or B rated
property who are remortgaging to benefit from a discounted
rate.
• Working with Core Logic under the UK Governments Green
Homes Finance Accelerator programme to provide the first
national retrofit coordination advisory service in the UK.
2.4.3 Measuring and assessing other portfolios
We are expanding the scope of the portfolios measured to
understand and assess the alignment dynamics of each one of
these portfolios maintaining our focus on our sectorial climate
approach. Although we are facing a clear lack of available data to
measure financed emissions, especially in “Retail and Commercial”
segments and in some regions. Some of the information needed to
properly assess the level of emissions and potential alignment of
our customers, is not being measured or available for our
customers (examples: energy performance certificates of real
estate assets in LATAM (Latin American) countries, emissions
calculated and reported by Corporates and particularly by SMEs,
etc…). We remain engaged to reduce these data gaps to measure
financed emissions in a way that can be useful towards steering
the alignment of other climate relevant portfolios and be able to
try to implement alignment levers to broad scope of our financed
portfolios.
2.4.4 Santander Asset Management’s (SAM)
alignment strategy and approach
In March 2021, we joined the Net Zero Asset Managers (NZAM)
initiative with the ambition to align the Santander Asset
Management portfolio by 2050 to help limit global warming to
1.5°C.
As part of joining this initiative, SAM set a target to halve net
emissions for 50% of its AuM in scope (some 27% of the total) by
2030, as well as certain engagement objectives. SAM maintains its
ambition to continue aligning its activity, promote greater
transparency, and strengthen cooperation between investors and
issuers in the net-zero transition. We conduct internal reviews on
the way we measure and disclose our progress, in parallel with the
NZAM review. We plan to take a more qualitative approach to our
reporting next year.
To analyse each issuer’s net zero efforts and progress, we
classified assets according to the Net Zero Investment Framework
(NZIF).
This maturity scale on the degree of issuers’ alignment with net
zero emissions targets provides us with a framework to check the
progress that issuers are making in their transition and identify
areas that require further effort in terms of engagement. It
considers these factors:
1. A long-term ambition consistent with the goal of achieving net
zero by 2050.
2. Short- and medium-term targets to reduce GHG emissions.
3. Disclosure of scope 1, 2 and 3 emissions.
4. Emissions performance against targets.
5. Alignment strategy.
In 2024, we worked on developing our Net Zero engagement
strategy, which aims to use dialogue and voting policies to
encourage issuers to commit to alignment plans and transparency
and disclose accurate and credible information to be able to
monitor performance. It also motivates issuers to set ambitious
targets that are consistent with the Paris Agreement goals.
SAM is part of the Climate Action 100+ collaborative engagement
initiative and conducts regular analysis of Net Zero projects to look
into their possible adherence to it. In 2023, SAM joined the IIGCC
(Institutional Investors Group on Climate Change) Net Zero
Engagement Initiative (launched in January of the same year),
which aims to boost the number of entities that form part of the
CA100+.
2.4.5 Our environmental footprint
In this section we cover how Santander manages the following
IRO:
Contribution to reducing the Group’s scope 1 and 2
I+
greenhouse gas emissions.
As part of our climate ambition, our strategy to lessen the
environmental impact of our operations involves: reducing our
CO2e emissions and compensating those we're unable to reduce by
mitigating beyond our value chain; reducing and handling waste
responsibly; and raising employees’ and other stakeholders’
awareness of environmental issues.
We disclose our findings from the exercise we conduct on the
scope 1, 2 and 3 emissions of our own operations at buildings and
offices. We also disclose scope 3 - category 3.15
'Investments’ (financed emissions) in the ‘SN 4. Our transition plan’
sustainability note.
We’ve been measuring our environmental footprint since 2001.
Since 2011, our energy efficiency and sustainability initiatives have
helped us cut our scope 1 and 2 emissions by c.86%. Though such
reductions achieved, we continue to find opportunities and new
technologies to become more energy efficient. In this sense, in
2024 we revised our efficiency target with the ambition of
achieving a reduction in emissions from our own operations of 75%
compared to 2020. The additional reductions proposed by this
review are 6% in scope 1 and 49% in scope 2 compared to 2024.
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2024 environmental footprint
96%
1,012,554 MWh
renewable electricity in 10 core
energy consumption
countries where we are present
Scope 1
35,503 t CO2e
direct emissions
Scope 2
24,350 t CO2e
indirect emissions from
electricity and other (market
based)
For more details on our environmental footprint
see note SN 7.1 'Green transition'.
The key drivers behind our reduction of consumption and
emissions (which we generally group into three-year plans) were:
• Efficient spaces: Better use of space in terms of daily building
occupancy and a more efficient and better located properties to
carry out our operations.
• Efficient maintenance and operational management of branches
and offices — implementation of ISO (International Standards
Organization) 14001/ISO 50001 and LEED
20 O&M standards as
drivers for continuous improvement from an environmental
perspective and to facilitate that we comply with growing sector
regulation at our premises in every market where the Group
operates.
• Awareness and involvement of the entire organization in
environment-related results.
• Technology: Heating, air conditioning, lighting, automated
control, new and more efficient systems at more affordable
prices.
• Vehicles in the Santander fleet fitted with better technology and
a wider range of vehicle types in every market.
• Improvements in environmental data collection to analyse
trends.
• The purchase of renewable energy and obtaining of energy
certificates.
The latest plan, Plan 2022/2025, which ended in 2024 with an
investment of EUR 38.3 million, achieved a reduction of more than
69.3 GWh through efficiency measures. Additionally, we converted
213.8 GWh into renewables through contract agreements. Other
outcomes of this Plan are:
• Over 8,800 kW (kilowatt) of solar panels for self-consumption
with a self-production of 18.5 GWh in Brazil, Chile and Spain,
which houses two of Europe’s largest solar installations on office
buildings and data centres, enabling us to reduce our scope 2
emissions.
• 37% of our workforce work at premises with a buildings or
energy efficiency certification or standard (LEED, Breeam
21, ISO).
These certifications reflect our efforts to reduce fuel, electricity,
paper and water consumption, as well as scope 1, 2 and 3
emissions. Examples include the recently confirmed Breeam
Excellent certification of our new UK HQ (Headquarters), Unity
Place, in Milton Keynes (almost 80,000 m
2), and of the Hernán
Cortés building in Spain.
• 96% certified renewable electricity either certified purchased or
self-produced in our 10 core markets, helps reduce our scope 2
emissions.
• 2,103 electric vehicle parking spaces at our buildings and
commercial offices across our footprint. This is well above the
1,250 target we included in the 2025 plan. Even with the
objective to electric vehicles, Santander continues to follow a
policy of using company shuttles, encouraging the use of public
transport, and implementing car sharing initiatives as part of a
more efficient employee commuting model.
Our 2030 Efficiency Plan for the Group builds on our progress and
will focus on the following initiatives and levers:
i. Renewable energy and self-production measures:
• Solar panels in Santander’s own buildings, data centres and
commercial premises.
• Geothermal energy.
• Bundled and unbundled agreements to purchase renewable
energy (suppliers, PPAs-Power Purchase Agreements, RECs-
Renewable Energy Certificates).
ii. Energy efficiency and consumption reduction measures
• Lighting efficiency projects.
• Temperature control efficiency projects.
• Automated measurement and control of office spaces and the
branch network.
• Projects to enhance façade materials.
• Projects to renovate and upgrade commercial premises.
• Project to modernize facilities.
• Communications and internal training to raise awareness among
employees of responsible water, electricity and paper
consumption and the correct ways to recycle.
• Continuous improvement programmes that follow ISO 140001 in
buildings and ISO 50001 in offices and branches in our markets
to reinforce the importance of robust property and maintenance
management.
• Projects to build new, more efficient headquarters and rearrange
our assets.
iii. Direct emissions reduction measures:
• Replacing fossil fuels with other forms of energy.
• Preventing the leakage of direct emissions from the temperature
control systems at all Santander premises.
• Updating and modernizing air conditioning systems with more
eco-friendly and efficient cooling mechanisms.
• Monitoring possible leakages in air conditioning systems and
implementing predictive and preventative maintenance.
• Updating Santander’s fleet with hybrid and electric vehicles.
20 Leadership in Energy and Environmental Design
21 Building Research Establishment Environmental Assessment Method
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• Replacing conventional oil or gas boilers with electric heat pump
systems and technologies where the weather allows.
With these measures, we want to continue reducing our direct
scope 1 and indirect scope 2 emissions, with specific targets that
will enable us to reduce:
Scope 2
location-
Scope 2
market-
Alignment lever
Scope 1
(tCO2e)
based
(tCO2e)
based
(tCO2e)
i. Renewable energy and
self-production measures
2,000
9,000
ii. Energy efficiency and
consumption reduction
measures
1,600
20,000
3,000
iii. Direct emissions
reduction measure
600
Total
2,200
22,000
12,000
Banco Santander remains offsetting scope 1 and 2 emissions. As
part of our voluntary carbon credit market monitoring, every year
we carefully analyse and select a list of initiatives, usually in our
core markets. We follow a strict carbon credit selection process
that includes due diligence and compliance of our environmental
policies. Projects are also certified under some of the industry's
most well-known standards. Moreover, all the carbon credits we
purchased in 2024 were ratified by an independent rating agency
to validate their integrity. In 2024, we used 59,858 credits
22 (85%
reduction credits and 15% removal credits), to offset our scope 1
and 2 emissions.
Other key measures
Waste management
Since 2021, our offices and buildings in our core markets have been
free of single-use plastics to meet the target we set in 2019. The
2.5 Further actions and enablers
2.5.1 Strategy for engagement with other key
stakeholders
As mentioned previously, we believe that the banks are enablers of
the transition and as such, should not be considered as the sole
drivers of this process.
In order for banks to support the transition of their clients, the
enabling conditions must be in place. Our aim is to contribute
constructively to the transition debate by supporting policymakers
and regulators take a common approach to legislation. In this
sense, it is now necessary that the predominant regulatory and
“finance-centric” approach to the net zero transition that has been
adopted to date is reconsidered, acknowledging that the financial
sector is an enabler, but that it cannot be the sole driver of sectors´
investments towards a low carbon transition.
In addition, it is important that banks´ aim to supporting high
emitting companies in achieving their transition to cleaner
production models is recognised as a priority. This means that our
financed emissions are likely to rise as we finance the transition of
Santander Group City and Santander España’s central services
buildings have ‘Zero waste’ certification.
Employee awareness
Santander runs local and global employee awareness campaigns
on the importance of reducing consumption and waste. Each
subsidiary posts news and feature articles on the environment and
the Group’s ESG initiatives on its internal portal. In 2024, we
observed Earth Hour for the 15th consecutive year by switching off
the lights at the Group’s most emblematic buildings.
Scope 3
The assessment we conducted to determine the materiality of
indirect GHG emissions (scope 3) found that the only material
category under this scope was category 3.15 (financed emissions),
with a weighting of 99% of the total.
Moreover, the categories listed below are considered material
based on their volume, management capacity and, therefore,
potential to reduce them.
In addition to the scope 3 categories we reported on in recent years
(3.6 Business travel and 3.7 Employee commuting), in this
document we’re reporting on four more supply chain-related
categories
23 for the first time:
• 3.1 Purchased goods and services
• 3.2 Capital goods
• 3.4 Upstream transportation and distribution
• 3.9 Downstream transportation and distribution
To enhance the quality of these emissions and to draw up actions
to reduce them, Santander and Aquanima will work with the key
vendors of the leading purchasing groups to obtain information on
their carbon footprint.
these companies. Nonetheless, supervisors should not consider our
portfolios as misaligned with a 2050 net-zero pathway, but rather
the opposite; we are financing and engaging in our customers’
transition, not divesting from them.
There is a meaningful opportunity ahead to foster that the
appropriate levers are set to facilitate the transition of the global
economy. This includes the review of the current sustainable
finance framework. Whereas much progress has been achieved to
date in areas such as reporting on sustainability matters,
taxonomies to classify green activities and financing, the aim of the
European Commission to streamline and consolidate multiple
requirements on companies is very much welcome. The reduction
of complexity and of the regulatory burden would facilitate the
implementation of the framework by the market, and the
allocation of resources to support the transition, while positively
contributing to companies' competitiveness and economic growth.
Finally, a framework that supports business transition should not
seek to increase the capital requirements linked to ESG risk drivers
since the Pillar I prudential framework already considers their
22 Since emissions offsetting is done by country, the upward rounding of tCO2e means that the total amount of credits is slightly higher than the total sum of emissions.
23 We calculated these categories based on our operating expenditure in 2024. The emissions factors we used to calculate these categories in 2024 are based on the emission
intensities within the input-output (IO) database of the US Environmental Protection Agency (EPA), which are split by economic sector.
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impact. Increased capital requirements would be counter
productive and could jeopardize the transition of the economy —
especially in emerging countries and that of companies in carbon
intensive sectors.
Authorities should work together as much as possible on drawing
up the regulatory framework that provides the right tools to
finance the transition of the economy globally.
For more details on our strategy for engagement with authorities,
supervisors, NGOs, etc. see 1.2 'Stakeholder engagement'.
Partnerships and sector working groups
Partnerships with others in business and governments can help us
share best practice and accelerate progress if we are to tackle
climate change and protect biodiversity. Grupo Santander
participates in different organizations, alliances and working
groups: we engage with international and local stakeholders
(sector associations, think tanks, universities, peers and others) to
progress in global and company goals, in line with the SDG 17
(Sustainable Development Goal) on Partnerships for Goals.
In addition to the initiatives outlined in section 1.2 'Stakeholder
Engagement', we also engage with leading organisations to
improve banks’ stewardship of climate change and nature.
→World Economic Forum - International Business Council:
Santander is participating in the "Transforming Energy Demand"
project, which aims to identify ways in which companies can
reduce energy demand intensity as a means of contributing to
the global energy transition, as well as to the bottom-line. The
IBC (International Business Council), currently chaired by the
executive chair brings together 130 CEOs and company chairs
across industries, from developed and emerging markets, on all
continents. Member of this group are responsible for c.3% of
global energy consumption.
→World Economic Forum - Alliance of CEO Climate Leaders:
Santander continues its engagement within the World Economic
Forum Alliance of CEO Climate Leaders as key network to
influence stakeholders, including policymakers, and drive
change towards meeting net zero targets. We are also following
the work at the “Financing the Transition to a Net-Zero Future”
initiative.
→Banking Environment Initiative (BEI): Coordinated by the
Cambridge Institute for Sustainability Leadership (CISL), we
continue to take part in the Bank 2030 initiative, which aims to
create a roadmap for the banking sector to support broader
society’s transition to a low-carbon economy.
→Net Zero Banking Alliance (NZBA): We're a founding member of
this initiative (created in 2021) and member of the Net Zero
Asset Managers Initiative (NZAM), since 2021.
→Financing the Just Transition Alliance: Led by the Grantham
Research Institute within the London School of Economics, the
goal of the Alliance is to stimulate and support system level
innovation that enables investors and the financial sector more
broadly to deliver a just transition in the UK.
→Partnership for Carbon Accounting Financials (PCAF): We have
been a member of PCAF since 2021 and thus committed to
disclose our financed emissions according to the PCAF standard.
We also take part in its regional and sectoral working groups.
→TNFD Forum: We are part of the TNFD Forum to contribute to
the framework for financial institutions that will help the sector
to assess, manage and report on impacts and dependencies on
nature. We also participated in different TNFD-pilots in LATAM
(Latin American) that allow us to gain important insights that
highlighted the significant challenge, particularly regarding the
lack of availability of primary data and tropicalized databases to
assess impacts and dependencies.
→Energy Efficiency Financing Coalition: Led by the European
Commission and with the participation of Member States and
financial institutions, including Santander, the coalition seeks to
promote measures (non-regulatory and non-binding) that
promote energy efficiency in relevant sectors, such as cars,
agriculture, buildings, among others.
2.5.2 Governance & policies
Roles, responsibilities, and remuneration
Climate change and green transition oversight
The management and oversight bodies described in sustainability
note 2 approved our transition plan, as part of this report. Also, the
responsible banking, sustainability and cultural committee (RBSCC)
reviewed our portfolio alignment targets, which the board of
directors then approved. These bodies also receive regular updates
on progress with our targets and our climate agenda.
Moreover, they have also overseen the climate finance reports that
we have been publishing in recent years.
Other bodies such as the audit committee, the financial accounting
and reporting committee, the management committee and the
sustainability committee take part in overseeing sustainability
disclosures. The risk control committee and the risks supervision
commission review risk appetite proposals before their approval.
For more details on our ESG governance model, see note SN 2.
'Sustainability governance'.
Climate in incentive schemes
Since 2020, the Group’s variable pay scheme and, since 2022, our
long-term incentives, have considered green finance and the
progress made with climate and other sustainability targets.
In 2024, shareholders at the Annual General Meeting (AGM)
passed a board resolution on sustainability metrics for executives’
2024-2026 long-term incentives (with a weighting of 20%), which
are consistent with our targets. Half of the sustainability
dashboard covers supporting the transition to a low-carbon
economy, including socially responsible investment and green
finance raised and facilitated. Moreover, this line of action
considers the requirement to develop a transition plan that enables
a score of over 100%. Achieving a credible and comprehensive plan
will depend on the regulatory and political landscape.
For more details on the integration of climate-related performance in
incentive schemes, see section 1.4 'Sustainability governance'.
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Main areas involved in implementing our climate change
strategy
In 2024 we continued to embed climate management in business
as-usual across CIB, Risk and Sustainability. For instance, CIB
strengthened its corresponding governance. And Wealth continued
to reinforce and update the working groups and policies that
oversee and coordinate its SRI strategy, described in section 3.2.2
'Responsible investment and social finance'. Consumer has
different working groups that meet monthly to address
sustainability projects and issues, and quarterly to review progress
in the sustainability agenda.
Beyond global businesses, a number of local units are engaged in a
process coordinated by Group Responsible Banking. The objective
is to progress the alignment agenda, promote knowledge and
expertise sharing by local teams and seek synergy in the design of
reliable transition plans.
Other corporate-level initiatives and groups that support
governance meet regularly to implement our climate change
agenda and inform on regulation updates. For example, our public
policy sustainability working group updates on upcoming climate
and sustainability regulation; a regulatory radar governance
working group that meets quarterly to monitor the status of
implementation of sustainability regulations and to assign
responsibility for the implementation of regulatory initiatives to
the Group's areas; an environmental footprint working group that
measures our footprint and reviews ways to reduce it; and a
sustainable bonds working group that oversees sustainable bonds
issued from Group and its subsidiaries.
ESG Reporting & Internal Control
A new ESG Reporting & Internal Control team, set up in the second
quarter of 2023, in the Financial Accounting & Management
Control division oversees the disclosure, supervision and control of
the ESG information the Group uses to meet regulatory
requirements and stakeholder expectations. This year, the team
worked with each area in question to make information gathering
and the governance and control of disclosed information more
automated and efficient. The emission reduction objectives of our
own operations emissions (scopes 1 & 2) have been reviewed in
the Group’s ESG Reporting Forum.
ESG classification meetings
As part of our green transaction assessments, we created global,
regional and local panels to provide additional scrutiny and
validation, and coordination across the Group; agree on labelling
transactions as green, social or sustainable; and make sure that we
use the same standards and procedures across our footprint. The
Risk function leads these panels, which business, compliance and
sustainability teams also take part in.
Internal Audit
The internal audit function reviews climate risk, for more details
see note SN 2. 'Sustainability governance'.
Policies and guidance
The Group has different frameworks and policies that establish the
principles, processes and responsibilities for managing ESG criteria
throughout Santander Group.
The Group establishes ESG policies, procedures and guidelines
adapted to local regulations and applied to all units. We
systematically review the scope of the policies to adopt ESG
standards in accordance with international best practices. The main
ones are the ESCC risk policy and the Responsible banking and
sustainability policy.
For more details on our ESG governance model see note SN 2.
Sustainability governance'.
For more details on our ESCC risk management policy, see section
3.2.3 'Environmental, social and climate change risk
management'.
Climate training and skills development
Particularly in climate, we have developed different initiatives to
enhance capabilities, beyond the training on sustainability detailed
in section 3.3.1 'Talent and skills development'. Some themes of
these initiatives are social and environmental risk management
and sustainable finance.
For more details on our employees training and skills development
see section 3.1.1 'Talent and skills development'.
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3. SUPPORTING EMPLOYEES,
COMMUNITIES AND CUSTOMERS
(Social information)
3.1 Our employees
Aiming to attract and retain a talented team, our approach is based on
24:
→promoting 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.
→offering optimal conditions that safeguard employee health and well-being, with fair and competitive remuneration and initiatives that
afford a better work-life balance.
→promoting an inclusive and meritocratic culture where everyone feels valued.
3.1.1 Talent and skills development
This section outlines how we manage the following IRO:
Promote continuous career development and personal
I+
growth through learning and development
programmes.
For the purpose of this Annual Report and in line with previous
years, Santander defines employees as people who have an
employment contract with any of the companies that comprise our
consolidated group and whose contract remains in force at the
time of publication.
25
Europe 42.2%
206,753
employees
North America 20.0%
South America 37.8%
It is fundamental that our employees have the necessary abilities
and knowledge to perform their role.
i. 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.
We focused on:
a. digital transformation.
b. graduate internship programmes.
c. 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 based on lifelong learning.
ii. 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
Our potential review model, implemented in 2022, has enabled us
to delve deep into the skills, expertise and aspirations of some
24 For more information on employee dialogue, see section 1.2 of Dialogue with our stakeholders.
25 The following are not included as Employees: a) Interns; b) Salaried employees on leave or career breaks whose employment contracts are suspended under the respective
local employment regulations; c) Non-salaried individuals with temporary employment contracts through an external provider (NACE78) performing similar tasks to in-house
staff, who do not receive salaries or benefits paid by Santander, nor self-employed workers; d) Other workers engaged in different tasks within the value chain under service
contracts. Additional information on the characteristics and distribution of our employees is provided in the 'Sustainability Notes'.
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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 our global international mobility policy approved by the
Human Resources Committee by decision from the Group Board, is
an essential tool for the development of our professionals. The
objectives of this policy are to: contribute to the development of
talent in the Group; strengthen succession plans; attract external
talent; encourage global mentality; facilitate international
movement to satisfy business needs; share in a transparent
manner the criteria for mobility across the workforce.
iii. Learning and development
Our learning and development policy, provides an action
framework for the design, supervision and deployment of learning
activities with the purpose of promoting innovation and the
development of skills in our employees.
In 2024, we allocated EUR 64 million to employee training to
provide employees with the resources and tools they need to
enhance their skills and employability and to meet critical business
and market demands.
173,309 employees accessed Dojo, our digital learning platform
and we continue to roll it out to reach all employees. On top of its
vast catalogue of 174,223 references with courses in critical
competencies promote that our employees are up-to-date with the
latest trends and technologies. Dojo offers customized
recommendations based on current and future roles to foster a
culture of personal development and lifelong 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 address the critical skills needed to lead
the Group’s transformation.
It provides access to the latest trends, content and tools, and helps
create networks of senior leaders to promote the sharing of best
practices and experiences. It also encourages them to use what
they learn and make a clear path to drive our transformation.
Talent development programmes and promoting a
culture of lifelong learning
Our learning and talent development strategy places focus on the
development of young talent and digital business profiles, with
programmes such as Young Leaders and BeTech & Business.
These programmes are designed to identify and develop internal
talent, offering growth opportunities in the career of our
employees, helping them be prepared for future challenges.
We trained our employees in the skills they need to further their
careers. In 2024, 103,154 employees received training in core
business skills related to technology, banking and people to
enhance individual performance.
We award certificates to employees who complete training
activities and programmes to recognize their new skills. These
certificates are approved by an independent issuer. In 2024 17,305
employees obtained certificates, which will enable them to
broaden their career horizon, apply for new opportunities and
accredit their knowledge.
Mandatory training and promotion of Sustainability
and Responsible Banking
To reinforce the Group's culture and knowledge in relevant
matters, we have mandatory training, which looks to train all
employees in strategic and/or regulatory topics approved by the
Global Compliance Management Committee. In 2024, we covered
13 topics in mandatory training, including sustainability, code of
conduct, harassment prevention, cybersecurity, financial crime and
data protection. This efforts aims to protect the organization and
increase our employees capabilities to act with responsibility and
ethics in their daily activities. Moreover, each subsidiary has
mandatory courses related and applicable to their local laws and
regulations.
This year, our employees have participated in a training itinerary on
Green Finance for Retail & Commercial Banking, with transversal
and country-specific modules in countries we are present with a
sustainable offer. Furthermore, all employees have received
mandatory training on practical integration of ESG criteria into
commercial processes. As part of the Board of administration
training program, a session on sustainability with focus on ESRS
was conducted. This training strengthens the knowledge and skills
of our employees, drives business and benefits the community.
We continue progressing on the certification of experts in
sustainable finance topics and promoting our ESG Talks, a program
of sessions where we share knowledge and points of view on ESG
topics, with the participation of internal experts from different
businesses and functions involved in our sustainability agenda. We
have also trained our employees in inclusion, environment, health
and safety, as well as expanded our learning library related to
sustainability topics.
We will continue to invest in developing our employees so that
they are equipped to face future challenges and contribute to the
ongoing success of the Group.
8.7 (out of 10)
Rating on the learning,
usefulness and development of skills.
26
26 YourVoice response to the question: “My job enables me to learn new skills and develop them”. In the top 5% of the finance sector.
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3.1.2 Working conditions
This section outlines how we manage these IROs:
Promote the health, well-being and security of our
I+
employees in a safe and inclusive workplace; facilitate a
positive work-life balance through flexible working.
Harm employees through discriminatory conduct,
I
inadequate working conditions, harassment or
corruption.
Promote the general well-being of employees and
I+
provide appropriate remuneration under equal
conditions based on merit and market rates.
Potential risk of conflict with employees based on the
R
infringement of their rights.
i. 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.
Occupational health
27
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.
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 well
being). In 2024, over 64,000 employees took part in local
BeHealthy initiatives.
Rating on satisfaction and opinion on health
8.4 (out of 10)
Health and well-being as a
priority
28
8.4 (out of 10)
Support I need in terms of
physical and mental well-
being to perform my job.
29
In April, to celebrate World Health Day, we held BeHealthy Week,
bringing health and well-being to the focus of the Group
worldwide, with daily, in-person and virtual events. We also joined
global initiatives run by the World Health Organization, including
Global Mental Health Week, Women’s Health Month and Men’s
Health Month.
These initiatives gave our employees access to mental health and
emotional well-being support programmes, as well as to sports
centres, nutrition and mental health apps, specialist health and
preventative care, and other free or discounted services.
Work-life balance
Santander promotes employee work-life balance. Employees in all
our entities are entitled to paid paternity or adoption leave or to
care for newborn children or family members. In 2024, 8,195
27 For more details on absenteeism and health, see the 'Sustainability notes'.
28 Average employee rating of the statement 'Employee health and well-being is a priority at Santander'. In the top 25% of the financial sector. .
29 Average employee rating of the statement 'Santander offers me the support I need in terms of physical and mental well-being to perform my job', in line with the financial
sector.
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employees took paternity, maternity or adoption leave and 2,824
other employees family care leaves.
30
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. In nine of our core markets,
31 almost
all our employees in central services roles take part in flexi
working programmes that enable them to work remotely or adjust
their entry and exit times. We review these measures constantly
with our employees and in view of customer needs — considering
productivity, commitment and our experience as an employer.
Rating on satisfaction and opinion on flexibility
8.8 (out of 10)
Flexibility at Santander
32
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
33 . 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.
Collective bargaining and social dialogue
Santander promotes respect for the rights of employees
34 . In 2024,
we continued to guarantee freedom of association and the right to
collective bargaining. Our Responsible banking and sustainability
policy considers forming or joining unions and other representative
bodies a basic right of workers, in accordance with Article 10 of our
General code of conduct.
We also ensured respect for freedom of association, trade unions,
collective bargaining and protection for employees’
representatives under the laws of each country where we
operate
35 .
At 2024 year end, 110,692 employees worked at premises or in
companies with union representation.
We continued to promote and comply with the International
Labour Organization’s Fundamental Conventions and have a
European Business Council that meets regularly — Group senior
managers and employees’ legal representatives in Italy, Poland,
Portugal, Spain, the UK and other European countries attend.
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.
In Brazil, Santander and other local banks, implement preventive
measures to minimize the risks from individual labour-related
claims, which are common in this market. We have sufficient
provisions to cover these risks
36 . In order to minimize these claims,
an internal oversight committee has been established, setting
preventive measures to promote an environment with adequate
working hours and compensation for all positions in the same
location, in compliance with local labor legislation and
jurisprudence court rulings. Likewise, the departure records have
been digitized, and we have strengthened policies and guidance to
employees for the correct registration of working hours and
digitalization of departure records.
Protection of employee data
The handling of employee data is carried out under the protection
of labor laws and based on legal obligations or legitimate interests
covered by data protection regulations. As the data controller of
such data, Santander has the appropriate procedures, tools, and
controls based on the policies of the Group's data processing.
30 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.
31 The nine core markets with the most employees are Argentina, Brazil, Chile, Mexico, Poland, Portugal, Spain, the UK, and the US, accounting for93% of our total.
32 Employees’ rating of the question on whether they are satisfied with the amount of flexibility they have in their work schedules (within the average range for the finance
sector). A. 2024 Your Voice survey.
33 At Santander Polska, this leave is shared, with a guaranteed minimum for both parents of up to 20 weeks, and in Santander Chile the father has 2 weeks of guaranteed paid
leave.
34 See our commitment to human rights (which is included as well in our Responsible Banking and Sustainability policy) and international mechanisms of application in section
1.4.2. 'Human rights due diligence'.
35 In 15 of the countries with the highest number of employees in the Group, there are union representatives according to local regulations (by company, location or individual
affiliation). In those countries, except for the United Kingdom where data on union membership cannot be disclosed, 60% of workers have union representation.
36 For more details on our provisions, see Note 25 of this report.
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For more Information on data protection, see section 3.3.3 `Privacy, data
protection & cybersecurity'.
ii. Remuneration and corporate benefits
Adequate remuneration
Our remuneration framework combines fixed and variable pay
schemes based on the performance of employees and the Group.
Our remuneration and performance policies, as well as our general
code of conduct, forbid differential treatment that is not based on a
review of performance and corporate behaviours. It also promotes
dignify pay.
Specifically, the remuneration policy lays the foundations for non
discriminatory practices (related to performance and internal
consistency), as well as the principles, processes and criteria for
granting fixed and variable remuneration, creating long-term value
by managing risks.
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
37 . This demonstrates
our pledge to provide fair, competitive remuneration and the
appropriate combination of fixed and variable pay.
All our businesses and subsidiaries have short-term variable
remuneration schemes to reflect what we have accomplished and
how, according to Group-wide quantitative and qualitative goals as
well as individual and team goals, behaviour, leadership,
sustainability, commitment, growth and risk management. These
schemes promote meritocracy, recognize individual and team
contributions, and promote employee growth and well-being.
Aligned with sustainability goals, the variable compensation of
executive directors also weighs compliance with our sustainability
and climate goals
38 .
In 2024, we paid EUR 14.3 billion in employee wages and
benefits
39 .
To comply with EU regulations on remuneration and manage risk
correctly, we identified 1.246 employees subject to a deferred
variable pay scheme because their decisions can have a material
impact
40 on Santander's results. Therefore, the majority of them
are subject to a policy of deferral of a significant portion of their
variable compensation (ranging from 40% to 60%, depending on
their level of responsibility) for a period of four to seven years. This
variable compensation is paid out 50% in shares and 50% in cash,
and is subject to a possible reduction (malus) or recovery
(clawback).
For more information on adequate salaries, total remuneration ratio, see
SN 7.3 'Employees'.
Equal pay
Our remuneration practices promote a non-discriminatory salary
management in terms of gender and equivalent remuneration,
especially in those cases where employees perform the same or
similar work (equally remunerated for equal work or work of equal
value).
Our salary comparison between women and men who perform
similar functions remains at c. 0, which confirms our positive
performance in recent years and meets the ambition we set for
2025
41 . In certain jurisdictions we continue to periodically assess
compensation levels for pay equity and where appropriate make
adjustments to compensation.
We often consult our employees to gauge how appropriate and
acceptable our remuneration policies are and they recently
deemed our remuneration policies competitive.
For more information about the employee consultation process, refer to
section 3.1.4. 'Our listening strategy'.
Rating on satisfaction and opinion on compensation
7.8 (out of 10)
Fair pay
42
7.6 (out of 10)
Fair compensation process
43
MyContribution
MyContribution is our common performance management model.
We update it regularly, and it is aligned with our culture.
177,081 Santander employees had their performance reviewed
( 86% of the total
44) under this model in 2024.
These reviews include quarterly or annual quantitative variables;
corporate behaviour assessment variables (TEAMS) based on
feedback from peers and internal customers; and risk management
variables (RiskPro), which enable us to analyse individual and team
performance holistically.
37 Other compensations that complement the salary of our employees: benefits, pensions, other fixed compensations, incentives, and short or long-term variable
compensations.
38 Climate goals account for 2% of the total remuneration of executive directors, while sustainability targets represent 8% of their total variable remuneration.
39 See Note 46 of the annual accounts.
40 Material risk-takers.
41 Measured with the EPG - equal pay gap ratio, which compares the average compensation between men and women who perform similar tasks. Results for 2024, across the
entire Group.
42 Average employee rating of the statement “I receive fair pay according to market rates (e.g. salary, promotions and benefits) for my contribution to Santander”, putting us in
the top 25% of the finance sector.
43 Average employee rating of the statement “the processes for determining compensation (e.g. salary, bonus and benefits) are fair and impartial”, in line with sector
benchmarks.
44 The employees who did not take part in MyContribution in 2024 were new hires and employees in some customer service, debt recovery and contact centre roles, who are
subject to similar performance management schemes but with shorter and more continuous cycles due to the nature of their work. 90,998 women (84% of the total number
of women at year end) and 86,071 men (87% of the total number of men employed). Due to statistical significance, we don't report other gender's percentages.
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3.1.3 Inclusive culture
This section outlines how we manage these IROs:
Promote a workforce that reflects the society we live in
I+
and encourages collaboration; guarantee the same
opportunities for all our employees, irrespective of
gender, disability or other characteristics.
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.
In the global markets we serve, our focus on an inclusive culture is
a critical driver of our business success. Our talented and engaged
team generates customer loyalty, leading to strong financial
results for our shareholders. By fostering equal opportunities for
all and an inclusive environment that values different backgrounds,
experiences, and viewpoints we enhance our problem-solving
capabilities, improve decision-making, and boost creativity to
achieve this.
Our approach to hiring, training, promoting, and retaining our
workforce is based on meritocracy. Our success is intrinsically
linked to the effectiveness of our team, making it a cornerstone of
our strategy for sustained growth and profitability.
Related matters are discussed at the highest level— the Group
Board cannot delegate these discussions and our executive
committee reviews progress.
Our inclusive culture is embedded in the global procedures and
regulations that underpin our organization and promotes
meritocracy. For instance, it features in our key position,
succession, nomination, and selection, suitability assessment and
succession of directors policies. It is also embedded in our Group
leadership principles and performance and remuneration reviews.
For further detail, see section 4.1 'Corporate culture'.
For further detail, see section 6 'Remuneration' of the corporate
governance chapter.
We have a strategy on this matter in place since 2020, which drives
us to act ethically and transparently. We base our global strategy
on five pillars (gender, persons with disabilities, LGBTIQ+
45, ethnic
and culture, and generational) and take action in other areas such
as socio-economic. While we maintain a global outlook, each
subsidiary adapts to its local landscape.
Where local laws allow, we encourage our employees to disclose
personal information voluntarily so that we can identify areas for
improvement and make decisions based on true data.
Rating on satisfaction and opinion on inclusion
9.3 (out of 10)
Inclusion
46
While our local teams have action plans based on their own
characteristics and conditions to continue supporting progress on
inclusive culture, we also run global initiatives to continue making
inroads:
• We run mentoring and networking programmes with diverse
groups.
• Since 2022, we have held global awards to give recognition to
individual and team initiatives that help facilitate equal
opportunity access. Stand-out initiatives in 2024 included a
project in Poland for the accessibility and inclusion of persons
with disabilities; a scheme at the Corporate Centre to spark the
interest of the daughters of our employees in studying STEM
(Science, Technology, Engineering, Mathematics); and promoting
labour reinsertion of women in Spain.
• We are part of global initiatives, such as:
45 Lesbian, gay, bisexual, transgender, intersex, and queer.
46 Average employee rating of the statement “At Santander we accept and respect everyone based on who they are, independent from gender, nationality, sexual orientation,
religion, etc.”, putting us in the top 10% of the finance sector.
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Gender
We promote career development based on merit and support our
high potential employees at every level to foster variety of
leadership
47 .
40% of our board members are women, which meets our goal for
women to make up 40% to 60% of our directors. This goal will
become a legal obligation in some jurisdictions from 2026.
Over the past five years, we have increased the number of women
in or senior executive positions from 22.7% in 2019 to 31.2% in
2024 — reaching 34.4% in our core Retail & Commercial
business
48 .
This indicator used as reference the senior executives with the
highest ranking in the organisation, representing 1% of the total
workforce. Therefore, we agreed to expand the base reference
49 , a
move that is possible thanks to more quality data and greater
analytical capacity, with common management and development
programmes across the Group, which also responds to stakeholder
expectations. The new indicator will allow us to:
• Reach more of our workforce
50 and, therefore, reach a greater
wealth of talented women internally that will proceed towards
senior roles organically.
• With this approach, we expect to progress gradually and
sustainably towards gender balance, moving closer to c.40% in
2030
51 .
Women make up 52.4% of our total workforce, a stable trend
given 52% of new hires have been women.
We run initiatives to promote equality in the job market . Our
programmes include:
• Women in Tech, which has been executed in 7
52 core countries of
the Group to attract talented women with a technology or digital
background (29% of our STEM roles are held by women)
53 .
• 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, has 8,000 professionals participating
and reaching representation in up to 16 countries. Some
initiatives are: Thursdays to Share, I Am Remarkable, Global
Mentoring Program, Women in Banking (WiB), the first women's
network in the Spanish banking sector, and the celebration of the
40th anniversary of the European Women's Management
Development Network at Banco Santander Financial City hosted
by SWN.
In 2024 we maintained our equal pay gap (EPG) at c. 0% after
reaching our goal in 2023 which we fulfilled two years early. In
certain jurisdictions we continue to periodically assess
compensation levels for pay equity and where appropriate make
adjustments to compensation.
We also measure at a global level the gender pay gap (GPG), which
compares the median pay of women and men. In 2024, our GPG
was 26% (improving 2.1 p.p. and 4.5 p.p. vs 2023 and 2022)
54 .
Persons with disabilities
We strive for the successful inclusion of our 4,828 employees with
disabilities (over 2.3% of our global workforce
55). There is a legal
requirement regarding the inclusion of persons with disabilities in
the workforce at least in 7 of countries with more than 1,000
employees.
We have employee networks in several units that aim to include
persons with disabilities. Our global Enable network, 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.
Our event to mark international day of persons with disabilities,
which we hold every year, included a talk with paralympic
medallist Susana Rodríguez Gacio. She shared her experience and
how education, hard work and passion have enabled her to break
down barriers and triumph in sport and medicine.
LGBTIQ+
Our global network of LGBTIQ+ employees and partners, Embrace,
ran events to share their 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
56 .
Ethnic and culture
We monitor ethnic minority representation in four of our core
markets. Employees who identify themselves as part of an ethnic
47 The percentage of male senior executive positions is 68,8%. For more data and metrics about employee characteristics, see the Sustainability Notes.
48 Retail & Commercial and its support areas account for 74.5% of our global workforce.
49 Applicable in accordance with local regulations.
50 Including these Group categories: Sr.Executive VP, Executive VP, VP, Director, Manager, Expert and Branch Manager which account for 14% of our employees.
51 At year end, 38.4% of senior management positions (Senior Executives and Other Executives) are held by women. This ratio does not include joint ventures due to their
temporary nature and joint management (they account for only 1.7% of our workforce).
52 When this programme or others were rolled out in a country where regulatory restrictions apply, the programmes are adjusted to comply with any required principles.
53 We have a growing proportion of employees performing STEM-related functions (Data and Services, Information Technology-IT Support, and Products), totalling 30,089
employees across the Group.
54 The gender pay gap measures differences in remuneration between all women and men, regardless of job type. For our management purposes, we use the gender pay gap
as the difference between the median remuneration of men and women, expressed as a percentage of men's remuneration.
55 Comparable to 2.2% at the end of 2023. As in previous years, we follow local regulations for the calculation and recognition of employees with disabilities. In most countries,
disabilities are recorded at the employee's request with the support of a certificate issued by social services (e.g., degree and date of disability). In the UK, disabilities are
recorded at the employee's request and do not require a certificate.
56 The law in 12 of Grupo Santander’s markets (accounting for 69% of our total workforce) allow for the voluntary request of gender identity information from employees.
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or racial minority in these markets account for over 31.6% of the
total workforce.
We have employee inclusion networks such as: Reach, Bold and
Talento não tem cor, which in 2023 had over 1,300 members.
Anti-harassment protocol and training
To reaffirm the Group’s ambition to combat discrimination
57 ,
108,213 employees across the Group received specialized training
in 2024, while 101,651 employees undertook a course on sexual
harassment. These courses are part of our global anti-harassment
protocol and General code of conduct as a common framework to
establish guaranteed standards and fight against discrimination
and behaviours that contravene fair treatment and moral integrity.
3.1.4 Employee feedback and experience
As detailed in the “Engagement with stakeholders” section, “Your
Voice” is our regular listening strategy to gather employees’
feedback. It includes specific questions on our processes and we
analyse the comments made on material impact and our
employees’ concerns.
Employees can give feedback and leave comments on every
question, preserving anonymity at all times, since the provider
facilitates data in an aggregated form to the Group. In addition,
managers with five or more employees can access real-time
aggregated results of their teams to identify levers that drive
greater engagement and promote dialogue, trust, and
transparency. As a result, this information helps each leader to
enhance team performance and reduce burnout, resignations, and
absenteeism.
In a broader sense, cross-geographical and global business action
plans are also established. During this year, numerous actions have
been launched to improve the employee experience and value
proposition. Some of these initiatives have focused on professional
growth, recognition, and workload management. In addition,
efforts have been made to simplify internal processes and promote
organizational transformation and change.
Moreover, our subsidiaries have action plans in place based on
their own characteristics and conditions to continue supporting
quality inclusive culture training.
For further detail related to workforce, see SN 7.3 'Employees'.
Please see our work and sexual harassment protocol and moral integrity
at work at santander.com/es/nuestro-compromiso/nuestra-cultura/
diversidad-equidad-inclusion
Since the implementation of YourVoice in 2022, we have seen a
positive trend in results and participation, reaching levels that
position us above the financial sector, with a participation rate of
83%.
The engagement measures the
level of involvement and
enthusiasm of employees
towards their work and the
organization.
8.7 (out of 10)
General engagement
Within the top 25% and
+0.4 compared to the
financial sector.
See in the section 4.3 'Ethics Channels' the processes to repair
negative impacts and channels for own staff to express their
concerns.
57 Consider race and ethnicity, color, sex, sexual orientation, gender identity, disability, age, religion, political opinion, national or social origin, among others."
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3.2 Communities' sustainable development
We consider affected communities those where Santander has a presence as an entity, either through its businesses or its community support
activities, and includes any specific groups mentioned in this chapter.
3.2.1 Supporting the economic and social
development of our communities
In
IRO:
I+ Drive economic growth and job creation in the regions
where we operate and provide credit to people and
businesses.
this section we cover how Santander manages the following
i. We help people and businesses prosper
Through finance and investment
→EUR 350.5 billion to help people buy homes and EUR 214.2
billion to purchase other goods.
58
→EUR 330 billion to help set up or grow companies (including
more than 530 thousand SMEs and self-employed).
59
→ EUR 24.1 billion in green finance raised and facilitated and EUR
88.8 billion assets under management in Socially Responsible
Investment.
→ EUR 1.27 billion disbursed in microcredits to more than 1.3
million of microentrepreneurs to support the creation and
expansion of their businesses.
Through community support
→ 2.6 million new people financially included.
→ EUR 166 million invested in communities, including 104 million
to promote higher education, employability and entrepreneurship,
benefitting 5 million people.
3.2.2 Responsible investment and
social finance
In this section we cover how Santander manages the following
IRO:
Contribution to sustainable development through
I+
financing and investment that promotes sustainable
performance in companies, addresses societal
challenges, mitigates a specific issue, or pursues
positive societal outcomes.
i. Social finance
Santander in its financing activity, support social activities such as
building hospitals, universities and homes intended for vulnerable
people. The tagging of these deals as social is being done to
improve the identification, management and reporting of this type
of financing, following the same operating model and system that
is used for environmental or sustainable finance.
Within this concept we consider the microfinance businesses that
the bank has in Latin America (Prospera in Brazil & Colombia, Tuiio
in Mexico and Surgir in Peru), through which the bank gave EUR
1.27 billion in microcredit in 2024. These businesses, covered in
more detail in the financial inclusion and financial health section of
this report, go in many cases beyond financing, providing access to
a bank account and other services such as microinsurance for
underbanked microentrepreneurs. During 2024, more than 1.3
million microentrepreneurs benefitted from this type of financing.
Additionally, during 2024 we have signed several agreements with
Multilateral Development Banks in Spain, Chile, Brazil and Poland
where these agreements include allocating part of the new
portfolio to social finance. An example is the agreement with the
IFC in Brazil to issue a social bond allocating funding to small and
medium enterprises in underserved regions of Brazil, as well as to
microentrepreneurs across the country.
ii. Socially responsible investment
We continue to improve our offer to clients with investment
options that promote ESG factors and/or have sustainable
objectives, with the aim of reaching EUR 100 billion of socially
responsible investment (SRI) assets under management (AuM) in
Wealth Management & Insurance (Wealth) by 2025. This ambition
was formally approved at the Wealth ESG forum in 2021.
In 2024, Wealth’s SRI AuM grew to EUR 88.8 billion
60: EUR 63.5 bn
in Santander Asset Management and EUR 25.3 bn from third party
funds in Private Banking.
This growth owes to the integration of sustainability into our
investment product and service strategy and the traction generated
by EU regulation.
We calculate Wealth’s SRI AuM and the metrics related to SAM’s
net zero by 2050 ambition every month. We process and store
these data in our own repository, and perform monthly variation
control and validation. An automated report on these data is sent
to the Group’s Sustainability data office every quarter. These data
are subject to an annual limited assurance audit prior to disclosure.
Wealth defines SRI as the volume of AuM classified under Articles
8 (promoting environment and social characteristics) and 9 (with
distinct sustainability objectives) of the SFDR (EU Reg. 2019/2088),
except illiquid investment in Private Banking, which we report as
committed capital. SRI includes: i) assets that SAM and other Group
58 Credit stock as at 31 December 2024.
59 Credit stock as at 31 December 2024. Data for SMEs and the self-employed covers individual customers with an outstanding loan at 2024 year end
60 Does not include SAM funds distributed by Private Banking to avoid double counting.
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Other Group
Grupo Santander
policies:
Responsible banking and
• Defence policy
sustainability policy
• Environmental,
social and
climate change
risk
SAM SRI policy
management
policy
SAM
SAM
Voting
Engagement
policy
policy
Grupo
Santander
Conflict of
interest
policy
SAM
Conflict of
interest
policy
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asset managers in the EU (and other regions where the SFDR
doesn’t apply, using equivalent criteria) manage or advise on; and
ii) third-party funds and advisory assets considered sustainable
investment according to the SFDR (Article 2.17) or under internal
SFICS sustainability standards.
Santander, through SAM, manages SRI assets through the SRI
policy, the Engagement policy, and the Voting policy. Santander
Private Banking Gestión (SPBG), our Private Banking asset
manager in Spain, also has its own Engagement policy. Our
investment product and service proposition meets the SFDR’s
transparency obligations, which require disclosure of information
on the embedding of sustainability risk, analysis and management
of adverse impacts on sustainability, ESG factors, and sustainable
investment targets.
The SRI policy sets out SAM’s socially responsible investment
approach and the standards we consider to embed ESG variables in
our investment analysis and decision-making. The Voting policy
outlines the principles and guidelines regarding the right to vote in
portfolio companies, facilitating alignment with the SRI policy to
promote the strong performance of long-term investments. Last,
the Engagement policy dictates the principles that govern SAM's
individual and collective engagement activities with the companies
it invests in.
The SAM board of directors approves and oversees the SRI policy.
SAM’s SRI team informs the local units of any revision of, or
amendment to, this policy so that they adopt it correctly and,
where appropriate, adapt it to local needs. Moreover, SAM’s SRI
strategy and monitoring forum oversees the monitoring and
coordination of SAM’s SRI strategy, as well as compliance with the
SRI policy and monitoring and control of all activities to embed SRI
in SAM.
SAM publishes its policies on its official website, as well as on the
Intranet for employees. The third-party regulations and initiatives
that SAM has pledged to uphold or that inspire our policies feature
in section 3 of our SRI policy, appendix II of our Voting policy, and
section 3 of our Engagement policy. SAM España and Santander
Pensiones have been working since 2023 to achieve full alignment
with the Spanish Stock Market Authority's (CNMV) Stewardship
code (to which they are signatories), reporting annually on the
activities they carry out to comply with each of its principles. In
2024, SAM published its first SRI report. It includes information on
voting and engagement and details on its SRI practices. It offers a
comprehensive view of how SAM embeds sustainability in its
operations.
SRI AUM (EUR billion)
12
67.7
88.8
100
2023
2024
2025
32%
2024 vs 2023
Santander Asset Management
As at December 2024, SAM held EUR 63.5 billion in SRI assets (32%
year on year) spread across eight countries. This accounts for
26.9% of SAM's total AuM and contributes towards Wealth’s
objective of EUR 100 billion in SRI AuM by 2025.
In 2024, we continued to broaden our SRI product and service
range, with a focus on the transformation of pension plans in Spain
and Portugal under Article 8 of the SFDR. We also launched new
products such as Santander GO Global Environmental Solutions
and Santander Target Maturity III. We enhanced our voting and
engagement policy and methodology for non-EU asset managers.
In 2024, we continued to focus on engaging with portfolio
companies in high emitting sectors. As in previous years, we took
part in the ‘Global Investor Statement to Governments on the
Climate Crisis’ initiative.
SAM’s governance backs the execution of its SRI strategy. It follows
environmental (including climate change), social and corporate
governance (ESG) standards and is organized around i) an SRI
strategy and oversight forum; ii) a voting and engagement forum;
and iii) an investment and sustainability forum led by our global
team of SRI experts. At the highest level is the ESG Wealth
Management & Insurance forum, chaired by the Global Head of
Wealth; it discusses, oversees and monitors the global SRI strategy
and the SAM, Private Banking and Insurance KPI.
SAM's ESG policies and relationship with the
Group’s sustainability documents
SAM has a global, multidisciplinary team of SRI experts that
develops and implements our ESG methodology, engagement and
voting activity and SRI policies, among other tasks. There is also a
local network of ESG experts for each of the markets where we
operate.
Moreover, we have a network of experts who are key to
embedding sustainability in our investment and reporting both
globally and locally.
For more details on our ESG approach in SAM, see
santanderassetmanagement.com/sustainability.
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For more information on our engagement and voting strategies, see
santanderassetmanagement.com/ sustainability/es/content/
view/11966/file/SAM_Informe_Stewardship_221123_ES.pdf
SAM’s SRI products
SRI products in SAM’s core markets
ESG methodology and business engagement
SAM runs several exclusions set out in its SRI policy that restrict or
prevent investment in certain sectors that are considered
unsustainable.
It also has its own analysis methodology based on market
benchmarks and core international frameworks and standards,
which enables it to assess the ESG performance of assets through
ratings awarded to issuers.
In 2024, we bolstered our methodology by revising the materiality
matrix and the data we analyse to identify the issuers that are best
positioned to manage sustainability related challenges and
opportunities, while generating value for both their businesses and
broader society.
We define ESG factors based on the relative impact of each
industry and its exposure to associated risks and opportunities that
arise from changes in policies and regulations, technology, supply
and demand, and stakeholder perception. We assign the ESG
factors identified for each industry a weighting within the model,
based on their materiality. The final ESG rating is the sum of the
weighted average of each key matter.
SAM uses its own criteria to determine whether an issuance can be
considered sustainable investment according to Article 2.17 of the
SFDR in order to meet the minimum percentage of sustainable
investment that characterizes the fund or investment or savings
solution.
This analysis draws on the information provided by ESG data
providers and SAM's weighting and materiality assessment
methodology.
Our methodology identifies over 30 key ESG matters where issuers
can generate environmental or social externalities that could
translate into material impacts for the issuer, therefore
representing risks and potential opportunities.
Our ESG rating analysis comprises these elements:
• Environmental factors: Any component of the issuer’s activity
that may represent an environmental issue such as greenhouse
gas emissions, resource depletion, pollution, water
management, and others.
• Social factors: Society-related matters that include workplace
issues, labour standards, talent management, relationships with
local communities, data privacy and security, and human rights.
• Governance factors: To assess the quality of the issuer’s
management, culture and ethics; the effectiveness of its
governance systems to minimize the risk of mismanagement;
and its ability to anticipate operational and legal risks that could
lead to non-compliance.
We conduct multidimensional analysis on how each company
manages these factors. It includes the existence of policies, target
analysis, integration of management systems, performance of key
performance factors, and other elements.
Outside the EU, we are making progress in training investment
teams to embed ESG assessment and sustainable investment
methodologies and standards with an approach that makes sense
in each jurisdiction, as well as increasing the coverage of our data
providers in certain markets (especially Latin America and Poland).
Engagement activities comprise constructive dialogue with
investees about sustainable investment objectives and the
qualitative and quantitative ESG factors that impact on them. This
exercise can have varying aims: i) to drive their behaviour and
activities towards enhancing transparency; ii) risk management
and the opportunities associated with ESG factors; and iii) the
impact on the sustainable investment objectives that particular
investments or savings solutions pursue. Our Engagement policy
sets out internal procedures, forms of engagement and different
escalation processes where targets are not achieved.
Last, SAM exercises its right to vote independently in the
companies it invests in under the scope and criteria outlined in its
policy, which strengthens its influence on ESG and sustainability
issues.
Insurance
In 2024, we focused on developing products to safeguard
vulnerable groups and reflect situations in specific contexts or
markets that have little protection. We’ll continue to cooperate
with our partners to promote this product offering and boost the
management of our insurers’ SRI investments.
Private Banking
Private Banking is contributing towards the objective of EUR 100
billion of SRI AuM in Wealth by 2025. Our third-party funds SRI
AuM amounted to EUR 25.3 billion at 2024 year end, including
committed capital to alternative funds.
In 2024, our global list of funds that are subject to advisory to
clients comprised mostly SFDR Article 8 and 9 funds in the EU.
In 2024, we introduced new social metrics in the sustainability
reports on the portfolio for our International Private Banking (IPB)
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clients and published a series of papers for our Private Banking
clients available on our global website, including papers around
investment in climate adaptation vs mitigation, the evolution of
businesses from a linear to circular economy, or green hydrogen
and the energy transition.
We will embed ESG services in portfolio management and advisory
services according to our clients’ investment needs.
In 2024, Global Finance named us 'Best private bank for Social
Responsibility' while Euromoney named us 'Best private bank for
Sustainability' in Chile.
For more details, visit our website santanderprivatebanking.com
3.2.3 Environmental, social and climate
change management
This section outlines how we manage these IRO:
Finance activities (in any customer segment) that
I
breach of the bank’s policies and jeopardize the well
being of present and future generations.
Potentially negative impact on the environment or
I
society by failing to sufficiently involve stakeholders or
use suitable customer identification and management
mechanisms when providing finance to a customer or
project.
i. Our ESCC policy
Grupo Santander recognises environmental and social issues (E&S)
pose some of the biggest challenges for the long-term prosperity
of the global economy, the well-being of people and society, and
the ability of the natural environment to support life.
Santander pledges to help customers and economies in their
efforts to transition to a low-carbon economy, by providing
financial products and services based on their context and
approach to environmentally and socially responsible business
operations. This is an ongoing effort — at different rates
depending on the market and with several external dependencies
such as public policy, technological advances, consumer needs
among other factors — requiring continuous engagement with
customers in their transition to a low-carbon economy. It is also
important that we monitor social issues that may arise, such as the
involuntary displacement of local or indigenous populations, the
health, safety and human rights of workers, and the impacts of
business activities on communities and other stakeholders.
To support our fight against climate change, the Group will
promote supporting customers navigate the transition to a low
carbon economy.
Grupo Santander:
• By 2030, will stop investing in, and/or providing financial
services to clients for whom coal fired power generation
represents directly more than 10% of revenues on a
consolidated basis;
• No exposure to thermal coal mining worldwide by 2030; and
• Supports international standards and treaties.
Santander embeds environmental and social standards in risk
management, focusing on priority sectors to support sustainable
and inclusive growth and uphold human rights.
The Group applies the precautionary principle to the analysis and
management of its main ESCC risks.
Our ESCC risk management policy (which is reviewed annually)
defines the standards for investing in and, providing financial
products and services to, companies and customers in oil & gas,
power generation and distribution, mining and metals, and soft
commodities (with particular focus on the financing of retail
customers with activities dedicated to farming and ranching in the
Amazon). It dictates prohibited activities
61 and those that require
special attention for the aforementioned sectors.
For the purpose of this policy, we define financial products and
services as transactions that entail credit risk, insurance, advisory
services, equity, and asset management.
From a social perspective, the ESCC policy follows international
standards and benchmarks such as the United Nations Global
Compact, the Universal Declaration of Human Rights, the
International Labour Organisation Declaration, the Convention on
the Rights of the Child, the Rio Declaration on Environment and
Development, the United Nations Convention against Corruption,
the Equator Principles, and the standards for social and
environmental performance and the explanatory notes of the
International Finance Corporation (IFC).
The policy states that Grupo Santander will not directly invest in, or
provide financial products and services to any of the following
activities across any customer segment:
• Projects or activities for oil & gas extraction, power generation
or transmission, mining, manufacturing, plantations or other
major infrastructure projects that put areas classified as
Ramsar Sites, World Heritage Sites or categories I, II, III or IV by
the International Union for Conservation of Nature (IUCN) at
risk.
• Projects that require free, prior and informed consent (FPIC)
according to the IFC Performance Standard 7 – Indigenous
Peoples and that fail to meet the standard, with no credible
action plan to achieve compliance.
Moreover, we conduct a detailed analysis on CIB clients that
operate in sectors subject to the ESCC policy, including any activity
that entails the resettlement of indigenous populations and/or
other vulnerable groups.
61 To the extent required by applicable law, customers and transactions involving activities enumerated in this section will be subject to an enhanced due diligence process to
determine the unique risks presented prior to decisioning.
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We conduct environmental, social and climate change
assessments in accordance with established procedures. These
assessments are part of the risk management and control of our
credit approval and investment decision work flows and
governance. Since the Group's board of directors owns the policy,
the individual or collective authorities that sanction these risks are
responsible for ensuring that decisions are made in consideration
of environmental, social and climate change risk and of the policy’s
standards.
Clients in applicable sectors
62 are assessed through a questionnaire
completed by the financial manager, which is then reviewed by a
team of analysts to perform a global ESCC risk assessment. ESCC
assessments of Santander’s CIB clients cover child labour, forced
labour, workplace discrimination, freedom of association, working
conditions, complaint mechanisms for employees and impacts on
communities in relation to their own operations and their supply
chain.
The ESCC risk and compliance departments deepen into cases that
uncover red flags. We usually conduct this extended due diligence
exercise alongside the client to deepen our understanding of issues
and determine the existence (or not) of corrective or remediation
measures. Moreover, in the client ESCC risk assessments, we
analyse the existence and effectiveness of reporting channels
available to affected communities, to understand if a process is in
place to avoid and manage adverse impacts on communities due to
their own activities or those of their supply chain.
The findings of the analysis (and its impact on credit and other
risks) are escalated to the bank’s risk approval committees and are
considered in decision-making process.
According to the methodology we use to analyse customers’
climate transition plans, we carry out an annual assessment of
ESCC risk for CIB clients in sectors where we have set alignment
targets (oil & gas, power generation, automotive, steel, and
aviation) to classify them based on their greenhouse gas
emissions, emissions targets, and transition risk management.
We continued to consider how ESCC risk affects our customers so
as to make our risk assessments more rounded and offer
customers support in their transition.
In 2024, the ESCC risk and compliance departments continued to
work with the business units to strengthen the governance and the
management of these risks in sustainable finance transactions. Our
groups of experts responsible for reviewing and classifying
operations as sustainable are the cornerstone of our risk
management for these transactions.
In addition to the analysis performed by the ESCC risk teams, the
Financial crime compliance (FCC) teams establish controls to
mitigate the environmental crimes detailed in the next section.
For more details on environmental, social and climate change risk
management, see section 2.3.2. 'Risk management cycle'.
ii. Equator Principles
The Equator Principles (EP) are a voluntary framework for financial
institutions to identify, assess and manage environmental and
social risks when financing projects. We have been a signatory to
the EP framework and applied these principles to project-related
transactions (especially project and export finance) since 2009
according with its scope.
The Group has an internal procedure to manage the environmental
and social (E&S) risks of project-related transactions. This
procedure guides the application of the EP. The assessment of
transactions that potentially require us to apply the EP starts with a
preliminary assessment conducted by the Front Office. The area
that manages ESCC risk under the EP sits in Santander CIB. CIB’s
ESCC Risk team oversees the Front Office’s preliminary assessment
and provides it with ad-hoc training and support. We conduct an
environmental and social risk review for applicable transactions,
based on the preliminary assessment findings. This review follows
these guidelines:
• For projects with minimal or no adverse environmental and social
risks and/or impacts (category C), the initial assessment is
considered sufficient.
• For projects with potential limited adverse environmental and
social risks and/or impacts that are few in number, generally
site-specific, largely reversible and readily addressed through
mitigation measures (category B) in designated countries, the
Front Office must complete a due diligence questionnaire that
includes the findings of the E&S risk assessment. The ESCC risk
area provides guidance throughout this process.
• For category A (with potential significant adverse environmental
and social risks and/or impacts that are diverse, irreversible or
unprecedented) and B (projects that involve high-risk factors or
are in non-designated countries), the ESCC risk area manages the
due diligence procedure and prepares an E&S risk assessment
report.
The findings of the E&S assessment form part of the application for
financing that is submitted to the risk approval committees before
a decision is made.
If approved, we continue to apply the Equator Principles when
preparing all subsequent contractual documents, closing the
transaction, and monitoring.
In the monitoring phase of a transaction, compliance with the E&S
clauses, the implementation of the corresponding E&S Action Plans
and compliance with the applicable E&S standards are monitored.
When a transaction or material incident is identified during the life
of the operation, measures could be taken in accordance with the
provisions in the credit agreement, such as, for example, requiring
the implementation of a Corrective Action Plan.
In 2024, we analysed 21 projects that fell within the scope of the
Equator Principles (for more details, see SN.7.1. Green transition,
table 5. 'Equator Principles').
62 Sectors covered by the ESCC Risk management policy and additional tactical sectors included in the CIB Procedure, as well as other material businesses and sectors
depending on the geography and local legal requirements.
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Risk/impact management in local
communities
As part of our due diligence under the EP, we assess and
ensure that projects identify and manage environmental
and social risks and impacts correctly and that they
maintain a sound relationship with local communities
according to international standards.
We pay special attention to, and ensure the correct
management of, these situations as potential impacts of
projects on communities:
• Involuntary resettlement/displacement (physical or
economic) of people.
• Risks to the health and safety of neighbouring
communities.
• Impacts on indigenous communities. In these cases, the
project must obtain free, prior and informed consent
(FPIC) under IFC Performance Standard 7.
iii. Management of principal adverse impacts
(PAIS)
Asset management activities could generate non-intentional
adverse impacts on society and the environment. Banco Santander
and its asset management businesses disclose and manage the
potential adverse impacts derived from the management of its
portfolios, through the measurement of representative KPI of the
main sustainability factors as detailed in the PAIS procedure
document from SAM. When an adverse impact is detected, several
aspects are assessed towards establishing mitigating mechanisms.
Among others, we consider: impact severity, frequency, success
rate of dialogue initiatives and level of exposure.
3.2.4 Community Support
This section outlines how we manage the following IRO:
Contribution to education, employability and
I+
entrepreneurship, as well as to community
development through support programmes.
i. Our approach
We support the communities where we operate by helping them
address their social needs.
Santander's community support focuses on higher education,
employability and entrepreneurship, complemented with the
support on financial education and to vulnerable people.
Moreover, we have a strong track record in supporting cultural and
other social initiatives.
We make donations and other contributions to projects and
initiatives either autonomously or in cooperation with other non
profit organizations and entities that share similar aims.
Santander has a sensitive issues policy, integrating the activity of
donations, as well as a Guide on Community Support and People
Helped, inspired by the Business for Societal impact (B4SI)
standards. This Guide sets out the methodology for quantifying the
contributions that both the parent company and our subsidiaries
make. We also have a humanitarian crisis guide that outlines
Santander’s response to events or disasters with a social impact.
ii. Support for higher education, employability
and entrepreneurship
103.8
million euros of
support
2.2
million people and
businesses helped
1,181
partnerships with
universities and
entities in 14
countries
63
Santander has supported education, employability, and
entrepreneurship for over 28 years.
During this period, we have invested over EUR 2.4 billion in
partnership with more than 1,100 universities and entities, helping
over 3.7 million people and businesses. In 2024 alone, we
allocated EUR 104 million to promoting education, employability
and entrepreneurship, and helped 2.2 million people and
businesses. This reinforces our objective with EUR 400 million
between 2023 and 2026 in these three pillars, that supports our
purpose to help people and businesses prosper. Until 2024 we
have allocated EUR 208.9 million against this ambition.
We help higher education institutions enhancing the university
ecosystem through partnership agreements. We also help adults
access and complete their higher education studies through grants
and scholarships. Through lifelong learning opportunities, they can
acquire and update the skills that will enable them to boost their
job prospects. We provide training, resources and other benefits to
help businesses and entrepreneurial projects create opportunities,
grow and transform through each stage of their development.
1. Education
Our support for education involves grants and scholarships for
students and researchers to access and complete their higher
education studies. We also help universities to face their main
challenges and strengthen their transformation in different areas,
with a special focus on digitalisation. We do this through:
→Scholarships and grants awarded in collaboration with
universities and institutions of international prestige, which help
with access to university, academic mobility, research or the
opportunity to do internships.
→Agreements signed with 1,181 universities, institutions and
organisations in 14 countries.
63 Includes universities, institutions and organizations that have an agreement with Santander Universities, Universia, Fundación Universia and Fundación Banco Santander.
With activity from Santander Universities alone, the figure is 939 academic entities in 11 countries. Since 2024, Universia reports only agreements signed in the geographies
where the Group operates.
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→Campus Digital, which offers an innovative relational model
improving the life of the university community. It streamlines
academic procedures and communications through an easy and
simple experience, adapting to users’ needs, and ensuring data
privacy. It offers services such as digital credentials, tuition fee
payments, certificates, schedules and discounts.
For more details, visit the website mycampusdigital.com
→Universia Network, represents a global space for meetings,
cooperation and joint reflection between universities in the
Ibero-American higher education area.
→MetaRed is a collaborative network of heads of public and
private Ibero-American higher education institutions to discuss
and work together on three of the biggest challenges that
universities are facing: digital transformation (MetaRed TIC),
university entrepreneurship (MetaRed X), and sustainability
(MetaRed ESG).
For more details, visit the website metared.org
2. Employability
Our ambition to help people prosper through their upskilling and
reskilling is embodied in our support for lifelong learning. This is a
necessity demanded by both companies and society in order to
respond to current and future challenges. Moreover, we facilitate
access to employment in the early professional stages.
→Santander Open Academy is a global platform for learning and
professional development that offers, to any person, access to
training to have better job opportunities.
It offers free courses and open learning for skills in high demand
by the labour market.
In 2024, we launched short, direct access courses with unlimited
seats and a certificate for participants to expand their knowledge
and boost their skills anytime, anywhere.
For more details, visit the website santanderopenacademy.com
→Universia is the platform through which Santander guides and
posts job offers for young graduates and students who are
coming to the end of their studies. It uses artificial intelligence to
help them draw up their professional profile and uses online
tests to measure their skills.
For more details, visit the website universia.net
→Fundación Universia, a recognised international organisation,
which participates in international forums of the United Nations
and the International Labour Organization on topics related to
inclusive culture. We bolster improvement of quality of life for
people with disabilities and other vulnerable groups in
educational and work environments.
654
scholarships and
courses for
students with
disabilities and
other vulnerable
groups
1,180
people with
disabilities and
other vulnerable
groups hired by
companies
For more details, visit the website fundacionuniversia.net
3. Entrepreneurship
We help SMEs create opportunity, grow and transform.
→Santander X, a global initiative that provides access to training,
advice and resources (including benefits) needed to launch, scale
up and transform a business.
We help entrepreneurs showcase the most impressive projects
and connect with other businesses through Santander X 100, a
dynamic, global community that offers them unique benefits.
For more details, visit the website santanderx.com
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iii. Other community support programmes.
Social action
We aim to complement our support for higher education,
employability, and entrepreneurship, mainly through financial
education and supporting vulnerable people.
62.5
EUR million in
other community
support
programmes
64
2.9
million people
helped
65
Financial
education
Enhanced
knowledge and
understanding of
financial products
and services
Vulnerable
people
Reduced risk of
exclusion and
better quality of
life for vulnerable
people
Arts
and culture
Promote cultural
events and
programmes
On top of direct community action, we cooperate with, and channel
our support through, local NGOs and social charities. Some
partnerships are with the bank’s foundations in Argentina, Spain,
the US, Mexico, Portugal, Poland and the UK.
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.
Volunteering
At Santander we encourage our employees to volunteer in
initiatives that help the communities where we have a presence.
These initiatives, which the Group promotes and supports, seek to
get employees to dedicate their time and use their skills and talent
to support charitable causes, non-profit projects and organizations
that benefit society.
Corporate volunteering is a valuable way for employees to engage
with the community and contribute to a social cause. In particular, it
aims to:
→contribute to the Group’s community support objectives through
the direct involvement of Group employees in volunteering
programmes;
→foster a culture of inclusion by breaking down prejudices and
stereotypes;
→enhance our employees’ skills and work environment through
collaboration; and
→contribute to the well-being of our employees through
experiences that provide satisfaction, purpose and pride of
belonging.
75 k
working hours
volunteered
We have a global corporate volunteering guide that sets out a
common framework for this activity. Moreover, each subsidiary
runs initiatives based on the specific needs of its market. For
instance:
• In Brazil, we offer volunteering opportunities related to financial
education, entrepreneurship, employability and upholding the
rights of children, teenagers and senior citizens. The programme
also encourages Volunteering Groups, which carry out continuous
and autonomous actions, and are a reference for mobilizing and
involving other employees through the Volunteering Programme.
• At the Corporate Centre, we run initiatives to support the inclusion
in the job market, mentoring programmes to help women victims
of domestic violence find work, and coaching programmes to
prevent early school-leaving.
• In Chile, we support students in their transition to higher
education through a tutorial programme and give financial
education to schoolchildren across the country through the
“Misión Ahorro” programme. We also run emergency operations
to help build basic shelter for people left vulnerable following
fires or earthquakes.
• In Spain, on top of local activities that we run at our branches, we
execute flagship projects such as the ‘Finanzas para Mortales’
financial education programme, where our employees teach
financially vulnerable groups; the ‘Santander Natura’ programme,
where employees and their families help preserve the
environment; and our Pro Bono volunteer programme, where
volunteers’ expertise helps solve the challenges that NGOs face
so that they can continue to perform their work.
• In Mexico, we run numerous volunteering initiatives with a special
focus on reforestation and habitat conservation, such as Rally del
Ajolote (sporting events and reforestation) and a beach clean-up
programme alongside WWF (World Wildlife Fund) México.
• Through Santander Tuiio, we delivered financial education
sessions in schools to elementary education children on personal
finance basic concepts, as well as delivering the financial health
book "My first steps in finance".
64 It includes the social contributions of the foundations linked to the Group.
65 Based on the People Helped internal methodology, which considers international best practices. Calculated with partners’ certified data or with conservative estimates based
on recognized conversion factors.
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Financial education
Financial education is a key component of community support. It
aims to boost citizens’ financial skills by providing the necessary
tools and information to understand products, concepts and
financial risks for better use and decision-making.
Santander promotes financial education through several initiatives
that target the general public, with tailored content based on age
and needs to foster financial inclusion and better financial health.
In addition, and as outlined in examples above, financial education
is a core component of volunteering initiatives across the bank.
Our initiatives follow international standards such as the OECD
Principles, as set out in our guide to financial education, which also
outlines the criteria for counting the number of beneficiaries.
We are also exploring different channels to foster financial
education content and reach specific audiences, such as the use of
social media as a way to engage with younger people on this
subject.
In 2024, 4 million people accessed our financial education
initiatives and content, which in social media considers only people
engaging with the content (not the reach of the activity).
For more details on financial education, visit our website santander.com/
es/nuestro-compromiso/crecimiento- inclusivo-y-sostenible/educación
financiera
Humanitarian crises
As an international bank that operates in several regions and
markets, Santander is sensitive to global situations that can affect
the well-being of individuals and communities. That's why we
have a procedure to oversee our response to humanitarian crises.
We assess the severity of crises according to their scale and
urgency following our corporate guide, which sets out the
framework of action and governance for each situation. This helps
make the bank’s response to unexpected events as efficient and
effective as possible.
In 2024, we analysed such events as the dana storm in Valencia
(Spain), forest fires in the Valparaíso region (Chile), the floods in
Rio Grande do Sul (Brazil), the earthquake in Gansu and Qinghai
(China), and others.
In the case of the dana storms in Spain, since it devastated Valencia
and its surroundings with special virulence, as well as other
municipalities in Castilla-La Mancha and Andalucia, the Santander
Group has been in contact with the teams in the affected areas and
has implemented different measures to support and help both our
clients, our teams and their families as well as the rest of those
affected by the floods. Additionally, the Group has been in
permanent contact with different NGOs, which are acting on the
ground, to better understand their needs and channel the aid from
the Group, that of our clients and employees in the best possible
way.
Charitable foundations
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.
In 2024, Santander made a donation to Fundación Banco Santander
for a total of 22,167,105 Banco Santander shares. The donated
shares are meant to help the foundation financially; it can use the
dividends to cover some (if not all) of the cost of fulfilling its
founding purposes.
66 These include managing the bank's art
collection and financing numerous literary, educational, social,
cultural and environmental productions and activities, in which the
remodelling of the Santander's headquarters on Paseo de Pereda
in Santander and our relations with universities in Spain will play
an important role.
For more details, visit the website fundacionbancosantander.com/es/
fundacion/transparencia.
We have other Santander foundations in countries where we
operate (Argentina, the US, Mexico, Portugal, Poland and the UK),
which boost the number of initiatives we run. Their focus varies
according to local needs; for instance, in Argentina on art and
culture; in Portugal on education, inclusion and culture; and in
Poland on education for children and young people. Activities from
these foundations are aligned with the bank’s community support
priorities.
For more details on our foundations in other countries, visit the websites
esg.santander.pl (Poland), fundacionsantander/argentina (Argentina),
and fundacaosantanderportugal.pt (Portugal).
3.3 Our customers
Our customer-centric approach is a fundamental lever for
generating sustainable value
67, building a digital bank with
branches and a multi-channel offering that covers all of our
customers' financial needs. We operate through five global
business segments that provide services to various types of clients,
including individuals, small and medium-sized enterprises, large
corporations, and public entities, among others
68 .
This chapter focuses on individual customers who use the products
and/or services offered by the Group and establish a contractual
relationship with it. Include those clients who, due to their
circumstances, may be particularly vulnerable to the marketing of
products and services.
Impacts resulting from relationships with corporate clients are
discussed in section 3.2.3 of Environmental, Social, and Climate
Change Management.
66 For more details, see Note 34 ‘Other equity instruments and own shares' in the 'Consolidated financial statements'.
67 For more information on employee dialogue, see section 1.2 of Dialogue with our stakeholders.
68 The actions outlined in this section are specific to Santander and not sector-wide
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3.3.1 Conduct with customers
In this section we cover how Santander manages the following
IRO:
Potential losses due to claims or a reduction in the
R
numbers of customers because of inadequate customer
practices throughout their life cycle.
Negative impact on the customer if the bank fails to
I
provide sufficient information on the product or service
they are signing up for.
Negative impact on the customer if they do not have
I
access to complaints channels or if, after making a
complaint, the bank fails to take the necessary action.
i. Customer conduct principles
Customer conduct risk model
Our customer conduct risk model approved by compliance and
conduct committee, sets out the principles that underpin how we
align customer engagement with our Simple, Personal and Fair
culture and how we make that the products and services we offer
adapt to our customers’ needs while protect their rights
69 . This
model also outlines the key processes, instruments and
governance that enable us to mitigate and manage customer
conduct risk at every stage of our relationship with them (product
and service design, sales and post-sales).
Model principles
Key processes
Governance and remit
→Fair treatment
→Approval and ratification of products
→Our Product governance and consumer
and services (Product and service
protection area, part of the Compliance
→Customer-focused product and service
approval policy)
and conduct unit, develops and
design
oversees how we follow our customer
→Customer conduct training
→Transparency in all customer
conduct risk model
engagement
→Sales oversight, with special focus on
→The board of directors oversees the
the classification and suitability of
→Responsible sales practices
Product and service approval policy,
products and services; advertising and
while local and corporate product
→Responsible pricing
transparency at the point of sale; and
governance forums assess and approve
monitoring
→Consideration of vulnerable customers
our products and services
or those in special circumstances, and
→Remuneration of sales and support
→The board is also responsible for the
prevention of overindebtedness
teams (Remuneration policy)
Group Remuneration policy, while the
→Personal data processing
→Post-sales oversight, with special focus
remuneration and risk committees, with
on recoveries, fraud management and
the support of the Human Resources
→Complaints handling
complaints handling (Customer service
and Compliance functions, monitor this
→Financial education
and dissatisfaction management policy)
policy’s compliance
→Safeguarding consumer assets against
→Managing vulnerable customers and
→Local and global compliance
fraud and misuse
preventing overindebtedness
committees set our risk appetite and
(Vulnerable customers and prevention
monitor compliance risk assessments
of overindebtedness policy)
(including customer conduct risk)
The customer conduct risk model and the policies that underpin it
facilitate the accessibility of products, services, and channels,
are subject to strict internal governance that ensures they are
considering the necessary technological developments and user
properly communicated to all our stakeholders and transposed to
experience improvements.
the Group’s subsidiaries. Moreover, we have several guides that
cover the key processes of the entire customer relationship cycle
Our risk appetite metrics for claims and internal events enable us
and aim to help the units and functions implement internal
to detect and manage customer queries and issues effectively and
regulations consistently.
proactively. In 2024, while disputes related to mortgage fees in
Spain and Swiss Franc mortgages in Poland impacted these
Consumer protection and customer conduct risk mitigation are a
metrics, our contact centres and protocols provided an appropriate
basic pillar of the Group’s strategy. The Compliance and conduct
response and solution for our customers.
function gives shape to this through objectives and annual plans,
using a methodology to monitor their effectiveness, determine the
customer conduct risk profile in each unit, and set any appropriate
For more information on internal conduct events, see Note 25 of the
annual accounts.
correction measures.
In 2024, the Group focused on implementing the European
Accessibility Directive in the applicable units, with specific plans to
69 For more information on our human rights commitment to our customers, see section 1.4 on our commitment to human rights.
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ii. Product and service marketing and design
Product and service governance
The purpose of the Product and service approval policy is to set out
the standards, processes and controls so that we design products
and services according to the customer conduct risk model
principles. This means products and services with appropriate
features to meet the target audience's needs, reasonable pricing,
and transparent marketing (i.e. the information we give to
customers uses simple language and a clear format; is accurate
and sufficient data; and is consistent and comparable so that
customers can cross-check it with similar financial products and
services). This transparency applies to all advertising, pre-
contractual and contractual information, as well as throughout the
product or service life cycle and across all channels.
The local and corporate product governance forums are
responsible for implementing this policy. These forums are able to
draw on document and assessment templates, which includes a
review of contractual and briefing material on each product and
service. We only approve products and services if all forum
members vote unanimously in favour of them.
Conduct training
Training is a key way to boost knowledge of consumer protection.
The Compliance function, with the support of Human Resources,
draws up mandatory refresher training for all employees on
managing and mitigating customer conduct risk. This course has a
satisfactory compliance rate in every country. Moreover, every unit
ensures strict compliance with the regulatory authorization
required to provide services to customers in each country(e.g.
MiFID licences in Europe). They also devise and monitor specific
training programmes to arm sales teams with the necessary
expertise to inform about and sell the products and services we
offer.
Quality and conduct metrics in sales teams’
remuneration
The Group follows a rule for at least 40% of sales units variable
pay to be based on quality and conduct metrics. This promotes
greater awareness and proactive and effective management of
customer conduct risk, has a positive impact on transparency with
customers, and helps us identify appropriate target audiences.
Sales monitoring
The Group has mechanisms to monitor products and services
throughout their life cycle. These enable us to detect and manage
(as early as possible) deterioration, failures in marketing and non
compliance with the terms and conditions under which they were
approved. We analyse and monitor:
• Customer Voice: queries, complaints and surveys, are a key
source of information to identify deficiencies in marketing and
customer engagement, and to draw up improvement plans; and
• Sales metrics and controls: monitoring of the percentage of
product or service cancellations shortly after sign-up. In 2024,
this analysis allowed to set up improvement plans to strengthen
welcome communications in different consumer entities,
through telephone sales channels in Mexico and the governance
of commercial campaigns in Poland.
iii. Post-sales
Conduct in fraud management
In July 2024, we embedded the guidelines for conduct in fraud
management in the Grupo Santander Fraud policy, which was
adopted by our subsidiaries in the second half of 2024. 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 include combining digital
channels to register cases of fraud, bringing together customer
voice in Group taxonomies, 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. They cover the
period 2024-2026.
We also have additional fraud management controls based on NPS
and quality assurance.
Complaints handling
In 2024, we conducted a review of the channels on which
customers can raise queries or complaints. The Customer service
and dissatisfaction management policy outlines the principle of
making multiple channels available to avoid the potential impact of
not having adequate means for customers to convey their issues or
dissatisfaction and to promote that we have channels that adapt to
our customers’ needs and preferences.
Additionally, customers can escalate complaints through external
channels, such as the Financial Ombudsman, regulatory bodies,
and consumer agencies, if they are not satisfied with the entity’s
resolution.
Most of our units are investing in digital channels to speed up case
resolution and help customers self-manage certain queries, as well
as to manage expectations better. Root-cause analysis governance
and mitigation plans are an essential component of continuous
improvement.
The units analyse customer complaints to identify their root causes
—such as deficiencies in products, services, systems, channels, or
communications—their impact, and the teams responsible for
resolving them. These teams must submit clear action plans
outlining what will be done, how, and when. Senior management
regularly monitors progress and effectiveness. In 2024, all
countries advanced in this area, with Spain leading efforts by
strengthening governance and setting specific objectives. As a
result, it achieved a 19% reduction in claims (excluding sector-wide
events).
We have established a global, multidisciplinary working group to
enhance our queries, requests and claims procedures and
platforms. This includes embedding artificial intelligence in case
registration and analysis.
Santander Brasil, in collaboration with the global Consumer
Protection and Models and Data functions, developed “Viva Voz”, a
tool that uses artificial intelligence to handle large volumes of
information and delve deeply and quickly into the root cause of
customer complaints. With this tool, it has gone from analysing 3%
of cases in two days to analysing 60% in one day and is aiming to
reach 100%. Similarly, Santander España and Polska are piloting
artificial intelligence solutions to enhance customer claims
management.
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Complaint type
A (%)
Resolution
A (%)
14.0
58.7
0.8
17.8
3.0
5.7
Banking
procedures
Loans
Investments
Payments
methods
Insurance
Others
84.1
15.9
In favour of the Bank
In favour of the customer
A. The Group uses the same standard claims metric for all geographies.
iv. Vulnerable customers
In this section we cover how Santander manages the following IRO:
Negative impact on the customer by failing to
I
guarantee access to, or the use of, products and services
that may present certain obstacles or weak spots.
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
identified and considered our customers’ difficulties and
vulnerabilities, and trying to mitigate their potential impact. In
2024, we continued to make headway with embedding Group
regulations
70 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 countries.
The Group is following indicators used by the units to identify and
monitor customers in special circumstances. We’re also developing
a methodology that will enable us to pinpoint potential signs of
vulnerability in order to foresee and try to adapt services to the
specific needs of certain customers.
To coordinate a common approach across our footprint, local units
met with the global team every two months in 2024 to facilitate
alignment in embedding the Group’s vulnerable customer
standards. 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.
3.3.2 Financial inclusion and financial
health
This section outlines how we manage the following IRO:
Positive impact on customers due to the bank’s offer of
I+
products and services that adapt to their needs and
expectations and promote financial inclusion and
health.
i. Financial health and inclusion as a key driver
of social progress
Financial health and inclusion are a priority for Santander in
contributing to social progress and promoting prosperity and
entrepreneurship.
In the markets where Santander operates, there are financial
inclusion challenges that we strive to address with tailored
business solutions.
To assess the significance of our proposition, we use 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. In particular, we:
• Considered different components of financial exclusion and
aggregate indicators to cover all our target audiences.
• Defined an inclusive financial system as one that maximizes the
use of financial products and services, access and financing.
• Measured involuntary financial exclusion through barriers that
people who do not participate in the formal financial system
perceive.
• Applied a correction factor that matches our business penetration
rate in the markets where we operate.
70 Approved in November 2023
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Target
+5 mn
B
People subject to inclusion measures
A
1.8 mn
4.3 mn
2023
2024
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Our ambition is for our financial inclusion initiatives to reach five
million people between 2023 and 2025. This is consistent with our
penetration rate in the markets where we operate and with the gap
identified in our latest assessment.
Our processes pinpoint the needs of customers facing financial
difficulty; develop products and services; and train our teams
71 .
These processes align with our customer conduct model,
vulnerable customer policy, and responsible banking and
sustainability policy. We set out the accounting standards for
initiatives and financially included individuals in our Financially
included people guide, which applies to the entire Group. The guide
includes these definitions:
• Unbanked: People who do not have a bank account or access to
any banking services.
• Underbanked: People who, despite having a bank account, have
difficulty accessing basic services (e.g. making deposits and
withdrawals) or source financing informally.
Access
1 million
New people subject to financial inclusion
measures related to access
We want to help unbanked and underbanked people enter the
financial system and gain access to basic financial services,
encouraging them to use financial services that are tailored to their
needs and barriers, have greater control over their finances and
enjoy faster and more secure transactions.
In 2024, our initiatives continued to:
• adapt to developing and mature market needs:
▪In developing markets, we focus on providing access to bank
accounts and cash deposit and withdrawal services to
unbanked and underbanked people. Our stand-out initiatives
include partnerships with merchants in Mexico to offer
Santander services, or the financial inclusion branches in
Argentina.
▪In mature markets with high account penetration, but with
an exodus of people from rural areas and an ageing
population, we focus on continuity in access to basic financial
services. Stand-out initiatives include Correos Cash and the
waiving of fees for vulnerable customers in Spain.
• People in financial distress: People who earn less than their
country’s legal minimum wage or who are unable to cover basic
living expenses.
This guide also enables us to use common metrics to monitor and
manage access and financing initiatives (listed below) that
contribute to our financial inclusion target:
In 2024, we financially included nearly 1 million people through
access initiatives; and 1.6 million people through finance
initiatives.
A. Based on internal financial inclusion methodology. Includes the principles,
definitions and standards we use consistently across our footprint to count the
number of people we include financially through initiatives, products and services
for access and finance.
B. Cumulative figure since 2023.
• offer access amid humanitarian crises: making mobile branches
available to remain close to our customers in the most affected
areas and maintaining key financial services such as cash
withdrawals, salary advance and payment holiday requests, and
insurance. For more details on our actions during humanitarian
crises, see section 3.2.4 'Supporting Communities'.
• promote inclusion: we are constantly adapting branches,
products, services and channels for people with disabilities and
senior citizens to be able to access them both in person and
online.
All of this harnessing technology to drive financial inclusion,
overcoming some of the barriers that prevent unbanked and
underbanked people from accessing financial products and services.
71 For more details, visit our website santander.com/informe-inclusion-financiera.
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Access initiatives and services:
Promoting access to cash and transactions
We promote underserved communities get cash
through our remote branches and agreements with
private and public entities that widen our footprint.
Promoting digital access
We help people access the banking system so they
can make payments; use basic, tailored financial
services; take greater control of their finances; and
make faster and more secure transactions.
Financial solutions for vulnerable groups
We offer financial support to vulnerable groups so
customers will have access to basic products and
know how to use them.
Branches in underbanked and
remote regions
A
Partnerships to reach
underserved communities
B
Digital wallets and points of
sale
C
Basic accounts
D
Support to senior citizen
customers
E
We also have global initiatives such as GetNet, which provides
digital payment services to individuals and merchants with a
wide range of payments solutions, boosting simplicity, speed
and security, that reaches underbanked segments improving
their financial inclusion.
Finance
1.6 million
New people subject to financial inclusion
measures related to finance
We promote financing for underbanked SMEs and entrepreneurs,
as well as the basic needs of low-income population through
products and services tailored to their needs.
Our microfinance proposition supports inclusive growth and
economic development in Latin America, where the financial
inclusion gap is wide. We have been offering microfinance services
to low-income and underbanked entrepreneurs since 2002. We
help our customers set up small businesses, which drive economic
growth and social mobility.
Through these initiatives, we offer loans to boost the income
generating capacity of new ventures and help microentrepreneurs
safeguard their business through financing that meets their
working capital needs. A large portion of the customers under
these initiatives are women, who are less likely to access financial
services in developing markets.
In 2024, we continued to:
• evolve our business proposition from microcredit towards
microfinance, by extending our customer value proposition
through solutions that go beyond credit — basic accounts,
financial education, microinsurance and other services.
• make business models more efficient, without jeopardizing the
social impact of our proposition. For instance, we leveraged the
use of technology to open low-cost mobile branches and
improved handling procedures to minimize the time from
microloan application to the funds being available to our
customers.
• combine group and individual credit granting model, adjusting to
our customers’ circumstances and needs, high higher presence of
individual model in Peru and Colombia, and growing — albeit at a
lower rate — in Brazil and Mexico.
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Other finance-based initiatives and services
Supporting customers in financial distress
We have debt relief programmes that include
payment deferrals and line of credit extensions.
Financing low-income households' basic needs
We offer products and services that enable low
income households to access housing and meet other
basic financial needs.
Supporting customers in
financial distress
F
Affordable housing supply
G
Support for low-income
households/people with
difficulty accessing credit
H
A. In Spain, branches in remote (or sparsely populated) areas to facilitate access to credit and combat social exclusion in communities of less than 10,000 inhabitants. In
Portugal, branches in low-income, small or isolated regions, such as the Azores and Madeira. In Argentina, we have financial inclusion branches and remote agents in the
marginal environment of Buenos Aires and vulnerable communities. In Poland, ATMs (Automated Teller Machines) in municipalities where there is no Santander branch or
partner point of sale. In Uruguay, we have installed three mobile branches since 2020 to reach areas with low levels of banking penetration.
B. Agreements with Correos Cash in Spain, partnerships with retailers such as Oxxo and 7Eleven in Mexico, and agreements with third parties in Uruguay (e.g. Abitab, Red
Pagos).
C. In Poland, we included the Cashless Poland programme to promote the use of payment terminals in localities where the use of digital media is low, and the use of our
associated Partners Outlets points of sale. In Chile we included Mas Lucas.
D. In some countries, we have basic bank accounts that go beyond regulation in order to serve the bottom of the pyramid. For example, the Cuenta LIfe in Chile or the no-fee
account for vulnerable customers in Spain.
E. In several countries we have value propositions aimed at the elderly. For example, tailor-made products for retirees in Mexico and Argentina, services such as Here & Now in
Portugal to help seniors with limited digital skills, and third-party access initiatives in the UK to support seniors who need to be cared for.
F. We have programmes in many countries to help people with debt problems. In Portugal, we have the Iris programme to help customers manage defaults. In the UK, we help
vulnerable customers get out of arrears with self-service tools and direct financial assistance. In Spain, we have financing programmes for vulnerable groups to relieve their
mortgage debts.
G. In Spain, the bank participates in the Social Housing Fund, which facilitates renting for people on low income. It also has affordable rental housing. In the US, as part of its
Communities plan, Santander US provides support for the construction, maintenance and rehabilitation of housing serving low- and moderate-income people.
H. We have initiatives to help groups with difficulties in accessing credit; among them, in Spain, we lend to SMEs at their risk limit; in the US, we lend to small businesses
operating in low- and moderate-income communities; in Argentina, we lend to entrepreneurs with little credit history. In Mexico, we offer special credit programmes to
people at the bottom of the pyramid.
ii. Progress on financial health
In 2024, we continued to make headway with a common approach
to financial health. We define financial health as people’s ability to
manage finances to meet short-term needs and support long-term
goals, bringing stability to avoid financial distress.
We run initiatives in all our markets to promote financial resilience,
planning, security and control among our customers in general
and, especially, the most vulnerable groups.
The solutions that help customers boost their financial health by
making more informed decisions include tools to manage money
better, debt calculators and advisory service, which together with
financial education support our customers' financial health and
better informed decisions.
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 financial
products and digital skills.
For more details on our financial education programmes for
customers and non-customers alike, see section 3.2.4 ‘Community
Support’.
In 2024 we have set metrics to monitor financial health, especially
for over-indebted customers.
3.3.3 Privacy, data protection
and cybersecurity
This section outlines how we manage these IRO:
Potential infringement of customers’, employees’ or
I
shareholders’ rights due to a lack of appropriate
technical or organizational measures to protect their
personal data according to law and the practices set by
the Group.
Education and awareness on cybersecurity issues to
I+
understand potential threats and mechanisms to avoid
them.
Potential losses due to fines or a reduction in the
R
number of customers because of a failure to detect or
respond effectively to breaches of privacy.
i. Privacy and data protection
The use of new technologies and progress with the digitalization of
businesses have led to a rapid increase in the processing of
personal data.
Our commitment to complying with regulation on the protection of
personal data throughout their life cycle is key in this regard. Our
corporate standards remain consistent with data protection and
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privacy laws at all times, with an ethical and transparent
management of personal data to enable individuals to exercise
greater control over their data.
We apply measures to obtain and use only the data that is strictly
necessary to process personal data for legitimate purposes. The
aim of these technical and organizational measures is to preserve
the confidentiality, integrity, availability and resilience of the
systems and services that we use to process data; and thereby to
achieve the correct protection of data subjects’ rights and
freedoms; and to boost individuals’ and broader society’s trust.
We created our compliance programme following the privacy
standards to manage data protection risk correctly. It is based on:
• local subsidiaries’ responsibility to abide by the General Data
Protection Regulation (GDPR) and/or local regulation on data
protection;
• a solid governance model consisting of:
1. corporate and local data protection policies.
2. a data protection officer (DPO) and/or privacy champions in
each unit. We formally disclose appointees to local authorities.
3. a corporate oversight programme based on the monitoring of
management indicators; annual reviews; and an annual
monitoring forum sponsored by the Group Chief Compliance
Officer where our units report on compliance status, key risks
and focal points, and other key data protection matters.
Other measures that strengthen our data protection management
are:
• a common, regular monitoring and reporting model for the units,
including meetings that we document in minutes;
• procedures to manage security-related incidents and the risks
that stem from the potentially unauthorized use of personal
data. We also have specific plans of action, where required,
which the corresponding areas manage;
• cooperation with third-party service providers that must comply
with data protection regulation. All data processors are subject to
a suitability test that we monitor through management
indicators and review regularly;
• reviews on our compliance with data protection laws, which our
Internal audit area performs as part of its annual programme;
• corporate tools that help us manage data protection-related
tasks by bringing together and monitoring control information
through indicators and the annual review programme. For
instance, we regularly update our data processing inventory and
report on indicators and security incidents;
• special training for DPOs and privacy champions as well as
corporate initiatives and the sharing of best practice among
units. In 2024, we ran a refresher course on data privacy by an
external provider and initiatives on the back of it;
• employee training and awareness campaigns on data protection,
which form part of our mandatory annual curriculum and that we
monitor through management indicators; and
• special focus on regulatory developments to update and
consolidate criteria, methodologies and documents.
In May we became aware of an unauthorized access to a Santander
database hosted by a third-party provider. The bank’s operations
and systems were not affected, so customers were able to
continue to transact securely.
Bank put in place protective actions and corrective actions for
clients and employees:
• Affected individuals, where applicable, were notified the incident
and dedicated channels were put in place to provide them with
further information.
• Information was made public by Santander in its corporate
website.
• The bank started an education campaign for clients and
employees regarding the most well-known types of fraud. This
campaign has been reinforced in response to the incident and to
minimize future similar incidents.
• Santander also notified the relevant supervisors and authorities
where the group has a presence, including the data protection
agencies, prudential supervisors, resolution authorities, and in
some jurisdictions law enforcement as required by local
regulations.
• Regarding clients, the Fraud Prevention and Cybersecurity teams
continue to be on alert and analysing any relevant behaviour that
could be associated with cases that take advantage of the
information in question. Also, where relevant and appropriate,
fraud prevention controls have been reinforced, that aim to
mitigate the possible impacts associated with this incident.
Containment was complete and corrective action has been
implemented that will minimize the possibility of any similar
unauthorized access.
ii. Cybersecurity
Cybersecurity provides vital support to our purpose of helping
people and businesses prosper and our aim to provide customers
with first-rate digital services.
We have a board- and subsidiary-board approved cybersecurity
framework that sets out the governance, functions, roles and
responsibilities to manage cybersecurity throughout the Group,
including the role of the Chief Information Security Officer (CISO).
Our cybersecurity policies, which develop the cybersecurity
framework, are based on international standards and subject to
ongoing review in order to maintain and enhance safety levels in
the Group. In 2024 we updated our Cybersecurity requirements
policy for technical and business areas, which includes security
provisions for the different domains.
To assess how we’re doing on cybersecurity within the industry, we
monitor our security rating provided by an independent third party.
Bitsight Company gives us with a score between 250 and 900 (with
740-900 considered “Advanced”) based on public information and
externally visible network traffic and systems. In 2024, we scored
790 points, which put us in the upper quartile among our peers and
meant that we hit our target.
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Protecting our customers’ and employees’ information is the
responsibility of every Santander employee. We outline this in
another policy under our cybersecurity framework: Cybersecurity
standards for the protection of Santander, which sets out the
principles that we must follow. En 2024, we ran these
cybersecurity awareness initiatives for our teams:
• Regular ethical phishing exercises to strengthen employees’ and
partners’ resilience to cyber threats.
• Promote a culture of reporting suspicious incidents or messages
through all available channels.
• Update to our mandatory cybersecurity training for employees,
including security recommendations against malicious attacks by
email, text message or phone call, deepfake, phishing, social
engineering, and other threats.
• Specialized training for high-risk groups such as payment agents,
IT professionals and developers, digital asset owners, board
members, and executives and their support teams.
• Specialized fraud training for contact centre agents and branch
employees.
• Internal awareness campaigns for all Group employees to keep
them up to date with the latest cybersecurity and fraud trends.
To boost the protection of our customers online, we ran several
initiatives that we assess by measuring their impact. In 2024, these
campaigns reached 58% engagement (far exceeding the 10%
market benchmark):
• Cyber Heroes, an interactive campaign where our customers test
their knowledge of online security and fraud prevention in
realistic scenarios. It's available in Argentina, Brazil, Chile,
Mexico, Portugal, Spain, Poland, and the UK.
• Awareness workshops for retail and corporate customers at our
branches to explain online threats and how they can reduce
them.
• Por una vida online y corriente ('Everyday Cyber'), a global
cybersecurity awareness campaign to help our customers adopt
better online security and fraud detection habits.
• Corporate sponsorships, such as Ferrari and League of Legends
(an online strategy game), which help us engage more audiences
using their unique tones and language. These campaigns follow
a multi-channel strategy to reach a global impact.
• In other Santander markets, our “Obvious Passwords” cyber
campaign in Uruguay received local recognition for its work in
raising awareness on such a hot topic as online security for
customers.
• Titania, remains one of Santander’s key initiatives to raise
awareness and promote learning about cybersecurity in the form
of a fiction podcast. With over two million plays, it received the
prizes for Best Podcast and Best Branded Content at the Ondas
Awards in Spain.
We run these campaigns through the Group’s numerous digital
channels. What’s more, users can report suspicious messages by
writing to reportphishing@gruposantander.com.
In 2024, we continued to promote collaboration on cybersecurity
and online fraud prevention with public and private organizations:
• Santander plays a key role in the Financial Services Information
Sharing and Analysis Center (FS-ISAC) for the exchange of
information in Europe and is the European board’s current chair.
This organization, established in The Hague, has more than
1,000 members from 174 entities, including major banks, Swift
and Europol.
• Santander is part of the leadership team of the US Ransomware
Task Force, whose objective is to improve prevention and
response capabilities against ransomware attacks.
• Santander contributes to the World Economic Forum's (WEF)
initiatives to fight cybercrime. This includes the Cybercrime Atlas,
which aims to disrupt cyber crime networks. We also participate
in several working groups to promote cybersecurity talent
through public-private partnerships; develop a cybersecurity
resilience plan; and contribute to narrowing the cybersecurity
skills and knowledge gap.
• We work on key cybersecurity and fraud prevention initiatives
with other entities and organizations such as the Institute of
International Finance (IIF), the European Financial Services Round
Table (EFR), the European Banking Federation, DigitalEurope,
and others.
For more details on our cybersecurity plan and the initiatives undertaken
during the year, see section 5. 'Research, development and innovation
(R&D&I)' in the 'Economic and financial review' chapter; and section '5.2
Operational risk management' in the 'Risk, compliance & conduct
management' chapter.
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4. BUSINESS CONDUCT
(Governance information)
4.1 Corporate culture
Santander Way
We are a global company, guided by a common culture, The
Santander Way. It is aligned with our corporate strategy and it is
the basis of our success. Our values (Simple, Personal and Fair), our
corporate behaviours (TEAMS), our leadership principles and our
robust risk culture (Risk Pro) guide us every day:
• We continued to promote our behaviours and leadership
principles in the Group’s talent processes, as well as promoting
them among our leaders for them to be an example of our
culture.
• We have intensified our efforts to give our employees the
necessary tools and resources to improve their competencies and
employability, aligning us with the most critic business and
market demands.
• This year we evolved Dojo, our digital learning platform, that
offers a personalized offer based on current and future roles,
promoting a culture of self-development and continuous
learning.
• We continued to assess how to improve our efforts through our
employee listening programme - YourVoice, and we have
developed action planes to keep making a better place to work.
• We continued to promote our culture through our performance
review, MyContribution, where 50% is based on 'what' we do,
40% on 'how' we do it and 10% on our risk management.
• All the above is sustained by our Global Culture Policy, which sets
the foundations, guidelines and standards to foster a coherent
culture across Banco Santander.
Our values
Simple Personal Fair
Our behaviours
Our leadership principles
→Promote a 'Group First' mindset
→Lead transformation
→Build, develop and grow talent
→Display TEAMS flawlessly
→Drive inclusive culture
Our strong risk management culture
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4.2 Ethical conduct
In this section we cover how Santander manages the following
IRO:
Act responsibly and consider investors’ interests and the
I+
impact on employees, broader society and the
environment; pay taxes to support the distribution of
wealth.
Harm broader society through bribery or corruption.
I-
Risk stemming from improper conduct that makes illicit
R
funds or assets appear legitimate and, therefore,
facilitates illegal activity or to benefit from it.
4.2.1 Conduct standards
Our General code of conduct (GCC) sets out the behaviours and
values that all Grupo Santander employees must abide by when
engaging with colleagues, customers, vendors and broader society.
It helps promote a solid risk management and compliance culture
and acts as a mechanism to prevent the risks we are exposed to.
The GCC promotes equal opportunity, non-discrimination, zero
tolerance for sexual or work-related harassment, respect for
others, work-life balance, human rights, and environmental
protection.
The Grupo Santander board of directors approves the GCC, which
all Group employees — general workforce, top management and
members of the management bodies of the subsidiaries that make
up Grupo Santander — must be aware of and comply with.
Available on our corporate website for all stakeholders to read, it is
in force in every Group subsidiary.
It includes a message from our Executive Chair on the importance
of having a solid and common corporate culture that all Santander
employees are on board with. Subsidiaries’ versions also have a
message from their local CEO.
The GCC’s core implementation mechanisms are:
i. Mandatory training for employees on the GCC through an
annual course that instils the guidelines they must follow in
their day-to-day to prevent possible risks, such as the Group’s
penal responsibility; how to handle conflicts of interest
according to our policy,
72 and what to do if they receive gifts and
invitations from people outside Grupo Santander.
We supplement GCC training with a statement that reinforces
our employees’ pledge to comply with it.
ii. #YourConductMatters: Campaigns via email, Intranet and other
media to boost employees’ awareness of the GCC, as well as of
Canal Abierto and the latest whistleblower protection laws.
iii. The Compliance area, which deals with employees’ queries on
the enforcement of the GCC.
iv. Canal Abierto, our whistleblowing channel where employees
and stakeholders can report violations of the GCC and of our
corporate behaviours.
v. Breaches to the GCC are managed and sanctioned in accordance
with applicable regulations.
Our risk appetite metrics include monitoring of employees’
completion of mandatory training on the GCC. Every quarter, we
gather completion data for every unit, which currently stands at
99,1% at December 2024. Thus, there is no requirement to put
remediation plans in place.
Moreover, mandatory training forms part of our employees’ annual
performance review, which acts as an incentive to complete it in
due time.
We also use another management metric to identify how many
incidents reported to the Group’s ethical channels are linked to
violations of the GCC.
For more details, see section 7.2 ‘Compliance and conduct risk
management’ in the ‘Risk management and compliance’ chapter.
4.2.2 Responsible taxation
The Group’s tax strategy is consistent with our business strategy.
Our principles of action in tax matters, which apply to all our
entities, must align with our purpose of helping people and
businesses prosper and with our aim to be the best open financial
services platform by acting responsibly and earning the lasting
loyalty of our employees, customers, shareholders and
communities. 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 to follow our tax
strategy and the principles that underpin it.
We participate in cooperative compliance initiatives led by tax
authorities. 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, in 2022, to the Portuguese Code of 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 jurisdictions where we operate, as well as to comply
with local laws.
Core principles of Santander’s tax strategy
• Satisfy our tax obligations based on a reasonable interpretation
of tax laws, grounded on their spirit and intention.
• Respect the rules on transfer pricing and pay taxes in each
jurisdiction according to our operations, assumed risks and
profits.
• Not give tax advice or planning strategies when marketing and
selling financial products and services. Not engage in
72 The Conflicts of Interest Policy has been updated to align it with the General Code of Conduct (updated in 2024) and to simplify it. In addition, the Procurement Management
Conduct Policy has been integrated into this policy.
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transactions or activities that enable our customers to avoid
paying taxes.
• Communicate Santander's total tax contribution clearly,
distinguishing between taxes borne by the Group and by third
parties for each jurisdiction.
• Not create, or acquire a stake in, entities registered in countries
or territories considered 'non-cooperative jurisdictions' without
board approval; and properly monitor the Group's operations in
such territories.
For more details on the Group’s tax strategy, visit our corporate website
santander.com.
The Group’s tax contribution and the relevant role that our
subsidiaries play in the effective application of 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, the Group paid EUR 22.5 billion in taxes, of which EUR
10.9 billion account for taxes we paid directly to the tax authorities
(57.5% of income before taxes) and the rest for collected taxes
originating from our business operations with third parties.
The taxes the Group paid directly are part of the cash flow
statement and mainly correspond to the income tax paid in 2024
(EUR 5.9 billion at an effective rate of 30.9%).
There is usually a mismatch in the taxes we pay directly and those
recorded in the financial statements because the payment date set
by the laws of each country is often different to the accrual date of
the income or the transactions subject to tax. Income tax expense
recorded for the year amounts to EUR 5.3 billion, which means an
effective rate of 27.8% (see Note 27 to the consolidated report).
For more details on the Group's tax contribution, see section SN 7.7 'Tax
contribution'.
4.2.3 Financial crime compliance (FCC)
Grupo Santander is firmly committed to the fight against financial
crime and 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/CFT); 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 reach out to
all our stakeholders through annual training programmes,
communications channels (corporate and subsidiary Intranet sites),
awareness campaigns, internal newsletters and best practices so
that they can learn about and understand their responsibilities
across the Group’s entire operations.
The policies that build on this framework (including customer due
diligence — CDD — procedures) are designed according to
domestic and international financial crime regulation to manage
and mitigate the impacts and risks related to 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.
Moreover, we have a common oversight methodology that enables
us to verify that all our operations comply with this framework
under the most demanding, standardized criteria that the
centralized and technical FCC units in our markets endorse. These
units also play a crucial role in promoting FCC culture and
awareness to all Grupo Santander employees.
The central and subsidiary-based Financial Crime Prevention units
engage in constant dialogue with all the Group’s businesses and
functions to identify new risk types, overcome emerging
challenges to prevent those risks, and implement risk
management, control and mitigation best practice. Some of the
salient responsible banking topics to highlight are:
For more details on our provisions, see Note 25 of this report.
People in special situations
Our FCC onboarding supports the Group’s ambition to help people
in special situations
73 get access to financial services and requires
business units to mitigate the potential financial crime risk related
to these groups, based on objective criteria and compliance with
FCC regulation.
Our mandatory FCC procedures (identification, risk segmentation
and due diligence) for people in special situations to access to
banking services and the document updates we perform under our
FCC framework are free of bias and subject to strict compliance
with the law. Moreover, the Group has been and will continue to
run remote and in-person onboarding that gives equal access and
opportunity that best adapt to each customers’ circumstances.
People trafficking and exploitation environmental
crime
Our customer risk assessment considers the risks stemming from
the sectors that our customers operate in. To categorize a sector,
we consider exposure to corrupt practices, people trafficking,
modern slavery, labour exploitation, child abuse and
environmental crime. We subject these sectors to further know
your-customer (KYC) due diligence to be absolutely sure of their
level of exposure or link to those types of practices. We also have
transaction control systems that enable us to detect irregular
movements that may come from or be related to such practices.
73 People in special situations (non-exhaustive list): individuals living in extremely rural areas, those residing in care facilities or pensioners, people unable to manage their
financial affairs, gender expression, students and young people, individuals living in shelters or refuges, prisoners and those on parole, international students, economic
migrants, refugees, and isolated individuals.
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Grupo Santander plays an active role in public-private sector
initiatives and specialist forums where we provide financial crime
prevention knowledge, expertise and analysis. As a global bank
that offers a wide range of financial products and services, we have
a deep understanding of the risks related to our sector. We are
firmly committed to the integrity of the financial system and the
development of effective solutions to boost cooperation between
the public and private sectors in tackling complex and global
challenges.
Bribery and corruption
In 2024, we continued to implement our ABC programme, which is
also subject to constant review and update in line with the rest of
our policies.
We conduct a risk and control self-assessment (RCSA) in all our
subsidiaries and units to identify residual risk within the
organization.
It involves assessing the inherent risks of our business activities in
terms of financial crime, with money laundering and terrorism
financing key factors and bribery and corruption also factors that
we consider. Marketing, Sponsorships, Vendor Management and
Human Resources are the areas with the highest exposure to the
ABC risk taxonomy. In 2024, we continued to enhance our
awareness strategy, which is based on the programmes included
under our corporate framework, by combining basic training with
customized programmes. Throughout the year, we ran technical
sessions, FCC risk awareness workshops, courses on ABC risks for
procurement staff, and specialized training for board members.
Thus the Group’s annual programmes cover FCC risks sufficiently.
Our training plans, which we supplement with compliance
programmes, help raise awareness among all the Group’s
employees.
As one of our KPI, the number of employees we train in the Group
highlights our firm commitment to mitigating bribery, corruption
and other FCC risks. This cover all risks functions takers. In
particular:
◦166,199 employees trained in FCC.
In 2024, we continued to bolster our assessment and mitigation
of the risks related to outsourcing and supplier relations in order
to automate the controls stemming from the ABC programme.
To support this initiative, Group employees received specialized
training on ABC and our code of conduct. This is a step forward
that bolsters Santander’s operational resilience and regulatory
compliance significantly.
For more detailed information on this issue, see section 4.4 'Our
suppliers'.
Detecting and managing FCC incidents
Per FCC laws, the financial intelligence units in all our markets
have a robust system to detect, investigate, respond to and inform
the authorities of suspicious transactions in terms of FCC (including
those with indications of bribery or corruption). This system
includes internal controls, lines of action and independent
investigation committees that operate outside of the chain of
command to preserve impartial incident management. The
findings of these investigations are reported regularly to the
Group’s management and oversight bodies.
Highlights of key activities related to detection and cooperation
with authorities activities in 2024 include:
231,810
disclosures to
authorities
453,175
investigations
conducted
Moreover, our whistleblowing channel, which we manage
according to the Group General code of conduct and Canal Abierto
policy, is where individuals can report violations of laws and
internal compliance regulations related to the fight against
financial crime (FCC).
In accordance with the established criteria
74, the Group has no
record of any judicial or administrative proceedings in relation to
corruption and anti-bribery, nor in relation to anti-money
laundering and terrorism financing.
For more detailed information on this issue, see section 4.2.1 'Conduct
standards'.
For more detailed information on this issue, see section 4.3.1 'Canal
Abierto'.
74 Reference is made in this Sustainability statement to judicial and administrative proceedings that have finalised during 2024 with a firm conviction, sanction or fine against an
entity of the Group, which are relevant to the Group due to their materiality.
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4.3 Ethical channels
In this section we cover how Santander manages these IRO:
Protect the confidentiality of users of the bank’s ethical
I+
channel and have an effective reporting system in place
that follows robust principles and procedures.
Negative impact on the environment or broader society
I
by failing to implement measures to resolve incidents
through complaints or reporting channels or due to a
lack of continuous improvement actions.
4.3.1 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.
Minimum standards applicable to all channels include subsidiary
CEO endorsement; communication to employees of the importance
of using the channel; information on how incidents have been
handled and lessons learned; easy access to the channel and
anonymity (if desired); external platforms to receive reports
according to best practice; mechanisms to manage conflicts of
interest in internal investigations of reports; and regular internal
audits.
The board of directors approved the Canal Abierto policy and the
related usage and operation procedure, and brought the Banco
Santander channel under the Chief Compliance Officer's direct
remit. These policies and procedures are available to Group
employees and stakeholders on our corporate website and the
Canal Abierto platform.
Canal Abierto is available to employees on Santander Now
(Intranet) and to any Banco Santander stakeholder through our
corporate website and the Canal Abierto platform.
Canal Abierto is mainly set up to receive reports from employees;
however, some subsidiaries’ local channels are open to vendors,
customers and other stakeholders, who can report violations of the
GCC. Business incidents or complaints outside of Canal Abierto’s
scope are not accepted on these channels.
On Canal Abierto, whistleblowers can report their suspicions about
professional conduct related to:
→ unlawful acts at the workplace;
→ irregularities or breaches of the General code of conduct and its
implementing regulation that may be subject to disciplinary
action;
→ improper accounting or auditing practices, internal control or
influence on external auditors (SOX);
→ violations of anti-money laundering and terrorism financing
laws or of our internal regulations to comply with those laws, as
well as acts of corruption and bribery;
→ violations of securities market laws;
→ conduct that may involve an act that infringes the law or any
other regulation and, in particular, a serious or very serious
criminal or administrative offence or infringement of European
Union law; and
→ acts or conduct that go against the Group’s corporate
behaviours.
Santander pledges to handle reports received through Canal
Abierto in a diligent, independent and objective manner for the
benefit of the parties involved. This is a protective measure for the
people who communicate in good faith through the channel, as
well as for anyone else who takes part of the related internal
investigations. The following criteria, which we set out in the
Group’s Canal Abierto policy, reflect that pledge:
→ Appropriate handling of the reports received, notwithstanding
their possible rejection should they fall under any of the cases
provided for in internal regulations or if it is considered that
there are no grounds for a case.
→ 60-day processing time, which could be extended by up to 30
days for cases that are considered especially complex.
→ Conflict of interest management during the investigation of
cases, in which anyone who may have a conflict of interest with
the persons involved in the matter will refrain from taking part.
The usage and operation procedure details the teams tasked
with investigating each case in relation to the type of report.
→ The prohibition of reprisals against employees or other
stakeholders who report, in good faith, breaches of internal or
external regulations or conduct that does not align with our
corporate behaviours, for having merely accessed an ethical
channel.
Every year, our employees undertake a mandatory training course
on the General code of conduct that includes a module on the
importance of using Canal Abierto.
Moreover, we raise awareness of Canal Abierto and it assurances
among our employees through email and other channels that
detail statistics on the handling of the reports received, the
channel’s features, when to use it, and other information.
On an annual basis, the compliance function prepares a joint report
for the risk supervision, regulation and compliance committee and
the audit committee, informing their members about the activity of
the Group’s channels, key statistics, and other matters related to
Canal Abierto.
The Compliance area aims to enhance how we manage and
analyse the Group’s ethical channels in order to keep our governing
bodies informed of the risks that we may spot, the key concerns of
employees and stakeholders, and the action plans we put in place
to reinforce our ethical and compliance culture.
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We collect data on the Group’s ethical channels every quarter in
relation to the number and type of reports received, and the
measures taken.
An external auditor reviews those data regularly to ensure their
traceability and integrity.
In 2024, 4,437 reports were received, including 216 reports from
third parties (163 from customers and 53 from vendors).
2024
Reports received
A
4,437
reports received over total headcount
2.1%
Categories of received reports
Breaches to the GCC
2,286
Marketing of products and services
321
Relative to privacy/security and confidentiality of
information
116
Internal fraud
292
Harassment
B
1,094
Equal opportunities and non-discrimination
132
Conflicts of interest/activities outside the Group
219
Other breaches to the GCC
C
112
Cases of Human Resources
D
1,754
Other typologies
E
397
Closed reports
4,122
Disciplinary actions
715
which led to dismissals
393
Dismissals over total headcount
0.2%
A. Scope includes companies in: Argentina, Brazil, Chile, Spain, Mexico, Poland,
Portugal, United Kingdom, United States, Uruguay, Colombia, Peru, Switzerland,
Bahamas, and Digital Consumer Bank subsidiaries and SCIB branches. In 2023,
reports received were 3,611. The increase in the number of cases received is due to
the fact that in 2024 a wider perimeter of business units was taken into account,
including banking and non-banking units.
4.4 Our suppliers
In this section we cover how Santander manages these IRO:
Promote responsible practices among vendors; engage
I+
with them, assess their ESG performance and give them
recommendations and tools to improve.
Potential risk from failing to ensure the operational
R
resilience of the value chain by assessing vendors’
solvency, reputation and compliance with the law.
4.4.1 Acting responsibly towards suppliers
Our outsourcing and third-party management model and third
party certification policy (which apply in all our markets) provide a
methodology so that our suppliers meet the Group’s minimum
requirements to avoid risks that stem from substandard
B. Harassment (according to CSRD regulation) is defined as a situation where an
unwanted conduct related to a protected ground of discrimination (for example,
gender under Directive 2006/54/EC of the European Parliament and of the
Council (15), or workplace harassment among others) occurs with the purpose or
effect of violating the dignity of a person, and of creating an intimidating, hostile,
degrading, humiliating or offensive environment. Over the total communications
received in this category, 89% were of workplace harassment.
C. It includes reports relative to Anti-money laundering and terrorist financing and
sanctions; cybersecurity, gifts and invitations, corruption and bribery, market
abuse and antitrust. The Group received 14 reports in 2024 regarding corruption,
which led to 3 dismissals.
D. It includes reports relative to breach of corporate behaviours, labour regulations
and serious acts of disrespect.
E. It includes reports relative to external fraud, accounting and auditing and any
other breach of the Group’s legal or internal regulations, policies or procedures in
relation to functional or organizational aspects not mentioned in the categories
above.
In accordance with the established criteria
75, the Group:
• has no record of any judicial proceedings in relation to incidents
of discrimination or violation of fundamental rights.
• has no record of cases involving employees that refer to serious
human rights incidents.
operational resilience, solvency, reputational control and
regulatory compliance.
Moreover, to promote responsible practices in our supply chain, we
have a supplier ESG certification methodology
76 that supplements
the third-party certification policy with the aim of identifying the
suppliers that pose the greatest risk in terms of sustainability. This
methodology also helps us determine which controls to adopt
according to the risk identified.
As a driver of the Global Compact training programme, we’re
supporting our suppliers in their transition through courses to
boost knowledge on sustainability and the resources needed to
implement it.
Sustainability in procurement
In 2024, we began embedding the new ESG approval methodology
in the Group, that enables us to:
75 More detail see previous footnote.
76 Applicable in accordance with local regulations.
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• Pre-classify all our suppliers according to their sector's
environmental and social exposure
77 .
• Give our suppliers a final ESG risk classification as low, medium
or high, through adjusting the pre-classification with a survey
considering other factors as country risk, number of employees,
and company-specific environmental traits.
As at 2024 year end, we had assessed 487 suppliers
78 identified
with ESG risk. We plan to continue embedding this methodology
and complete assessments by giving all our suppliers a final risk
classification over the next two years.
This assessment includes such ESG aspects as carbon footprint
calculation, inclusion in terms of gender and people with
disabilities, flexi-working, minimum wage and good governance
practices, codes of conduct and anti-corruption policies, human and
labour rights recognition, and other elements set out in
international standards such as the United Nations Global
Compact.
We supplement our supplier assessments with remediation plans,
where necessary, based on our findings. This helps our suppliers in
their transformation and compliance with domestic, European and
international ESG regulatory frameworks.
Sustainability in supplier negotiations
Negotiations to procure certain products and services such as
cards, electricity and corporate vehicles include mandatory and
specific sustainability requirements that we embed in purchasing
specifications.
Moreover, we request ESG information in the tenders of other
products and services that also have a vast environmental and
social impact, such as purchases of ATMs (Automated Teller
Machines) and hardware, and the transportation of cash. This
information, which in 2024 we considered for illustrative purposes,
includes the product's or service's carbon footprint, the use of
recycled or renewable materials, energy efficiency, accessibility for
people with disabilities, and compliance with social, labour and
environmental laws in the supply chain.
Other key aspects
→ The Group has a corporate tool to enhance and standardize the
certification of higher risk suppliers in all our core markets as well
as to review key risks such as cybersecurity, business continuity,
physical security, facilities and data protection, anti-bribery and
corruption, data integrity and other additional risks.
→ We continue to build up expert teams in our markets to consider
ESG standards in negotiations and risks assessments under the
new methodology.
→ We’re working to extend our ethical channels for suppliers to the
rest of our core markets.
4.4.2 Supplier payments practices
→ EUR 11.6 billion paid to suppliers. 89% are local and account for
88%
79 of total procurement volume.
The Group fully complies with the maximum payment terms
prescribed by law. Our average is 15 days (we paid 81% of invoices
within the maximum period). We have a cost model that oversees
payments to third parties, and is expected to be complemented
with specific controls for SMEs. There are no significant differences
found in payment terms to suppliers. Likewise, the Group has no
record of any judicial or administrative proceedings related to non
payment to suppliers.
80
77 Based on S&P’s ESG Risk Atlas.
78 New metric not comparable to 2023 information. Main companies of the Group in: Argentina, Brazil, Chile, Colombia, Germany, Mexico, Portugal, Peru, Spain, United
Kingdom and Uruguay, and other geographies in which Digital Consumer Bank operates such as Italy.
79 Main companies of the Group in: Argentina, Brazil, Chile, Colombia, Germany, Mexico, Portugal, Poland, Peru, Spain, United Kingdom, United States and Uruguay, and other
geographies in which Digital Consumer Bank operates such as Italy and Nordics.
80 Reference is made in this Sustainability statement to judicial and administrative proceedings related to non-payment to suppliers which are ongoing during 2024 and are
relevant to the Group due to their materiality.
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SUSTAINABILITY NOTES
SN 1. Introduction, basis of presentation of the Sustainability statement
and other information
a) Introduction
2013/34/EU as regards disclosure of non-financial and diversity
information. The Sustainability statement forms part of the
This report is the 'Consolidated non-financial information
consolidated directors’ report of Santander Group and the board of
statement and sustainability information' of Banco Santander, S.A.
directors approved it on 25 February 2024.
and its subsidiaries”. It provides detailed information in accordance
with Directive (EU) 2022/2464 on corporate information on
b) Scope of information
sustainability and Commission Delegated Regulation (EU)
The scope of this document covers the core activities of the Group
2023/2772. It also includes the information necessary to comply in
and its subsidiaries from 1 January to 31 December 2024 and is
accordance with Art.49, sections 5, 6, 7, 8 and 9 of the Spanish
prepared following the same consolidated basis (principles,
Commercial Code as amended by Act 11/2018, which transposes
accounting policies and criteria) as the financial statements and
into Spanish law Directive 2014/95/EU of the European Parliament
with the criteria differences set out in this table:
and of the Council of 22 October 2014 amending Directive
Topics
Scope of information
Climate, our transition plan (Environmental information)
Supporting our customers in the green transition
Green finance
Corporate & Investment Banking.
Financing of electric vehicles
Digital Consumer Bank auto loan portfolio.
Purchase of cards made of
Main companies of the Group in: Argentina, Brazil, Chile, México, Poland, Portugal, Spain, United
sustainable materials
Kingdom and Uruguay.
Embedding ESG in risk management
Portfolio exposure to climatic
Full Group scope
sectors
Equator Principles
Corporate & Investment Banking.
Aiming to align our activity with the Paris Agreement Goals
Climate alignment
Corporate & Investment Banking for thermal coal, power generation, oil & gas, aviation, steel and
auto manufacturing portfolios. Digital Consumer Bank for the auto loan portfolio. Commercial
banking perimeter of Brazil for the agro portfolio. And perimeter of commercial banking in Spain
and the United Kingdom for the portfolio of residential mortgages and real estate.
Environmental footprint
Full Group scope. Except for the calculation of Scope 3 emissions (categories 1, 2, 4 and 9) for
which the information of main companies of the Group in: Argentina, Brazil, Chile, Colombia,
Germany, Mexico, Portugal, Poland, Peru, Spain, United Kingdom, United States and Uruguay, and
other geographies in which Digital Consumer Bank operates such as Italy.
EU Taxonomy
Green Asset Ratio (GAR)
Scope based on the prudential consolidated group, in accordance with the Commission Delegated
Regulation (EU) 2021/2178.
Supporting employees, communities and customers (social information)
Acting responsibly towards our employees
Headcount
Full Group scope (except for accident data where Santander Polska S.A. is not included)
Remuneration
Full Group scope
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Training
Full Group scope
Employee engagement survey
Full Group scope
Communities sustainable development
SRI AuMs
Wealth Management & Insurance: SAM and Private Banking
Support for higher education,
Main companies of the Group in: Argentina, Brazil, Chile, Germany, Mexico, Poland, Portugal,
employability and entrepreneurship
Spain, United Kingdom, United States, United Kingdom and Uruguay, in addition to Fundación
Universia.
Other community support
programmes
Main Group companies in: Germany, Argentina, Brazil, Colombia, Chile, Spain, United States,
Mexico, Perú, Poland, Portugal, United Kingdom, Uruguay, and the rest of the countries in which
Digital Consumer Bank operates, as well as Foundations associated to the Group (e.g. Fund.
Banco Santander in Spain, Santander Foundation in the United Kingdom, etc.).
Acting responsibly towards customers
Customers, offices and channels
Full Group scope
NPS (customer satisfaction)
Main Group companies in: Argentina, Brazil, Chile, Spain, United States, Mexico, Poland,
Portugal, United Kingdom and Uruguay.
Customer complaints
All Group entities (>1% of reported claims volume in 2024).
Financial health and inclusion
Main companies of the Group in: Argentina, Brazil, Colombia, Chile, Chile, Germany, Mexico, Peru,
Poland, Portugal, Spain, United Kingdom, United States and Uruguay.
Business conduct (governance information)
Corporate governance
Corporate governance
Banco Santander, S.A.
Communications with shareholders
Banco Santander, S.A.
and investors
Ethical conduct
Mandatory training on the GCC
Full Group scope
Tax contribution
Full Group scope
Financial crime compliance
Main Group companies with FCC obliged parties within the perimeter of GFCC (Group Financial
Crime Compliance).
Litigation and penalties
Full Group scope
Ethical channels
Ethical channel
Group companies in: Argentina, Brazil, Chile, Spain, Mexico, Poland, Portugal, United Kingdom,
United States, Uruguay, Colombia, Peru, Switzerland, Bahamas, and CIB and Digital Consumer
Bank subsidiaries and branches.
Acting responsibly towards suppliers
Payments to suppliers
Main companies of the Group in: Argentina, Brazil, Chile, Colombia, Germany, Mexico, Portugal,
Poland, Peru, Spain, United Kingdom, United States and Uruguay, and other geographies in which
Digital Consumer Bank operates such as Italy and Nordics.
Evaluated suppliers identified with
Main companies of the Group in: Argentina, Brazil, Chile, Colombia, Germany, Mexico, Portugal,
ESG risk
Peru, Spain, United Kingdom and Uruguay, and other geographies in which Digital Consumer
Bank operates such as Italy.
Significant changes in criteria with respect to the 2023
Sustainability Report are reflected in the corresponding section of
this chapter, and generally in section h) of this note.
For a list of subsidiaries included in the consolidation that are
exempt from individual or consolidated sustainability reporting
pursuant to article 19a or 29a(8) of Directive 2013/34/EU, see
Annex 1. Subsidiaries of Banco Santander, S.A. in the ‘Audit report
and consolidated annual accounts'. Of this list, the following
companies are required to report sustainability information under
CSRD:
• Santander Consumer Bank AS (in Norway)
• Santander Bank Polska S.A. (in Poland)
• Stellantis Banque France (in France)
Other companies that meet the requirements established by the
standard but are located in countries where the directive has not
been transposed are not considered obliged to report under the
CSRD.
Moreover, the Group has not applied the exemption in relation to
the breakdown of information on upcoming events or matters
under negotiation.
From 1 January 2025 to the date on which we prepared this
Consolidated non-Financial Information Statement, there were no
additional events that could have a significant impact on the
information set out in this report other than those described in the
consolidated annual accounts.
For more details, see Notes 1, 2, 3 and 53 to the consolidated
report and sections 3 and 4 of the ‘Economic and financial review’
chapter.
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Corporate
Economic and
Risk management
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statement
governance
financial review
and compliance
c) Value chain
Banco Santander has a defined value chain that identifies all the
actors involved in it. It considers the entire consolidation scope set
out in the bank’s Annual Report. This chart illustrates our value
chain. It is split into three main groups (upstream, own operations
and downstream) and shows the actors in each one:
To define the value chain, the Group considered the indications of
Regulation 2022/2464 (paragraph 33); Delegated Regulation
2023/2772 (ESRS 1); and the EFRAG (European financial reporting
advisory group) Value Chain Implementation Guidance.
These are the definitions we used:
Upstream: Set of activities or processes carried out by companies
that are part of the bank’s upstream phases and that provide the
inputs
81 that we use for the development and marketing of
products and services. This includes companies with which the
bank has a direct and indirect commercial relationship.
• Financial institutions: Monetary institution and public entity
responsible for setting monetary policy that will impact on
Banco Santander; regulating currency circulation; supervising
the interbank market in which the bank operates; and providing
liquidity, where required, for solvency purposes. For instance,
the European Central Bank, Banco de España, Bundesbank,
Narodowy Bank Polski, etc.
• Product and service providers: Companies that provide
products and services that are subsequently marketed in later
phases of the bank’s value chain or that the bank uses to carry
out its operations. For instance, insurance companies (e.g.
suppliers of products that are marketed in the bank’s
downstream phase), technology providers, external audit and
consulting service providers, materials suppliers and office
landlords.
The Group continuously oversees the correct management and
maintenance of its supplies to offer a high value added service to
customers and to guarantee business continuity.
Own operations: Activities that the bank’s functional areas and
employees carry out in our markets and subsidiaries.
• Assets: Assets and properties that the bank owns. For instance,
tangible assets such as offices.
• Geographies: Places where the bank and its subsidiaries carry
out their operations. For instance, Brazil, Spain, United States,
the United Kingdom, and Mexico.
• Cross-cutting areas/functions: Departments and areas within
the bank whose function is to manage and develop the bank’s
operations. For instance, Compliance, Risk, Strategy, Human
Resources, Procurement.
Downstream: Commercial relationships and the products and
services that the bank sells to meet the needs of its customers and
end users.
• Retail and Commercial Banking: A segment that focuses on
meeting financial needs and offering a variety of products and
services that are accessible and tailored to specific customer
requirements. It covers all retail (individual) and commercial
(SMEs, large corporates and institutions, excluding those in
CIB) banking operations. For instance, savings accounts,
mortgages, credit cards and financial services for SMEs.
• Digital Consumer Bank: A segment that aims to convert single
product customers into complete banking customers through
other products. This business brings together Openbank
(online banking platform) and Santander Consumer Finance.
For instance, auto loans, consumer loans and credit cards.
• Corporate & Investment Banking (CIB): A segment that
provides a wide range of financial services to businesses,
81 Resources that develop and/or help create products and enable us to operate as a bank (e.g. employees; capital; buildings, offices and other physical infrastructure;
technology; and others).
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institutions and governments. It includes global corporate
banking, investment banking and markets worldwide, as well
as globally managed treasuries and equities businesses. For
instance, advice on mergers and acquisitions (M&A), corporate
finance, investment banking, asset management and risk
management.
• Wealth Management & Insurance (Wealth): A segment that
provides specialized financial services to high net worth clients
and those seeking to protect their assets through insurance. It
comprises Santander Asset Management, Santander Private
Banking, and Santander Insurance.
• Payments: A segment that provides digital payments and
global technology solutions for the bank and new customers in
the open market. It is structured into two businesses: PagoNxt
and Cards (e.g. the cards platform).
• Joint ventures, associates and other investments: Entities that
are not globally integrated in the annual accounts but in which
the Group has decision-making capacity over their operating
activities that have not been previously considered in the value
chain.
• Retailers: Sales channels for companies in the final phases of
the value chain that, through their own commercial network,
are responsible for selling the bank’s products and services to
their customers. For instance, car dealerships.
d) Information not disclosed
In response to the request set out below, the Group has disclosed
partial information. It is not possible to make further disclosure
because it is confidential and sensitive information on the Group's
strategy
• ESRS 2. Minimum Disclosure Requirement - Actions MDR-A -
Actions and resources in relation to material sustainability
matters. Paragraph 69 regarding disclosure of operating
expenses (OpEx) or capital expenditure (CapEx) allocated to
action plans.
The Group discloses certain metrics such as the amounts spent
on employee training and energy efficiency initiatives and
investment in community support, found in the corresponding
sections of this report and our annual accounts.
82
There is no other classified or sensitive information, or information
relating to intellectual property, know-how or innovation results,
that the Group has not included in the report.
e) Time horizons
In preparing this Sustainability statement (including the analysis of
double materiality), we used the following time horizons:
• One year for the short term (this is the standard time horizon for
the short term in the Group).
• One to five years for the medium term (financial planning).
• More than five years for the long term (strategic plan).
These horizons coincide with those provided for by the ESRS
standards. We expressly indicate the different time horizons we
use for processes or metrics described in this report.
f) Significant estimates and assumptions
The Group discloses metrics that incorporate value chain
information, which includes both direct data sources (from
customers or investees) and estimated data from third-party data
providers or sector averages. In some instances, these estimates
draw on factors that the Group is unable to influence and that may
have a significant impact on the information disclosed.
The most significant estimates and assumptions relate to the
Group’s disclosure of GHG emissions, the measurement of which is
subject to considerable uncertainty due to methodology and data
limitations, including reliance on third-party data. Our analysis and
climate target-setting uses estimates based on the recognized
frameworks available at the time. As methods and data evolve, our
data sources and figures may become outdated, and updates to
methodologies and assumptions could lead to different
conclusions. Thus, greenhouse gas emission factors are expected
to increase once data becomes available and the corresponding
companies are included in the calculations.
Climate-related targets, actions and initiatives require forward
looking parameters and long-term horizons. Our forward-looking
statements reflect our current view of future events and are based
on expectations, projections and estimations. These involve
significant uncertainty and risk due to such factors as scientific
developments, methodology developments, standards variation,
future market conditions and technological advances (which vary
across industries), as well as challenges in data availability and
accuracy and regulatory changes. These assessments must evolve
and should not be considered reliable indicators of future
performance.
We expect improvements in data quality, coverage and availability
in the coming years, driven by increased sustainability information
reporting and disclosure obligations and other elements. We also
expect new guidance, industry standards and scientific research in
this area. For that reason, Grupo Santander reserves the right to
review and update its targets, methodologies and approach
regularly and as necessary.
The disclosure of EU Taxonomy reporting is also subject to
uncertainty over data quality and the use of third-party data. For
more details, see section NS 5. EU Taxonomy of this Sustainability
Statement.
g) Comparative information, changes in the
preparation or presentation of sustainability
information
The Group has chosen to avail itself of the transitional provision
relating to section 7.1 of NEIS 1 comparative reporting whereby
the company is not required to disclose comparative information in
the first year of application of the directive.. Except for information
that is necessary to comply with Spanish Law 11/2018 and the
perimeter of disclosure allows its comparability.
In order to comply as accurately as possible with the different
requirements established by the regulation, the following
82 See sections 2.4.5 Our Environmental footprint, 3.1.1 Talent and Skills Development and 3.2.4 Community Support for this chapter; and notes 46 and 47 of the Annual
Accounts.
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indicators have been subject to modification in their calculation
methodology. Therefore the information provided in this
Sustainability statement is not comparable with the information
provided in previous years.
• Number of calendar days lost due to work-related injuries and
fatalities. Fatalities have been included in this metric. In previous
years, only work-related accidents, common illnesses and non
work-related accidents were considered.
• Energy consumption (renewable and non-renewable). This is
calculated based on the percentage of each generation source
(nuclear, renewable and fossil fuels) in each of the countries
where we consume energy and considers the renewable
electricity that we buy and self-produce. Only electricity that has
a renewable certificate is counted as renewable electricity.
• Scope 1 emissions. Emissions derived from refrigerant gas leaks
are included for the first time.
Additionally, the reporting scope that applies to the related metrics
has been modified:
• Internal consumption. The reporting scope is expanded with
information from all subsidiaries. Now covering 100% of the
Group's consolidated scope.
• Footprint compensation. Starting this year "2024", the Group
compensates scopes 1 and 2 of 100% of the Group.
Finally, scope 1 and 2 emission reduction targets have been
reviewed, based on the targets defined in the previous 2022-2025
plan. These targets are based on 2020 and have a horizon of 2030.
At the date of publication of this report, no material misstatements
of information disclosed in prior periods have been detected.
h) Incorporation by reference
This report includes all the information necessary to comply with
the requirements established in the ESRS, except in those cases in
which such information is already included in the Group's audit
report and consolidated annual accounts. In these cases, which are
detailed below, the disclosure will be made by reference to that
report.
• ESRS 2 - Disclosure requirement BP-1, paragraph 5.b).ii.
Reference is made to Appendix I of the Group's consolidated
annual accounts and audit report for the list of subsidiaries of
Banco Santander, S.A.
• ESRS 2 - Disclosure Requirement SBM-3, paragraph 48.d).
Reference is made to note 25.e) of the Group's consolidated
annual accounts and audit report to complete the information
relating to the financial effects derived from the amount of
convictions or penalties.
• ESRS 2. Minimum Disclosure Requirement - Actions MDR-A -
Actions and resources in relation to material sustainability
matters. Paragraph 69 regarding disclosure of operating
expenses (OpEx) or capital expenditure (CapEx) allocated to
action plans. Reference is made to notes 46 and 47 of the
Group's audit report and consolidated annual accounts for more
details on the connection of sustainability information with
annual accounts information.
• ESRS 2 - Minimum Disclosure Requirement - MDR-M parameters,
in relation to the positive impact of 'Act responsibly and consider
investors’ interests and the impact on employees, broader
society and the environment; pay taxes to support the
distribution of wealth'. Reference is made to note 27 of the
Group's audit report and consolidated annual accounts for more
details on the Group's tax information.
• ESRS S1 - Disclosure Requirement S1-17, paragraphs 103(c),
104(b) and AR 105. Reference is made to note 25.e) of the
Group's Annual Report and Consolidated Financial Statements to
complete the disclosures regarding serious human rights
incidents involving the company's personnel.
• ESRS S3 - Disclosure Requirements S3-1, paragraph 17 and AR
12; and S3-4, paragraph 36. Reference is made to note 25.e) of
the Group's Consolidated Annual Report and Accounts for
supplementary information on serious human rights incidents
relating to affected groups.
• ESRS S4 - Disclosure Requirements S4-4, paragraph 35.
Reference is made to note 25.e) of the Group's Consolidated
Annual Report and Accounts for supplementary information on
serious human rights incidents relating to consumers or end
users.
• ESRS G1- G1-4, paragraphs 24.a) and 25.d). Reference is made to
note 25.e) of the Group's Annual Report and Consolidated
Financial Statements to complete the information regarding
convictions and fines for breaches of anti-corruption and anti
bribery laws.
Sustainability note 11. 'Directive (EU) 2022/2464 content index'
provides the sections of this report and of the Group's Annual
Report and Consolidated Financial Statements where the
information that responds to each of the requirements defined by
the ESRS can be found.
i) Use of phase-in provisions in accordance with
Appendix C of ESRS 1
The following table details those requirements for which Grupo
Santander has opted to not disclosure in this first year of preparing
its sustainability report in accordance with the Commission's
delegated regulation (EU) 2023/2772.
Disclosure
ESRS
requirement
Description
ESRS 2
SBM-1, paragraph 40,
b( and c)
Total revenue/Revenue by
significant ESRS Sectors
ESRS 2
SBM-3, paragraph 48
e)
Potential financial effects
Potential financial effects from
ESRS E1
E1-9
material physical and transition
risks and potential climate
related opportunities
ESRS S1
S1-7
Characteristics of non-employee
workers in the undertaking’s
own workforce
ESRS S1
S1-14
Health and safety: information
on non-employee workers
ESRS S1
S1-15
Work-life balance
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List of datapoints in cross-cutting and topical standards that derive from other EU legislation
The table below illustrates the data points covered by ESRS 2 and the thematic ESRS derived from other EU legislation. For
each data point, in the last column, it is indicated whether or not it is material and if it is, where in the report the information
is located.
Disclosure
Benchmark
Materiality of the data
Requirement
Regulation
(3)
EU Climate Law
(4)
point and location in
and related datapoint
SFDR
(1) reference
Pillar 3
(2) reference
reference
reference
the report
ESRS 2 GOV-1
Indicator number 13 of
Commission Delegated
Sustainability notes.
Board's gender
Table #1 of Annex 1
Regulation (EU)
SN2. Sustainability
diversity paragraph 21
2020/1816 (5),
governance
(d)
Annex II
ESRS 2 GOV-1
Delegated Regulation
Sustainability notes.
Percentage of board
(EU) 2020/1816,
SN2. Sustainability
members who are
Annex II
governance
independent
paragraph 21 (e)
ESRS 2 GOV-4
Indicator number 10
1. Sustainability at
Statement on due
Table #3 of Annex 1
Grupo Santander
diligence paragraph 30
1.4 Sustainability
governance
(1.4.2 Human rights
due diligence).
ESRS 2 SBM-1
Indicators number 4
Involvement in
Table #1 of Annex 1
activities related to
fossil fuel activities
paragraph 40 (d) i
Article 449a
Delegated Regulation
Regulation (EU) No
(EU) 2020/1816,
575/2013;
Annex II
Commission
Implementing
Regulation
(EU) 2022/2453 (6)
Table 1: Qualitative
information on
Environmental risk and
Table 2: Qualitative
information on Social
risk
Sustainability notes SN
11. Commission
Delegated Regulation
(EU) 2023/2772 on
sustainability reporting
standards content
index (SBM-1 –
Strategy, business
model and value chain)
ESRS 2 SBM-1
Involvement in
activities related to
chemical production
paragraph 40 (d) ii
Indicator number 9
Table #2 of Annex 1
Delegated Regulation
(EU) 2020/1816,
Annex II
Not material
ESRS 2 SBM-1
Involvement in
activities related to
controversial weapons
paragraph 40 (d) iii
Indicator number 14
Table #1 of Annex 1
Delegated Regulation
(EU) 2020/1818 (7),
Article 12(1) Delegated
Regulation (EU)
2020/1816,
Annex II
Not material
ESRS 2 SBM-1
Involvement in
activities related to
cultivation and
production of tobacco
paragraph 40 (d) iv
Delegated Regulation
(EU) 2020/1818,
Article 12(1) Delegated
Regulation (EU)
2020/1816,
Annex II
Not material
ESRS E1-1
Transition plan to
reach climate
neutrality by 2050
paragraph 14
Regulation
(EU) 2021/1119,
Article 2(1)
2. Our climate
transition plan
Sustainability notes
SN 4. Our transition
plan
ESRS E1-1
Undertakings excluded
from Paris-aligned
Benchmarks paragraph
16 (g)
Article 449a
Delegated Regulation
Regulation (EU) No
(EU) 2020/1818,
575/2013;
Article12.1 (d) to (g),
Commission
and Article 12.2
Implementing
Regulation
(EU) 2022/2453
Template 1: Banking
book-Climate Change
transition risk: Credit
quality of exposures by
sector, emissions and
residual maturity
Sustainability notes
SN 4. Our transition
plan
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Disclosure
Benchmark
Materiality of the data
Requirement
Regulation
(3)
EU Climate Law
(4)
point and location in
and related datapoint
SFDR
(1) reference
Pillar 3
(2) reference
reference
reference
the report
ESRS E1-4
Indicator number 4
GHG emission
Table #2 of Annex 1
reduction targets
paragraph 34
Article 449a
Delegated Regulation
2. Our climate
Regulation (EU) No
(EU) 2020/1818,
transition plan
575/2013;
Article 6
2.4 Aiming to align our
Commission
activity with the Paris
Implementing
Agreement Goals
Regulation
(EU) 2022/2453
Sustainability notes
Template 3: Banking
SN 4. Our transition
book – Climate change
plan
transition risk:
alignment metrics
ESRS E1-5
Indicator number 5
Energy consumption
Table #1 and Indicator
from fossil sources
n. 5 Table #2 of Annex
disaggregated by
1
sources (only high
climate impact sectors)
paragraph 38
Sustainability notes
SN 7.1 Green transition
(Table 2.
Environmental
footprint 2023-2024)
ESRS E1-5 Energy
consumption and mix
paragraph 37
Indicator number 5
Table #1 of Annex 1
Sustainability notes
SN 7.1 Green transition
(Table 2.
Environmental
footprint 2023-2024)
ESRS E1-5
Energy intensity
associated with
activities in high
climate impact sectors
paragraphs 40 to 43
Indicator number 6
Table #1 of Annex 1
Sustainability notes
SN 7.1 Green transition
(Table 2.
Environmental
footprint 2023-2024)
ESRS E1-6
Gross Scope 1, 2, 3 and
Total GHG emissions
paragraph 44
Indicators number 1
and 2 Table #1 of
Annex 1
Article 449a;
Regulation (EU) No
575/2013;
Commission
Implementing
Regulation
(EU) 2022/2453
Template 1: Banking
book – Climate change
transition risk: Credit
Delegated Regulation
(EU) 2020/1818,
Article 5(1), 6
and 8(1)
Sustainability notes
SN 7.1 Green
transitions
(Table 3. Gross scopes
1, 2, 3 and total GHG
emissions )
quality of exposures by
sector, emissions and
residual maturity
ESRS E1-6
Gross GHG emissions
intensity paragraphs
53 to 55
Indicators number 3
Table #1 of Annex 1
Article 449a
Regulation (EU) No
575/2013;
Commission
Implementing
Regulation
(EU) 2022/2453
Template 3: Banking
book – Climate change
transition risk:
Delegated Regulation
(EU) 2020/1818,
Article 8(1)
Sustainability notes
SN 7.1 Green
transitions
(Table 3. Gross scopes
1, 2, 3 and total GHG
emissions )
alignment metrics
ESRS E1-7
GHG removals and
carbon credits
paragraph 56
Regulation
(EU) 2021/1119,
Article 2(1)
Sustainability notes
SN 7.1 Green
transitions
(Table 3. Gross scopes
1, 2, 3 and total GHG
emissions )
ESRS E1-9
Exposure of the
benchmark portfolio to
climate-related
physical risks
paragraph 66
Delegated Regulation
(EU) 2020/1818,
Annex II Delegated
Regulation
(EU) 2020/1816,
Annex II
Phase-in (partially)
2. Our climate
transition plan
2.3.4 Potential
financial effects
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Disclosure
Requirement
and related datapoint
Benchmark
Regulation
(3)
reference
Materiality of the data
point and location in
the report
EU Climate Law
(4)
reference
SFDR
(1)
reference
Pillar 3
(2)
reference
ESRS E1-9
Disaggregation of
monetary amounts by
acute and chronic
physical risk paragraph
66 (a)
ESRS E1-9
Location of significant
assets at material
physical risk paragraph
66 (c).
ESRS E1-9 Breakdown
of the carrying value of
its real estate assets by
energy-efficiency
classes paragraph 67
(c).
Article
Regulation (EU) No
575/2013;
Commission
Implementing
Regulation
(EU) 2022/2453
paragraphs 46
and 47; Template 5:
Banking book - Climate
change physical risk:
Exposures subject to
physical risk.
449a
Phase-in (partially)
2. Our climate
transition plan
2.3.4 Potential
financial effects
Article 449a
Regulation (EU) No
575/2013;
Commission
Implementing
Regulation
(EU) 2022/2453
paragraph 34;
Template 2:Banking
book -Climate change
transition risk: Loans
collateralised by
immovable property -
Energy efficiency of
the collateral
Phase-in (partially)
2. Our climate
transition plan
2.3.4 Potential
financial effects
ESRS E1-9
Degree of exposure of
the portfolio to
climate- related
opportunities
paragraph 69
Delegated Regulation
(EU) 2020/1818,
Annex II
Phase-in
ESRS E2-4
Amount of each
pollutant listed in
Annex II of the
E-PRTR Regulation
(European Pollutant
Release and Transfer
Register) emitted to
air, water and soil,
paragraph 28
Indicator number 8
Table #1 of Annex 1
Indicator number 2
Table #2 of Annex 1
Indicator number 1
Table #2 of Annex 1
Indicator number 3
Table #2 of Annex 1
Not material
ESRS E3-1
Water and marine
resources paragraph 9
Indicator number 7
Table #2 of Annex 1
Not material
ESRS E3-1
Dedicated policy
paragraph 13
Indicator number 8
Table 2 of Annex 1
Not material
ESRS E3-1
Sustainable oceans
and seas paragraph 14
Indicator number 12
Table #2 of Annex 1
Not material
ESRS E3-4
Total water recycled
and reused paragraph
28 (c)
Indicator number 6.2
Table #2 of Annex 1
Not material
ESRS E3-4
Total water
consumption in m
3 per
net revenue on own
operations paragraph
29
Indicator number 6.1
Table #2 of Annex 1
Not material
ESRS 2- SBM 3 - E4
paragraph 16 (a) i
Indicator number 7
Table #1 of Annex 1
Not material
ESRS 2- SBM 3 - E4
paragraph 16 (b)
Indicator number 10
Table #2 of Annex 1
Not material
ESRS 2- SBM 3 - E4
paragraph 16 (c)
Indicator number 14
Table #2 of Annex 1
Not material
ESRS E4-2
Sustainable land /
agriculture practices or
policies paragraph 24
(b)
Indicator number 11
Table #2 of Annex 1
Not material
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Disclosure
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Materiality of the data
Requirement
Regulation
(3)
EU Climate Law
(4)
point and location in
and related datapoint
SFDR
(1) reference
Pillar 3
(2) reference
reference
reference
the report
ESRS E4-2
Indicator number 12
Not material
Sustainable oceans /
Table #2 of Annex 1
seas practices or
policies paragraph 24
(c)
ESRS E4-2
Indicator number 15
Not material
Policies to address
Table #2 of Annex 1
deforestation
paragraph 24 (d)
ESRS E5-5
Indicator number 13
Not material
Non-recycled waste
Table #2 of Annex 1
paragraph 37 (d)
ESRS E5-5
Indicator number 9
Not material
Hazardous waste and
Table #1 of Annex 1
radioactive waste
paragraph 39
ESRS 2- SBM3 - S1
Indicator number 13
Not material
Risk of incidents of
Table #3 of Annex I
forced labour
paragraph 14 (f)
ESRS 2- SBM3 - S1
Indicator number 12
Not material
Risk of incidents of
Table #3 of Annex I
child labour paragraph
14 (g)
ESRS S1-1
Indicator number 9
1. Sustainability at
Human rights policy
Table #3 and
Grupo Santander
commitments
Indicator number 11
(1.4.2 Human rights
paragraph 20
Table #1 of Annex I
due diligence)
ESRS S1-1
Delegated Regulation
Due diligence policies
(EU) 2020/1816,
on issues addressed by
Annex II
the fundamental
International Labor
Organisation
Conventions 1 to 8,
paragraph 21
3.1 Our employees
Cross reference to:
1. Sustainability at
Grupo Santander
(1.4.2 Human rights
due diligence)
ESRS S1-1
Indicator number 11
Not material
Processes and
Table #3 of Annex I
measures for
preventing trafficking
in human beings
paragraph 22
ESRS S1-1
Indicator number 1
3.1 Our employees
Workplace accident
Table #3 of Annex I
3.1.2 Working
prevention policy or
conditions
management system
(i. Employee health
paragraph 23
and well-being)
ESRS S1-3
Indicator number 5
3.1 Our employees
Grievance/complaints
Table #3 of Annex I
3.1.4 Employee
handling mechanisms
feedback and
paragraph 32 (c)
experience
ESRS S1-14
Indicator number 2
Delegated Regulation
Sustainability notes
Number of fatalities
Table #3 of Annex I
(EU) 2020/1816,
7.3 Employees
and number and rate
Annex II
(Table 22.
of work- related
Occupational health &
accidents paragraph 88
safety)
(b) and (c)
ESRS S1-14
Indicator number 3
Sustainability notes
Number of days lost to Table #3 of Annex I
7.3 Employees
injuries, accidents,
(Table 22.
fatalities or illness
Occupational health &
paragraph 88 (e)
safety)
ESRS S1-16
Indicator number 12
Delegated Regulation
Sustainability notes
Unadjusted gender pay Table #1 of Annex I
(EU) 2020/1816,
7.3 Employees
gap paragraph 97 (a)
Annex II
(Table 16.
Remuneration ratios)
ESRS S1-16
Indicator number 8
Sustainability notes
Excessive CEO pay
Table #3 of Annex I
7.3 Employees
ratio paragraph 97 (b)
(Table 16.
Remuneration ratios)
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financial review
and compliance
Disclosure
Requirement
and related datapoint
ESRS S1-17
Incidents of
discrimination
paragraph 103 (a)
SFDR
(1)
reference
Indicator number 7
Table #3 of Annex I
Pillar 3
(2)
reference
Benchmark
Regulation
(3)
reference
EU Climate Law
(4)
reference
Materiality of the data
point and location in
the report
3.1 Our employees
3.1.3 Inclusive culture
4. Business conduct
4.2 Ethical conduct
ESRS S1-17 Non-
respect of UNGPs on
Business and Human
Rights and OECD
paragraph 104 (a)
ESRS 2- SBM3 – S2
Significant risk of child
labour or forced labour
in the value chain
paragraph 11 (b)
ESRS S2-1
Human rights policy
commitments
paragraph 17
ESRS S2-1 Policies
related to value chain
workers paragraph 18
ESRS S2-1 Non-respect
of UNGPs on Business
and Human Rights
principles and OECD
guidelines paragraph
19
ESRS S2-1
Due diligence policies
on issues addressed by
the fundamental
International Labor
Organisation
Conventions 1 to 8,
paragraph 19
ESRS S2-4
Human rights issues
and incidents
connected to its
upstream and
downstream value
chain paragraph 36
Indicator number 14
Table #3 of Annex 1
ESRS S3-1
Human rights policy
commitments
paragraph 16
ESRS S3-1
non-respect of UNGPs
on Business and
Human Rights, ILO
principles or and OECD
guidelines paragraph
17
Indicator number 10
Table #1 and Indicator
n. 14 Table #3 of
Annex I
Indicators number 12
and n. 13 Table #3 of
Annex I
Indicator number 9
Table #3 and Indicator
n. 11 Table #1 of
Annex 1
Indicator number 11
and n. 4 Table #3 of
Annex 1
Indicator number 10
Table #1 of Annex 1
Indicator number 9
Table #3 of Annex 1
and Indicator number
11 Table #1 of Annex
1
Indicator number 10
Table #1 Annex 1
Delegated Regulation
(EU) 2020/1816,
Annex II Delegated
Regulation
(EU) 2020/1818 Art 12
(1)
Delegated Regulation
(EU) 2020/1816,
Annex II Delegated
Regulation
(EU) 2020/1818, Art 12
(1)
Delegated Regulation
(EU) 2020/1816,
Annex II
Delegated Regulation
(EU) 2020/1816,
Annex II Delegated
Regulation
(EU) 2020/1818, Art 12
(1)
3.1 Our employees
3.1.3 Inclusive culture
4. Business conduct
4.2 Ethical conduct
Not material
Not material
Not material
Not material
Not material
Not material
Not material
Not material
ESRS S3-4
Human rights issues
and incidents
paragraph 36
ESRS S4-1 Policies
related to consumers
and end-users
paragraph 16
ESRS S4-1
Non-respect of UNGPs
on Business and
Human Rights and
OECD guidelines
paragraph 17
Indicator number 14
Table #3 of Annex 1
Indicator number 9
Table #3 and
Indicator number 11
Table #1 of Annex 1
Indicator number 10
Table #1 of Annex 1
Delegated Regulation
(EU) 2020/1816,
Annex II Delegated
Regulation
(EU) 2020/1818, Art 12
(1)
Not material
3.3 Our customers
3.3 Our customers -
Cross reference to:
1. Sustainability at
Santander
(1.4.2 Human rights
due diligence)
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Disclosure
Requirement
and related datapoint
SFDR
(1) reference
Pillar 3
(2) reference
Benchmark
Regulation
(3)
reference
EU Climate Law
(4)
reference
Materiality of the data
point and location in
the report
ESRS S4-4
Indicator number 14
Not material
Human rights issues
and incidents
Table #3 of Annex 1
paragraph 35
ESRS G1-1
Indicator number 15
4. Business conduct
United Nations
Table #3 of Annex 1
4.2 Ethical conduct
Convention against
Corruption paragraph
10 (b)
(4.2.3 Financial crime
compliance)
ESRS G1-1
Indicator number 6
4. Business conduct
Protection of whistle-
Table #3 of Annex 1
4.3 Ethical channels
blowers paragraph 10
(d)
ESRS G1-4
Fines for violation of
anti- corruption and
anti-bribery laws
paragraph 24 (a)
Indicator number 17
Table #3 of Annex 1
Delegated Regulation
(EU) 2020/1816,
Annex II)
4. Business conduct
4.2 Ethical conduct
(4.2.3 Financial crime
compliance)
ESRS G1-4
Indicator number 16
4. Business conduct
Standards of anti-
Table #3 of Annex 1
4.2 Ethical conduct
corruption and anti
bribery paragraph 24
(b)
(4.2.3 Financial crime
compliance)
(1) Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector
(Sustainable Finance Disclosures Regulation) (OJ L 317, 9.12.2019, p. 1).
(2) Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and
amending Regulation (EU) No 648/2012 (Capital Requirements Regulation “CRR”) (OJ L 176, 27.6.2013, p. 1).
(3) Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts
or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 (OJ L 171, 29.6.2016,
p. 1).
(4) Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending
Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021, p. 1).
(5) Commission Delegated Regulation (EU) 2020/1816 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as
regards the explanation in the benchmark statement of how environmental, social and governance factors are reflected in each benchmark provided and published (OJ L 406,
3.12.2020, p. 1).
(6) Commission Implementing Regulation (EU) 2022/2453 of 30 November 2022 amending the implementing technical standards laid down in Implementing Regulation
(EU) 2021/637 as regards the disclosure of environmental, social and governance risks (OJ L 324,19.12.2022, p.1.).
(7) Commission Delegated Regulation (EU) 2020/1818 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as
regards minimum standards for EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks (OJ L 406, 3.12.2020, p. 17)."
SN 2. Sustainability governance
Board of directors
It consist of 15 members, of which 13 are non-executive directors
and 2 are executive directors. The majority are independent
directors (66.67% of the total members of the council).
Likewise, the board of directors shall ensure that the procedures to
select members guarantee the individual and collective expertise
of directors, encourage diversity in terms of gender, age,
geographical origin, experience and knowledge, and do not carry
any implicit bias that could lead to any form of discrimination on
grounds such as disability, race or ethnic origin. The board
currently has a balanced presence of both genders (women -men)
with a diversity ratio of 67%.
83 In terms of geographical origin/
international experience, 60% of the directors come from or
studied in continental Europe, 60% in the US/UK, 13% in Latin
America, and 7% in other regions. The Board also has extensive
international experience, mainly in the markets where we operate
(European market, US and UK markets, and Latin American
markets). The Board also has the skills and experience to monitor
materiality issues (e.g. on issues related to sustainability, human
resources, culture, talent and remuneration, as well as to business
conduct and risk management). None of the directors are currently
assigned a specific employee representation role.
The board of directors as the highest decision-making body in the
Group performs the following functions:
• approves the Responsible Banking agenda and set the strategy;
• approves the culture policy and related policies on responsible
business and sustainability matters and, in particular, on
environmental and social matters;
• supervise that the responsible banking strategy is consistent
with Group strategy;
• reviews the performance against the public objectives and that
the metrics are covered within the responsible banking agenda;
• tracks key initiatives; and
• reviews subsidiaries’ strategies.
For more details, see the Rules and Regulations of the board of
Directors, available on the Group's corporate website; and section
4.2 'Board composition' in the 'Corporate governance' chapter.
83 The diversity ratio is calculated by dividing the number of women by men. The percentage of each gender vs total membership is40% women and 60% men.
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Responsible banking, sustainability and cultural
committee
The responsible banking, sustainability and cultural committee
(RBSCC) assists the board in fulfilling its supervisory
responsibilities regarding the responsible business strategy and
sustainability issues of Banco Santander and its Group. In
particular, it has the following functions:
(i) advise the council on the design of the strategy and policies on
responsible business and sustainability, in particular
environmental and social matters, by monitoring, supervising and
evaluating them;
(ii) Advise the council in formulating the Group’s strategy with
interest groups; as well as supervise the involvement with them;
(iii) ensure that adequate control processes are in place with
respect to responsible banking practices, and that risks and
opportunities related to sustainability and accountability are
identified and managed; and
(iv) to report regularly to the council on the progress made by the
Group on responsible business practices and sustainability.
The responsible banking, sustainability and culture committee
consists of five independent directors, 80% of whom are women.
All of them have been appointed by the board of directors taking
into account their knowledge, qualifications and experience in the
areas for which the committee is responsible. Thus, its members
have competence in issues relevant to this function as strategy and
human resources, culture, talent and remuneration, responsible
business and sustainability, risk management and also in issues
related to education and universities.
In 2024, the committee held five meetings, and, among others, the
following topics were discussed.
Environmental issues:
• Reviewed the Group’s climate change strategy and alignment
targets. Endorsed the Group priorities for 2024 in relation to
sustainability, including supporting our customers in their green
transition.
• Reviewed ESG factors introduced in the credit approval process,
associated action plans and related achievements. Worked with
the risk supervision, regulation and compliance committee to
review the progress made in embedding climate-related and
environmental risks, as well as to monitor the implementation of
controls and processes to mitigate ESG risks.
• Reviewed the green finance strategy and its execution.
• Monitored our own environmental footprint, value chain
emissions and carbon neutral claim.
Social issues:
• Reviewed our social agenda, which includes financial inclusion;
financial health; business with social output; and corporate social
responsibility or philanthropic activities. And reviewed the
outcomes of the holistic human rights due diligence exercise.
• Reviewed the progress made within our community support
strategy, which includes Santander Universidades strategy and
its alignment with the Group's transformation agenda.
• Discussed People and Culture's activities and progress and
proposals regarding inclusive culture in coordination with the
nomination and remuneration committees, with a key focus on
the representation of women in senior positions within the
Group.
Governance issues:
• Identified priority sustainability areas for action based on the
outcomes of a materiality assessment that the Sustainability
team conducts every year. Verified that the proposed
sustainability agenda and targets remained aligned with the
Group´s strategy. Monitored and assessed the Group's progress
on its targets to control that its KPI remained relevant and
aligned with committee expectations. And reviewed ESG global
ratings' assessments of Banco Santander.
• Assisted the board in ensuring that sustainability targets and
metrics were embedded in the Group's remuneration schemes.
As part of that, reviewed, in coordination with the remuneration
committee, a proposal to further increase the alignment of the
long-term incentive for 2024-2026 with our sustainability
agenda.
• Reviewed the progress made regarding the management of the
supply chain in regards to ESG.
• Supported the audit committee on the supervision and
assessment of the process to prepare and present non-financial
information.
• Reviewed the main European and international financial
regulatory and supervisory initiatives and priorities related to
sustainability. Received information on local regulatory
developments.
In addition, it received specific training in sustainability, with
special attention to the new Corporate Sustainability Reporting
Directive (CSRD).
For more details, see the Rules and Regulations of the board of
Directors, available on the Group's corporate website; and sections
4.2 'Board composition' and 4.9 'Responsible banking,
sustainability and cultural committee activities in 2024' in the
'Corporate governance' chapter.
Board audit committee
The board audit committee (BAC) assists the board in overseeing
and reviewing the financial and sustainability information process,
as well as internal control systems.
The audit committee consists of five independent directors, 60% of
whom are women. All of them have been appointed by the board
of directors based on their knowledge, qualifications and
experience in the areas of finance, accounting and auditing,
internal control, information technology, business or risk
management.
In 2024, the committee held 15 meetings, including four joint
sessions with the risk supervision, regulation and compliance
committee. With regard to sustainability reporting, the committee
oversaw the sustainability reporting process, receiving regular
updates from the Group's Chief Accounting Officer (CAO) and the
main functions responsible for sustainability reporting.
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For more details, see the Rules and Regulations of the board of
Directors, available on the Group's corporate website; and sections
4.2 'Board composition' and 4.5 'Audit committee activities in
2024' of the 'Corporate governance' chapter.
Risk supervision, regulation and compliance
committee
The risk supervision, regulation and compliance committee
supports and advises the board in defining and assessing risk
policies that affect the Group and in determining the current and
future risk appetite and the strategy and culture in this area,
including proposing appropriate changes in view of internal or
external circumstances that impact on the Group (both financial
and non-financial risks), among other functions.
The risk supervision, regulation and compliance committee
consists of five external directors (40% women), with three
independent members, including its chair. All of them have been
appointed by the board of directors based on their knowledge,
qualifications and experience in the areas for which the committee
is responsible. Thus, its members have competence in issues
relevant to this function as banking, accounting, auditing and
financing, strategy, risk management, governance and control, as
well as in human resources, culture, talent and remuneration.
In 2024, the committee held 18 meetings, including one strategy
session, four joint sessions with the audit committee, one joint
session with the nomination committee and one joint session with
the remuneration committee. It reviewed relevant topics on
customer data protection, operational resilience, aspects of
customer conduct, complaints and internal whistleblowing. Issues
such as culture and internal control are also addressed.
For more information see: the Rules and Regulations of the Board
of Directors, available on the Group's corporate website; and
sections 4.2 'Board composition' and 4.8 'Risk supervision,
regulation and compliance committee activities in 2024' in the
'Corporate governance' chapter.
Other committees of the Group board, such as the Nomination and
Remuneration Committees, also support and review sustainability
related issues. For further details, see section 4. 'Board of
Directors' in the 'Corporate Governance' chapter.
Other governance bodies
The corporate accounting and financial reporting, management
and sustainability committee performs these functions (among
others):
• Approve the content and scope of sustainability disclosures.
• Analyze and validate or, when applicable, propose the approval
of all significant sustainability information.
This committee meets monthly, or on an extraordinary basis when
deemed appropriate.
The risk control committee (CCR) is responsible for controlling
risks and providing a holistic view of them. Determines whether
lines of business are managed according to the risk appetite
approved by the board. It also identifies, tracks and evaluates the
impact of current and emerging risks on the Group’s risk profile.
The CCR is composed of senior management members in the
functions of risk, compliance and conduct, financial and general
intervention, among others.
Other forums and support functions
First line of defence
Business functions and all other functions that generate risk
exposure are the first line of defence. The first line of defence
identifies, measures, controls, tracks and reports the risks that
originate and applies the policies, models and procedures that
regulate risk management. Risk generation must be adjusted to the
approved risk appetite and associated limits. The head of each unit
that generates a risk has primary responsibility for managing it.
The corporate sustainability function works continuously to
define, execute and monitor our sustainability strategy, and
coordinates and drives the responsible banking agenda, with
support from a senior adviser on responsible business practices
who reports directly to the executive chair, as well as with the
sustainability network in our core markets, global businesses and
corporate functions.
The accounting and management control function, is responsible
for (among others):
• establishing and maintaining the internal control system on the
financial and sustainability information generated by the
function; and
• Implementing the standards and policies reflected in the
sustainability information sent to the Corporation.
It is the responsibility of the functions involved in executing the
strategy and preparing information on sustainability (for example:
Technology, Operations, Risks, Human Resources, Tax, and others)
that the information provided is true and reliable, establishing the
necessary controls and correcting any weaknesses.
Second line of defence
Risk and Compliance & Conduct functions, as the second line of
defence, will provide independent challenge and oversight of the
risk management activities performed by the first line of defence.
This second line of defence should control, within their respective
domains of responsibility, that risks are managed in accordance
with the risk appetite defined by senior management and promote
a strong risk culture throughout the organization.
The internal control function within the Enterprise Wide Risk
Management (EWRM) function will be responsible for establishing
the criteria and monitoring the implementation and effectiveness
of the Santander Group Internal Control System. This will help to
the adequacy and integrity of the internal controls established by
the different functions to provide reasonable assurance in the
achievement of the defined objectives (which include, among
others, the reliability of financial and sustainability reporting).
Third line of defence
The internal audit function periodically assesses that policies,
methods and procedures are adequate and effectively applied for
the management and control of accounting, financial and
management information. The annual audit plan, which was
carried out on the basis of a robust risk assessment process (Top
down & Bottom-up methodology), provides reviews of the main
aspects contained in this report.
In this way, issues related to climate risk and disclaimers are
regularly verified as well as compliance with the rules and
procedures established in the General Code of Conduct (GCC),
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independently monitoring their adequacy and effectiveness and
those of their local developments. the Open Channel is reviewed
and specifically evaluates compliance with data protection
regulations.
The audit function reports to the Audit Committee, which, among
other functions, assists the board in the supervision and evaluation
of the process of preparing and presenting financial and non
financial information, as well as internal control systems.
Risk management and internal controls over
sustainability information
In order to control the quality and reliability of the information
included in the Sustainability statement, Santander implemented
an internal control system that complies with the most demanding
international standards and complies with the guidelines
established by the Committee of Sponsoring Organisations of the
Treadway Commission (COSO).
Like the Sustainability information itself, at Santander we are
evolving our Internal Control System so that it covers all the
material aspects identified for 2026.
First, we identify the most material risks and then establish the
necessary controls, complying with the requirements regarding the
disclosure of sustainability information.
The most significant aspects taken into account in the process of
preparing sustainability information are the following:
• Identification and definition of quantitative and qualitative
criteria that emanate from regulatory interpretation or our
impacts risks and opportunities in areas where there are no
consolidated market practices.
• The hypotheses, judgments, estimates and approximations used
in the calculation and preparation of certain metrics.
• Ensuring the completeness of information and establishing
perimeters for each metric or group of metrics.
• Difficulties in having, in certain respects, third-party information
necessary for the construction of our narrative or metrics,
especially in the value chain (emissions information from our
portfolio, alignment information, supplier information, etc.).
• Calculation, processing and consolidation of both quantitative
and qualitative information.
In addition, we also began to prepare reasonable assurance of
several of the metrics to convergence in the quality standards of
financial and sustainability information.
Similarly to the control of financial information, the
implementation and supervision of the control system of
sustainability information is carried out through the following
bodies: Board of Directors, Audit committee, Risk Control
committee and Corporate Accounting and Financial, Management
and Sustainability Reporting committee.
For more details, see the introductory paragraph “Sustainability
information” of the consolidated management report itself; section
8. 'Internal control over financial reporting (ICFR)' in the 'Corporate
governance' chapter; and section 1.5 'Internal control system' in
the 'Risk management and compliance' chapter.
Internal control system for sustainability information
Control culture
Basis of Internal
Control. Essential to
provide reasonable
assurance in achieving
the objectives defined
by the Group, acting
responsibly.
Control Activities
Actions established by
policies and
procedures that help
that management
instructions are carried
out to mitigate
identified risks.
Risk Assessment
(RCSA)
Dynamic process of
evaluating the risks
associated with
achieving the
organization's
objectives.
Information and
Communication
Accurate and timely
information for
decision-making,
facilitating the
escalation and
governance of
improvements and
incidents.
Monitoring activities
Mechanisms and
instruments to monitor
the correct
implementation and
effectiveness of the
internal control
system, promoting a
continuous evaluation
of the same.
Cross-cutting regulations to embed ESG standards in
our business model
Responsible banking framework
Establishes responsible banking as a strategic topic for Grupo
Santander and all local units.
Accounting and Financial Reporting, Management and
Sustainability information framework
Sets out the principles, directives and guidelines regarding the
preparation of accounting, financial and management information
that must be applied by all Group subsidiaries as an essential
element of proper governance.
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Responsible banking and sustainability policy
Sets out our sustainability principles, targets and strategy
(including human rights protection) to create long-term
stakeholder value.
Responsible banking model
Sets out the roles and responsibilities of the first, second and third
line of defence in all responsible banking-related activity to drive
our sustainability agenda, embed ESG standards and achieve our
goals.
In addition to these regulations, which apply to all the Group’s
units and businesses, the following section of this chapter details
the regulations that apply specifically to the management of each
of the material topics and associated IROs:
• Climate change (see section 2. 'Our climate transition plan');
• Own workforce (see section 3.1 'Our employees');
• Consumers and end users (see section 3.3 'Our customers');
• Affected communities (see section 3.2. 'Communities'
sustainable development'),
• Business conduct (see section 4. 'Business conduct').
All regulations (corporate frameworks, models, policies and
procedures) help maintain a high level of governance, and the
highest standards in terms of their drafting, approval, and in the
monitoring of their local transposition.
The approval of the regulations is responsibility of the Board of
Directors or its committees, when the regulated matter falls within
their scope of responsibility according to their rules and
regulations. Corporate frameworks in all cases must be approved
by the board of directors. The regulations approved by the board
under this chapter are as follows:
→Relevant corporate frameworks related to sustainability:
Responsible Banking, Risk; Cybersecurity; Compliance and
conduct; Financial Crime and compliance; Human resources.
→Relevant policies related to sustainability: Responsible banking
and sustainability; Code of conduct; Code of conduct in securities
markets; Corporate Defence; Environmental, social and climate
change risk; Tax; Conflict of interest; Defence sector; Anti-money
laundering and countering the financing terrorism;
Remuneration; Performance management; Group Succession;
Culture.
For more details on the Group's key regulatory documents on
sustainability, see our corporate website santander.com.
SN 3. Materiality assessment – Detailed methodology
The Group and subsidiaries’ double materiality assessments are
based on European Sustainability Regulatory Standards (ESRS) 1
and 2, and the Double Materiality Assessment Guide from the
ERAG.
Our assessment comprised these phases:
1. Background and stakeholder analysis
General view of the bank, its operations and main lines of business,
based on:
→Information on the entity: Sources include strategic and
financial plans, financial statements and other published reports.
This analysis considers operations, products and services,
geographical footprint, business relationships and the value
chain.
→External information: Public documents on sector trends,
analyst and supervisor papers, and peers’ sustainability reports.
To enhance this background analysis, we also use these external
sources:
1. The UNEP FI impact analysis tool to uncover the impact of the
Group’s financing operations, including those related to climate
change. This tool provides a in-built impact mappings that
combined, with our internal data and context, enables us to
identify the most significant impact areas of the portfolio.
2. The ENCORE (environmental risk assessment) database to
obtain information on the bank customer’s environmental
dependencies.
ENCORE: a materiality database of dependencies between
production processes and ecosystem services.
3. Human rights due diligence to spot the actual and potential
impact of the bank’s operations on human rights throughout the
value chain.
We use the stakeholder analysis to identify directly affected
stakeholders (customers, employees and investors) and readers of
the report (supervisors and regulators, our communities and
NGOs). We analyse information gathered during stakeholder
engagement exercises and conduct surveys on sustainability
matters to use as part of our materiality assessment.
2. Identification of impacts, risks and
opportunities
The background analysis uncovered +100 IROs. We categorize
every IRO and assign them to a topic, sub-topic or sub-sub-topic
under ESRS 1, AR 16. For each IRO, we detail:
→the part of the value chain they touch and over what time frame.
→the dependencies between impacts and risks, assessing how
each impact can lead to new risks and opportunities, with a
special focus on the negative impacts of the human rights due
diligence exercise; and
→who in the organization manages it.
→What is the type of financial effect for risks and opportunities.
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3. Assessment of impacts, risks and
opportunities
The methodology we use to measure materiality follows the
EFRAG implementation guidance. After applying that methodology
in this phase, 32 IROs were material.
Impact
We analyse the materiality of actual and potential impacts based
on the likelihood and severity of occurrence and, in the case of
negative impacts, include irreparable impacts.
→Scale (size of impact): split into five categories: Low, moderately
low, medium, high, very high.
→Scope: split into four categories: Local, national, international,
global.
→Irreparable impact (when negative): split into four levels;
reparable, reparable with moderate effort, difficult to repair, and
irreparable.
We estimate the likelihood of impact on a scale of 1 to 5.
Risks
We adapted our methodology according to the maturity of
quantifying environmental and social risks.
→The climate materiality assessment includes a climate risk
assessment (transition and physical) across several time
horizons to align with the EBA’s Guidelines on the management
of ESG risks and other EU risk management directives. We used
this information to quantify the materiality of credit, market,
operational, reputational and other risks.
→We assessed other environmental risks related to Pollution,
Water and marine resources, Biodiversity and ecosystems and
Resource use and circular economy through the exercise
described in the section 2.3.5. “Our approach to nature and
biodiversity”. This assessment sought to identify connection
between our portfolios and nature in line with target 15 of the
Kunming-Montreal Global Biodiversity Framework adopted at
the COP15 in 2022.
→For social and governance risks, we used the Sustainability
Accounting Standards Board’s (SASB) financial materiality and
internal financial information.
Opportunities
We base the opportunities assessment on forecasts for all our
global businesses. We mapped out projected ESG revenue against
the identified opportunities and compared it to the Group’s revenue
on a scale of 1 to 5.
Stakeholder views
We supplement IROs assessments with stakeholder views
(affected groups and readers of the report).
The number of specific inputs received within this exercise is
detailed below. These inputs are part of the constant dialogue with
our stakeholders, as detailed in section 1.2. Dialogue with our
stakeholders.
Retail
Customers
N = 9000+
=
Investors
N = 8
=
NGOs
N = 3
=
Senior
management
N = 8
=
Employees
N = c.200
=
Regulators and
supervisors
84
N = 2
=
The survey results show agreement in prioritizing three areas: the
fight against climate change and supporting the green transition;
protecting customer data; information transparency and fostering
financial inclusion. Specifically:
• Retail customers prioritize social (privacy and personal data
security) and governance matters (transparency and honesty).
• Employees and senior management prioritize each ESG area
equally.
• Investors, regulators and NGOs prioritize environmental
matters.
4. Materiality thresholds
We set a threshold of 3.5 on a scale of 1 to 5 to classify an IRO as
material (for impact perspective and financial materiality). This
means that we consider IROs that sit between medium (3) and high
(4) as material. Taken as a reference the score calculation for the
impacts, the score values greater than 3.5 represent events of
medium-high severity and events with medium-high probability of
occurrence.
We also assessed the reasonability and coherence of the list of
IROs identified as material. In quantitative terms assuming that the
distribution of the events materiality follows a normal distribution
(average=3 and standard deviation = 0.5), the probability of a score
value of 3.5 is around 16%, which is considered reasonable for a
material event.
84 Hemos consultado a las dos principales funciones del Grupo que monitorean esta actividad
Annual report 2024
122
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Information on impacts, risks and opportunities (IROs)
Linked to
ESRS
IRO description
IRO type
Value chain
Summary of current/
potential effects
(narrative)
People/
environment
Strategy- and business
model-related impacts
Time
horizon
1
impact due to
own
operations or
business
relations
2
Systemic/
specific
Core activities that lead
to positive impacts
Risks and/or
opportunities
stemming
from impacts More details
E1 - Climate
change
Contribute to protecting
the environment by
driving an increase in the
use of renewable energy
and other low-carbon
technology.
Positive
impact
Downstream
- Promote the
development of
innovative, clean
technology and our
customers’ transition
Environment
1. Help our customers in
their green transition
while also managing
climate-related risks and
impacts
Short/
medium
term
Business
relations
N/A
N/A
N/A
2.2 Supporting our
customers in their
transition goals
E1 - Climate
change
Contribute to reducing
the Group’s scope 1 and
2 greenhouse gas
emissions.
Positive
impact
Own
operations
- Reducing our
environmental footprint
Environment
1. Help our customers in
their green transition
while also managing
climate-related risks and
impacts
Short/
medium
term
Own
operations
N/A
N/A
N/A
2.4 Aiming to align our
activity with the Paris
Agreement Goals - 2.4.5
Our environmental
footprint
E1 - Climate
change
Adverse impact on the
environment due to the
bank’s financing of, or
investment in, non
sustainable assets and
activities
Negative
impact
Downstream - Adverse environmental
impact
Environment
1. Help our customers in
their green transition
while also managing
climate-related risks and
impacts
Short/
medium
term
Business
relations
N/A
N/A
N/A
2.4 Aiming to align our
activity with the Paris
Agreement Goals
E1 - Climate
change
Growth in the financing
of renewable energy and
other energy transition
solutions.
Opportunity
Downstream
- Support clean
technology through our
financial product
proposition
N/A
N/A
N/A
N/A
N/A
N/A
✔
2.2 Supporting our
customers in their
transition goals
E1 - Climate
change
Revenue growth by
providing our customers
with sustainable
solutions in such sectors
as construction, mobility
or agriculture.
Opportunity
Downstream
- Grow our revenue by
providing sustainable
solutions in several
sectors and partnering
our customers in their
transition
N/A
N/A
N/A
N/A
N/A
N/A
✔
2.2 Supporting our
customers in their
transition goals
E1 - Climate
change
Reputational risk based
on the perception of our
progress with climate
related policies and
objectives
Risk
Own
operations
and
downstream
- Potential reputational
damage if risks
materialize
N/A
N/A
N/A
N/A
N/A
N/A
✔
2.3 Embedding climate in
risk management - 2.3.3
Reputational risk
Promote the health,
Global health and well
S1 - Own
workforce
well-being and security
of our employees in a
safe and inclusive work
place; facilitate a positive
work-life balance
through flexible working.
Positive
impact
Own
operations
- Contribute positively to
a workplace that
promotes flexible
working, health and
well-being
People
2. Help our employees
develop by promoting
diversity and learning
and providing fair
working conditions.
Short/
medium
term
Own
operations
N/A
being strategy that sets
out how we protect the
health, safety and well
being of our employees
and promote a healthy
lifestyle.
N/A
3.1 Our employees
3.1.1 Working conditions
- i. Employee health and
well-being
Promote a workforce
S1 - Own
workforce
that reflects the society
we live in and
encourages
collaboration; guarantee
the same opportunities
for all our employees,
irrespective of gender,
disability or other
characteristics.
Positive
impact
Own
operations
- Contribute positively to
an inclusive environment
that offers equal
opportunity for all
People
2. Help our employees
develop by promoting
diversity and learning
and providing fair
working conditions.
Short/
medium
term
Own
operations
N/A
Global inclusive culture
strategy for 2020-2025
that drives us to act
ethically, purposefully
and transparently.
N/A
3.1 Our employees
3.1.2 Equal opportunity
for all
Annual report 2024
123
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
ESRS
S1 - Own
workforce
IRO description
Promote continuous
career development and
personal growth through
learning and
development
programmes
IRO type
Positive
impact
Value chain
Own
operations
Summary of current/
potential effects
(narrative)
- Promote training,
development and
personal growth among
employees
People/
environment
People
Strategy- and business
model-related impacts
2. Help our employees
develop by promoting
diversity and learning
and providing fair
working conditions.
Time
horizon
1
Short/
medium
term
Linked to
impact due to
own
operations or
business
relations
2
Own
operations
Systemic/
specific
N/A
Core activities that lead
to positive impacts
Create talent
programmes to promote
individual growth while
considering business
demands.
Risks and/or
opportunities
stemming
from impacts
N/A
More details
3.1 Our employees -
3.1.3 Talent and skills
development
S1 - Own
workforce
Promote the general
well-being of employees
and provide appropriate
remuneration under
equal conditions based
on merit and market
rates
Positive
impact
Own
operations
- Promote appropriate
and equal remuneration
People
2. Help our employees
develop by promoting
diversity and learning
and providing fair
working conditions.
Short/
medium
term
Own
operations
N/A
Remuneration
framework that
combines fixed and
variable pay schemes
based on targets for
employees and the
Group.
N/A
3.1 Our employees
3.1.1 Working conditions
- ii. Remuneration and
corporate benefits
S1 - Own
workforce
Harm employees
through discriminatory
conduct, inadequate
working conditions,
harassment or corruption
Negative
impact
Own
operations
- Potential harm to
employees through an
inadequate working
environment and
conditions.
People
2. Help our employees
develop by promoting
diversity and learning
and providing fair
working conditions.
Short/
medium
term
Own
operations
Systemic
N/A
N/A
3.1 Our employees
3.1.2 Equal opportunity
for all
S1 - Own
workforce
Potential risk of conflict
with employees due to
poor management or
ethical or conducts
failings
Risk
Own
operations
- Potential harm if risks
materialize
N/A
N/A
N/A
N/A
N/A
N/A
✔
3.1 Our employees
3.1.1 Working conditions
- i. Employee health and
well-being
S4 -
Consumers
and end
users
The customer benefits
from the bank’s
development of products
and services that adapt
to their needs and
expectations and
promote financial
inclusion and health.
Positive
impact
Own
operations
- Promote customer
inclusion through
products and services
that adapt to their needs
People
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.
Short/
medium
term
Own
operations
N/A
Develop products and
services and special
programmes to achieve
financial health and
inclusion
N/A
3.3 Our customers
3.3.2 Financial health
and inclusion - i.
Financial inclusion
S4 -
Consumers
and end
users
Education on, and
awareness of, cyber
security to understand
potential threats and
ways to repel them
Positive
impact
Own
operations
Knowledge and
awareness of
cybersecurity matters to
help reduce online
threats
People
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.
Short/
medium
term
Own
operations
N/A
Interactive campaigns,
awareness workshops,
corporate sponsorship,
podcasts
N/A
3.3 Our customers
3.3.3 Privacy, data
protection and
cybersecurity
S4 -
Consumers
and end
users
Negative impact on the
customer if they do not
have access to
complaints channels or
if, after making a
complaint, the bank fails
to take the necessary
action
Negative
impact
Own
operations
- Potential breakdown of
trust and long-term
relationships with
customers
People
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.
Short/
medium
term
Own
operations
Systemic
N/A
N/A
3.3 Our customers
3.3.1 Customer conduct
Annual report 2024
124
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Linked to
impact due to
own
Risks and/or
Summary of current/
operations or
opportunities
potential effects
People/
Strategy- and business
Time
business
Systemic/
Core activities that lead
stemming
ESRS
IRO description
IRO type
Value chain
(narrative)
environment model-related impacts
horizon
1
relations
2
specific
to positive impacts
from impacts More details
4. Be a trusted partner to
our customers, with
Negative impact on the
products and services
S4 -
customer if the bank fails
- Potential breakdown of
that adapt to their needs, Short/
Consumers
to provide sufficient
Negative
trust and long-term
Business
3.3 Our customers -
Downstream
People
while applying
medium
Systemic
N/A
N/A
and end
information on the
impact
relationships with
relations
3.3.1 Customer conduct
responsible practices,
term
users
product or service they
customers
supporting their financial
are signing up for
inclusion, and protecting
their information.
S4 -
Consumers
and end
users
Negative impact
stemming from a
potential infringement of
customers’, employees’
or shareholders’ rights
due to a lack of
appropriate technical or
organizational measures
to protect their personal
data according to law
and the practices set by
the Group
- Potential breakdown of
Negative
trust and long-term
Upstream
People
impact
relationships with
customers
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.
3.3 Our customers -
Short/
Business
3.3.3 Privacy, data
medium
Systemic
N/A
N/A
relations
protection and
term
cybersecurity
4. Be a trusted partner to
Negative impact on the
our customers, with
customer by failing to
products and services
S4 -
- Potential breakdown of
guarantee access to, or
that adapt to their needs, Short/
3.3 Our customers -
Consumers
Negative
Own
trust and long-term
Own
the use of, products and
People
while applying
medium
Systemic
N/A
N/A
3.3.1 Customer conduct
and end
impact
operations
relationships with
operations
services that may
responsible practices,
term
iv. Vulnerable customers
users
customers
present certain obstacles
supporting their financial
or weak spots
inclusion, and protecting
their information.
Potential losses due to
sanctions or a reduction
S4 -
3.3 Our customers
in the number of
Consumers
- Potential harm if risks
3.3.3 Privacy, data
customers because of a
Risk
Downstream
N/A
N/A
N/A
N/A
N/A
N/A
✔
and end
materialize
protection and
failure to detect or
users
cybersecurity
respond effectively to
breaches of privacy
Potential losses due to
claims or a reduction in
S4
the numbers of
Consumers
- Potential harm if risks
3.3 Our customers
customers because of
Risk
Downstream
N/A
N/A
N/A
N/A
N/A
N/A
✔
and end
materialize
3.3.1 Customer conduct
substandard customer
users
practices throughout
their life cycle
Annual report 2024
125
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Linked to
impact due to
own
Risks and/or
Summary of current/
operations or
opportunities
potential effects
People/
Strategy- and business
Time
business
Systemic/
Core activities that lead
stemming
ESRS
IRO description
IRO type
Value chain
(narrative)
environment model-related impacts
horizon
1
relations
2
specific
to positive impacts
from impacts More details
- Education: Grants and
scholarships for students
and researchers to
S3 - Affected
communities
Contribution to
education, employability
and entrepreneurship, as
well as to community
development through
support programmes
Positive
impact
Own
operations
- Enhance education,
employability and
entrepreneurship
opportunities, and
contribute positively to
addressing social needs
in the communities we
serve
People
3. Contribute to the
economic, financial and
social development of
our communities, with a
special focus on
education, employability
and entrepreneurship.
Short/
medium
term
Own
operations
N/A
access and complete
their studies; and
support to universities in
overcoming their key
challenges (i.e.
digitalization)
- Employability: Support
lifelong learning; and
facilitate access to
employment in the early
stages of people’s career.
- Entrepreneurship:
Provide access to the
N/A
3.2 Supporting our
communities’
sustainable development
- 3.2.4 Supporting
communities
training, advice and
resources (including
benefits).
S3 - Affected
communities
Drive economic growth
and job creation in the
regions where we
operate and provide
credit to people and
businesses
Positive
impact
Downstream
- Grow the economy by
helping people and
businesses
People
3. Contribute to the
economic, financial and
social development of
our communities, with a
special focus on
education, employability
and entrepreneurship.
Short/
medium
term
Business
relations
N/A
Lending to create or
grow businesses;
microloans to
microentrepreneurs to
support the start-up and
expansion of their
businesses; and
mortgages and loans for
other items.
N/A
3.2 Supporting our
communities’
sustainable development
- 3.2.1 Supporting our
economy and the social
development of our
communities
Contribution to
S3 - Affected
communities
sustainable development
through financing and
investment that
promotes sustainable
performance in
companies, addresses
societal challenges,
mitigates a specific issue,
or pursues positive
societal outcomes
Positive
impact
Downstream
- Grow the economy,
with a focus on activities
that promote ESG
performance; address
social challenges;
mitigate a specific social
issue; or pursue positive
social outcomes
People
3. Contribute to the
economic, financial and
social development of
our communities, with a
special focus on
education, employability
and entrepreneurship.
Short/
medium
term
Business
relations
N/A
- Label operations.
- Propose investment
that covers ESG factors
and sustainability
objectives.
N/A
3.2 Supporting our
communities’
sustainable development
- 3.2.2 Socially
responsible investment
and lending
Annual report 2024
126
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Linked to
ESRS
IRO description
IRO type
Value chain
Summary of current/
potential effects
(narrative)
People/
environment
Strategy- and business
model-related impacts
Time
horizon
1
impact due to
own
operations or
business
relations
2
Systemic/
specific
Core activities that lead
to positive impacts
Risks and/or
opportunities
stemming
from impacts More details
S3 - Affected
communities
Finance activities (in any
customer segment) that
breach of the bank’s
policies and jeopardize
the well-being of present
and future generations
Negative
impact
Downstream - Potential damage to
people’s well-being
People
3. Contribute to the
economic, financial and
social development of
our communities, with a
special focus on
education, employability
and entrepreneurship.
Short/
medium
term
Business
relations
Systemic
N/A
N/A
3.2 Supporting our
communities’
sustainable development
- 3.2.3 Environmental,
social and climate
change management
S3 - Affected
communities
Potentially negative
impact on the
environment or society
by failing to sufficiently
involve stakeholders or
use suitable customer
identification and
management
mechanisms when
providing finance to a
customer or project
Negative
impact
Own
operations
- Potential damage to
people’s well-being and/
or to the environment
People/
environment
3. Contribute to the
economic, financial and
social development of
our communities, with a
special focus on
education, employability
and entrepreneurship.
Short/
medium
term
Own
operations
Systemic
N/A
N/A
3.2 Supporting our
communities’
sustainable development
- 3.2.3 Environmental,
social and climate
change management
Act responsibly and
consider investors’
G1 -
Business
conduct
interests and the impact
on employees, broader
society and the
environment; pay taxes
to support the
distribution of wealth
Positive
impact
Own
operations
- Promote decision
making that considers all
stakeholders’ interests
People/
environment
5. Act responsibly
through a strong culture,
governance and conduct.
Short/
medium
term
Own
operations
N/A
N/A
N/A
4.2 Ethical behaviour
G1 -
Business
conduct
Protect the
confidentiality of users of
the bank’s ethical
channel and have an
effective reporting
system in place that
follows robust principles
and procedures
Positive
impact
Own
operations
- Availability of
mechanisms for
stakeholders to escalate
confidentially and/or
anonymously (and
according to regulatory
requirements)
substandard practices by
the bank and its people
People
5. Act responsibly
through a strong culture,
governance and conduct.
Short/
medium
term
Own
operations
N/A
N/A
N/A
4.3 Ethical channels
G1 -
Business
conduct
Promote responsible
practices among
vendors; engage with
them, assess their ESG
performance and give
them recommendations
Positive
impact
Own
operations
- Promote responsible
practice in our value
chain
People/
environment
5. Act responsibly
through a strong culture,
governance and conduct.
Short/
medium
term
Own
operations
N/A
N/A
N/A
4.4 Our suppliers
and tools to improve
Annual report 2024
127
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
ESRS
IRO description
IRO type
Value chain
Summary of current/
potential effects
(narrative)
People/
environment
Strategy- and business
model-related impacts
Time
horizon
1
Linked to
impact due to
own
operations or
business
relations
2
Systemic/
specific
Core activities that lead
to positive impacts
Risks and/or
opportunities
stemming
from impacts More details
G1 -
Business
conduct
Negative impact on the
environment or broader
society by failing to
implement measures to
resolve incidents through
complaints or reporting
channels or due to a lack
of continuous
improvement actions
Negative
impact
Own
operations
- Potential harm to
people and/or the
environment; loss of
stakeholders’ trust in the
channel’s effectiveness
People/
environment
5. Act responsibly
through a strong culture,
governance and conduct.
Short/
medium
term
Own
operations
N/A
N/A
N/A
4.3 Ethical channels
G1 -
Business
conduct
Harm broader society
through bribery or
corruption
Negative
impact
Own
operations
- Potential loss of
customers’ and other
stakeholders’ trust
People
5. Act responsibly
through a strong culture,
governance and conduct.
Short/
medium
term
Own
operations
N/A
N/A
N/A
4.2 Ethical behaviour
G1 -
Business
conduct
Potential risk from failing
to ensure the operational
resilience of the value
chain by assessing
vendors’ solvency,
reputation and
compliance with the law
Risk
Own
operations
- Potential harm if risks
materialize
N/A
N/A
N/A
N/A
N/A
N/A
✔
4.4 Our suppliers
G1 -
Business
conduct
Risk stemming from
improper conduct that
makes illicit funds or
assets appear legitimate
and, therefore, facilitates
illegal activity or benefits
from it.
Risk
Own
operations
- Potential harm if risks
materialize
N/A
N/A
N/A
N/A
N/A
N/A
✔
4.2 Ethical behaviour
1. For more information on time horizons, see section 1.3 Materiality assessment.
2. Own operations are the bank’s internal activities; Business relations primarily centre on upstream and downstream value chain activities.
Annual report 2024
128
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
SN 4. Our transition plan
i. Alignment targets details
Target types: To help our customers’ transition to a low-carbon
economy, we employ physical emissions intensity for setting
targets in the power generation, steel, aviation and auto sectors.
For the oil & gas sector, we choose the absolute emissions metric.
We prioritize engagement over divestment. We recognize that in
certain situations, establishing alignment targets may
inadvertently discourage the transition. For example, when they
increase their leverage to undertake significant capex programs to
align their operations, while the alignment benefits will only
materialise over the medium term. To prevent undesirable
outcomes like the one described, we evaluate each case
individually and base our decisions on a long-term perspective.
However, due to the absence of a widely accepted “transition
finance taxonomy”, we consider alignment targets to be an
effective tool for informing portfolio decisions, provided that each
case is managed individually. For the different targets’ design
choices taken, we considered inputs from several different internal
and external stakeholders.
Scenarios:
85 To set 2030 science-based alignment targets for our
financed sectors, we choose a credible scenario that draws a
pathway to reach net zero emissions by 2050 and will limit
temperature increase to 1.5 ºC in line with the Paris Agreement.
The scenario we have chosen for the sectors for which we have
released alignment targets is the “International Energy Agency -
Net Zero Emissions by 2050 Scenario” (IEA-NZE). Our aviation
target is consistent with the expected adoption of current
technologies. This scenario takes into account the technological,
regulatory and market changes that need to take place. Regarding
our scope 1 and 2 own emission reduction objective by 2030, it is
aligned with the cross-sector absolute reduction method
considered by SBTi, going beyond the minimum ambition of a
linear annual reduction of a 4.2% linear annual reduction between
the base year and target year.
Target coverage:
86 All CIB portfolio targets and metrics are global
and include our core subsidiaries. SCF's target is European and
includes its passenger car portfolio (including loans and leasing) in
16 units (13 countries in Europe). This is the same scope we use to
measure emissions performance and progress with our targets,
though we are working on obtaining information and tracking
emissions for other vehicle types.
Baseline years: We use 2019 as the baseline year for the four
initial sectors and 2020 and 2022 for auto manufacturing and auto
lending in Europe, respectively. We chose those years to be
representative of our portfolios at that time. For our own
operations emissions (Scopes 1 & 2) reduction objectives, we use
2020 as the baseline considering the deadline of the plan set to
2030, and the guidelines criteria for setting science-based targets.
Financed emissions: According to the methodology and design we
chose for each target we calculate financed emissions based on
PCAF
87 . Since the emissions information of our customers or assets
financed is not available in the same way as their financial
information, there is a lag of at least one year in the emissions
data.
ii. Disclosed financed emissions
Santander discloses financed emissions from its loan portfolio for
different uses. In the context of portfolio alignment, we calculate
the financed emissions of the portfolios of the most relevant
sectors, following market standards and practices, focusing on the
parts of the value chain of each industry that are most polluting
and actionable through alignment strategies. For this purpose it is
necessary to use information to monitor alignment strategies and
their effectiveness.
Additionally, obligations arising from regulatory or supervisory
requirements need to cover financed emissions from wider
perimeters. For this, we also use other sources and methodologies,
including average emission factors per sector based on market
recognised methodologies (such as PCAF).
We also calculate the financed emissions of our long-term
investments in equity and sovereign debt, which are material
exposures in our balance sheet.
85 The latest IEA's net-zero scenario was published in the World Energy Outlook in October 2024. The reference data for 2030 are 0.19 tCO2/MWh in power (-58% vs. 2019),
23% reduction vs. 2019 in oil & gas (which implies 18.27 mtCO2 applied to Santander baseline), 1.29 tCO2e/tS in steel (-18% vs. 2019), 60.59 gCO2e/RPK in aviation (-29% vs.
2019) and 116 gCO2/vkm in automotive (-40% vs. 2020). For own emission reduction reference data for 2030 is 104,400 ton (-42% vs. 2020).
86 From our total lending on the balance sheet, about 9% of our exposure comprises sectors for which Santander published emissions alignment targets for high-emitting
sectors (Power generation, oil and gas, aviation, steel, auto manufacturing and auto lending. Excluding the thermal-coal phase out) and around18% of total CIB lending. Using
baselines exposures with different time horizons as per the above table, and balance sheet exposures as at December 2023.Our objectives and alignment targets have been
externally assured only in the verification process of the present report.
87 PCAF: “Partnership for Carbon Accounting Financials” is a global partnership of financial institutions that work together to develop and implement a harmonized approach to
assess and disclose the greenhouse gas (GHG) emissions associated with their loans and investments. Santander joined PCAF in 2021.
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2. Financed emissions for alignment
A
Sector
Year
B
Exposure
(drawn
amount
EUR bn)
C
Emissions
scope
Absolute
emissions
(mtCO2e)
Physical emissions
intensity
Financial emissions
intensity (mtCO2e/
EUR bn lent)
Overall PCAF
D
score
2020
10.31
4.59
0.17 tCO2e/MWh
0.45
2.5
Power generation
2021
2022
10.23
11.88
1
4.24
3.82
0.19 tCO2e/MWh
0.16 tCO₂e/MWh
0.41
0.32
2.8
3.0
2023
10.75
3.14
0.15 tCO₂e/MWh
0.29
3.2
2020
6.67
22.58
73.60 tCO2e/TJ
3.38
3.6
Oil & gas
2021
2022
8.25
6.89
1 + 2 + 3
E
27.43
20.94
74.36 tCO2e/TJ
73.28 tCO₂e/TJ
3.33
3.04
3.9
3.0
2023
6.82
20.27
72.97 tCO₂e/TJ
2.97
3.0
2020
2.44
1.08
93.05 gCO2e/RPK
0.44
3.7
Aviation
2021
2022
2.02
1.65
1 + 2
0.84
1.35
97.21 gCO2e/RPK
81.09 gCO₂e/RPK
0.42
0.82
3.2
3.0
2023
0.70
0.58
82.99 gCO₂e/RPK
0.83
3.0
2020
1.31
2.14
1.40 tCO2e/tS
1.63
3.1
Steel
2021
2022
1.42
1.96
1 + 2
1.90
1.88
1.36 tCO2e/tS
1.24 tCO₂e/tS
1.33
0.96
3.1
3.1
2023
2.04
1.84
1.38 tCO₂e/tS
0.90
3.3
2020
4.45
3.49
149 gCO2/vkm
0.79
3.1
Auto - manufacturing 2021
2022
3.90
3.95
3
E
2.67
2.74
138 gCO2/vkm
133 gCO₂/vkm
0.68
0.70
3.0
3.0
2023
4.02
2.74
134 gCO₂/vkm
0.68
3.0
Agro
F
2022
2023
1.80
3.58
1 + 2
6.20
9.83
7.04 tCO₂e/ton
6.59 tCO₂e/ton
3.52
2.75
3.3
3.1
Auto - lending
G
2022
2023
55.27
62.40
1 + 2
5.84
6.78
137 gCO2e/vkm
133 gCO₂e/vkm
0.11
0.11
3.2
2.7
2022
211.05
2.63
39.72 kgCO2e/m
2
0.01
3.3
Mortgages
H
1 + 2
2023
262.45
1.93
21.06 kgCO₂e/m²
0.01
3.5
Commercial Real
2023
18.26
1+2
0.19
22.89 kgCO2e/m²
0.01
4.0
Estate
I
A. These financed emissions should not be confused with the EBA Pillar 3 exercise financed emissions calculations, as the perimeter and therefore, supporting data of the two
exercises are different. In the case of corporate business loans, Banco Santander calculates the Total Value of the Company (used to obtain the emissions attribution factor)
by adding the total equity and debt of the company in order to avoid the high volatility in market capitalization.
B. Obtaining emissions data from our customers is a challenge. As they disclose more non-financial information worldwide, the quality of our reporting on finance emissions
will improve. In some other retail sectors, we rely on availability of emissions information for the different asset types as well as business information.
C. For power generation it includes Corporates and Project Finance in operation.
D. Scores illustrate the data quality used to calculate the financed emissions (with 1 being the best). Financed emissions information comes from a wide range of sources for
emissions, physical intensity, and production data. For CIB portfolios CDP is the main source for GHG emissions and Trucost for fossil fuel production, we also used Asset
Impact and Annual Reports as secondary sources to cover information gaps. We rely on Transition Pathway Initiative to measure physical intensity for certain sectors, such as
Autos, O&G and Steel. In other retail sectors, we rely on the good quality of business information but also on data suppliers to improve and expand their emission databases.
E. Scope 3 - category 11: use of sold products.
F. Agriculture portfolio in Brazil. It includes financing for livestock (such as raising cattle for meat and dairy), agricultural activity (such as planting perennial and temporary crops
for soybeans, corn, rice, and vegetables) and land use change. Since there is no specific methodology for agriculture, the PCAF score was adapted considering the data
available in primary production portfolio that made possible to measure land management emissions. Financed emissions of the Brazil agriculture portfolio as of March
2022 and December 2023.
G. Consumer lending for the acquisition of passenger cars, covering a significant majority of the exposure in Europe.
H. Mortgage portfolio in the United Kingdom for 2022, and in the United Kingdom and Spain for 2023. Assessment includes Scope 1 and 2 emissions based on actual (where
available) and modelled EPC's.
I. Commercial real estate portfolios in the United Kingdom and Spain. Assessment includes Scope 1 and 2 emissions based on actual (where available) and modelled EPC's.
More detail regarding other financed emissions calculations from our balance sheet, see section SN 7.1 Green transition.
iii. Internal carbon pricing
customers go green. Nonetheless, we do consider carbon pricing in
several of our internal review and assessment tools, such as
Internal carbon pricing is a tool that helps internalize the external
scenario analyses and transition risk calculations. These processes
costs of carbon emissions and align operations with broader
reflect the "real world" costs in our prices. A “fictitious” internal
sustainability objectives. Setting an internal carbon price does not
carbon price would cause disparity between the customer’s actual
appear to be the most appropriate approach for our type of
ability to pay debt and internal valuations. We encourage the
operations and core business model as we strive to help our
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creation of carbon prices in real economies to facilitate the
transition to a low-carbon economy.
Grupo Santander’s strategy to lessen the environmental impact of
our operations involves reducing CO2e emissions and offsetting the
emissions that we’re unable to reduce. We follow a strict carbon
credits selection process that includes due diligence on compliance
and consistency with our environmental, social and climate change
policy. Credits are certified under some of the industry's most well
known standards. Moreover, the carbon credits we purchase are
ratified by an independent rating agency to validate their integrity.
We actively monitor the voluntary carbon credit market to adapt
our offsetting strategy to best practice.
Offsetting serves to internalize the cost of emissions (scopes 1 and
2) from our own operations.
iv. EU Paris-aligned benchmarks
Because of our financing and investment operations, Santander is
not excluded from the EU Paris-aligned benchmarks. These
benchmarks are designed to align investment with the Paris
Agreement’s goals and include undertakings that meet special
sustainability standards. They exclude undertakings that do not
meet those standards.
We disclose our exposure to undertakings excluded from those
benchmarks in section ‘10.4 Credit quality of exposures‘ of our
SN 5. EU Taxonomy
Information on Article 8 of the EU Taxonomy
Regulation
In 2020, the European Union adopted the Taxonomy Regulation
that sets out a list of activities that can qualify as environmentally
sustainable
90 and stipulates that companies subject to the
Corporate Sustainability Reporting Directive (CSRD
91) must disclose
how their operations align with the EU Taxonomy.
→GAR, financial institutions:
Financial institutions have been disclosing their Green Asset Ratio
(GAR) since 2023. This ratio measures the financing granted to
Taxonomy-aligned activities as the numerator and the total
balance sheet as the denominator.
To be considered aligned, activities must meet specific taxonomy
criteria and ensure that they do no significant harm (DNSH) to any
of the other environmental objectives and meet minimum social
safeguards (MSS).
Pillar 3 disclosures report in accordance with points (d) to (g) of
Article 12(1) and (2) of Regulation (EU) 2020/1818.
v. Locked-in GHG emissions
Our double materiality assessment shows that our direct emissions
do not have a negative impact on, or pose material risk to, the
environment. Regarding locked-in GHG emissions from key
assets,
88 the nature of our financing and investment activity means
that none of our key assets are sources of scope 1 and 2 emissions.
Nonetheless, the Group takes carbon footprint reduction measures
to help make a positive contribution to the environment.
As detailed in the 2.4.5 ‘Our environmental footprint’ section
regarding indirect GHG emissions (scope 3), the only material
category under this scope was category 3.15 (financed emissions),
with a weighting of over 99% of the total scope 3 emissions.
Regarding locked-in GHG emissions from key products,
89 the
category Scope 3.11 “Use of sold products emissions” is not
material to the bank.
With regard to locked-in GHG emissions in category 3.15, there is
currently no information available to have a reliable estimation due
to lack of information from counterparties. In future exercises, its
evaluation will be assessed based on the availability of data.
Santander's GAR is 3.04% (turnover-based)
92
and 3.28% (CapEx-based)
93
The European Taxonomy criteria do not reflect the full reality of
companies’ transition efforts. Many activities that contribute to the
transition to a greener economy do not meet the Taxonomy’s
alignment criteria. Thus, we cannot include them in the ratio (for
instance, certain types of hybrid cars, which, despite being an
undoubted improvement on petrol cars, are not admitted in all
cases).
Moreover, the limitations in the design of the ratio and in financial
institutions’ implementation of the Taxonomy lead to reduced
numbers:
• The numerator and denominator are not symmetric. While the
denominator reflects the balance sheet total, the numerator only
includes financing in relation to four portfolios: financial
institutions; non-financial institutions subject to the CSRD;
households (mortgages, auto and renovations); and local
governments. Thus, the numerator does not consider green loans
to SMEs or the majority of non-European entities.
88 Estimates of future GHG emissions that could arise during the useful life of a company’s key assets. The term “key assets” refers to existing or planned assets that a company
owns or controls (e.g. fixed or mobile installations and equipment) and that are direct or indirect energy-related sources of GHG emissions.
89 Estimates of future GHG emissions as the direct GHG emissions from the use of products sold throughout their useful life (category 3.11).
90 These are: 1) climate change mitigation; 2) climate change adaptation; 3) sustainable use and protection of water and marine resources; 4) transition to a circular economy;
5) pollution prevention and control and protection; and 6) restoration of biodiversity and ecosystems.
91 The CSRD applies to large companies, listed companies, banks, or insurance companies that meet certain criteria, such as having a balance sheet total greater than EUR 20
million, a turnover greater than EUR 40 million, or an average number of employees greater than 500 during the fiscal year.
92 Calculation for the two climate-related objectives. For the flow of volumes, the Green Asset Ratio is 2.6% (turnover-based) and 3.4% (CapEx-based).
93 Eligibility for the climate-related targets is 34.0% (based on both turnover and CapEx) and, for the remaining four targets, is 0.04% based on turnover and 0.03% based on
CapEx.
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• The available data is limited. In Latin America and even in
European countries such as Poland (key markets for the Group),
energy efficiency certificates are either non-existent or very
limited, which makes it impossible to account for aligned
mortgages in the ratio. There are also significant gaps in
companies’ alignment information.
• DNSH (do no significant harm) and MSS (minimum social
safeguards) implementation criteria are complex and in no way
reflect the reality of a bank. These criteria compel financial
institutions to collect evidence that shows the counterparty
meets certain standards for each transaction. This results in an
inability to include specific aligned financing (e.g. project finance)
in the numerator.
Based on a voluntary approach and to mitigate the first limitation
mentioned above, we complement disclosure, we complement the
GAR with an additional ratio (European and symmetric):
• The numerator follows the same criteria than the previous ratio
but only covers European exposures aligned with the Taxonomy.
• The denominator is symmetric and only includes portfolios
where we can currently label exposures as environmentally
sustainable: European financial and non-financial corporations
subject to the CSRD, households, and local governments. We
excluded (non-exhaustive list): Non-CSRD companies (since they
do not have reporting obligations), cash & interbank loans,
derivatives, goodwill and others.
(EUR million)
2024
2023
GAR stock
A
3.04%
2.42%
Taxonomy aligned activities
39,656
31,142
Total GAR denominator
1,306,542
1,288,300
European & Symmetric - GAR
A
7.90%
6.09%
Taxonomy aligned activities
39,287
30,037
Total GAR denominator
497,604
493,167
A Turnover-based ratio
→Other businesses’ GAR (asset management, insurance and
investment services):
In addition to the credit institutions GAR that has already been
published, we included the GAR for asset management, insurance
94
and investment services businesses according to the European
Commission's requirements
95
→Our key performance indicator for asset management is 1.59%
(based on turnover) and 2.60% (based on CapEx).
96
→Our key performance indicator for insurance
97 is 1.45% (based
on turnover) and 2.05% (based on CapEx).
98
→Regarding the investment services KPI, we analysed the turnover
of the Group's companies in relation to the total, noting that it
accounts for less than 3% and is, therefore immaterial
99 .
→Consolidated KPI:
Last, per the European Commission's communiqué, we publish a
consolidated KPI of all businesses, calculated as the weighted
average of the applicable KPI of each business (credit institutions,
asset management, insurance and investment services) based on
turnover and CapEx, with weightings according to the proportion of
revenue stemming from the activities covered by the
corresponding KPI in their total turnover.
100
Our consolidated KPI is 2.99% (based on turnover) and 3.24%
(based on CapEx).
We considered net interest income and fees for the weighting of
the turnover-based KPI.
Please find the complete disclosure on the following pages,
including the templates set out in the Taxonomy Regulation.
For more details on how our financial strategy, product design and
relations with customers and counterparties comply with the EU
Taxonomy, please see the sections 2. 'Supporting the green transition'
and 10.9 'GFANZ transition planning'.
For more details about GAR, please see the section "SN 7.2 EU taxonomy
tables".
94 For the asset management and insurer KPI, we included eligible and aligned transactions based on the eligibility and alignment ratios of counterparties (both in terms of
CapEx and turnover).
95 C/2024/6691
96 Eligibility for climate-related targets is 10.9% based on turnover and 10.6% based on CapEx. For the remaining four objectives, eligibility is 1.0% based on turnover and 0.5%
based on CapEx.
97 European Commission requirements dictate the disclosure of a KPI relating to investment and underwriting. Since the Group does not engage in underwriting relating to non
life insurance (but only markets these products), we only disclose an investment KPI.
98 Eligibility for climate-related targets is 11.7% based on turnover and 12.4% based on CapEx. For the remaining four objectives, eligibility is 0.3% (based on both turnover and
CapEx).
99 As part of detailed analysis, we identified the companies under this activity and reviewed a significant volume of revenue derived from it. Following our review, we conclude
that this indicator is of little relevance to the Group's sustainability disclosures and, thus, decided not to publish the templates in this regard. Of the analysed revenue
samples, 80% comes from customers who are not required to disclose taxonomy information and, therefore, do not publish alignment information. For customers who do
publish taxonomy information, the percentage of aligned revenues of the total subject to this KPI is around 0.3%.
100 Based on turnover and CapEx, with weightings according to the proportion of revenue stemming from the activities covered by the corresponding KPI in their total turnover.
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SN 6. Sustainable finance and investment classification system (SFICS)
Sustainable finance is key to meeting our climate ambition. We
continue to build on our sustainable finance guidelines, which we
first published in February 2022, and that we continue updating
based on developments in regulation and market practice. Since
2024 it also includes socially responsible investment standards
and is now called the Sustainable finance and investment
classification system (SFICS).
The SFICS outlines common standards to consider an asset or
activity as environmental, social or sustainable in all the Group’s
units and businesses. It draws on such international market
guidelines, standards and principles as the EU Taxonomy (including
the four new environmental targets for 2023), ICMA (International
Capital Market Association) Principles, LMA (Loan Market
Association) Principles, UNEP FI Framework and the Climate Bonds
Standard.
The SFICS enables us to track our sustainable activity, support
product development and mitigate greenwashing risk.
We updated the SFICS based on lessons
learned and market trends. It now features:
A sustainability approach for customers that
complements the activity-based approach.
Additional details on manufacturing, real estate,
sustainable agriculture and other activities.
New activities that come to light on the back of
developments in the EU Taxonomy and to cover new
environmental goals related to water, waste, the
circular economy and biodiversity.
We will continue working to evolve the SFICS in line with market
developments and business practice, to have a comprehensive set
of criteria that enables us to classify green and transition activities
to support our customers transition and contribute to our climate
ambition.
Internationally recognized sector principles and guidelines that the SFICS draws on
EU taxonomy
ICMA Green/
LMA Green
LMA
ICMA
Febraban
UNEP FI
Climate Bond
Social Bond
Loan
Sustainability
Sustainability
taxonomy
framework
Standards
Principles
Principles
Linked Loan
Linked Bond
(Brazil)
Principles
Principles
Eligible products
Dedicated purpose
→Proceeds go towards eligible environmental and social
activities and initiatives.
→Eligibility criteria: Activities with a specific environmental
and social purpose under accepted standards that follow
internationally recognized sector guidelines and principles
(ICMA, LMA, Climate Bonds Standard) and the EU taxonomy.
Update in 2023 to the Green, social and
sustainability funding global framework
Sustainability-linked financing
→Sustainability-linked transactions designed to help our
customers achieve their ESG objectives.
→Transaction structured to achieve pre-determined
sustainability performance targets (ESG ratings and metrics).
→Alignment with sector standards (ICMA and LMA).
Updated in 2023, this framework is the reference for all
environmental, social and sustainability-labelled funding
instruments traded in sustainable capital markets and enables all
Grupo Santander entities to issue based on it. It replaces our
previous Global sustainable bond and Green bond frameworks.
Consistent with best market practice and investor expectations, it
covers use of proceeds, project assessment and selection,
management of proceeds and reporting in line with the
International Capital Market Association’s (ICMA) and Loan Market
Association’s (LMA) guidelines. It is also consistent with the SFICS.
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SN 7. Our progress in figures
SN 7.1 Green transition
135
Table 1. Green finance
135
Table 2. Environmental footprint
135
Table 3. Gross scopes 1, 2, 3 and total GHG emissions
136
Table 4. GHG mitigation projects financed through
carbon credits
138
Table 5 Equator principles
139
SN 7.2 EU taxonomy tables
140
SN 7.3 Employees
191
Table 6. Employees by region
191
Table 7. Employees by gender
191
Table 8. Employees by management group and gender
192
Table 9. Employees by age bracket
192
Table 10. Employees by employment contract
193
Table 11. Collective bargaining coverage
and social dialogue
193
Table 12. Turnover by region
193
Table 13. Average remuneration by management group,
gender and age bracket
194
Table 14. Remuneration ratios
194
Table 15. Average remuneration of senior management
194
Table 16. Average remuneration of senior
management linked to long-term objectives
194
Table 17. Senior management composition
195
Table 18. Training
195
Table 19. Hours of training by gender and management
group
195
Table 20. Occupational health and safety
195
SN 7.4 Customers
196
Table 21. Group customers
196
Table 22. Dialogue by channel
196
Table 23. NPS ranking by country
196
Table 24. Total complaints
197
SN 7.5 Financial inclusion
197
Table 25. People financially included
197
Table 26. Microfinance
197
SN 7.6 Community support
197
Table 27. Community support
197
Table 28. Outputs and outcomes
198
SN 7.7 Tax contribution
199
Table 29. Total taxes paid
199
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SN 7.1 Green transition
1. Green finance
A
EUR bn
Raised and facilitated
Accumulated since 2019
2024
24.1
139.4
2023
20.9
115.3
2022
28.8
94.5
2021
31.9
65.7
A. From January to December 2024, CIB contributed EUR 24.1 billion to the green finance target. According to Infralogic, Bloomberg, Dealogic, TXF and Mergermarket league
tables. This refers to all roles undertaken by Banco Santander in the same project. It does not include financial inclusion and entrepreneurship. Green Finance raised and
facilitated is not a synonym of EU Taxonomy.
2. Environmental footprint
A
2024
2023
Var. 2024-2023 (%)
Consumption
Total internal energy consumption (MWh)
1,012,554
-
Total fossil energy consumption (MWh)
179,258
-
Share of fossil sources in total energy consumption (%)
17.7%
-
Consumption from nuclear sources (MWh)
6,457
-
Share of nuclear sources in total energy consumption (%)
0.6%
-
Total certified renewable energy consumption (MWh)
793,136
-
Share of certified renewable sources in total energy consumption
78.3%
-
(%)
Fuel consumption by renewable source, such as biomass (MWh)
0
-
Consumption of purchased or acquired electricity, heat, steam, and
780,356
-
cooling from renewable sources (MWh)
Consumption of self-generated non-fuel renewable energy
12,780
-
(MWh)
Total not certified renewable energy consumption (MWh)
33,703
-
Share of not certified renewable sources in total energy consumption
3.3%
-
(%)
Total electricity (millions of kwh)
856.65
805.31
6.4
Electricity from non-renewable sources (millions of kwh)
63.52
25.63
147.8
Electricity from renewable sources (millions of kwh)
793.14
779.68
1.7
Percentage of contractual instruments (contracts for renewable electricity
guaranteed by utility) used for the procurement of renewable electricity.
53%
Percentage of contractual instruments (PPAs_Power Purchase Agreements)
used for the purchase of renewable electricity
9%
Percentage of contractual instruments (IRECs (International Renewable
Electricity Certificates or DoO) used for the procurement of renewable
electricity
38%
Water (m
3)
B
1,961,149
1,858,645
5.5
Paper (t)
6,023
4,932
22.1
Recycled or certified paper (t)
5,000
4,417
13.2
A. For 2024, information is included for 100% of the Group’s average employees in all the countries we operate. The entities listed under ESRS Requirement E1, paragraph 50.b)
(investees with operational control), are not material to Santander.
B. Santander consumes water basically from public water supply networks.
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N (2024)
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Contents
3. Gross scopes 1, 2, 3 and total GHG emissions (excluding financed emissions)
Base year
(2020)
G
Retrospective
Comparative
(2023)
H
% N / N-1
Milestones and target years
I
2025
2030
2050
Annual
Target % /
Base Year
Scope 1 GHG emissions
A,B
Gross scope 1 GHG emissions (tCO2e)
35,962
25,755
35,503
37.8%
-
33,303
-
0.7 %
Scope 2 GHG emissions
A,C
Gross location-based Scope 2 GHG
emissions (tCO2e)
297,621
205,292
194,276
(5.4%)
-
172,276
-
4.2 %
Gross market-based Scope 2 GHG
emissions (tCO2e)
144,038
21,516
24,350
13.2%
-
12,350
-
9.1 %
Significant scope 3 GHG emissions
D
Total Gross indirect (Scope 3) GHG
emissions (tCO2e)
-
125,441
1,116,061
-
-
-
-
-
1 Purchased goods and services
E
-
-
698,768
-
-
-
-
-
2 Capital goods
E
-
-
216,388
-
-
-
-
-
4 Upstream transportation and
distribution
E
-
-
52,835
-
-
-
-
-
6 Business travel
A,F
-
50,061
52,150
4.2%
-
-
-
-
7 Employee commuting
A,F
-
75,380
82,569
9.5%
-
-
-
-
9 Downstream transportation
E
-
-
13,350
-
-
-
-
-
Total GHG emissions (excluding financed
emissions)
A,J
Total GHG emissions (location-based)
(tCO2e)
-
356,488
1,345,841
277.5%
-
-
-
-
Total GHG emissions (market-based)
(tCO2e)
-
172,711
1,175,915
580.9 %
-
-
-
-
A. For 2024, information is included for 100% of the Group’s average employees in all the countries we operate. The entities listed under ESRS Requirement E1, paragraph 50.b)
(investees with operational control), are not material to Santander.
B. These emissions include those derived from direct energy consumption: Natural gas, diesel as well as the fuel consumption of the fleets where it is applicable (Argentina,
Mexico, Brazil, Chile and Poland this year) and fugitive emissions of refrigerant gases according to the GHG Protocol standard. For the calculation of these emissions,
emission factors from DEFRA (Department for Environment, Food and Rural Affairs) 2024 for the financial year 2024 and DEFRA 2023 for the financial year 2023 have been
applied. For Brazil’s own fuels, the factors of the Brazilian GHG Protocol Program are used. Santander does not use biomass as fuel and therefore does not produce direct
biogenic emissions. Santander does not manage emissions subject to regulated Emission Trading Schemes (ETS), including the EU-ETS, national ETS and non-EU ETS. The
direct emissions in tCO2e disaggregated by country are: Argentina 1,554, Brazil 2,772, Chile 564, Germany 2,270, Mexico 6,609, Nordics 3, Poland 6,652, Portugal 231, Spain
5,995, UK 2,676, USA 5,109, Others 1,067.
C. These emissions include those derived from electricity consumption and the use of district heating and correspond to Scope 2 defined by the GHG Protocol standard. In 2024
they have been calculated with emission factors of the 2024 edition of the IEA, for 2023 the emission factors of the 2023 edition were used. For the calculation of district
heating in Poland and Norway, local public emission factors for 2024 different from DEFRA were used. Data on biogenic emissions is not included as information on these
emissions is not available in the EIA emission factor database.
◦ Indirect emissions Electricity – market-based: For the calculation of these emissions, only renewable electricity is considered as renewable electricity that can be certified
by any type of contract or product recognized as such, but not the share of the country energy mix obtained from IEA data (i.e. where non-renewable electricity is
purchased expressly).
◦ Indirect Emissions Electricity – location-based: The IEA emission factor for each country has been applied for all electricity purchased, regardless of its source of origin
(renewable or non-renewable).
The indirect emissions in tCO2e disaggregated by country are:
◦Market-based: Argentina 441, Brazil 115, Chile 44, Germany 2,008, Mexico 1,613, Nordics 8, Poland 12,021, Portugal 309, Spain 1,371, UK 1,103, USA 0, Others 5,316.
◦ Location-based: Argentina 12,444, Brazil 17,577, Chile 7,350, Germany 5,824, Mexico 51,629, Nordics 36, Poland 26,826, Portugal 3,041, Spain 29,338, UK 16,408, USA
18,486, Others 5,316.
D. The assessment we conducted to determine the materiality of indirect GHG emissions (scope 3) found that the only material category under this scope was category 3.15
(financed emissions), with a weighting of 99% of the total.. The other categories are identified as not relevant, given its low representativeness. In addition, the categories
disclosed in this table are defined as relevant, and the following categories are identified as not relevant, given their low representativeness: 3.3 - Fuel and energy-related
activities (not included in Scope 1 or 2); 3.5 - waste generated in operations; 3.8 - upstream leased assets; 3.10 - processing of sold products; 3.11 - use of sold products;
3.12 - end-of-life treatment of sold products; 3.14 - franchises.
Biogenic emissions are not included as information on these emissions is not available in the databases we use to calculate any of the categories.
E. Supply chain emissions are calculated using a spend-based approach considering the payments to our suppliers in the current year. For that non primary data obtained from
suppliers has been used. These are calculated using the Supply Chain Greenhouse Gas Emission Factors v1.3 from the U.S. Environmental Protection Agency. Our supplier
taxonomies are mapped to the sectors considered in the database and then converted into emissions through spend-based emissions factors. Then, different spending
taxonomies are grouped based on the GHG scope 3 categories based on their nature (purchased goods and services, capital goods, upstream and downstream
transportation)
F. For the calculation of these emission factors DEFRA 2023 for fiscal year 2023 and DEFRA 2022 for fiscal year 2022 have been applied. For Brazil’s specific fuels, emissions
factors from the Brazilian GHG Protocol Program have been applied.
G. Base year is 2020. Emissions disclosed that year were reviewed to consider the same circumstances as the disclosed in this report 2024: equal perimeter (all countries and
businesses that have employees, formerly G10) and considering fugitive emissions equivalent to current emissions (recently included in emissions footprint).
H. Data with no information for 2023 are first reported in 2024.
I. Our reduction objectives have been externally assured only in the verification process of the present report.
J. To comply with the regulatory requirements we have extended the financed emissions calculations, in most cases based on factors and other proxies. More details see table
below 3.2. The total absolute financed emissions (scope 3, categories 15 and 13) of this broad scope, including scope 1, 2 and 3 are 283.8 mtCO2e. And the total GHG
emissions (market-based) are 285.0 mtCO2e. With this figure, the ratio of "GHG total emissions / Total income" is: 4.6 mtCO2e/bn€ (Total income figure as disclosed in the
Consolidated Income Statements).
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3.1. Financed emissions of non-financial corporations, as disclosed in Pillar 3
Sector
Gross
carrying
amount
(€bn)
GHG financed
emissions (scope
1 and scope 2 of
the counterparty)
(mtCO2e)
GHG financed
emissions (scope
3 of the
counterparty)
(mtCO2e)
GHG emissions: gross
carrying amount
percentage of the
portfolio derived from
company-specific
reporting
Exposures towards sectors that highly contribute to climate
change
A
259.3
58.6
159.3
10.1%
A - Agriculture, forestry and fishing
8.5
8.1
3.8
0.5%
B - Mining and quarrying
11
11.8
41.5
28.2%
C - Manufacturing
53.7
13.7
63.2
14.3%
D - Electricity, gas, steam and air conditioning supply
13.9
10.7
7.2
23.6%
E - Water supply; sewerage, waste management and
remediation activities
1.7
1.1
0.5
3.8%
F - Construction
18.7
0.9
4.8
2.7%
G - Wholesale and retail trade; repair of motor vehicles and
motorcycles
77.7
6.1
31
12.1%
H - Transportation and storage
17.3
4.4
5.6
9.4%
I - Accommodation and food service activities
11.3
0.5
1.4
1.3%
L - Real estate activities
45.6
1.3
0.3
1.0%
Exposures towards sectors other than those that highly
contribute to climate change
A
79.2
K - Financial and insurance activities
0
Exposures to other sectors (NACE codes J, M - U)
79.2
TOTAL
338.5
58.6
159.3
7.8%
A. In accordance with the Commission delegated regulation EU) 2020/1818 supplementing regulation (EU) 2016/1011 as regards minimum standards for EU Climate
Transition Benchmarks and EU Paris-aligned Benchmarks -Climate Benchmark Standards Regulation - Recital 6: Sectors listed in Sections A to H and Section L of Annex I to
Regulation (EC) No 1893/2006.
3.2. Financed emissions estimated from balance sheet
A
GHG financed
Asset
Gross carrying
amount
assessed
(EUR bn)
emissions
(scope 1 and
scope 2)
(mtCO2e)
GHG Scope 1
and 2 mtCO2e/
exposure
(EUR bn)
GHG financed
emissions
(scope 3)
(mtCO2e)
GHG Scope 3
mtCO2e/
exposure
(EUR bn)
PCAF Score
I
Non-financial corporations (Pillar 3)
B
338.5
58.6
0.18
159.3
0.66
4.8
Mortgages
c
350.5
3.6
0.01
0.0
0.01
3.8
Motor vehicle loans
D
170.2
27.0
0.16
0.0
0.16
4.2
Sovereign debt
E
155.2
33.9
0.22
0.0
0.22
2.2
Corporate bonds
F
45.7
0.3
0.006
0.7
0.02
5.0
Equity instruments
G
6.8
0.01
0.002
0.1
0.01
5.0
Investments: joint ventures and associated
H
7.3
0.02
0.003
0.2
0.03
4.0
TOTAL
1,065.6
123.5
0.12
160.3
0.27
A. This includes scope 3 - category 13 and 15 emissions for regulatory purposes.
B. These are the financed emissions reported under the EBA Pillar 3 exercise, which should not be confused with the portfolio alignment financed emissions, as the scope and
supporting data of the two exercises is different.
C. Mortgage financed emissions. Calculated as of 2023, for the UK and Spain, and as of 2024 for Poland. Also extending calculation to rest of group's mortgage portfolio (2024
data).
D Motor vehicle loans financed emissions from loans and leases. That includes the current auto-lending alignment target scope, calculated as of 2023, and other auto
exposures within EU consumer finance business and auto-lending in America, calculated with 2024 financial data.
E. Sovereign debt at fair value or amortized cost. Financed emissions calculated covers scope 1 including 'Land Use, Land-Use Change and Forestry' (LULUCF), following the
recommendations by PCAF methodology and using the United Nations Framework Convention on Climate Change (UNFCCC) official reported emissions factors from the
PCAF database.
F. Private fixed-income instruments at fair value or amortized cost, excluding the exposures included in the Pillar 3 reporting. Financed emissions calculated covers scope 1, 2
and 3 from the issuers, following the recommendations by PCAF methodology and using the emissions factors from the PCAF database.
G. Equity instruments at fair value, excluding the exposures included in the Pillar 3 reporting. Financed emissions calculated covers scope 1, 2 and 3 from the issuers, following
the recommendations by PCAF methodology and using the emissions factors from the PCAF database.
H. Investments in joint ventures and associated. Financed emissions calculated covers scope 1, 2 and 3 from the companies, following the recommendations by PCAF
methodology and using the emissions factors from the PCAF database.
I. As explained below, we had to extrapolate the emissions calculations for near 20% of the exposure assessed for 'Financed emissions estimated from balance sheet'. The PCAF
score is an approximation assuming the extrapolations account for PCAF score 5 (worse quality), and the rest is calculated following the PCAF standard recommendations.
Santander discloses for the first time financed emissions of new categories from our balance sheet in this annual report, and we extend the
scope from the emissions calculated with PCAF methodology to a broader scope to cover almost all balance sheet exposures subject to
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financed emissions calculations, with the only purpose of complying with the disclosure regulation. In the 'SN. 4 Our transition plan' we
disclose the financed emissions of portfolio alignment with reasonable quality of data, with the aim of managing our portfolios with
alignment purposes. In this section, we prioritize the completeness of the sustainability information disclosed. This means that the
calculations where primarily supported by emissions factors, proxies or approximations, instead of actual reported emissions, to extend the
calculation of financed emissions as reasonable as possible. This calculation helps us reach the figures we disclose, although we will
continue to work on improving the available data and calculations in the future.
For all these reasons, we could expect some volatility in the financed emissions disclosed as better information becomes available over time
or as some of the proxies/factors provided by external parties are updated.
4. GHG mitigation projects financed through carbon credits
Carbon credits cancelled and used for scopes 1+2
compensation
N (2024)
Total (tCO2e)
A
59,858
Share from removal projects
B (%)
15 %
Share from reduction projects (%)
85 %
Share of projects validated by Verra’s VCS
13 %
Share of projects validated by Climate Action Reserve
15 %
Share of projects validated by Gold Standard
72 %
Share from projects within the EU (%)
— %
Share of carbon credits that qualify as corresponding
adjustments (%)
C
— %
A. Since emissions offsetting is done by country, the upward rounding of tCO2e means that the total amount of credits is slightly higher than the total sum of emissions.
B. In 2024, all GHG phase-out mitigation projects are nature-based (biogenic) solutions projects. Santander cancels all credits after purchase in the year. In 2024, 71,300 new
credits were acquired and cancelled: 16.5% validated by Climate Action Reserve (removal projects) and 83.5% validated by Gold Standard (reduction projects). The existing
contractual agreements Santander has in different countries will enable us to obtain 70.259 carbon credits between from now to 2073 year. Cancellation of such credits will
be based on the mitigation approach at the time.
C. It is reported 0% since Article 6 is not yet applicable.
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5. Equator Principles
Number of projects
Project Finance
Project Related Corporate Loans
Project-Related Refinance and
Project-Related Acquisition for
Project Finance
Category
A
B
C
A
B
C
A
B
C
TOTAL
3
9
3
2
3
1
0
0
0
Sector
Mining
0
0
0
0
0
0
0
0
0
Infrastructure
1
1
3
0
0
0
0
0
0
Oil & gas
1
0
0
0
0
0
0
0
0
Power
1
6
0
1
2
1
0
0
0
Others
0
2
0
1
1
0
0
0
0
Region
Americas
1
2
0
1
2
0
0
0
0
Europe, Middle East & Africa
2
7
3
1
0
1
0
0
0
Asia pacific
0
0
0
0
1
0
0
0
0
Type
Designated countries
A
2
9
3
0
2
1
0
0
0
Non-designated countries
1
0
0
2
1
0
0
0
0
Independent review
Yes
3
8
1
2
2
0
0
0
0
No
0
1
2
0
1
1
0
0
0
A. In accordance with the definition of designated countries included in the Equator Principles, with solid environmental and social governance, legislation and institutions to
protect their inhabitants and the environment.
Category A – Projects with potential significant adverse environmental and social risks and/or impacts that are diverse, irreversible or unprecedented;
Category B – Projects with potential limited adverse environmental and social risks and/or impacts that are few in number, generally site-specific, largely reversible and readily
addressed through mitigation measures;
Category C – Projects with minimal or no adverse environmental and social risks and/or impacts.
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SN 7.2 EU taxonomy tables
101
0. Summary of KPI to be disclosed by credit institutions under Article 8 Taxonomy Regulation - 2024
Main KPI
Green asset ratio (GAR)
stock
Total environmentally sustainable assets (1)
39,656
KPI (3)
3.04
KPI (4)
3.28
% coverage (over total assets) (5)
69.8
% of assets excluded from the numerator of
the GAR (Article 7.2 and 7.3 and Section 1.1.2.
of Annex V)
34.0
% of assets excluded from the
denominator of the GAR (Article 7.1 and
Section 1.2.4 of Annex V)
30.2
Additional KPI
GAR (flow)
Total environmentally sustainable assets (2)
7,862
KPI
2.63
KPI
3.35
% coverage (over total assets)
65.9
% of assets excluded from the numerator of
the GAR (Article 7.2 and 7.3 and Section 1.1.2.
of Annex V)
40.7
% of assets excluded from the
denominator of the GAR (Article 7.1 and
Section 1.2.4 of Annex V)
34.1
Trading book(6)
Financial guarantees
249
1.47
3.46
Assets under management
2,047
1.3
2.14
Fees and commissions
income(6)
(1) Total environmentally sustainable assets used for turnover KPI. Total environmentally sustainable assets used for Capex KPI amounts to EUR 42,834 million.
(2) Total environmentally sustainable assets used for turnover KPI. Total environmentally sustainable assets used for Capex KPI amounts to EUR 10,009 million for GAR flow, EUR 585 million for financial guarantees and EUR 3,360
million for assets under management .
(3) Based on the Turnover KPI of the counterparty.
(4) Based on the CapEx KPI of the counterparty.
(5) % of assets covered by the KPI over banks´ total assets.
(6) Fees and Commissions and Trading Book KPIs shall only apply starting 2026.
101 Perimeter calculation for GAR, in accordance with the Commission Delegated Regulation (EU) 2021/2178, is based on the prudential consolidated group. In this context, the entities within the Santander Group are consolidated using the full consolidation
method, except for jointly controlled entities, which are proportionately consolidated. Companies that cannot be consolidated due to their activity are included using the equity method. The difference between the total assets of the public and prudential
perimeters is not significant. This difference is due to the exclusion of non-financial entities and the inclusion of multi-group and intergroup entities, in accordance with this consolidation criterion.
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0. Summary of KPI to be disclosed by credit institutions under Article 8 Taxonomy Regulation - 2023
Main KPI
Green asset ratio (GAR)
stock
Total environmentally sustainable assets (1)
31,151
KPI (3)
2.4
KPI (4)
2.6
% coverage (over total assets) (5)
70.3
% of assets excluded from the numerator of
the GAR (Article 7.2 and 7.3 and Section 1.1.2.
of Annex V)
33.9
% of assets excluded from the
denominator of the GAR (Article 7.1 and
Section 1.2.4 of Annex V)
29.7
Additional KPIs
GAR (flow)
Total environmentally sustainable assets (2)
7,079
KPI
1.6
KPI
1.9
% coverage (over total assets)
50.6
% of assets excluded from the numerator of
the GAR (Article 7.2 and 7.3 and Section 1.1.2.
of Annex V)
36.0
% of assets excluded from the
denominator of the GAR (Article 7.1 and
Section 1.2.4 of Annex V)
49.4
Trading book(6)
Financial guarantees
142
0.9
1.8
Assets under management
829
0.6
1.1
Fees and commissions
income(6)
(1) Total environmentally sustainable assets used for turnover KPI. Total environmentally sustainable assets used for Capex KPI amounts to EUR 33,422 million
(2) Total environmentally sustainable assets used for turnover KPI. Total environmentally sustainable assets used for Capex KPI amounts to EUR 8,435 million for GAR flow, EUR 289 million for financial guarantees and EUR 1,550 million for assets
under management
(3) Based on the Turnover KPI of the counterparty
(4) Based on the CapEx KPI of the counterparty
(5) % of assets covered by the KPI over banks´ total assets
(6) Fees and Commissions and Trading Book KPIs shall only apply starting 2026
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1. Assets for the calculation of GAR (Capex) - 2024
2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Million EUR
Total [gross]
carrying
amount
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
GAR - Covered assets in both
numerator and denominator
Loans and advances, debt securities
1
and equity instruments not HfT
eligible for GAR calculation
664,610
447,158
42,818
36,969
9,508
2,202
101
17
0
3
447,259
42,834
36,969
9,508
2,206
2
Financial undertakings
25,544
5,704
1,600
0
28
432
27
2
0
0
5,732
1,602
0
28
432
3
Credit institutions
18,208
3,332
312
0
1
12
24
2
0
0
3,356
314
0
1
12
4
Loans and advances
16,848
3,097
293
0
1
12
11
2
0
0
3,108
295
0
1
12
5
Debt securities, including UoP
(Use of Proceeds)
1,360
235
19
0
0
0
13
0
0
0
248
19
0
0
0
6
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
7
Other financial corporations
7,336
2,372
1,288
0
28
420
4
0
0
0
2,376
1,289
0
28
420
8
of which investment firms
2,300
975
878
0
0
233
0
0
0
0
975
878
0
0
233
9
Loans and advances
1,778
528
439
0
0
136
0
0
0
0
528
439
0
0
136
10
Debt securities, including UoP
523
447
439
0
0
98
0
0
0
0
447
439
0
0
98
11
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
of which management
12
258
101
8
0
0
5
0
0
0
0
102
8
0
0
5
companies
13
Loans and advances
176
61
3
0
0
3
0
0
0
0
61
3
0
0
3
14
Debt securities, including UoP
80
41
5
0
0
2
0
0
0
0
41
5
0
0
2
15
Equity instruments
2
0
0
0
0
0
0
0
0
0
0
0
16
of which insurance undertakings
2,050
246
9
0
0
0
2
0
0
0
247
9
0
0
0
17
Loans and advances
1,931
246
9
0
0
0
2
0
0
0
247
9
0
0
0
18
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
19
Equity instruments
119
0
0
0
0
0
0
0
0
0
0
0
20
Non-financial undertakings
28,232
11,539
4,248
0
648
1,771
73
15
0
3
11,612
4,263
0
648
1,774
21
Loans and advances
26,333
10,918
3,827
0
646
1,508
65
6
0
3
10,983
3,833
0
646
1,511
22
Debt securities, including UoP
1,891
620
420
0
1
262
8
8
0
1
628
428
0
1
263
23
Equity instruments
8
1
1
0
0
0
0
0
0
1
1
0
0
24
Households
609,668
428,942
36,969
36,969
8,832
0
0
0
0
0
428,942
36,969
36,969
8,832
0
of which loans collateralised by
25
362,813
331,277
28,137
28,137
0
0
0
0
0
0
331,277
28,137
28,137
0
0
residential immovable property
of which building renovation
26
1,189
1,189
0
0
0
0
0
0
0
0
1,189
0
0
0
0
loans
27
of which motor vehicle loans
96,477
96,477
8,832
8,832
8,832
0
96,477
8,832
8,832
8,832
0
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2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Million EUR
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Total [gross]
carrying
amount
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
28
Local governments financing
1,166
973
0
0
0
0
0
0
0
0
973
0
0
0
0
29
Housing financing
155
153
0
0
0
0
0
0
0
0
153
0
0
0
0
30
Other local government
financing
1,012
819
0
0
0
0
0
0
0
0
819
0
0
0
0
31
Collateral obtained by taking
possession: residential and
commercial immovable
properties
4,825
0
0
0
0
0
0
0
0
0
0
0
0
0
0
32
Assets excluded from the numerator
for GAR calculation (covered in the
denominator)
637,106
0
0
0
0
0
0
0
0
0
0
0
0
0
0
33
Financial and Non-financial
undertakings
438,149
34
SMEs and NFCs (other than SMEs)
not subject to NFRD disclosure
obligations
134,206
35
Loans and advances
132,387
36
of which loans collateralised
by commercial immovable
property
23,620
37
of which building renovation
loans
1,704
38
Debt securities
1,575
39
Equity instruments
244
40
Non-EU country counterparties
not subject to NFRD disclosure
obligations
303,944
41
Loans and advances
276,247
42
Debt securities
24,306
43
Equity instruments
3,391
44
Derivatives
5,772
45
On demand interbank loans
12,146
46
Cash and cash-related assets
9,252
47
Other categories of assets (e.g.
Goodwill, commodities etc.)
171,788
48 Total GAR assets
1,306,542
447,158
42,818
36,969
9,508
2,202
101
17
0
3
447,259
42,834
36,969
9,508
2,206
49 Assets not covered for GAR
calculation
565,848
50
Central governments and
Supranational issuers
142,309
51
Central banks exposure
193,354
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Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Million EUR
Of which environmentally sustainable (Taxonomy-
Of which environmentally sustainable
Of which environmentally sustainable (Taxonomy
aligned)
(Taxonomy-aligned)
aligned)
Total [gross]
Of which
Of which
Of which
carrying
Use of
Of which
Of which
Use of
Of which
Use of
Of which
Of which
amount
Proceeds
transitional
enabling
Proceeds
enabling
Proceeds
transitional
enabling
52
Trading book
230,185
53 Total assets
1,872,390
447,158
42,818
36,969
9,508
2,202
101
17
0
3
447,259
42,834
36,969
9,508
2,206
Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations
54 Financial guarantees
16,898
1,282
570
0
47
387
39
15
0
4
1,320
585
0
47
390
55 Assets under management
102
156,908
13,238
3,345
0
184
1,419
348
15
0
1
13,586
3,360
0
184
1,420
56
Of which debt securities
71,062
8,288
1,665
0
96
752
292
2
0
0
8,580
1,668
0
96
752
57
Of which equity instruments
63,320
4,744
1,616
0
86
642
54
12
0
1
4,798
1,628
0
86
643
102 The assets under management taken into account in this template covers the whole Group.
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1. Assets for the calculation of GAR (Turnover) - 2024
2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Million EUR
Total
[gross]
carrying
amount
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
GAR - Covered assets in both
numerator and denominator
Loans and advances, debt securities
1
and equity instruments not HfT
eligible for GAR calculation
664,610
444,137
39,615
36,969
8,952
1,412
365
41
0
18
444,503
39,656
36,969
8,952
1,431
2
Financial undertakings
25,544
4,921
776
0
3
280
289
21
0
2
5,210
798
0
3
281
3
Credit institutions
18,208
3,265
280
0
0
5
25
2
0
0
3,290
281
0
0
5
4
Loans and advances
16,848
3,028
260
0
0
5
12
2
0
0
3,040
262
0
0
5
5
Debt securities, including UoP
1,360
237
19
0
0
0
13
0
0
0
250
19
0
0
0
6
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
7
Other financial corporations
7,336
1,656
497
0
2
274
264
20
0
2
1,919
516
0
2
276
8
of which investment firms
2,300
392
263
0
0
141
43
4
0
2
435
268
0
0
143
9
Loans and advances
1,778
174
68
0
0
47
43
4
0
2
217
72
0
0
49
10
Debt securities, including UoP
523
218
196
0
0
94
0
0
0
0
218
196
0
0
94
11
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
of which management
12
258
122
6
0
0
4
0
0
0
0
122
6
0
0
4
companies
13
Loans and advances
176
120
6
0
0
4
0
0
0
0
121
6
0
0
4
14
Debt securities, including UoP
80
1
0
0
0
0
0
0
0
0
1
0
0
0
0
15
Equity instruments
2
0
0
0
0
0
0
0
0
0
0
0
16
of which insurance undertakings
2,050
244
7
0
0
0
219
15
0
0
462
22
0
0
0
17
Loans and advances
1,931
244
7
0
0
0
219
15
0
0
462
22
0
0
0
18
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
19
Equity instruments
119
0
0
0
0
0
0
0
0
0
0
0
20
Non-financial undertakings
28,232
9,302
1,869
0
117
1,133
76
20
0
17
9,378
1,889
0
117
1,149
21
Loans and advances
26,333
9,014
1,648
0
117
936
70
16
0
16
9,084
1,664
0
117
952
22
Debt securities, including UoP
1,891
288
221
0
0
197
7
3
0
0
294
224
0
0
197
23
Equity instruments
8
0
0
0
0
0
0
0
0
0
0
0
24
Households
609,668
428,942
36,969
36,969
8,832
0
0
0
0
0
428,942
36,969
36,969
8,832
0
25
of which loans collateralised by
residential immovable property
362,813
331,277
28,137
28,137
0
0
0
0
0
0
331,277
28,137
28,137
0
0
26
of which building renovation
loans
1,189
1,189
0
0
0
0
0
0
0
0
1,189
0
0
0
0
27
of which motor vehicle loans
96,477
96,477
8,832
8,832
8,832
0
96,477
8,832
8,832
8,832
0
28
Local governments financing
1,166
973
0
0
0
0
0
0
0
0
973
0
0
0
0
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Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Million EUR
Total
[gross]
carrying
amount
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
29
Housing financing
155
153
0
0
0
0
0
0
0
0
153
0
0
0
0
30
Other local government
financing
1,012
819
0
0
0
0
0
0
0
0
819
0
0
0
0
31
Collateral obtained by taking
possession: residential and
commercial immovable
properties
4,825
0
0
0
0
0
0
0
0
0
0
0
0
0
0
32
Assets excluded from the numerator
for GAR calculation (covered in the
denominator)
637,106
0
0
0
0
0
0
0
0
0
0
0
0
0
0
33
Financial and Non-financial
undertakings
438,149
34
SMEs and NFCs (other than SMEs)
not subject to NFRD disclosure
obligations
134,206
35
Loans and advances
132,387
36
of which loans collateralised
by commercial immovable
property
23,620
37
of which building renovation
loans
1,704
38
Debt securities
1,575
39
Equity instruments
244
40
Non-EU country counterparties not
subject to NFRD disclosure
obligations
303,944
41
Loans and advances
276,247
42
Debt securities
24,306
43
Equity instruments
3,391
44
Derivatives
5,772
45
On demand interbank loans
12,146
46
Cash and cash-related assets
9,252
47
Other categories of assets (e.g.
Goodwill, commodities etc.)
171,788
48 Total GAR assets
1,306,542
444,137
39,615
36,969
8,952
1,412
365
41
0
18
444,503
39,656
36,969
8,952
1,431
49 Assets not covered for GAR
calculation
565,848
50
Central governments and
Supranational issuers
142,309
51
Central banks exposure
193,354
52
Trading book
230,185
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2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Million EUR
Total
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
[gross]
carrying
amount
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
53 Total assets
1,872,390
444,137
39,615
36,969
8,952
1,412
365
41
0
18
444,503
39,656
36,969
8,952
1,431
Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations
54 Financial guarantees
16,898
809
218
0
1
166
67
31
0
31
876
249
0
1
197
55 Assets under management
103
156,908
12,858
1,994
0
78
844
861
53
0
19
13,719
2,047
0
78
863
56
Of which debt securities
71,062
8,627
912
0
37
367
520
20
0
11
9,147
931
0
37
378
57
Of which equity instruments
63,320
4,061
1,040
0
40
462
328
32
0
8
4,389
1,072
0
40
470
103 The assets under management taken into account in this template covers the whole Group.
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1. Assets for the calculation of GAR (Capex) - 2023
2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Million EUR
Total [gross]
carrying
amount
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
GAR - Covered assets in both
numerator and denominator
Loans and advances, debt securities
1
and equity instruments not HfT
eligible for GAR calculation
661,433
465,892
33,416
29,115
6,975
1,640
60
7
0
5
465,953
33,422
29,115
6,975
1,645
2
Financial undertakings
28,156
7,544
510
0
11
349
4
0
0
0
7,548
510
0
11
349
3
Credit institutions
22,517
6,241
3
0
0
2
4
0
0
0
6,245
3
0
0
2
4
Loans and advances
20,257
5,232
3
0
0
2
4
0
0
0
5,236
3
0
0
2
5
Debt securities, including UoP
2,261
1,009
0
0
0
0
0
0
0
0
1,009
0
0
0
0
7
Other financial corporations
5,639
1,303
507
0
10
347
0
0
0
0
1,303
507
0
10
347
8
of which investment firms
1,987
438
349
0
0
307
0
0
0
0
438
349
0
0
307
9
Loans and advances
1,455
138
49
0
0
7
0
0
0
0
138
49
0
0
7
10
Debt securities, including UoP
313
300
300
0
0
300
0
0
0
0
300
300
0
0
300
12
of which management
companies
141
102
11
0
1
1
0
0
0
0
102
11
0
1
1
13
Loans and advances
141
102
11
0
1
1
0
0
0
0
102
11
0
1
1
14
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
16
of which insurance undertakings
1,892
318
0
0
0
0
0
0
0
0
318
0
0
0
0
17
Loans and advances
1,892
318
0
0
0
0
0
0
0
0
318
0
0
0
0
18
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
20
Non-financial undertakings
25,910
10,901
3,791
0
395
1,291
56
7
0
5
10,957
3,798
0
395
1,296
21
Loans and advances
24,347
10,367
3,315
0
395
1,063
49
7
0
5
10,416
3,322
0
395
1,068
22
Debt securities, including UoP
1,563
534
476
0
0
228
7
0
0
0
541
476
0
0
228
24
Households
607,245
447,326
29,115
29,115
6,569
0
0
0
0
0
447,326
29,115
29,115
6,569
0
25
of which loans collateralised by
residential immovable property
366,626
356,979
22,545
22,545
0
0
0
0
0
0
356,979
22,545
22,545
0
0
26
of which building renovation
loans
528
528
0
0
0
0
0
0
0
0
528
0
0
0
0
6
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
11
Equity instruments
219
0
0
0
0
0
0
0
0
0
0
0
15
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
19
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
23
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
27
of which motor vehicle loans
89,820
89,820
6,569
6,569
6,569
0
89,820
6,569
6,569
6,569
0
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2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Million EUR
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Total [gross]
carrying
amount
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
28
Local governments financing
122
122
0
0
0
0
0
0
0
0
122
0
0
0
0
29
Housing financing
75
75
0
0
0
0
0
0
0
0
75
0
0
0
0
30
Other local government
financing
46
46
0
0
0
0
0
0
0
0
46
0
0
0
0
31
Collateral obtained by taking
possession: residential and
commercial immovable
properties
5,595
0
0
0
0
0
0
0
0
0
0
0
0
0
0
32
Assets excluded from the numerator
for GAR calculation (covered in the
denominator)
621,271
0
0
0
0
0
0
0
0
0
0
0
0
0
0
33
Financial and Non-financial
undertakings
478,101
SMEs and NFCs (other than SMEs)
34
not subject to NFRD disclosure
141,389
obligations
35
Loans and advances
139,095
of which loans collateralised
36
by commercial immovable
22,909
property
37
of which building renovation
loans
141
38
Debt securities
2,140
39
Equity instruments
155
Non-EU country counterparties
40
not subject to NFRD disclosure
296,567
obligations
41
Loans and advances
272,256
42
Debt securities
21,525
43
Equity instruments
2,787
44
Derivatives
5,421
45
On demand interbank loans
11,911
46
Cash and cash-related assets
8,621
47
Other categories of assets (e.g.
Goodwill, commodities etc.)
117,217
48 Total GAR assets
1,288,300
465,892
33,416
29,115
6,975
1,640
60
7
0
5
465,953
33,422
29,115
6,975
1,645
49 Assets not covered for GAR
calculation
545,242
50
Central governments and
Supranational issuers
137,606
51
Central banks exposure
230,835
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2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Million EUR
Of which environmentally sustainable (Taxonomy-
Of which environmentally sustainable
Of which environmentally sustainable (Taxonomy
aligned)
(Taxonomy-aligned)
aligned)
Total [gross]
Of which
Of which
Of which
carrying
Use of
Of which
Of which
Use of
Of which
Use of
Of which
Of which
amount
Proceeds
transitional
enabling
Proceeds
enabling
Proceeds
transitional
enabling
52
Trading book
176,800
53 Total assets
1,833,542
465,892
33,416
29,115
6,975
1,640
60
7
0
5
465,953
33,422
29,115
6,975
1,645
Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations
54 Financial guarantees
15,573
644
285
0
4
152
26
0
0
0
669
286
0
4
152
55 Assets under management
137,531
4,979
1,550
0
77
665
36
0
0
0
5,015
1,550
0
77
665
56
Of which debt securities
39,836
3,613
837
0
26
440
7
0
0
0
3,621
837
0
26
440
57
Of which equity instruments
43,158
1,365
713
0
52
225
29
0
0
0
1,394
713
0
52
225
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1. Assets for the calculation of GAR (Turnover) - 2023
2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Million EUR
Total
[gross]
carrying
amount
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
GAR - Covered assets in both numerator
and denominator
Loans and advances, debt securities and
1
equity instruments not HfT eligible for
GAR calculation
661,433
464,201
31,142
29,115
6,834
799
474
9
0
8
464,675
31,151
29,115
6,834
807
2
Financial undertakings
28,156
7,899
310
0
4
208
373
0
0
0
8,272
310
0
4
208
3
Credit institutions
22,517
6,892
1
0
0
0
15
0
0
0
6,907
1
0
0
0
4
Loans and advances
20,257
5,883
1
0
0
0
15
0
0
0
5,898
1
0
0
0
5
Debt securities, including UoP
2,261
1,009
0
0
0
0
0
0
0
0
1,009
0
0
0
0
7
Other financial corporations
5,639
1,006
309
0
4
208
358
0
0
0
1,365
309
0
4
208
8
of which investment firms
1,987
280
172
0
0
155
41
0
0
0
321
172
0
0
155
9
Loans and advances
1,455
127
19
0
0
2
41
0
0
0
168
19
0
0
2
10
Debt securities, including UoP
313
153
153
0
0
153
0
0
0
0
153
153
0
0
153
12
of which management companies
141
99
17
0
0
0
0
0
0
0
99
17
0
0
0
13
Loans and advances
141
99
17
0
0
0
0
0
0
0
99
17
0
0
0
14
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
16
of which insurance undertakings
1,892
317
0
0
0
0
317
0
0
0
634
0
0
0
0
17
Loans and advances
1,892
317
0
0
0
0
317
0
0
0
634
0
0
0
0
18
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
20
Non-financial undertakings
25,910
8,855
1,718
0
260
591
101
9
0
7
8,955
1,727
0
260
598
21
Loans and advances
24,347
8,617
1,509
0
258
552
83
9
0
7
8,700
1,518
0
258
560
22
Debt securities, including UoP
1,563
237
208
0
2
39
18
0
0
0
255
208
0
2
39
24
Households
607,245
447,326
29,115
29,115
6,569
0
0
0
0
0
447,326
29,115
29,115
6,569
0
25
of which loans collateralised by
residential immovable property
366,626
356,979
22,545
22,545
0
0
0
0
0
0
356,979
22,545
22,545
0
0
26
of which building renovation loans
528
528
0
0
0
0
0
0
0
0
528
0
0
0
0
28
Local governments financing
122
122
0
0
0
0
0
0
0
0
122
0
0
0
0
29
Housing financing
75
75
0
0
0
0
0
0
0
0
75
0
0
0
0
6
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
11
Equity instruments
219
0
0
0
0
0
0
0
0
0
0
0
15
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
19
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
23
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
27
of which motor vehicle loans
89,820
89,820
6,569
6,569
6,569
0
89,820
6,569
6,569
6,569
0
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Contents
2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Million EUR
Total
[gross]
carrying
amount
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
30
Other local government financing
46
46
0
0
0
0
0
0
0
0
46
0
0
0
0
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
5,595
0
0
0
0
0
0
0
0
0
0
0
0
0
0
32
Assets excluded from the numerator for
GAR calculation (covered in the
denominator)
621,271
0
0
0
0
0
0
0
0
0
0
0
0
0
0
33
Financial and Non-financial
undertakings
478,101
34
SMEs and NFCs (other than SMEs) not
subject to NFRD disclosure obligations
141,389
35
Loans and advances
139,095
36
of which loans collateralised by
commercial immovable property
22,909
37
of which building renovation loans
141
38
Debt securities
2,140
39
Equity instruments
155
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
296,567
41
Loans and advances
272,256
42
Debt securities
21,525
43
Equity instruments
2,787
44
Derivatives
5,421
45
On demand interbank loans
11,911
46
Cash and cash-related assets
8,621
47
Other categories of assets (e.g.
Goodwill, commodities etc.)
117,217
48 Total GAR assets
1,288,300
464,201
31,142
29,115
6,834
799
474
9
0
8
464,675
31,151
29,115
6,834
807
49 Assets not covered for GAR calculation
545,242
50
Central governments and Supranational
issuers
137,606
51
Central banks exposure
230,835
52
Trading book
176,800
53 Total assets
1,833,542
464,201
31,142
29,115
6,834
799
474
9
0
8
464,675
31,151
29,115
6,834
807
Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations
54 Financial guarantees
15,573
494
142
0
3
98
6
0
0
0
500
142
0
3
99
55 Assets under management
137,531
4,302
825
0
57
431
406
4
0
4
4,708
829
0
57
435
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financial review
and compliance
2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
56
Million EUR
Of which debt securities
Total
[gross]
carrying
amount
39,836
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
3,308
445
0
11
269
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
233
0
0
0
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
3,541
446
0
11
269
57
Of which equity instruments
43,158
993
380
0
46
162
173
3
0
3
1,167
384
0
46
165
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and compliance
2. GAR sector information (Capex)
2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Breakdown by sector - NACE 4 digits
level
(code and label)
Non-Financial corporates (Subject
to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Non-Financial corporates (Subject
to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Non-Financial corporates
(Subject to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Of which
Of which
Of which
Of which
Mn EUR
environmentally
sustainable
(CCM)
Mn EUR
environmentally
sustainable
(CCM)
Of which
environmentally
Mn EUR sustainable (CCA)
Of which
environmentally
Mn EUR sustainable (CCA)
environmentally
sustainable
Mn EUR
(CCM+CCA)
Mn EUR
environmentally
sustainable
(CCM+CCA)
1 A Agriculture, forestry and
fishing
25
0
0
0
25
0
2 B610 - Extraction of crude
petroleum
67
53
0
0
67
53
3
B910 - Support activities for
petroleum and natural gas
extraction
354
261
1
0
354
261
4 B Mining and quarrying
50
4
0
0
51
4
5
C2410 - Manufacture of basic
iron and steel and of ferro
alloys
61
55
0
0
61
55
6
C2511 - Manufacture of metal
structures and parts of
structures
121
120
0
0
121
120
7
C2732 - Manufacture of other
electronic and electric wires
and cables
129
98
0
0
129
98
8 C2733 - Manufacture of wiring
devices
66
55
0
0
66
55
9 C2910 - Manufacture of motor
vehicles
443
147
0
0
443
147
10
C3020 - Manufacture of
railway locomotives and
rolling stock
134
34
0
0
134
34
11
C3030 - Manufacture of air
and spacecraft and related
machinery
60
0
0
0
60
0
12 C Manufacturing
622
278
3
3
625
281
13 D3511 - Production of
electricity
971
726
0
0
972
726
14 D3513 - Distribution of
electricity
400
362
0
0
400
362
15 D3514 - Trade of electricity
471
328
0
0
471
328
16 D3521 - Manufacture of gas
136
46
0
0
136
46
17 D Electricity, gas, steam and air
conditioning supply
92
38
0
0
92
38
18 E Water supply
78
3
0
0
78
3
19 F4110 - Development of
building projects
80
1
0
0
80
1
20 F4211 - Construction of roads
and motorways
149
35
3
0
152
35
Annual report 2024
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2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Breakdown by sector - NACE 4 digits
level
(code and label)
Non-Financial corporates (Subject
to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Non-Financial corporates (Subject
to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Non-Financial corporates
(Subject to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Of which
Of which
Of which
Of which
Mn EUR
environmentally
sustainable
(CCM)
Mn EUR
environmentally
sustainable
(CCM)
Of which
environmentally
Mn EUR sustainable (CCA)
Of which
environmentally
Mn EUR sustainable (CCA)
environmentally
sustainable
Mn EUR
(CCM+CCA)
Mn EUR
environmentally
sustainable
(CCM+CCA)
21 F4299 - Construction of other
civil engineering projects n.e.c.
88
10
2
0
90
10
22 F4312 - Site preparation
390
2
0
0
390
2
23 F Construction
162
38
1
0
164
38
24 G4511 - Sale of cars and light
motor vehicles
551
81
0
0
552
81
25 G4519 - Sale of other motor
vehicles
101
23
0
0
101
23
26 G4641 - Wholesale of textiles
58
0
0
0
58
0
27
G4711 - Retail sale in non
specialised stores with food,
beverages or tobacco
predominating
132
11
0
0
132
11
28
G4778 - Other retail sale of
new goods in specialised
stores
103
1
0
0
103
1
29 G Wholesale and retail trade
403
69
8
0
412
69
30 H4950 - Transport via pipeline
148
134
0
0
148
134
31 H5210 - Warehousing and
storage
83
0
0
0
83
0
32
H5221 - Service activities
incidental to land
transportation
267
7
0
0
267
7
33 H Transport and storage
158
30
0
0
159
30
34 I5510 - Hotels and similar
accommodation
182
0
0
0
182
0
35 I Accommodation and food
service activities
50
0
0
0
50
0
36 J6120 - Wireless
telecommunications activities
348
30
31
1
379
31
37 J6399 - Other information
service activities n.e.c.
472
0
0
0
472
0
38 J Information and
communication
160
12
2
2
163
14
39 L6810 - Buying and selling of
own real estate
140
73
7
0
148
73
40 L6820 - Renting and operating
of own or leased real estate
175
0
0
0
175
1
41 L Real estate activities
22
0
0
0
22
0
42 M7010 - Activities of head
offices
929
554
8
8
937
562
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2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Breakdown by sector - NACE 4 digits
level
(code and label)
Non-Financial corporates (Subject
to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Non-Financial corporates (Subject
to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Non-Financial corporates
(Subject to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Of which
Of which
Of which
Of which
Mn EUR
environmentally
sustainable
(CCM)
Mn EUR
environmentally
sustainable
(CCM)
Of which
environmentally
Mn EUR sustainable (CCA)
Of which
environmentally
Mn EUR sustainable (CCA)
environmentally
sustainable
Mn EUR
(CCM+CCA)
Mn EUR
environmentally
sustainable
(CCM+CCA)
43
M7490 - Other professional,
scientific and technical
activities n.e.c.
196
88
3
0
199
88
44 M Professional, scientific and
technical activities
156
69
1
0
157
69
45 N7711 - Renting and leasing of
cars and light motor vehicles
723
119
0
0
723
119
46
N8211 - Combined office
administrative service
activities
84
30
0
0
84
30
47 N8299 - Other business
support service activities n.e.c.
230
90
0
0
230
90
48
N Administrative and support
service activities
105
0
0
0
105
0
49
O Public administration and
defence, compulsory social
security
0
0
0
0
0
0
50 P Education
18
0
0
0
18
0
51
Q Human health services and
social work activities
14
2
0
0
14
2
52
R Arts, entertainment and
recreation
20
0
0
0
20
0
53
S9609 - Other personal service
activities n.e.c.
83
19
0
0
83
19
54 S Other services
275
111
1
0
276
111
1. Exposures in the banking book towards those sectors covered by the Taxonomy (NACE sectors 4 levels of detail), using the relevant NACE Codes on the basis of the principal activity of the counterparty. A threshold above 0.5% of the eligible exposure
has been set for reporting NACE at level 4. All other NACEs outside this threshold are reported at level 1.
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statement
governance
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and compliance
2. GAR sector information (Turnover)
2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Breakdown by sector - NACE 4 digits
level
(code and label)
Non-Financial corporates (Subject
to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Non-Financial corporates (Subject
to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Non-Financial corporates
(Subject to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Of which
Of which
Of which
Of which
Mn EUR
environmentally
sustainable
(CCM)
Mn EUR
environmentally
sustainable
(CCM)
Of which
environmentally
Mn EUR sustainable (CCA)
Of which
environmentally
Mn EUR sustainable (CCA)
environmentally
sustainable
Mn EUR
(CCM+CCA)
Mn EUR
environmentally
sustainable
(CCM+CCA)
1 A Agriculture, forestry and
fishing
25
0
0
0
25
0
2
B910 - Support activities for
petroleum and natural gas
extraction
186
76
1
0
187
76
3 B Mining and quarrying
46
6
0
0
46
6
4 C2351 - Manufacture of
cement
67
1
0
0
67
1
5
C2410 - Manufacture of basic
iron and steel and of ferro
alloys
88
3
0
0
88
3
6 C2442 - Aluminium production
138
35
0
0
138
35
7
C2511 - Manufacture of metal
structures and parts of
structures
150
0
0
0
150
0
8
C2732 - Manufacture of other
electronic and electric wires
and cables
100
44
0
0
100
44
9 C2910 - Manufacture of motor
vehicles
432
36
0
0
432
36
10 C3011 - Building of ships and
floating structures
68
16
0
0
68
16
11
C3020 - Manufacture of
railway locomotives and
rolling stock
134
37
0
0
134
37
12
C3030 - Manufacture of air
and spacecraft and related
machinery
73
0
0
0
73
0
13 C3313 - Repair of electronic
and optical equipment
49
0
0
0
49
0
14 C Manufacturing
318
60
0
0
318
60
15 D3511 - Production of
electricity
613
348
2
0
615
348
16 D3513 - Distribution of
electricity
236
165
0
0
236
165
17 D3514 - Trade of electricity
235
163
0
0
235
163
18 D3521 - Manufacture of gas
99
5
0
0
99
5
19 D Electricity, gas, steam and air
conditioning supply
52
19
0
0
52
19
20 E3600 - Water collection,
treatment and supply
51
0
0
0
51
0
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Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Breakdown by sector - NACE 4 digits
level
(code and label)
Non-Financial corporates (Subject
to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Non-Financial corporates (Subject
to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Non-Financial corporates
(Subject to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Of which
Of which
Of which
Of which
Mn EUR
environmentally
sustainable
(CCM)
Mn EUR
environmentally
sustainable
(CCM)
Of which
environmentally
Mn EUR sustainable (CCA)
Of which
environmentally
Mn EUR sustainable (CCA)
environmentally
sustainable
Mn EUR
(CCM+CCA)
Mn EUR
environmentally
sustainable
(CCM+CCA)
21 E Water supply
28
4
1
0
29
4
22 F4110 - Development of
building projects
81
2
0
0
81
2
23
F4120 - Construction of
residential and non-residential
buildings
51
11
0
0
51
11
24 F4211 - Construction of roads
and motorways
175
71
8
0
183
71
25 F4299 - Construction of other
civil engineering projects n.e.c.
93
19
4
0
97
19
26 F4312 - Site preparation
374
0
1
0
374
0
27 F Construction
111
33
6
0
117
33
28 G4511 - Sale of cars and light
motor vehicles
272
24
0
0
272
24
29 G4519 - Sale of other motor
vehicles
99
11
0
0
99
11
30
G4614 - Agents involved in the
sale of machinery, industrial
equipment, ships and aircraft
63
0
0
0
63
0
31 G Wholesale and retail trade
174
16
0
0
174
16
32 H4950 - Transport via pipeline
50
36
0
0
50
36
33 H5210 - Warehousing and
storage
83
0
0
0
83
0
34
H5221 - Service activities
incidental to land
transportation
265
10
0
0
265
10
35 H Transport and storage
124
7
0
0
124
7
36 I5510 - Hotels and similar
accommodation
167
0
0
0
167
0
37 I Accommodation and food
service activities
41
0
0
0
41
0
38 J6120 - Wireless
telecommunications activities
453
90
20
3
473
93
39 J6399 - Other information
service activities n.e.c.
472
0
0
0
472
0
40 J Information and
communication
138
3
12
3
150
7
41 L6810 - Buying and selling of
own real estate
158
61
0
0
158
61
42 L6820 - Renting and operating
of own or leased real estate
185
0
4
4
189
4
43 L Real estate activities
22
0
0
0
22
0
Annual report 2024
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2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Breakdown by sector - NACE 4 digits
level
(code and label)
Non-Financial corporates (Subject
to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Non-Financial corporates (Subject
to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Non-Financial corporates
(Subject to NFRD)
[Gross] carrying amount
SMEs and other NFC not subject
to NFRD
[Gross] carrying amount
Of which
Of which
Of which
Of which
Mn EUR
environmentally
sustainable
(CCM)
Mn EUR
environmentally
sustainable
(CCM)
Of which
environmentally
Mn EUR sustainable (CCA)
Of which
environmentally
Mn EUR sustainable (CCA)
environmentally
sustainable
Mn EUR
(CCM+CCA)
Mn EUR
environmentally
sustainable
(CCM+CCA)
44 M7010 - Activities of head
offices
767
179
4
3
772
183
45
M7112 - Engineering activities
and related technical
consultancy
67
29
1
0
68
29
46
M7490 - Other professional,
scientific and technical
activities n.e.c.
145
62
4
0
149
62
47 M Professional, scientific and
technical activities
59
27
6
4
65
31
48 N7711 - Renting and leasing of
cars and light motor vehicles
716
41
0
0
716
41
49 N7712 - Renting and leasing of
trucks
49
0
0
0
49
0
50
N8211 - Combined office
administrative service
activities
58
4
0
0
58
4
51 N8299 - Other business
support service activities n.e.c.
196
65
0
0
196
65
52 N Administrative and support
service activities
79
0
0
0
79
0
53
O Public administration and
defence, compulsory social
security
0
0
0
0
0
0
54 P Education
18
0
0
0
18
0
55 Q Human health services and
social work activities
13
1
0
0
13
1
56 R Arts, entertainment and
recreation
15
0
0
0
15
0
57 S9609 - Other personal service
activities n.e.c.
70
3
0
0
70
3
58 S Other services
210
44
2
2
212
46
1. Exposures in the banking book towards those sectors covered by the Taxonomy (NACE sectors 4 levels of detail), using the relevant NACE Codes on the basis of the principal activity of the counterparty. A threshold above 0.5% of the eligible exposure has
been set for reporting NACE at level 4. All other NACEs outside this threshold are reported at level 1.
Annual report 2024
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Contents
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and strategy
statement
governance
financial review
and compliance
3. GAR KPI stock (Capex) - 2024
2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
% (compared to total covered assets in the denominator)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Of which
Proportion
of total
assets
GAR - Covered assets in both numerator and
denominator
covered
Proceeds transitional
enabling
Proceeds
enabling
Proceeds transitional
enabling
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
67.3%
6.4%
5.6%
1.4%
0.3%
0.0%
0.0%
0.0%
0.0%
67.3%
6.4%
5.6%
1.4%
0.3%
35.5%
2
Financial undertakings
22.3%
6.3%
0.0%
0.1%
1.7%
0.1%
0.0%
0.0%
0.0%
22.4%
6.3%
0.0%
0.1%
1.7%
1.4%
3
Credit institutions
18.3%
1.7%
0.0%
0.0%
0.1%
0.1%
0.0%
0.0%
0.0%
18.4%
1.7%
0.0%
0.0%
0.1%
1.0%
4
Loans and advances
18.4%
1.7%
0.0%
0.0%
0.1%
0.1%
0.0%
0.0%
0.0%
18.4%
1.7%
0.0%
0.0%
0.1%
0.9%
5
Debt securities, including UoP
17.3%
1.4%
0.0%
0.0%
0.0%
1.0%
0.0%
0.0%
0.0%
18.2%
1.4%
0.0%
0.0%
0.0%
0.1%
6
Equity instruments
30.9%
3.4%
0.0%
0.0%
0.1%
0.0%
0.0%
31.0%
3.5%
0.0%
0.0%
0.0%
7
Other financial corporations
32.3%
17.6%
0.0%
0.4%
5.7%
0.0%
0.0%
0.0%
0.0%
32.4%
17.6%
0.0%
0.4%
5.7%
0.4%
8
of which investment firms
42.4%
38.2%
0.0%
0.0%
10.1%
0.0%
0.0%
0.0%
0.0%
42.4%
38.2%
0.0%
0.0%
10.1%
0.1%
9
Loans and advances
29.7%
24.7%
0.0%
0.0%
7.6%
0.0%
0.0%
0.0%
0.0%
29.7%
24.7%
0.0%
0.0%
7.6%
0.1%
10
Debt securities, including UoP
85.5%
84.0%
0.0%
0.0%
18.7%
0.0%
0.0%
0.0%
0.0%
85.5%
84.0%
0.0%
0.0%
18.7%
0.0%
11
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
12
of which management companies
39.3%
3.0%
0.0%
0.0%
1.9%
0.0%
0.0%
0.0%
0.0%
39.3%
3.0%
0.0%
0.0%
1.9%
0.0%
13
Loans and advances
34.6%
1.7%
0.0%
0.0%
1.6%
0.0%
0.0%
0.0%
0.0%
34.6%
1.7%
0.0%
0.0%
1.6%
0.0%
14
Debt securities, including UoP
50.7%
5.7%
0.0%
0.0%
2.6%
0.0%
0.0%
0.0%
0.0%
50.7%
5.7%
0.0%
0.0%
2.6%
0.0%
15
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
16
of which insurance undertakings
12.0%
0.5%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
12.1%
0.5%
0.0%
0.0%
0.0%
0.1%
17
Loans and advances
12.7%
0.5%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
12.8%
0.5%
0.0%
0.0%
0.0%
0.1%
18
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
19
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
20
Non-financial undertakings
40.9%
15.0%
0.0%
2.3%
6.3%
0.3%
0.1%
0.0%
0.0%
41.1%
15.1%
0.0%
2.3%
6.3%
1.5%
21
Loans and advances
41.5%
14.5%
0.0%
2.5%
5.7%
0.2%
0.0%
0.0%
0.0%
41.7%
14.6%
0.0%
2.5%
5.7%
1.4%
22
Debt securities, including UoP
32.8%
22.2%
0.0%
0.1%
13.9%
0.4%
0.4%
0.0%
0.0%
33.2%
22.7%
0.0%
0.1%
13.9%
0.1%
23
Equity instruments
9.6%
9.5%
0.0%
4.6%
0.0%
0.0%
0.0%
9.6%
9.5%
0.0%
4.6%
0.0%
24
Households
70.4%
6.1%
6.1%
1.4%
0.0%
0.0%
0.0%
0.0%
0.0%
70.4%
6.1%
6.1%
1.4%
0.0%
32.6%
of which loans collateralised by residential
25
91.3%
7.8%
7.8%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
91.3%
7.8%
7.8%
0.0%
0.0%
19.4%
immovable property
26
of which building renovation loans
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
0.0%
0.0%
0.0%
0.0%
0.1%
27
of which motor vehicle loans
100.0%
9.2%
9.2%
9.2%
0.0%
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statement
governance
financial review
and compliance
2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
% (compared to total covered assets in the denominator)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Proportion
of total
Use of
Of which
Of which
Use of
Of which
Use of
Of which
Of which
assets
Proceeds transitional
enabling
Proceeds
enabling
Proceeds transitional
enabling
covered
28
Local governments financing
83.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
83.4%
0.0%
0.0%
0.0%
0.0%
0.1%
29
Housing financing
99.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
99.1%
0.0%
0.0%
0.0%
0.0%
0.0%
30
Other local government financing
81.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
81.0%
0.0%
0.0%
0.0%
0.0%
0.1%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.3%
32 Total GAR assets
34.2%
3.3%
2.8%
0.7%
0.2%
0.0%
0.0%
0.0%
0.0%
34.2%
3.3%
2.8%
0.7%
0.2%
69.8%
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Risk management
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statement
governance
financial review
and compliance
3. GAR KPI stock (Turnover) - 2024
2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
% (compared to total covered assets in the denominator)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Of which
Proportion
of total
assets
GAR - Covered assets in both numerator and
denominator
covered
Proceeds transitional
enabling
Proceeds
enabling
Proceeds transitional
enabling
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
66.8%
6.0%
5.6%
1.3%
0.2%
0.1%
0.0%
0.0%
0.0%
66.9%
6.0%
5.6%
1.3%
0.2%
35.5%
2
Financial undertakings
19.3%
3.0%
0.0%
0.0%
1.1%
1.1%
0.1%
0.0%
0.0%
20.4%
3.1%
0.0%
0.0%
1.1%
1.4%
3
Credit institutions
17.9%
1.5%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
18.1%
1.5%
0.0%
0.0%
0.0%
1.0%
4
Loans and advances
18.0%
1.5%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
18.0%
1.6%
0.0%
0.0%
0.0%
0.9%
5
Debt securities, including UoP
17.4%
1.4%
0.0%
0.0%
0.0%
1.0%
0.0%
0.0%
0.0%
18.4%
1.4%
0.0%
0.0%
0.0%
0.1%
6
Equity instruments
31.0%
3.2%
0.0%
0.0%
0.1%
0.0%
0.0%
31.1%
3.3%
0.0%
0.0%
0.0%
7
Other financial corporations
22.6%
6.8%
0.0%
0.0%
3.7%
3.6%
0.3%
0.0%
0.0%
26.2%
7.0%
0.0%
0.0%
3.8%
0.4%
8
of which investment firms
17.1%
11.4%
0.0%
0.0%
6.1%
1.9%
0.2%
0.0%
0.1%
18.9%
11.6%
0.0%
0.0%
6.2%
0.1%
9
Loans and advances
9.8%
3.8%
0.0%
0.0%
2.7%
2.4%
0.3%
0.0%
0.1%
12.2%
4.1%
0.0%
0.0%
2.7%
0.1%
10
Debt securities, including UoP
41.7%
37.4%
0.0%
0.0%
18.0%
0.0%
0.0%
0.0%
0.0%
41.7%
37.4%
0.0%
0.0%
18.0%
0.0%
11
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
12
of which management companies
47.1%
2.4%
0.0%
0.0%
1.5%
0.2%
0.0%
0.0%
0.0%
47.3%
2.4%
0.0%
0.0%
1.5%
0.0%
13
Loans and advances
68.4%
3.4%
0.0%
0.0%
2.1%
0.3%
0.0%
0.0%
0.0%
68.7%
3.4%
0.0%
0.0%
2.1%
0.0%
14
Debt securities, including UoP
1.5%
0.2%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
1.5%
0.2%
0.0%
0.0%
0.0%
0.0%
15
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
16
of which insurance undertakings
11.9%
0.3%
0.0%
0.0%
0.0%
10.7%
0.7%
0.0%
0.0%
22.6%
1.1%
0.0%
0.0%
0.0%
0.1%
17
Loans and advances
12.6%
0.4%
0.0%
0.0%
0.0%
11.3%
0.8%
0.0%
0.0%
23.9%
1.1%
0.0%
0.0%
0.0%
0.1%
18
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
19
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
20
Non-financial undertakings
32.9%
6.6%
0.0%
0.4%
4.0%
0.3%
0.1%
0.0%
0.1%
33.2%
6.7%
0.0%
0.4%
4.1%
1.5%
21
Loans and advances
34.2%
6.3%
0.0%
0.4%
3.6%
0.3%
0.1%
0.0%
0.1%
34.5%
6.3%
0.0%
0.4%
3.6%
1.4%
22
Debt securities, including UoP
15.2%
11.7%
0.0%
0.0%
10.4%
0.3%
0.2%
0.0%
0.0%
15.6%
11.9%
0.0%
0.0%
10.4%
0.1%
23
Equity instruments
6.0%
4.3%
0.0%
3.0%
0.0%
0.0%
0.0%
6.0%
4.3%
0.0%
3.0%
0.0%
24
Households
70.4%
6.1%
6.1%
1.4%
0.0%
0.0%
0.0%
0.0%
0.0%
70.4%
6.1%
6.1%
1.4%
0.0%
32.6%
of which loans collateralised by residential
25
91.3%
7.8%
7.8%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
91.3%
7.8%
7.8%
0.0%
0.0%
19.4%
immovable property
26
of which building renovation loans
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
0.0%
0.0%
0.0%
0.0%
0.1%
27
of which motor vehicle loans
100.0%
9.2%
9.2%
9.2%
0.0%
Annual report 2024
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Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
% (compared to total covered assets in the denominator)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Proportion
of total
Use of
Of which
Of which
Use of
Of which
Use of
Of which
Of which
assets
Proceeds transitional
enabling
Proceeds
enabling
Proceeds transitional
enabling
covered
28
Local governments financing
83.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
83.4%
0.0%
0.0%
0.0%
0.0%
0.1%
29
Housing financing
99.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
99.1%
0.0%
0.0%
0.0%
0.0%
0.0%
30
Other local government financing
81.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
81.0%
0.0%
0.0%
0.0%
0.0%
0.1%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.3%
32 Total GAR assets
34.0%
3.0%
2.8%
0.7%
0.1%
0.0%
0.0%
0.0%
0.0%
34.0%
3.0%
2.8%
0.7%
0.1%
69.8%
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Contents
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
3. GAR KPI stock (Capex) - 2023
2023
% (compared to total covered assets in the denominator)
Climate Change Mitigation (CCM)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Of which
Proceeds transitional
enabling
Climate Change Adaptation (CCA)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Of which
Proceeds transitional
enabling
Proportion
of total
assets
covered
1
2
3
4
5
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
Financial undertakings
Credit institutions
Loans and advances
Debt securities, including UoP
70.4
26.8
27.7
25.8
44.6
5.1
1.8
0.0
0.0
0.0
4.4
0.0
0.0
0.0
0.0
1.1
0.0
0.0
0.0
0.0
0.2
1.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
70.4
26.8
27.7
25.8
44.6
5.1
1.8
0.0
0.0
0.0
4.4
0.0
0.0
0.0
0.0
1.1
0.0
0.0
0.0
0.0
0.2
1.2
0.0
0.0
0.0
36.1
1.5
1.2
1.1
0.1
7
8
9
10
Other financial corporations
of which investment firms
Loans and advances
Debt securities, including UoP
23.1
22.0
9.5
96.0
9.0
17.6
3.4
96.0
0.0
0.0
0.0
0.0
0.2
0.0
0.0
0.0
6.2
15.4
0.5
96.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
23.1
22.0
9.5
96.0
9.0
17.6
3.4
96.0
0.0
0.0
0.0
0.0
0.2
0.0
0.0
0.0
6.2
15.4
0.5
96.0
0.3
0.1
0.1
0.0
12
13
14
of which management companies
Loans and advances
Debt securities, including UoP
72.0
72.0
0.0
7.7
7.7
0.0
0.0
0.0
0.0
0.9
0.9
0.0
0.5
0.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
72.0
72.0
0.0
7.7
7.7
0.0
0.0
0.0
0.0
0.9
0.9
0.0
0.5
0.5
0.0
0.0
0.0
0.0
16
17
18
of which insurance undertakings
Loans and advances
Debt securities, including UoP
16.8
16.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
16.8
16.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.1
0.1
0.0
20
21
22
Non-financial undertakings
Loans and advances
Debt securities, including UoP
42.1
42.6
34.2
14.6
13.6
30.4
0.0
0.0
0.0
1.5
1.6
0.0
5.0
4.4
14.6
0.2
0.2
0.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
42.3
42.8
34.6
14.7
13.6
30.4
0.0
0.0
0.0
1.5
1.6
0.0
5.0
4.4
14.6
1.4
1.3
0.1
24
25
26
Households
of which loans collateralised by residential
immovable property
of which building renovation loans
73.7
97.4
100.0
4.8
6.1
0.0
4.8
6.1
0.0
1.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
73.7
97.4
100.0
4.8
6.1
0.0
4.8
6.1
0.0
1.1
0.0
0.0
0.0
0.0
0.0
33.1
20.0
0.0
GAR - Covered assets in both numerator and
denominator
6
Equity instruments
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
11
Equity instruments
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
15
Equity instruments
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
19
Equity instruments
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
23
Equity instruments
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
27
of which motor vehicle loans
100.0
7.3
7.3
7.3
0.0
100.0
7.3
7.3
7.3
0.0
4.9
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Contents
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
% (compared to total covered assets in the denominator)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Proportion
of total
Use of
Of which
Of which
Use of
Of which
Use of
Of which
Of which
assets
Proceeds transitional
enabling
Proceeds
enabling
Proceeds transitional
enabling
covered
28
Local governments financing
100.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
100.0
0.0
0.0
0.0
0.0
0.0
29
Housing financing
100.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
100.0
0.0
0.0
0.0
0.0
0.0
30
Other local government financing
100.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
100.0
0.0
0.0
0.0
0.0
0.0
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.3
32 Total GAR assets
36.2
2.6
2.3
0.5
0.1
0.0
0.0
0.0
0.0
36.2
2.6
2.3
0.5
0.1
70.3
Annual report 2024
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
3. GAR KPI stock (Turnover) - 2023
2023
% (compared to total covered assets in the denominator)
Climate Change Mitigation (CCM)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Of which
Proceeds transitional
enabling
Climate Change Adaptation (CCA)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Of which
Proceeds transitional
enabling
Proportion
of total
assets
covered
1
2
3
4
5
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
Financial undertakings
Credit institutions
Loans and advances
Debt securities, including UoP
70.2
28.1
30.6
29
44.6
4.7
1.1
0
0
0
4.4
0
0
0
0
1
0
0
0
0
0.1
0.7
0
0
0
0.1
1.3
0.1
0.1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
70.3
29.4
30.7
29.1
44.6
4.7
1.1
0
0
0
4.4
0
0
0
0
1
0
0
0
0
0.1
0.7
0
0
0
36.1
1.5
1.2
1.1
0.1
7
8
9
10
Other financial corporations
of which investment firms
Loans and advances
Debt securities, including UoP
17.8
14.1
8.7
49
5.5
8.7
1.3
49
0
0
0
0
0.1
0
0
0
3.7
7.8
0.1
49
6.4
2.1
2.8
0
0
0
0
0
0
0
0
0
0
0
0
0
24.2
16.1
11.5
49
5.5
8.7
1.3
49
0
0
0
0
0.1
0
0
0
3.7
7.8
0.1
49
0.3
0.1
0.1
0
12
13
14
of which management companies
Loans and advances
Debt securities, including UoP
70.2
70.2
0
12
12
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
70.2
70.2
0
12
12
0
0
0
0
0
0
0
0
0
0
0
0
0
16
17
18
of which insurance undertakings
Loans and advances
Debt securities, including UoP
16.7
16.7
0
0
0
0
0
0
0
0
0
0
0
0
0
16.8
16.8
0
0
0
0
0
0
0
0
0
0
33.5
33.5
0
0
0
0
0
0
0
0
0
0
0
0
0
0.1
0.1
0
20
21
22
Non-financial undertakings
Loans and advances
Debt securities, including UoP
34.2
35.4
15.2
6.6
6.2
13.3
0
0
0
1
1.1
0.2
2.3
2.3
2.5
0.4
0.3
1.2
0
0
0
0
0
0
0
0
0
34.6
35.7
16.3
6.7
6.2
13.3
0
0
0
1
1.1
0.2
2.3
2.3
2.5
1.4
1.3
0.1
24
25
26
Households
of which loans collateralised by residential
immovable property
of which building renovation loans
73.7
97.4
100
4.8
6.1
0
4.8
6.1
0
1.1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
73.7
97.4
100
4.8
6.1
0
4.8
6.1
0
1.1
0
0
0
0
0
33.1
20
0
GAR - Covered assets in both numerator and
denominator
6
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
11
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
15
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
19
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
23
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
27
of which motor vehicle loans
100
7.3
7.3
7.3
0
100
7.3
7.3
7.3
0
4.9
Annual report 2024
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Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
% (compared to total covered assets in the denominator)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Proportion
of total
Use of
Of which
Of which
Use of
Of which
Use of
Of which
Of which
assets
Proceeds transitional
enabling
Proceeds
enabling
Proceeds transitional
enabling
covered
28
Local governments financing
100
0
0
0
0
0
0
0
0
100
0
0
0
0
0
29
Housing financing
100
0
0
0
0
0
0
0
0
100
0
0
0
0
0
30
Other local government financing
100
0
0
0
0
0
0
0
0
100
0
0
0
0
0
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.3
32 Total GAR assets
36
2.4
2.3
0.5
0.1
0
0
0
0
36.1
2.4
2.3
0.5
0.1
70.3
Annual report 2024
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Contents
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
4. GAR KPI flow (Capex)
2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
% (compared to total covered assets in the denominator)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Of which
Proportion
of total
new assets
GAR - Covered assets in both numerator and
denominator
covered
Proceeds transitional
enabling
Proceeds
enabling
Proceeds transitional
enabling
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
58.1%
8.8%
5.5%
4.2%
1.3%
0.0%
0.0%
0.0%
0.0%
58.2%
8.8%
5.5%
4.2%
1.3%
25.0%
2
Financial undertakings
25.5%
10.2%
0.0%
0.2%
2.6%
0.2%
0.0%
0.0%
0.0%
25.7%
10.2%
0.0%
0.2%
2.6%
2.0%
3
Credit institutions
17.8%
1.8%
0.0%
0.0%
0.1%
0.2%
0.0%
0.0%
0.0%
18.0%
1.8%
0.0%
0.0%
0.1%
2.0%
4
Loans and advances
17.5%
1.8%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
0.0%
17.5%
1.8%
0.0%
0.0%
0.1%
2.0%
5
Debt securities, including UoP
27.2%
2.5%
0.0%
0.0%
0.0%
5.3%
0.0%
0.0%
0.0%
32.5%
2.5%
0.0%
0.0%
0.0%
0.0%
6
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
7
Other financial corporations
57.3%
44.6%
0.0%
1.2%
13.2%
0.0%
0.0%
0.0%
0.0%
57.3%
44.6%
0.0%
1.2%
13.2%
0.0%
8
of which investment firms
92.7%
91.2%
0.0%
0.0%
21.2%
0.0%
0.0%
0.0%
0.0%
92.7%
91.2%
0.0%
0.0%
21.2%
0.0%
9
Loans and advances
71.1%
66.5%
0.0%
0.0%
20.3%
0.0%
0.0%
0.0%
0.0%
71.1%
66.5%
0.0%
0.0%
20.3%
0.0%
10
Debt securities, including UoP
97.3%
96.4%
0.0%
0.0%
21.4%
0.0%
0.0%
0.0%
0.0%
97.3%
96.4%
0.0%
0.0%
21.4%
0.0%
11
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
12
of which management companies
54.5%
7.7%
0.0%
0.0%
4.9%
0.0%
0.0%
0.0%
0.0%
54.5%
7.7%
0.0%
0.0%
4.9%
0.0%
13
Loans and advances
70.3%
15.7%
0.0%
0.0%
14.1%
0.1%
0.0%
0.0%
0.0%
70.4%
15.7%
0.0%
0.0%
14.1%
0.0%
14
Debt securities, including UoP
50.7%
5.7%
0.0%
0.0%
2.6%
0.0%
0.0%
0.0%
0.0%
50.7%
5.7%
0.0%
0.0%
2.6%
0.0%
15
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
16
of which insurance undertakings
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
17
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
18
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
19
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
20
Non-financial undertakings
37.9%
20.5%
0.0%
3.9%
9.0%
0.2%
0.1%
0.0%
0.0%
38.1%
20.6%
0.0%
3.9%
9.1%
3.0%
21
Loans and advances
38.2%
19.8%
0.0%
4.3%
8.2%
0.2%
0.0%
0.0%
0.0%
38.4%
19.9%
0.0%
4.3%
8.2%
3.0%
22
Debt securities, including UoP
35.3%
26.9%
0.0%
0.0%
17.2%
0.6%
0.6%
0.0%
0.1%
36.0%
27.5%
0.0%
0.0%
17.3%
0.0%
23
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
24
25
26
27
Households
of which loans collateralised by residential
immovable property
of which building renovation loans
of which motor vehicle loans
64.4%
93.1%
100.0%
100.0%
6.9%
6.1%
0.0%
15.4%
6.9%
6.1%
0.0%
15.4%
4.7%
0.0%
0.0%
15.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
64.4%
93.1%
100.0%
100.0%
6.9%
6.1%
0.0%
15.4%
6.9%
6.1%
0.0%
15.4%
4.7%
0.0%
0.0%
15.4%
0.0%
0.0%
0.0%
0.0%
20.0%
7.0%
0.0%
6.0%
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Corporate
Economic and
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governance
financial review
and compliance
2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
% (compared to total covered assets in the denominator)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Proportion
of total
Use of
Of which
Of which
Use of
Of which
Use of
Of which
Of which
new assets
Proceeds transitional
enabling
Proceeds
enabling
Proceeds transitional
enabling
covered
28
Local governments financing
97.7%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
97.7%
0.0%
0.0%
0.0%
0.0%
0.0%
29
Housing financing
94.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
94.4%
0.0%
0.0%
0.0%
0.0%
0.0%
30
Other local government financing
98.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
98.1%
0.0%
0.0%
0.0%
0.0%
0.0%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
32 Total GAR assets
22.2%
3.3%
2.1%
1.6%
0.5%
0.0%
0.0%
0.0%
0.0%
22.2%
3.3%
2.1%
1.6%
0.5%
65.9%
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4. GAR KPI flow (Turnover)
2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
% (compared to total covered assets in the denominator)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Of which
Of which
Proportion
of total
new assets
GAR - Covered assets in both numerator and
denominator
covered
Proceeds transitional
enabling
Proceeds
enabling
Proceeds transitional
enabling
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
56.6%
6.9%
5.5%
3.8%
0.8%
0.0%
0.0%
0.0%
0.0%
56.7%
6.9%
5.5%
3.8%
0.8%
25.0%
2
Financial undertakings
21.2%
5.3%
0.0%
0.0%
2.1%
0.2%
0.0%
0.0%
0.0%
21.4%
5.3%
0.0%
0.0%
2.1%
2.0%
3
Credit institutions
18.4%
2.0%
0.0%
0.0%
0.0%
0.2%
0.0%
0.0%
0.0%
18.6%
2.0%
0.0%
0.0%
0.0%
2.0%
4
Loans and advances
18.1%
1.9%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
18.1%
2.0%
0.0%
0.0%
0.0%
2.0%
5
Debt securities, including UoP
27.2%
2.5%
0.0%
0.0%
0.0%
5.3%
0.0%
0.0%
0.0%
32.5%
2.5%
0.0%
0.0%
0.0%
0.0%
6
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
7
Other financial corporations
33.0%
18.9%
0.0%
0.1%
10.6%
0.1%
0.0%
0.0%
0.0%
33.1%
18.9%
0.0%
0.1%
10.6%
0.0%
8
of which investment firms
42.5%
37.2%
0.0%
0.0%
18.3%
0.0%
0.0%
0.0%
0.0%
42.5%
37.2%
0.0%
0.0%
18.3%
0.0%
9
Loans and advances
20.8%
10.0%
0.0%
0.0%
7.0%
0.0%
0.0%
0.0%
0.0%
20.8%
10.0%
0.0%
0.0%
7.0%
0.0%
10
Debt securities, including UoP
47.1%
43.0%
0.0%
0.0%
20.7%
0.0%
0.0%
0.0%
0.0%
47.1%
43.0%
0.0%
0.0%
20.7%
0.0%
11
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
12
of which management companies
18.0%
6.1%
0.0%
0.0%
3.8%
0.5%
0.0%
0.0%
0.0%
18.5%
6.1%
0.0%
0.0%
3.8%
0.0%
13
Loans and advances
85.3%
30.1%
0.0%
0.2%
19.2%
2.4%
0.0%
0.0%
0.0%
87.6%
30.1%
0.0%
0.2%
19.2%
0.0%
14
Debt securities, including UoP
1.5%
0.2%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
1.5%
0.2%
0.0%
0.0%
0.0%
0.0%
15
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
16
of which insurance undertakings
0.0%
0.0%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
17
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
18
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
19
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
20
Non-financial undertakings
28.2%
8.1%
0.0%
0.6%
5.1%
0.2%
0.0%
0.0%
0.0%
28.5%
8.1%
0.0%
0.6%
5.1%
3.0%
21
Loans and advances
29.7%
7.6%
0.0%
0.7%
4.3%
0.2%
0.0%
0.0%
0.0%
30.0%
7.6%
0.0%
0.7%
4.3%
3.0%
22
Debt securities, including UoP
14.0%
13.0%
0.0%
0.0%
12.3%
0.5%
0.3%
0.0%
0.0%
14.5%
13.2%
0.0%
0.0%
12.3%
0.0%
23
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
24
25
26
27
Households
of which loans collateralised by residential
immovable property
of which building renovation loans
of which motor vehicle loans
64.4%
93.1%
100.0%
100.0%
6.9%
6.1%
0.0%
15.4%
6.9%
6.1%
0.0%
15.4%
4.7%
0.0%
0.0%
15.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
64.4%
93.1%
100.0%
100.0%
6.9%
6.1%
0.0%
15.4%
6.9%
6.1%
0.0%
15.4%
4.7%
0.0%
0.0%
15.4%
0.0%
0.0%
0.0%
0.0%
20.0%
7.0%
0.0%
6.0%
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governance
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2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
% (compared to total covered assets in the denominator)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Proportion
of total
Use of
Of which
Of which
Use of
Of which
Use of
Of which
Of which
new assets
Proceeds transitional
enabling
Proceeds
enabling
Proceeds transitional
enabling
covered
28
Local governments financing
97.7%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
97.7%
0.0%
0.0%
0.0%
0.0%
0.0%
29
Housing financing
94.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
94.4%
0.0%
0.0%
0.0%
0.0%
0.0%
30
Other local government financing
98.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
98.1%
0.0%
0.0%
0.0%
0.0%
0.0%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
32 Total GAR assets
21.6%
2.6%
2.1%
1.5%
0.3%
0.0%
0.0%
0.0%
0.0%
21.6%
2.6%
2.1%
1.5%
0.3%
65.9%
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5. KPI off-balance sheet exposures (Capex stock)
2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
% (compared to total eligible off-balance sheet
assets)
Proportion of total covered assets funding taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets funding taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
1 Financial guarantees (FinGuar KPI)
7.6%
3.4%
0.0%
0.3%
2.3%
0.2%
0.1%
0.0%
0.0%
7.8%
3.5%
0.0%
0.3%
2.3%
2 Assets under management (AuM KPI)
8.4%
2.1%
0.0%
0.1%
0.9%
0.2%
0.0%
0.0%
0.0%
8.7%
2.1%
0.0%
0.1%
0.9%
5. KPI off-balance sheet exposures (Turnover stock)
2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
% (compared to total eligible off-balance sheet
assets)
Proportion of total covered assets funding taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets funding taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
1 Financial guarantees (FinGuar KPI)
4.8%
1.3%
0.0%
0.0%
1.0%
0.4%
0.2%
0.0%
0.2%
5.2%
1.5%
0.0%
0.0%
1.2%
2 Assets under management (AuM KPI)
8.2%
1.3%
0.0%
0.0%
0.5%
0.5%
0.0%
0.0%
0.0%
8.7%
1.3%
0.0%
0.0%
0.5%
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and compliance
5. KPI off-balance sheet exposures (Capex flow)
2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
% (compared to total eligible off-balance sheet
assets)
Proportion of total covered assets funding taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets funding taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
1 Financial guarantees (FinGuar KPI)
13.4%
5.5%
0.0%
1.0%
4.0%
0.7%
0.3%
0.0%
0.0%
14.1%
5.8%
0.0%
1.0%
4.0%
2 Assets under management (AuM KPI)
9.7%
2.1%
0.0%
0.1%
0.9%
0.4%
0.0%
0.0%
0.0%
10.0%
2.1%
0.0%
0.1%
0.9%
5. KPI off-balance sheet exposures (Turnover flow)
2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
% (compared to total eligible off-balance sheet
assets)
Proportion of total covered assets funding taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets funding taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
1 Financial guarantees (FinGuar KPI)
7.0%
2.5%
0.0%
0.0%
2.0%
0.1%
0.0%
0.0%
0.0%
7.1%
2.5%
0.0%
0.0%
2.0%
2 Assets under management (AuM KPI)
9.1%
1.2%
0.0%
0.1%
0.5%
0.6%
0.0%
0.0%
0.0%
9.7%
1.3%
0.0%
0.1%
0.5%
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6. The proportion of the insurance or reinsurance undertaking’s investments that are directed at funding, or are associated with, Taxonomy-aligned in relation to total
investments - 2024
The weighted average value of all the investments of insurance or reinsurance undertakings that are
The weighted average value of all the investments of insurance or reinsurance undertakings that are
directed at funding, or are associated with Taxonomy-aligned economic activities relative to the value of
directed at funding, or are associated with Taxonomy-aligned economic activities, with following weights
total assets covered by the KPI, with following weights for investments in undertakings per below:
for investments in undertakings per below:
Turnover-based: %
1.4%
Turnover-based: [EUR million]
125
CapEx—based: %
2.1%
CapEx-based: [EUR million]
177
The percentage of assets covered by the KPI relative to total investments of insurance or reinsurance
The monetary value of assets covered by the KPI. Excluding investments in sovereign entities.
undertakings (total AuM). Excluding investments in sovereign entities.
Coverage ratio: %
38.9%
Coverage: [EUR million]
8,654
Additional, complementary disclosures: breakdown of denominator of the KPI
The percentage of derivatives relative to total assets covered by the KPI.
The value in EUR millions of derivatives:.
X %
0.7%
[EUR million]
61
The proportion of exposures to financial and non-financial undertakings not subject to Articles 19a and 29a
Value of exposures to financial and non-financial undertakings not subject to Articles 19a and 29a of
of Directive 2013/34/ EU over total assets covered by the KPI:
Directive 2013/34/EU:
For non-financial undertakings:
1.4%
For non-financial undertakings: [EUR million]
122
For financial undertakings:
26.0%
For financial undertakings: [EUR million]
2,249
The proportion of exposures to financial and non-financial undertakings from non-EU countries not subject
Value of exposures to financial and non-financial undertakings from non-EU countries not subject to Articles
to Articles 19a and 29a of Directive 2013/34/EU over total assets covered by the KPI:
19a and 29a of Directive 2013/34/EU:
For non-financial undertakings:
1.7%
For non-financial undertakings: [EUR million]
145
For financial undertakings:
1.4%
For financial undertakings: [EUR million]
121
The proportion of exposures to financial and non-financial undertakings subject to Articles 19a and 29a of
Value of exposures to financial and non-financial undertakings subject to Articles 19a and 29a of Directive
Directive 2013/34/EU over total assets covered by the KPI:
2013/34/EU:
For non-financial undertakings:
4.6%
For non-financial undertakings: [EUR million]
394
For financial undertakings:
17.4%
For financial undertakings: [EUR million]
1,502
The proportion of exposures to other counterparties over total assets covered by the KPI:
Value of exposures to other counterparties:
X %
46.9%
[EUR million]
4,060
The proportion of the insurance or reinsurance undertaking’s investments other than investments held in
The proportion of the insurance or reinsurance undertaking’s investments other than investments held in
respect of life insurance contracts where the investment risk is borne by the policy holders, that are directed
respect of life insurance contracts where the investment risk is borne by the policy holders, that are directed
at funding, or are associated with, Taxonomy-aligned economic activities: X %
at funding, or are associated with, Taxonomy-aligned economic activities:
X %
80.9%
[EUR million]
6,999
The value of all the investments that are funding economic activities that are not Taxonomy-eligible relative
Value of all the investments that are funding economic activities that are not Taxonomy-eligible:
to the value of total assets covered by the KPI:
X %
88.3%
[EUR million]
7,639
The value of all the investments that are funding taxonomy-eligible economic activities, but not taxonomy-
Value of all the investments that are funding Taxonomy- eligible economic activities, but not taxonomy-
aligned relative to the value of total assets covered by the KPI:
aligned:
X %
10.3%
[EUR million]
890
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Additional, complementary disclosures: breakdown of numerator of the KPI
The proportion of Taxonomy-aligned exposures to financial and non-financial undertakings subject to
Value of Taxonomy-aligned exposures to financial and non-financial undertakings subject to Articles 19a
Articles 19a and 29a of Directive 2013/34/EU over total assets covered by the KPI:
and 29a of Directive 2013/34/EU:
For non-financial undertakings:
For non-financial undertakings:
Turnover-based: %
0.5%
Turnover-based: [EUR million]
47
Capital expenditures-based: %
0.9%
Capital expenditures-based: [EUR million]
74
For financial undertakings:
For financial undertakings:
Turnover-based: %
0.9%
Turnover-based: [EUR million]
78
Capital expenditures-based: %
1.2%
Capital expenditures-based: [EUR million]
103
The proportion of the insurance or reinsurance undertaking’s investments other than investments held in
Value of insurance or reinsurance undertaking’s investments other than investments held in respect of life
respect of life insurance contracts where the investment risk is borne by the policy holders, that are directed
insurance contracts where the investment risk is borne by the policy holders, that are directed at funding, or
at funding, or are associated with, Taxonomy-aligned:
are associated with, Taxonomy-aligned:
Turnover-based: %
*
Turnover-based: [EUR million]
*
Capital expenditures-based: %
*
Capital expenditures-based: [EUR million]
*
The proportion of exposures to other counterparties and assets over total assets covered by the KPI:
Value of taxonomy-aligned exposures to other counterparties:
Turnover-based: %
0%
Turnover-based: [EUR million]
0%
Capital expenditures-based: %
0%
Capital expenditures-based: [EUR million]
0%
Breakdown of the numerator of the KPI per environmental objective
Taxonomy-aligned activities –:
Transitional activities turnover: A%
0.0%
Turnover: 1.4%
Transitional activities capex: A%
0.1%
(1) Climate change mitigation
Enabling activities turnover: B%
0.7%
CapEx: 2.0%
Enabling activities capex: B%
0.7%
Turnover: 0.0%
Enabling activities turnover: A%
0.0%
(2) Climate change adaptation
CapEx: 0.0%
Enabling activities capex: B%
0.0%
* The value of these investments is 89M€ (1%) turnover-based and 125€ (1,4%) CapEx based. The calculation is based on the proportion of these investments with respect to the total portfolio.
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7. Template: KPI for Asset Managers
104.
- 2024
Standard template for the disclosure required under Article 8 of Regulation (EU) 2020/852 (asset managers)
The weighted average value of all the investments that are directed at funding, or are associated with
The weighted average value of all the investments that are directed at funding, or are associated with
Taxonomy-aligned economic activities relative to the value of total assets covered by the KPI, with following
taxonomy-aligned economic activities, with following weights for investments in undertakings per below:
weights for investments in undertakings per below:
Turnover-based: %
1.6%
Turnover-based: [EUR million]
2,003
CapEx—based: %
2.6%
CapEx-based: [EUR million]
3,278
The percentage of assets covered by the KPI relative to total investments (total AuM). Excluding
The monetary value of assets covered by the KPI. Excluding investments in sovereign entities.
investments in sovereign entities.
Coverage ratio: %
62.10%
Coverage: [EUR million]
125,892
Additional, complementary disclosures: breakdown of denominator of the KPI
The percentage of derivatives relative to total assets covered by the KPI.
The value in EUR millions of derivatives:.
X %
0.00%
[EUR million]
37
The proportion of exposures to financial and non-financial undertakings not subject to Articles 19a and 29a
Value of exposures to financial and non-financial undertakings not subject to Articles 19a and 29a of
of Directive 2013/34/ EU over total assets covered by the KPI:
Directive 2013/34/EU:
For non-financial undertakings:
15.8%
For non-financial undertakings: [EUR million]
19,863
For financial undertakings:
18.7%
For financial undertakings: [EUR million]
23,489
The proportion of exposures to financial and non-financial undertakings from non-EU countries not subject
Value of exposures to financial and non-financial undertakings from non-EU countries not subject to Articles
to Articles 19a and 29a of Directive 2013/34/EU over total assets covered by the KPI:
19a and 29a of Directive 2013/34/EU:
For non-financial undertakings:
9.4%
For non-financial undertakings: [EUR million]
11,776
For financial undertakings:
17.7%
For financial undertakings: [EUR million]
22,301
The proportion of exposures to financial and non-financial undertakings subject to Articles 19a and 29a of
Value of exposures to financial and non-financial undertakings subject to Articles 19a and 29a of Directive
Directive 2013/34/EU over total assets covered by the KPI:
2013/34/EU:
For non-financial undertakings:
9.2%
For non-financial undertakings: [EUR million]
11,637
For financial undertakings:
29.1%
For financial undertakings: [EUR million]
36,665
The proportion of exposures to other counterparties over total assets covered by the KPI:
Value of exposures to other counterparties:
X %
0.1%
[EUR million]
124
The value of all the investments that are funding economic activities that are not Taxonomy-eligible relative
Value of all the investments that are funding economic activities that are not Taxonomy-eligible:
to the value of total assets covered by the KPI:
X %
89.3%
[EUR million]
112,424
The value of all the investments that are funding taxonomy-eligible economic activities, but not taxonomy-
Value of all the investments that are funding Taxonomy- eligible economic activities, but not taxonomy-
aligned relative to the value of total assets covered by the KPI:
aligned:
X %
9.1%
[EUR million]
11,465
104 Only assets under management from asset managers are included.
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Additional, complementary disclosures: breakdown of numerator of the KPI
The proportion of Taxonomy-aligned exposures to financial and non-financial undertakings subject to
Value of Taxonomy-aligned exposures to financial and non-financial undertakings subject to Articles 19a
Articles 19a and 29a of Directive 2013/34/EU over total assets covered by the KPI:
and 29a of Directive 2013/34/EU:
For non-financial undertakings:
For non-financial undertakings:
Turnover-based: %
0.8%
Turnover-based: [EUR million]
959
Capital expenditures-based: %
2.9%
Capital expenditures-based: [EUR million]
3,609
For financial undertakings:
For financial undertakings:
Turnover-based: %
0.8%
Turnover-based: [EUR million]
1,044
Capital expenditures-based: %
2.3%
Capital expenditures-based: [EUR million]
2,947
The proportion of exposures to other counterparties and assets over total assets covered by the KPI:
Value of taxonomy-aligned exposures to other counterparties:
Turnover-based: %
0.0%
Turnover-based: [EUR million]
5
Capital expenditures-based: %
0.0%
Capital expenditures-based: [EUR million]
5
Breakdown of the numerator of the KPI per environmental objective
Taxonomy-aligned activities –:
Transitional activities turnover: A%
0.10%
Turnover: 1.5%
Transitional activities capex: A%
0.70%
(1) Climate change mitigation
CapEx: 2.6%
Enabling activities turnover: B%
0.10%
Enabling activities capex: B%
1.00%
Turnover: 0.0%
Enabling activities turnover: A%
0.00%
(2) Climate change adaptation
CapEx: 0,0%
Enabling activities capex: B%
0.00%
8. Consolidated KPI - 2024
KPI per Business segment
Proportion of total
KPI turnover based
KPI CapEx based
Revenue
group revenue
KPI turnover based
KPI CapEx based
weighted
weighted
Asset
1,258
2.1%
1.6%
2.6%
0.0%
0.1%
management
Banking activities
57,526
97.0%
3.0%
3.3%
2.9%
3.2%
Investment firms
111
0.2%
0.0%
0.0%
0.0%
0.0%
Insurance
440
0.7%
1.4%
2.1%
0.0%
0.0%
undertakings
Total
59,335
100.0%
Average KPI
3.0%
3.2%
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and compliance
9. Nuclear and fossil gas related activities - 2024 (credit institution)
Nuclear energy related activities
1
The undertaking carries out, funds or has exposures to research, development, demonstration
and deployment of innovative electricity generation facilities that produce energy from nuclear
processes with minimal waste from the fuel cycle.
YES
2
The undertaking carries out, funds or has exposures to construction and safe operation of new
nuclear installations to produce electricity or process heat, including for the purposes of district
heating or industrial processes such as hydrogen production, as well as their safety upgrades,
using best available technologies.
YES
3
The undertaking carries out, funds or has exposures to safe operation of existing nuclear
installations that produce electricity or process heat, including for the purposes of district heating
or industrial processes such as hydrogen production from nuclear energy, as well as their safety
upgrades.
YES
Fossil gas related activities
4 The undertaking carries out, funds or has exposures to construction or operation of electricity
generation facilities that produce electricity using fossil gaseous fuels.
YES
5 The undertaking carries out, funds or has exposures to construction, refurbishment, and
operation of combined heat/cool and power generation facilities using fossil gaseous fuels.
YES
6 The undertaking carries out, funds or has exposures to construction, refurbishment and operation
of heat generation facilities that produce heat/cool using fossil gaseous fuels.
YES
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9. Nuclear and fossil gas related activities:
9. Nuclear and fossil gas related activities:
Taxonomy-aligned economic activities (denominator) - Capex - 2024
Taxonomy-aligned economic activities (denominator) - Turnover - 2024
CCM+CCA
CCM
CCA
CCM+CCA
CCM
CCA
Nuclear energy related activities
Amount
%
Amount
%
Amount
%
Nuclear energy related activities
Amount
%
Amount
%
Amount
%
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
1 referred to in Section 4.26 of Annexes I and II to Delegated
0
0.0%
0
0.0%
0
0.0%
1 referred to in Section 4.26 of Annexes I and II to Delegated
0
0.0%
0
0.0%
0
0.0%
Regulation 2021/2139 in the denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
2 referred to in Section 4.27 of Annexes I and II to Delegated
4
0.0%
4
0.0%
0
0.0%
2 referred to in Section 4.27 of Annexes I and II to Delegated
0
0.0%
0
0.0%
0
0.0%
Regulation 2021/2139 in the denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
3 referred to in Section 4.28 of Annexes I and II to Delegated
28
0.0%
28
0.0%
0
0.0%
3 referred to in Section 4.28 of Annexes I and II to Delegated
36
0.0%
36
0.0%
0
0.0%
Regulation 2021/2139 in the denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
4 referred to in Section 4.29 of Annexes I and II to Delegated
1
0.0%
1
0.0%
0
0.0%
4 referred to in Section 4.29 of Annexes I and II to Delegated
0
0.0%
0
0.0%
0
0.0%
Regulation 2021/2139 in the denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
5 referred to in Section 4.30 of Annexes I and II to Delegated
0
0.0%
0
0.0%
0
0.0%
5 referred to in Section 4.30 of Annexes I and II to Delegated
0
0.0%
0
0.0%
0
0.0%
Regulation 2021/2139 in the denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
6 referred to in Section 4.31 of Annexes I and II to Delegated
0
0.0%
0
0.0%
0
0.0%
6 referred to in Section 4.31 of Annexes I and II to Delegated
0
0.0%
0
0.0%
0
0.0%
Regulation 2021/2139 in the denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of other taxonomy-aligned economic
Amount and proportion of other taxonomy-aligned economic
7 activities not referred to in rows 1 to 6 above in the
42,800
3.3%
42,784
3.3%
17
0.0%
7 activities not referred to in rows 1 to 6 above in the
39,620
3.0%
39,578
3.0%
41
0.0%
denominator of the applicable KPI
denominator of the applicable KPI
8 Total applicable KPI
42,834
3.3%
42,818
3.3%
17
0.0%
8 Total applicable KPI
39,656
3.0%
39,615
3.0%
41
0.0%
Note 1: The denominator of the applicable KPI is 1.306.541.919.505 euros
Note 1: The denominator of the applicable KPI is 1.306.541.919.505 euros
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Corporate
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statement
governance
financial review
and compliance
9. Nuclear and fossil gas related activities:
Taxonomy-aligned economic activities (numerator) - Capex - 2024
9. Nuclear and fossil gas related activities:
Taxonomy-aligned economic activities (numerator) - Turnover - 2024
CCM+CCA
CCM
CCA
CCM+CCA
CCM
CCA
Nuclear energy related activities
Amount
%
Amount
%
Amount
%
Nuclear energy related activities
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.26 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0
0.0%
0
0.0%
0
0.0%
1
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.26 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0
0.0%
0
0.0%
0
0.0%
2
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.27 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
4
0.0%
4
0.0%
0
0.0%
2
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.27 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0
0.0%
0
0.0%
0
0.0%
3
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.28 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
28
0.1%
28
0.1%
0
0.0%
3
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.28 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
36
0.1%
36
0.1%
0
0.0%
4
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.29 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
1
0.0%
1
0.0%
0
0.0%
4
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.29 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0
0.0%
0
0.0%
0
0.0%
5
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.30 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0
0.0%
0
0.0%
0
0.0%
5
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.30 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0
0.0%
0
0.0%
0
0.0%
6
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.31 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0
0.0%
0
0.0%
0
0.0%
6
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.31 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0
0.0%
0
0.0%
0
0.0%
7
Amount and proportion of other taxonomy-aligned economic
activities not referred to in rows 1 to 6 above in the numerator
of the applicable KPI
42,800
99.9%
42,784
99.9%
17
0.0%
7
Amount and proportion of other taxonomy-aligned economic
activities not referred to in rows 1 to 6 above in the numerator
of the applicable KPI
39,620
99.9%
39,578
99.8%
41
0.1%
8 Total amount and proportion of taxonomy-aligned economic
activities in the numerator of the applicable KPI
42,834 100.0%
42,818 100.0%
17
0.0%
8 Total amount and proportion of taxonomy-aligned economic
activities in the numerator of the applicable KPI
39,656 100.0%
39,615
99.9%
41
0.1%
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Contents
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Sustainability
Corporate
Economic and
Risk management
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statement
governance
financial review
and compliance
9. Nuclear and fossil gas related activities:
Taxonomy-eligible but not taxonomy-aligned economic activities - Capex- 2024
CCM+CCA
CCM
CCA
Nuclear energy related activities
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.26
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
0
0.0%
0
0.0%
0
0.0%
2
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.27
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
0
0.0%
0
0.0%
0
0.0%
3
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.28
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
17
0.0%
17
0.0%
0
0.0%
4
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.29
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
80
0.0%
80
0.0%
0
0.0%
5
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.30
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
23
0.0%
23
0.0%
0
0.0%
6
7
8
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.31
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
Amount and proportion of other taxonomy-eligible but not
taxonomy-aligned economic activities not referred to in rows 1
to 6 above in the denominator of the applicable KPI
Total amount and proportion of taxonomy eligible but not
taxonomy- aligned economic activities in the denominator of
the applicable KPI
1
404,304
404,424
0.0%
30.9%
31.0%
1
404220
404340
0.0%
30.9%
30.9%
0
84
84
0.0%
0.0%
0.0%
9. Nuclear and fossil gas related activities:
Taxonomy-eligible but not taxonomy-aligned economic activities -Turnover- 2024
CCM+CCA
CCM
CCA
Nuclear energy related activities
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.26
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
0
0.0%
0
0.0%
0
0.0%
2
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.27
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
1
0.0%
1
0.0%
0
0.0%
3
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.28
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
70
0.0%
70
0.0%
0
0.0%
4
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.29
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
833
0.1%
833
0.1%
0
0.0%
5
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.30
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
41
0.0%
41
0.0%
0
0.0%
6
7
8
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.31
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
Amount and proportion of other taxonomy-eligible but not
taxonomy-aligned economic activities not referred to in rows 1
to 6 above in the denominator of the applicable KPI
Total amount and proportion of taxonomy eligible but not
taxonomy- aligned economic activities in the denominator of
the applicable KPI
0
403,901
404,846
0.0%
30.9%
31.0%
0
403,577
404,523
0.0%
30.9%
31.0%
0
324
324
0.0%
0.0%
0.0%
Annual report 2024
181
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
9. Nuclear and fossil gas related activities:
9. Nuclear and fossil gas related activities:
Taxonomy non-eligible economic activities - Capex- 2024
Taxonomy non-eligible economic activities - Turnover- 2024
Amount
%
Amount
%
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
1 referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the
0
0.0%
1 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0
0.0%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
2 referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the
0
0.0%
2 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0
0.0%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
3 referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the
0
0.0%
3 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0
0.0%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
4 referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the
0
0.0%
4 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0
0.0%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
5 referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the
0
0.0%
5 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0
0.0%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
6 referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the
0
0.0%
6 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0
0.0%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic
Amount and proportion of other taxonomy-non-eligible economic activities not referred
7
859,283
65.8%
7
862,039
66.0%
activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
to in rows 1 to 6 above in the denominator of the applicable KPI
Total amount and proportion of taxonomy eligible but not taxonomy- aligned economic
Total amount and proportion of taxonomy-non-eligible economic activities in the
8
859,283
65.8%
8
862,039
66.0%
activities in the denominator of the applicable KPI
denominator of the applicable KPI
Annual report 2024
182
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
10. Nuclear and fossil gas related activities - 2024 (insurance)
Nuclear energy related activities
1
The undertaking carries out, funds or has exposures to research, development, demonstration
and deployment of innovative electricity generation facilities that produce energy from nuclear
processes with minimal waste from the fuel cycle.
NO
2
The undertaking carries out, funds or has exposures to construction and safe operation of new
nuclear installations to produce electricity or process heat, including for the purposes of district
heating or industrial processes such as hydrogen production, as well as their safety upgrades,
using best available technologies.
NO
3
The undertaking carries out, funds or has exposures to safe operation of existing nuclear
installations that produce electricity or process heat, including for the purposes of district heating
or industrial processes such as hydrogen production from nuclear energy, as well as their safety
upgrades.
NO
Fossil gas related activities
4 The undertaking carries out, funds or has exposures to construction or operation of electricity
generation facilities that produce electricity using fossil gaseous fuels.
YES
5 The undertaking carries out, funds or has exposures to construction, refurbishment, and
operation of combined heat/cool and power generation facilities using fossil gaseous fuels.
YES
6 The undertaking carries out, funds or has exposures to construction, refurbishment and operation
of heat generation facilities that produce heat/cool using fossil gaseous fuels.
NO
10. Nuclear and fossil gas related activities:
Taxonomy-aligned economic activities (denominator) - Capex- 2024
10. Nuclear and fossil gas related activities:
Taxonomy-aligned economic activities (denominator) - Turnover- 2024
CCM+CCA
CCM
CCA
CCM+CCA
CCM
CCA
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.26 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
1
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.26 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
2
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.27 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
2
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.27 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
3
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.28 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
3
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.28 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
4
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.29 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
4
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.29 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
5
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.30 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
5
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.30 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
6
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.31 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
6
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.31 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
7
Amount and proportion of other taxonomy-aligned economic
activities not referred to in rows 1 to 6 above in the
177.4
2.05%
177.3
2.05%
0.1
0.00%
7
Amount and proportion of other taxonomy-aligned economic
activities not referred to in rows 1 to 6 above in the
125.2
1.45%
124.3
1.44%
0.8
0.01%
denominator of the applicable KPI
denominator of the applicable KPI
8 Total applicable KPI
177.4
2.05%
177.3
2.05%
0.1
0.00%
8 Total applicable KPI
125.2
1.45%
124.3
1.44%
0.8
0.01%
Note 1: The denominator of the applicable KPI is 8,654 million euros..
Note 1: The denominator of the applicable KPI is 8,654 million euros..
Annual report 2024
183
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
10. Nuclear and fossil gas related activities:
Taxonomy-aligned economic activities (numerator) - Capex- 2024
10. Nuclear and fossil gas related activities:
Taxonomy-aligned economic activities (numerator) - Turnover- 2024
CCM+CCA
CCM
CCA
CCM+CCA
CCM
CCA
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.26 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0.0
0.00 %
0.0
0.00 %
0.0
0.00 %
1
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.26 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
2
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.27 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0.0
0.00 %
0.0
0.00 %
0.0
0.00 %
2
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.27 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
3
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.28 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0.0
0.00 %
0.0
0.00 %
0.0
0.00 %
3
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.28 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
4
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.29 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0.0
0.00 %
0.0
0.00 %
0.0
0.00 %
4
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.29 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
5
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.30 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0.0
0.00 %
0.0
0.00 %
0.0
0.00 %
5
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.30 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
6
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.31 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0.0
0.00 %
0.0
0.00 %
0.0
0.00 %
6
Amount and proportion of taxonomy- aligned economic activity
referred to in Section 4.31 of Annexes I and II to Delegated
Regulation 2021/2139 in the numerator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
7
Amount and proportion of other taxonomy-aligned economic
activities not referred to in rows 1 to 6 above in the numerator
177.4 100.00 %
177.3 99.94 %
0.1
0.06 %
7
Amount and proportion of other taxonomy-aligned economic
activities not referred to in rows 1 to 6 above in the numerator
125.2 100.00%
124.3 99.33%
0.8
0.67%
of the applicable KPI
of the applicable KPI
8 Total amount and proportion of taxonomy-aligned economic
activities in the numerator of the applicable KPI
177.4 100.00 %
177.3 99.94 %
0.1
0.06 %
8 Total amount and proportion of taxonomy-aligned economic
activities in the numerator of the applicable KPI
125.2 100.00%
124.3 99.33%
0.8
0.67%
Annual report 2024
184
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
10. Nuclear and fossil gas related activities:
Taxonomy-eligible but not taxonomy-aligned economic activities - Capex - 2024
CCM+CCA
CCM
CCA
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.26
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
2
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.27
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
3
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.28
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
4
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.29
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
5
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.30
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
6
7
8
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.31
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
Amount and proportion of other taxonomy-eligible but not
taxonomy-aligned economic activities not referred to in rows 1
to 6 above in the denominator of the applicable KPI
Total amount and proportion of taxonomy eligible but not
taxonomy- aligned economic activities in the denominator of
the applicable KPI
0.0
895.8
895.9
0.00%
10.35%
10.35%
0.0
892.8
892.8
0.00%
10.32%
10.32%
0.0
3.0
3.0
0.00%
0.03%
0.03%
10. Nuclear and fossil gas related activities:
Taxonomy-eligible but not taxonomy-aligned economic activities - Turnover-2024
CCM+CCA
CCM
CCA
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.26
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
2
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.27
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
3
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.28
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
4
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.29
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
0.1
0.00%
0.1
0.00%
0.0
0.00%
5
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.30
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
0.0
0.00%
0.0
0.00%
0.0
0.00%
6
7
8
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.31
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
Amount and proportion of other taxonomy-eligible but not
taxonomy-aligned economic activities not referred to in rows 1
to 6 above in the denominator of the applicable KPI
Total amount and proportion of taxonomy eligible but not
taxonomy- aligned economic activities in the denominator of
the applicable KPI
0.0
889.4
889.5
0.00%
10.28%
10.28%
0.0
870.0
870.1
0.00%
10.05%
10.05%
0.0
19.5
19.5
0.00%
0.22%
0.22%
Annual report 2024
185
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
10. Nuclear and fossil gas related activities:
10. Nuclear and fossil gas related activities:
Taxonomy non-eligible economic activities - Capex- 2024
Taxonomy non-eligible economic activities - Turnover - 2024
Nuclear energy related activities
Amount
%
Nuclear energy related activities
Amount
%
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
1 referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the
0
1 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0.0
0.00%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
2 referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the
0
2 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0.0
0.00%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
3 referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the
0
3 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0.0
0.00%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
4 referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the
0
4 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0.0
0.00%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
5 referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the
0
5 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0.0
0.00%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
6 referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the
0
6 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0.0
0.00%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic
Amount and proportion of other taxonomy-non-eligible economic activities not referred
7
7,580.8
87.60%
7
7,638.6
88.27%
activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
to in rows 1 to 6 above in the denominator of the applicable KPI
Total amount and proportion of taxonomy eligible but not taxonomy- aligned economic
Total amount and proportion of taxonomy-non-eligible economic activities in the
8
7,580.8
87.60%
8
7,638.6
88.27%
activities in the denominator of the applicable KPI
denominator of the applicable KPI
Annual report 2024
186
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
11. Nuclear and fossil gas related activities- 2024 (asset manager)
Nuclear energy related activities
The undertaking carries out, funds or has exposures to research, development, demonstration
1 and deployment of innovative electricity generation facilities that produce energy from nuclear
YES
processes with minimal waste from the fuel cycle.
The undertaking carries out, funds or has exposures to construction and safe operation of new
nuclear installations to produce electricity or process heat, including for the purposes of district
2
YES
heating or industrial processes such as hydrogen production, as well as their safety upgrades,
using best available technologies.
The undertaking carries out, funds or has exposures to safe operation of existing nuclear
installations that produce electricity or process heat, including for the purposes of district heating
3
YES
or industrial processes such as hydrogen production from nuclear energy, as well as their safety
upgrades.
Fossil gas related activities
The undertaking carries out, funds or has exposures to construction or operation of electricity
4
YES
generation facilities that produce electricity using fossil gaseous fuels.
The undertaking carries out, funds or has exposures to construction, refurbishment, and
5
YES
operation of combined heat/cool and power generation facilities using fossil gaseous fuels.
The undertaking carries out, funds or has exposures to construction, refurbishment and operation
6
YES
of heat generation facilities that produce heat/cool using fossil gaseous fuels.
11. Nuclear and fossil gas related activities:
11. Nuclear and fossil gas related activities:
Taxonomy-aligned economic activities (denominator) - Capex- 2024
Taxonomy-aligned economic activities (denominator) - Turnover- 2024
CCM+CCA
CCM
CCA
CCM+CCA
CCM
CCA
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
1 referred to in Section 4.26 of Annexes I and II to Delegated
2.6
0.00%
2.6
0.00%
0.0
0.00%
1 referred to in Section 4.26 of Annexes I and II to Delegated
0.0
0.00%
0.0
0.00%
0.0
0.00%
Regulation 2021/2139 in the denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
2 referred to in Section 4.27 of Annexes I and II to Delegated
2.2
0.00%
2.2
0.00%
0.0
0.00%
2 referred to in Section 4.27 of Annexes I and II to Delegated
0.4
0.00%
0.4
0.00%
0.0
0.00%
Regulation 2021/2139 in the denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
3 referred to in Section 4.28 of Annexes I and II to Delegated
0.6
0.00%
0.6
0.00%
0.0
0.00%
3 referred to in Section 4.28 of Annexes I and II to Delegated
21.9
0.02%
21.9
0.02%
0.0
0.00%
Regulation 2021/2139 in the denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
4 referred to in Section 4.29 of Annexes I and II to Delegated
0.0
0.00%
0.0
0.00%
0.0
0.00%
4 referred to in Section 4.29 of Annexes I and II to Delegated
0.0
0.00%
0.0
0.00%
0.0
0.00%
Regulation 2021/2139 in the denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
5 referred to in Section 4.30 of Annexes I and II to Delegated
0.1
0.00%
0.0
0.00%
0.1
0.00%
5 referred to in Section 4.30 of Annexes I and II to Delegated
0.2
0.00%
0.2
0.00%
0.0
0.00%
Regulation 2021/2139 in the denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
6 referred to in Section 4.31 of Annexes I and II to Delegated
16.9
0.01%
16.9
0.01%
0.0
0.00%
6 referred to in Section 4.31 of Annexes I and II to Delegated
0.3
0.00%
0.3
0.00%
0.0
0.00%
Regulation 2021/2139 in the denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of other taxonomy-aligned economic
Amount and proportion of other taxonomy-aligned economic
7 activities not referred to in rows 1 to 6 above in the
3,255.8
2.59%
3,241.1
2.57%
14.8
0.01%
7 activities not referred to in rows 1 to 6 above in the
1,980.7
1.57%
1,928.6
1.53%
52.1
0.04%
denominator of the applicable KPI
denominator of the applicable KPI
8 Total applicable KPI
3,278.1
2.60%
3,263.3
2.59%
14.9
0.01%
8 Total applicable KPI
2,003.4
1.59%
1,951.3
1.55%
52.1
0.04%
Note 1: The denominator of the applicable KPI is 125,892 million euros.
Note 1: The denominator of the applicable KPI is 125,892 million euros.
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11. Nuclear and fossil gas related activities:
11. Nuclear and fossil gas related activities:
Taxonomy-aligned economic activities (numerator) - Capex- 2024
Taxonomy-aligned economic activities (numerator) - Turnover- 2024
CCM+CCA
CCM
CCA
CCM+CCA
CCM
CCA
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
1 referred to in Section 4.26 of Annexes I and II to Delegated
2.6
0.08%
2.6
0.08%
0.0
0.00%
1 referred to in Section 4.26 of Annexes I and II to Delegated
0.0
0.00%
0.0
0.00%
0.0
0.00%
Regulation 2021/2139 in the numerator of the applicable KPI
Regulation 2021/2139 in the numerator of the applicable KPI
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
2 referred to in Section 4.27 of Annexes I and II to Delegated
2.2
0.07%
2.2
0.07%
0.0
0.00%
2 referred to in Section 4.27 of Annexes I and II to Delegated
0.4
0.02%
0.4
0.02%
0.0
0.00%
Regulation 2021/2139 in the numerator of the applicable KPI
Regulation 2021/2139 in the numerator of the applicable KPI
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
3 referred to in Section 4.28 of Annexes I and II to Delegated
0.6
0.02%
0.6
0.02%
0.0
0.00%
3 referred to in Section 4.28 of Annexes I and II to Delegated
21.9
1.09%
21.9
1.09%
0.0
0.00%
Regulation 2021/2139 in the numerator of the applicable KPI
Regulation 2021/2139 in the numerator of the applicable KPI
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
4 referred to in Section 4.29 of Annexes I and II to Delegated
0.0
0.00%
0.0
0.00%
0.0
0.00%
4 referred to in Section 4.29 of Annexes I and II to Delegated
0.0
0.00%
0.0
0.00%
0.0
0.00%
Regulation 2021/2139 in the numerator of the applicable KPI
Regulation 2021/2139 in the numerator of the applicable KPI
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
5 referred to in Section 4.30 of Annexes I and II to Delegated
0.1
0.00%
0.0
0.00%
0.1
0.00%
5 referred to in Section 4.30 of Annexes I and II to Delegated
0.2
0.01%
0.2
0.01%
0.0
0.00%
Regulation 2021/2139 in the numerator of the applicable KPI
Regulation 2021/2139 in the numerator of the applicable KPI
Amount and proportion of taxonomy- aligned economic activity
Amount and proportion of taxonomy- aligned economic activity
6 referred to in Section 4.31 of Annexes I and II to Delegated
16.9
0.51%
16.9
0.51%
0.0
0.00%
6 referred to in Section 4.31 of Annexes I and II to Delegated
0.3
0.01%
0.3
0.01%
0.0
0.00%
Regulation 2021/2139 in the numerator of the applicable KPI
Regulation 2021/2139 in the numerator of the applicable KPI
Amount and proportion of other taxonomy-aligned economic
Amount and proportion of other taxonomy-aligned economic
7 activities not referred to in rows 1 to 6 above in the numerator
3,255.8 99.32%
3,241.1 98.87%
14.8
0.45%
7 activities not referred to in rows 1 to 6 above in the numerator
1,980.7 98.87%
1,928.6 96.27%
52.1
2.60%
of the applicable KPI
of the applicable KPI
Total amount and proportion of taxonomy-aligned economic
Total amount and proportion of taxonomy-aligned economic
8
3,278.1 100.00%
3,263.3 99.55%
14.9
0.45%
8
2,003.4 100.00%
1,951.3 97.40%
52.1
2.60%
activities in the numerator of the applicable KPI
activities in the numerator of the applicable KPI
Annual report 2024
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11. Nuclear and fossil gas related activities:
11. Nuclear and fossil gas related activities:
Taxonomy-eligible but not taxonomy-aligned economic activities - Capex- 2024
Taxonomy-eligible but not taxonomy-aligned economic activities - Turnover-2024
CCM+CCA
CCM
CCA
CCM+CCA
CCM
CCA
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount and proportion of taxonomy- eligible but not
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.26
taxonomy-aligned economic activity referred to in Section 4.26
1
0.1
0.00%
0.1
0.00%
0.0
0.00%
1
0.0
0.00%
0.0
0.00%
0.0
0.00%
of Annexes I and II to Delegated Regulation 2021/2139 in the
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.27
taxonomy-aligned economic activity referred to in Section 4.27
2
4.7
0.00%
4.7
0.00%
0.0
0.00%
2
0.0
0.00%
0.0
0.00%
0.0
0.00%
of Annexes I and II to Delegated Regulation 2021/2139 in the
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.28
taxonomy-aligned economic activity referred to in Section 4.28
3
26.1
0.02%
26.1
0.02%
0.0
0.00%
3
8.2
0.01%
8.2
0.01%
0.0
0.00%
of Annexes I and II to Delegated Regulation 2021/2139 in the
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.29
taxonomy-aligned economic activity referred to in Section 4.29
4
0.0
0.00%
0.0
0.00%
0.0
0.00%
4
111.5
0.09%
111.5
0.09%
0.0
0.00%
of Annexes I and II to Delegated Regulation 2021/2139 in the
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.30
taxonomy-aligned economic activity referred to in Section 4.30
5
1.1
0.00%
0.0
0.00%
1.1
0.00%
5
11.2
0.01%
11.2
0.01%
0.0
0.00%
of Annexes I and II to Delegated Regulation 2021/2139 in the
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not
Amount and proportion of taxonomy- eligible but not
taxonomy-aligned economic activity referred to in Section 4.31
taxonomy-aligned economic activity referred to in Section 4.31
6
0.6
0.00%
0.6
0.00%
0.0
0.00%
6
0.4
0.00%
0.4
0.00%
0.0
0.00%
of Annexes I and II to Delegated Regulation 2021/2139 in the
of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
denominator of the applicable KPI
Amount and proportion of other taxonomy-eligible but not
Amount and proportion of other taxonomy-eligible but not
7 taxonomy-aligned economic activities not referred to in rows 1
10,501.2
8.34%
9883.7
7.85%
617.4
0.49%
7 taxonomy-aligned economic activities not referred to in rows 1
10,823.2
8.60% 10,752.4
8.54%
70.8
0.06%
to 6 above in the denominator of the applicable KPI
to 6 above in the denominator of the applicable KPI
Total amount and proportion of taxonomy eligible but not
Total amount and proportion of taxonomy eligible but not
8 taxonomy- aligned economic activities in the denominator of
10,533.7
8.37%
9915.2
7.88%
618.5
0.49%
8 taxonomy- aligned economic activities in the denominator of
10,954.4
8.70% 10,883.6
8.65%
70.8
0.06%
the applicable KPI
the applicable KPI
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11. Nuclear and fossil gas related activities:
11. Nuclear and fossil gas related activities:
Taxonomy non-eligible economic activities - Capex- 2024
Taxonomy non-eligible economic activities - Capex- 2024
Amount
%
Amount
%
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
1 referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the
0.0
0.00 %
1 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0.0
0.00%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
2 referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the
0.0
0.00 %
2 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0.0
0.00%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
3 referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the
0.0
0.00 %
3 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0.0
0.00%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
4 referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the
0.0
0.00 %
4 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0.0
0.00%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
5 referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the
0.0
0.00 %
5 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0.0
0.00%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of taxonomy- eligible but not taxonomy-aligned economic activity
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
6 referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the
0.0
0.00 %
6 taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
0.0
0.00%
denominator of the applicable KPI
Regulation 2021/2139 in the denominator of the applicable KPI
Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic
Amount and proportion of other taxonomy-non-eligible economic activities not referred
7
112,080.1
89.03%
7
112,934.2
89.71%
activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
to in rows 1 to 6 above in the denominator of the applicable KPI
Total amount and proportion of taxonomy eligible but not taxonomy- aligned economic
Total amount and proportion of taxonomy-non-eligible economic activities in the
8
112,080.1
89.03%
8
112,934.2
89.71%
activities in the denominator of the applicable KPI
denominator of the applicable KPI
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SN 7.3 Employees
6. Employees by region
A,B
Number of employees
Region
2024
2023
Spain
34,940
35,266
Brazil
57,133
57,868
Chile
9,240
9,576
Poland
13,846
13,361
Argentina
8,100
8,365
Mexico
29,768
31,239
Portugal
5,316
5,303
UK
22,542
24,221
USA
11,341
12,579
Others
14,527
14,986
Total
206,753
212,764
A. At year end, information from People & Culture global platform for harmonized
people processes groupwide. Employee data is breakdown according to
geographical criteria and cannot be compared to the figures in the 'Economic and
Financial Report' chapter, which follow management criteria. Employees refers to
employees hired as described in chapter 3.1. Our employees.
B. See note 46.b) in the consolidated annual accounts.
7. Employees by gender
A
Number of employees (headcount)
Gender
2024
2023
Male
98,377
100,449
Female
108,319
112,315
Other
B
6
-
Not declared
51
-
Total employees
206,753
212,764
A. Employees at year end. At Santander we comply with local regulations (and in
turn to comply with the CSRD) recording Gender as defined in the employees
national identification (as required by each local administration) and is broken
down in female, male (both available in all countries), plus other and not
declared(these two only accepted in very few countries).
B. In 12 countries the regulation allows us to voluntarily report gender identity,
guaranteeing privacy and equal treatment. Among those employees who have
voluntarily reported it, 2.8% identify themselves as non-binary, trans or others.
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Contents
8. Employees by management group and gender
A
Senior executives
B
2024
2023
Not
Not
Men
Women
Others
declared
Total
Men
Women
Others
declared
Total
Europe
959
443
0
1
1,403
1,073
500
-
-
1,573
North America
198
72
0
0
270
202
82
-
-
284
South America
299
146
0
0
445
305
141
-
-
446
Group total
1,456
661
0
1
2,118
1,580
723
-
-
2,303
Other executives
C
2024
2023
Not
Not
Men
Women
Others
declared
Total
Men
Women
Others
declared
Total
Europe
8,850
5,096
1
6
13,953
10,704
7,629
-
-
18,333
North America
3,881
2,622
0
3
6,506
3,778
2,522
-
-
6,300
South America
3,982
2,996
0
1
6,979
3,878
2,708
-
-
6,586
Group total
16,713
10,714
1
10
27,438
18,360
12,859
-
-
31,219
Other employees
2024
2023
Not
Not
Men
Women
Others
declared
Total
Men
Women
Others
declared
Total
Europe
32,654
39,201
3
37
71,895
31,413
38,062
-
-
69,475
North America
15,047
19,571
2
3
34,623
16,387
21,111
-
-
37,498
South America
32,507
38,172
0
0
70,679
32,709
39,560
-
-
72,269
Group total
80,208
96,944
5
40
177,197
80,509
98,733
-
-
179,242
A. At year end.
B. Senior Executives includes employees with harmonized management levels: Senior Executive VP. Executive VP and VP.
C. Other Executives includes Directors, Mangers, Experts and Branch Managers.
9. Employees by age bracket
A
Number and % of total
2024
aged < 30
aged 30 - 50
age over 50
Europe
11,842
13.57%
54,262
62.19%
21,147
24.24%
North America
10,485
25.33%
25,239
60.97%
5,675
13.71%
South America
22,372
28.64%
49,183
62.97%
6,548
8.38%
Group total
44,699
21.62%
128,684
62.24%
33,370
16.14%
A. At year end. Age brackets are presented according to CSRD definitions. Average age of our workforce is 38 years old, as it was in 2023.
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10. Employees by employment contract
A
2024
Men
Women
Other
Not declared
Total
Number of employees
98,377
108,319
6
51
206,753
Number of permanent
employees
96,541
105,942
6
13
202,502
Number of temporary
employees
1,836
2,377
0
38
4,251
Number of full-time
employees
97,163
102,740
5
50
199,958
Number of part-time
employees
1,214
5,579
1
1
6,795
Number of non
guaranteed hours
employees
0
0
0
0
0
A. At year end. 98% of employees in Santander have a permanent employment contract and 97% have full-time contract, as in 2023. For additional definitions see 7.
Employees by gender.
11. Collective bargaining coverage and social dialogue
A
Collective Bargaining Coverage
Social dialogue
Coverage Rate
0-19%
Employees – EEA (European
Economic Area) (for
countries with >50 empl.
representing >10% total
empl)
Poland
Employees – Non-EEA
(estimate for regions with
>50 empl. representing
>10% total empl)
United States
Workplace representation
(EEA only)
(for countries with >50 empl.
representing >10% total
empl)
20-39%
Mexico
40-59%
60-79%
80-100%
Portugal and Spain
Argentina, Brazil, Chile and
United kingdom
Spain, Poland and Portugal
A. Percentage of employees covered by collective agreement, as defined by CSRD. The aggregate average is 74%, among main entities in our 16 relevant countries that
aggregately represent 98% of our global headcount, that aggregate average is similar to previous period.
12. Turnover by region
A,B
2024
2023
Total
Turnover ratio
C
Total
Turnover ratio
Europe
10,464
11.77%
8.87
10.07%
North America
9,905
23.38%
10,705
24.21%
South America
19,726
25.33%
20,900
26.41%
Group total
40,095
19.17%
40,478
19.14%
A. Employees who ended definitely their employment relation with Santander entities through 2024, it does not include temporary leave or transfer between Santander
companies. Information from People & Culture global platform used harmonized people processes groupwide.
B. The total number of terminated employees was 0.9% lower than in 2023, the turnover rate remained stable compared to the previous year, with variations of -1
percentage point in South America and North America and +2 points in Europe. 53.9% of those laid off are women, in line with the distribution of our workforce.
C. Turnover rate is calculated over average headcount of the period.
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13. Average remuneration by management group, gender, and age bracket
A
2024
Not
Women
Men
Other
B
declared
B
Total
C
Gender
41,822
65,625
-
-
53,131
Senior
executives
Other
executives
Other
employees
Total
Management group
524,748
129,847
36,834
-
53,131
<30
30-50
>50
Total
Age bracket
23,329
53,353
88,044
-
53,131
A. It includes gross annual salary and comparable supplements, pension schemes and variable remuneration. 99% of
Santander employees receive other salaries that supplement their salary.
B. The categories requested by CSRD, by gender and age groups have been used. Groups with less than 50 employees
(others, not declared) are not included because they are not statistically relevant and to avoid statistically erroneous
conclusions.
C.
The average pay of our constant workforce (i.e. employees who were with us at 2023 year end and remained at 2024
year end) grew 11.4% in 2024 in constant euros (this does not include Argentina due to exchange rate distortions
between the two periods). If we consider the current exchange rates (including Argentina) and the new hired
employees, the average remuneration has had a net increase of 3.1% in comparison with the average for our
workforce in 2023 (EUR 51,535).
14. Remuneration ratios
2024
Hourly GPG ratio (average)
36%
GPG ratio (median)
A
26%
EPG ratio
c. 0
Remuneration ratio
B
367.1
A. GPG Ratio (median) includes annual base salary and variable remuneration paid in
the year.
B. Ratio of the annual remuneration of the highest-paid individual for the
performance of executive duties (salary, pension contributions, variable
remuneration); divided over Median employee annual remunerations (excluding
the highest-paid). This figure is impacted by our business model, with a large
presence in three geographical regions (Europe, North and South America) and a
large network of branches (c.8,000), since more than half of our employees are
based in Mexico and South America (mainly in Brazil) where remuneration is
aligned to the local cost of living, much lower than that of other countries that are
the reference for establishing the remuneration of executive directors. In addition,
the use of the median overstates this effect versus the mean: with average data
the result of the ratio would be 239.7.
15. Average remuneration of senior management (with variable remuneration not linked to
long-term objectives)
Thousand euros
2024
2023
Men
Women
Total
Men
Women
Total
Executive directors
9,137
12,127
10,632
8,257
11,544
9,900
Non-executive directors
285
356
309
368
327
352
Senior management
A
3,898
1,380
3,538
4,112
1,645
3,583
A. Members of the senior management at the end of the year.
16. Average remuneration of senior management linked to long-term objectives (fair value)
Thousand euros
2024
2023
Men
Women
Total
Men
Women
Total
Executive directors
1,611
2,332
1,972
1,537
2,243
1,890
Senior management
A
553
170
498
563
189
483
A. Additionally, in 2023, one senior executive received EUR 200,000 of the Digital Transformation award from PagoNxt S.L.
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17. Senior management composition
Number
2024
2023
Men
Women
Total
Men
Women
Total
Executive directors
1
1
2
1
1
2
Non-executive directors
10
5
15
8
5
13
Senior management
12
2
14
11
3
14
A. Members of the senior management at the end of the year.
18. Training
2024
Total investment in training (euros)
63,730,131
Total hours of training
5,286,317
% employees trained
A
94.4
Total attendees
B
6,925,442
Hours of training per employee
C
25.3
A. Calculation based on year-end headcount.
B. Training courses completed by our employees during 2024 (2% higher vs 2023).
C. Calculation based on average headcount during the year. Women completed an average of 26.2 hours and men 24.3 hours.
19. Hours of training by gender and management group
A
2024
Men
Women
Others
Not declared
Total
Gender
2,413,371
2,872,035
111
800
5,286,317
Senior executive
Other executive
Other employees
Total
Management level
52,476
857,065
4,376,775
-
5,286,317
A. The aggregate number learning hours decreased 12.9% in comparison with the previous period, based on digitalization and optimization of training courses, plus the
evolution of our workforce.
20. Occupational health and safety
A,H
2024
2023
Men
Women
Total
Men
Women
Total
Number of fatal occupational accidents or
work-related illness
0
0
0
0
0
0
Work-related illness
B
1
2
3
3
12
15
Total number of accidents
C
317
633
950
128
271
399
Work-related accident rate (CSRD criterion,
equivalent to the frequency rate of Law
11/2018)
D
1.15
2.08
1.64
0.51
0.94
0.74
Total number of days of absence due to
accidents
E
12,617
24,094
36,711
-
-
-
Accident rate
F
0.03
0.06
0.05
0.02
0.04
0.03
Severity rate
G
0.05
0.08
0.06
0.03
0.06
0.04
A. As in the rest of this chapter, we only include information about our employees. In accident ratios, Santander Bank Polska s.a. is not included.
B. Reported globally since 2023, following local laws for occupational illnesses where they are regulated country-wide or for specific jobs, as soon as a medical examination
confirms the cause as occupational.
C. We report occupational injuries that can be documented in 2024, including accidents while commuting. We standardized criteria, processes and systems across our footprint
to calculate leave on medical grounds in every market. Banco Santander only considers occupational accidents and illnesses that, following expert review, are recognized as
work-related and reported to official bodies (e.g. in Brazil, through a comunicação de acidente de trabalho — CAT, or work-related accident notice — to the Instituto Nacional
do Seguro Social — INSS, National Social Security Institute). In Brazil, this indicator only considers absences due to occupational accident of 15 days or more. The variation
from 2023 stems mainly from having standardized types of absence and, especially, the impact of standardization in the UK, where employees report voluntarily if the cause
is occupational; in this country, though there is no specialized verification like in our other, we accounted for these absences as reported by the employees.
D. Number of occupational accidents with leave for every 1,000,000 theoretical working hours.
E. Including days missed due to occupational accident with leave according to the definition provided. Across the entire Group, we accounted for 100 days for occupational
illnesses and 0 days for occupational fatalities.
F. Ratio of hours missed due to an occupational accident divided by the total number of theoretical hours worked by employees in the year.
G. Days missed due to occupational accident with leave for every 1,000 theoretical working hours. Hours worked are theoretical. This includes accidents while commuting.
H. In addition, in all units our employees have recorded 16.4 million hours of absence due to health reasons (16.9 million hours in 2023).
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Contents
SN 7.4 Customers
21. Group customers
A
2024
2023
var.
Europe
46,820,826
46,293,433
1%
Spain
15,307,491
15,022,877
2%
United Kingdom
22,541,474
22,480,761
—%
Portugal
2,988,779
2,908,192
3%
Poland
5,978,671
5,877,433
2%
Others Europe
B
4,411
4,170
6%
South America
80,404,762
73,028,442
10%
Brazil
C
69,454,776
62,804,350
11%
Chile
4,311,488
4,052,314
6%
Argentina
5,117,205
4,771,370
7%
Others South America
D
1,521,293
1,400,408
9%
North America
25,762,219
25,027,302
3%
United States
F
4,473,683
4,510,043
(1)%
México
21,288,536
20,517,259
4%
Digital Consumer Bank
19,549,525
20,192,858
(3)%
Santander Consumer Bank
F
16,953,371
17,665,556
(4)%
Santander Digital
2,596,154
2,527,302
3%
Total
172,537,332
164,542,034
5%
A. Figures corresponding to total customers.
B. Includes the rest of Private Banking and other CIB Europe.
C. From 2024 onwards, Brazil includes number of customers instead of decision units.
D. Includes Uruguay, Peru and Colombia.
E. Includes BPI Miami.
F. SCF includes customers in all European countries, including the UK.
22. Dialogue by channel
2024
2023
Var .2024/2023 %.
Branches
Number of branches
8,011
8,518
(6.0)%
Digital banking
A
Digital customers
B (millions)
59.3
54.2
9.4 %
A. Santander Consumer Finance not included.
B. Counts once for customers of both Internet and mobile banking.
23. NPS ranking by country
2024
2023
Argentina
2
1
Brazil
5
4
Chile
1
1
Uruguay
1
2
Spain
3
3
Poland
3
3
Portugal
3
2
UK
4
5
Mexico
3
2
USA
6
9
NPS to measure customer satisfaction, audited by Stiga/Deloitte.
Santander position vs competitors (Official Peer Group by countries). Key peers by country: Argentina:
Galicia, BBVA, ICBC, HSBC, Banco Macro, Banco de la Nación; Brazil: Itaú, CEF, Bradesco, Banco do Brasil,
Nubank; Chile: BCI, Banco de Chile, Itaú, Scotiabank, Banco Estado; Uruguay: Brou, Itaú, BBVA, Scotiabank;
Spain: Bankinter, BBVA, Caixabank, Sabadell, Unicaja; Poland: ING, Millenium, MBank, Bank Polski, Bank
Pekao, BNP Paribas; Portugal: BPI, Millenium BCP, CGD, Novo Banco, Montepio; UK: Nationwide, Barclays,
Halifax, NatWest Gr., Lloyds, HSBC, TSB; Mexico: BBVA, Scotiabank, Banorte, HSBC, Banamex, Banco
Azteca; US: Chase, Capital One, Bank of America, PNC, Wells Fargo, KeyBank, Citizens, Citigroup, TD Bank,
M&T Bank, Truist.
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24. Total complaints
A
2024
2023
Spain
B
156,460
88,326
Portugal
3,588
4,789
United Kingdom
C
30,778
25,309
Poland
4,209
6,272
Brazil
226,976
207,211
Mexico
71,082
68,565
Chile
D
10,458
8,441
Argentina
6,351
5,525
US
6,256
5,712
SCF
E
165,478
33,074
A. Compliance metrics based on group-wide criteria, homogeneous for all geographies. Include
complaints received through formal channels such as the official complaints service (if exists), public or
private consumer organisations and agencies, senior management, customer ombudsmen (if exists),
regulator channels.
B. Spain increases due to claims for mortgage origination fees. It includes Open bank S.A.
C. UK increases due to a change in the perimeter in 2024. Excluding the effect of the change of perimeter, formal claims are reduced by 20%.
D. Impacted by the inflow of fraud claims in the first half of the year, until the country's fraud law was amended, with a significant reduction in the second half of the year.
E. SCF impacted by high volume of discretionary commission claims on UK dealers.
SN 7.5 Financial inclusion
25. People financially included
A
million people (Accumulated since 2023)
2024
2023
Access
1.9
1.0
Finance
2.4
0.8
Total
4.3
1.8
A. A new target for people financially included was launched in 2023, which considers access and finance
initiatives (the previous target also included financial education). The figures reflect only the new people
financially included since 2023 (unique people).
26. Microfinance
million euros / people
2024
2023
Total credit disbursed
A
1,270
1,172
Total micro-entrepreneurs supported
1.3
1.2
A. The increase in credit disbursed is mainly due to the bank's objective to expand its microfinance
programmes in Latin America.
SN 7.6 Community support
27. Community Support
million euros
2024
2023
Support for higher education,
employability, and entrepreneurship
103.8
105.1
Other local initiatives
62.5
68.9
Total
166.4
174.0
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28. Outputs and outcomes
28.1 People helped through Santander Universities
programmes
people helped
2024
2023
Higher education
Employability
A
Entrepreneurship
B
Total
A
34,062
2,078,051
52,570
2,164,683
28,849
463,045
7,036
498,930
A. The significant increase in the number of people helped in terms of employability owes to the global launch of short, direct access courses with unlimited places and a
completion certificate.
B. In 2024, we began to disclose entrepreneur support programmes in the US through Santander Universities.
28.2 People helped through other local initiatives
A,B
2024
2023
Childhood education
357,549
600,649
Social welfare
702,706
968,301
Art and culture
672,539
69,772
Others
1,146,566
530,764
Total
2,879,360
2,169,486
A. The nature and depth of initiatives is very diverse, both between them and comparing to initiatives of
Santander Universities.
B. The increase is due to a better identification of people helped in countries, as well as the inclusion of initiatives.
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SN 7.7 Tax contribution
We pay taxes in the jurisdictions where we earn a profit. Thus, the
profits obtained, and the taxes accrued and paid, correspond to the
countries where we operate.
For every EUR 100 in total income, the Group pays EUR 36 in taxes,
including EUR 18 in taxes paid directly by Santander and EUR 18 in
taxes collected from third parties.
The taxes Santander pays directly (see table below) include non
recoverable value added tax (VAT), employers' social security
contributions, charges levied on banks and financial transactions in
Spain, the UK, Poland, Portugal, Brazil and Argentina, and other
taxes.
29. Total taxes paid
EUR million
2024
Jurisdiction
Corporate
income tax
A
Other
taxes paid
Total
own taxes paid
B
Third-party
C
taxes
Total
contribution
Spain
533
1,863
2,396
2,013
4,409
UK
348
510
858
614
1,472
Portugal
590
175
765
336
1,101
Poland
503
310
813
295
1,108
Germany
238
92
330
96
426
Rest of Europe
638
296
934
184
1,118
Total Europe
2,850
3,246
6,096
3,538
9,634
Brazil
1,213
543
1,756
2,559
4,315
Mexico
875
524
1,399
1,123
2,522
Chile
326
103
429
332
761
Argentina
258
428
686
2,858
3,544
Uruguay
53
76
129
149
278
Rest of Latin America
54
25
79
21
100
Total Latin America
2,779
1,699
4,478
7,042
11,520
United States
241
113
354
935
1,289
Other
10
4
14
11
25
TOTAL
5,880
5,062
10,942
11,526
22,468
A. The Group's income tax for the year 2023 amounted to EUR 5,214 mn
B. Total own taxes paid for all these concepts amounted to EUR 10,942 mn, broken down as EUR 5,880 mn in corporate income tax, EUR 1,296 mn in non-recoverable VAT and
other sales taxes, EUR 1,851 mn in employer-paid payroll taxes, EUR 90 mn in property taxes, EUR 334 mn in Spanish temporary bank levy, EUR 342 mn in bank levies and EUR
1,149 mn in other taxes.
C. Total third-party taxes amounted to EUR 11,526 mn, broken down as EUR 3,167 mn in salary withholdings and employees' social security contributions, EUR 1,230 mn in
recoverable VAT, EUR 2,366 mn in tax deducted at source on capital, EUR 385 mn in non-resident taxes, EUR 404 mn in property taxes, EUR 262 mn in stamp taxes, EUR 2,188
mn in taxes related to the financial activity and EUR 1,524 mn in other taxes.
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SN 8. Additional metrics to comply
with Spanish Act 11/2018
1. Average employees, by contract type and gender. As required by Ley 11/2018
A
2024
Women
Men
Other
Not declared
Total
Average employees
109,762
99,257
6
86
209,112
Average permanent
employees
107,404
97,487
6
64
204,960
Average temporary
employees
2,358
1,771
0
22
4,151
Average full-time
employees
103,837
98,023
6
83
201,949
Average part-time
employees
5,925
1,234
0
3
7,163
A. Average headcount throughout the year. We reclassified genders according to CSRD definitions. The breakdown
remains stable, with an average 52% women employees against 53% in 2023. The breakdown by contract type
also remains similar: The average headcount with a permanent contract is 98%, while the average headcount with
a full-time contract is 96.5%, the same figures as in 2023.
2. Average employees, by contract type and age bracket. As required
by Ley 11/2018
A
2024
Under 30
30-50
Over 50
Total
Average employees
46,556
129,728
32,828
209,112
Average permanent
employees
44,748
127,682
32,531
204,960
Average temporary
employees
1,808
2,046
297
4,151
Average full-time
employees
45,412
125,537
30,999
201,949
Average part-time
employees
1,143
4,191
1,829
7,163
A. Average headcount throughout the year. We amended the age groups according
to CSRD definitions and the breakdown remains flat in comparison with 2023.
3. Average employees, by contract type and management group.
A
2024
Senior
Other
Other
executive
executive
employees
Total
Average employees
2,273
30,748
176,091
209,112
Average permanent
employees
2,253
30,291
172,416
204,960
Average temporary
employees
20
457
3,674
4,151
Average full-time
employees
2,263
30,234
169,452
201,949
Average part-time
employees
10
514
6,639
7,163
A. Average headcount throughout the year. The breakdown by job band remains
unchanged. The breakdown of the average number of employees by band is the
same as in 2023: 1% senior director; 15% other director; and 84% the rest of the
workforce.
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4. Dismissals, by gender, management group and age Bracket.
A,B
2024
Women
Men
Other
Not declared
Total
Gender
C
7,755
6,599
2
29
14,385
Senior
Other
Other
executives
executives
employees
Total
Management group
D
114
1,229
13,042
14,385
<30
30-50
>50
Total
Age bracket
4,495
7,866
2,024
14,385
A. Dismissal: Termination of permanent employment determined unilaterally by the company. This includes voluntary
terminations as part of reorganizations or redundancy programmes, plus other termination caused by individual
performance or disciplinary actions.
B. It does not include temporary absences or transfers to other Group companies.
C. We used CSRD classification by gender and age group. The dismissal rate is stable (6.9% v 6.7% in 2023). The breakdown
by gender shifted, as 53.9% of dismissed employees were women (in line with the workforce breakdown), down 3 pp in
comparison with 2023 (57.4%).
D. The breakdown by job band is similar to 2023.
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SN 9. Alternative performance measures (APMs)
The following are additional alternative performance measures
(APMs) to those listed in section 8 of the chapter 'Economic and
Financial Review'. The metrics we use in this report have not been
subject to further third-party verification beyond the scope of
limited assurance.
Data related to tax contribution
The profits obtained, and the taxes accrued and paid, correspond to
the countries where we operate.
Taxes paid by the Group
The taxes Santander pays directly are included in the cash flow statement
and mainly stem from the corporate income tax paid. They also include
non-recoverable value added tax (VAT), employers' social security
contributions, charges levied on banks and financial transactions in the
geographies were we operate, and other taxes.
See data in the section SN 7.7 Tax contribution of this chapter.
It reflects how the Bank complies
with its commitment to tax
transparency in the jurisdictions
where it operates.
Third-party taxes
These are those generated by the development of our economic activity.
This is the sum of salary withholdings and employees' social security
contributions, recoverable VAT, tax deduced at source on capital, non
resident taxes, property taxes, stamp taxes, taxes related to the financial
activity, and others.
See data in the section SN 7.7 Tax contribution of this chapter.
Total tax contribution
The Group's total tax contribution includes the taxes paid by the Group as a
direct cost and the taxes collected from third parties in the course of our
economic activity.
See data in the section SN 7.7 Tax contribution of this chapter.
Data related to sustainable finance
Green finance raised and
facilitated
Financing volume of
renewable energy projects
Financing volume of
renewable electric vehicles
Nominal amount of project finance, financial advisory, project bonds, green
bonds (DCM), export finance (ECA), mergers and acquisitions (M&A), and
equity capital markets (ECM) transactions ranked by the ESG Classification
Meeting and reported in the League Tables of Infralogic, Bloomberg,
Dealogic, TXF and Mergermarket since the beginning of the year.
See data in section 2. Our climate transition plan and SN 7.1 Green
transition (Table 1. Green finance) in this chapter.
Nominal amount of renewable energy projects (greenfield and brownfield)
financed since the beginning of the year and reported externally as reported
in Infralogic's League Tables for project financing.
See data in section Sustainability at Santander in 2024 of this chapter.
Financing volume of vehicles powered exclusively by a rechargeable electric
battery (no petrol engine).
See data in section Sustainability at Santander in 2024 of this chapter.
It reflects Santander's ambition and
contribution to helping our
customers, and society as a whole,
in the transition to a low-carbon
economy.
Credit disbursed to
microentrepreneurs (EUR)
Total amount of credit disbursed during the year to low-income
entrepreneurs with low access to banking services, or with difficulties in
accessing credit, with the objective of creating and/or growing their
businesses. Data includes information on microfinance programmes in
Brazil, Colombia, Mexico and Peru.
See data in section Sustainability at Santander in 2024 and SN 7.5 Financial
inclusion (Table 27. Microfinance) of this chapter.
It reflects Santander's ambition and
contribution to help address
financial inclusion challenges in the
markets where we operate.
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Data related to financed emissions
Financed emissions
from corporates and
projects
For the financed emissions associated with business loans, equities, investments, bonds, and
projects we calculate the emissions in accordance with the methodology established by
management that is based on the Partnership for Carbon Accounting Financials (PCAF) standard
for financed emissions.
The financed emissions for a corporate client portfolio are calculated using the following
equation:
Financed emissions = Attribution Factor x Emissions
The following equations are used to determine the attribution factor at company level:
Attribution Factor = Outstanding amount / Total Enterprise Value
In the case of corporate business loans (CIB alignment targets), Banco Santander calculates the
Total Value of the Company (used to obtain the emissions attribution factor) by adding the total
equity and debt of the company to avoid the high volatility in market capitalization.
In the case of Project Finance, the financed emissions for a Project are calculated using the
production and an emission factor.
We use as data sources (non-exhaustive): annual/Sustainability Reports of our customers, Asset
Impact, Capital IQ, Carbon Disclosure Project, S&P Trucost, Transition Pathway Initiative, Wood
Mackenzie, IBA, JATO, and PCAF database.
See data in section Our transition plan in this chapter.
These metrics
reflect Santander’s
ambition and
contribution to
addressing the
challenges of
emissions
measurement,
supporting our
customers in their
objectives and
aligning portfolios to
progress on our
ambition towards
net zero emissions
by 2050.
Auto – lending
For the auto lending portfolio for Santander Consumer Finance Europe the financed emissions
are those associated with the passenger cars financed and leased (passenger cars being the
most material vehicle type in the Auto portfolio). These are calculated following the PCAF
methodology:
Financed emissions = ∑ Attribution Factor x vehicle emissions
To determine the attribution factor of each of the loans, the following formula is used:
Attribution factor = Outstanding amount / vehicle value at origination
The vehicle emissions are calculated using the emissions of each specific vehicle, where
available, multiplied by the annual distance estimated for each vehicle.
See data in section Our transition plan in this chapter.
Mortgages and
Commercial Real
Estate
Mortgages and commercial real estate portfolio emissions lending on residential mortgages
includes Scope 1 and 2 emissions based on actual (where available) and modelled EPC's. We
define this asset class as on balance sheet loans for specific consumer purposes – namely the
purchase and refinance of residential property.
The following calculation approach was used to arrive at the financed emissions for each of the
properties in the portfolio:
Financed emissions = building emissions x LTV
The attribution factor is the outstanding amount of the loan as per the reporting year for each
mortgage, divided by the total property value at origination for each building.
See data in section Our transition plan in this chapter.
Agriculture
Agriculture portfolio emissions for Santander Brazil from lending to farmers associated with
primary production activities in Brazil (agriculture and livestock activities), financed through
Retail mechanisms. Assessment includes Scope 1 and 2 emissions.
In this sector, Santander’s financed emissions estimation is based on GHG Protocol guidance and
PCAF methodology, with adaptations to accommodate data availability in retail agriculture
portfolio.
Land management emissions:
The general equations used to calculate financed emissions of an agricultural activity are as
follows:
Financed emissions = ∑ quantity produced or area of production or number of animals x Emission
factor
Emission factor sources include the GHG Protocol Brazil Tool for the Agricultural Sector, the
Reference Report from Brazil's IV National Inventory, among other specialized literature.
Land Use Change (LUC) emissions:
The total LUC emissions for the portfolio are calculated for each property: collecting shapefiles
of farms associated with the operations financed in the retail portfolio, computing annual tree
cover loss areas (in hectares), for the last 20 years, for each property, and evaluate
corresponding carbon stock loss using emission factors, applying the Linear Discounting
Methodology, and calculating the attribution factor for emissions related to Santander.
Sources (non-exhaustive): properties’ Rural Environmental Registry number, MapBiomas
Collection 8, Brazil´s IV National Inventory Carbon Map.x
See data in section Our transition plan in this chapter.
Sovereign bonds
For the sovereign bonds portfolio we calculate the financed emissions following the PCAF
standard recommendations, as follows:
Attributed emissions = Exposure to Sovereign Bond (USD) / PPP-adjusted GDP (international
USD) x Sovereign Emissions (tCO2e)
See data in section Our transition plan in this chapter.
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Data related to responsible investment
Socially responsible
investment assets under
management (SRI AUM)
Value corresponding to total volume of assets under management
registered as article 8 - promoting ESG characteristics - and 9 - with explicit
sustainability objectives - of the Sustainable Finance Disclosure Regulation
(SFDR, EU Reg. 2019/2088) except for illiquid investments in Private
Banking which are reported in terms of committed capital. It includes: i)
assets managed or advised by Santander Asset Management (SAM) and
other Group asset managers in the EU and, using equivalent criteria, in
countries where SFDR does not apply; and ii) third party funds and assets
under advise deemed sustainable investments according to either SFDR
(Article 2.17) or internal criteria as per SFICS (Sustainable Finance &
Investment Classification System).
See data in section 3.2.2 Responsible investment and social finance of this
chapter.
It reflects Santander's ambition and
contribution to promote
responsible investment. It also
allows our managers and bankers
to have a more complete vision of
the assets in which to invest and
identify competitive advantages
and mitigate risks.
Data related to employees training
Total investment in
Sum of all expenditures accrued in Learning Activities, during the period,
It reflects the bank's commitment
training
including: Direct costs from trainers who are employed as Employees (i.e.
to training and lifelong learning for
Total Compensation prorated for the dedication to training activities), but
its employees.
not including Salaries of Learning and Development Employees, External
suppliers / vendors expenses paid and budgeted by the Learning
department (for any type of service: training design, training sessions
delivery, communications, consulting), logistic and facilities costs (training
rooms, catering, accommodation and travel, materials), Labour cost of
employees within the Learning Department (actual amounts accrued during
the period, including gross compensation - all items-, plus company taxes
contributions, ), IT costs and licenses plus their applicable services;
expenditures in Marketing and Communications paid and budgeted by the
Learning Department.; Other expenses
See data in section SN 7.3 Employees (table 19. Training) of this chapter.
Data related to community support
Support for education,
employment and
entrepreneurship
Support for other local
initiatives
Total community support
Total amount invested to support education, employment and
entrepreneurship.
See data in section 3.2.4 Community support and SN 7.6 Community
support (table 27. Community support) of this chapter.
Total amount invested through local initiatives to promote childhood
education, social welfare (especially among vulnerable groups), art and
culture.
See data in section 3.2.4 Community support and SN 7.6 Community
support (table 27. Community support) of this chapter.
Sum of investment in education, employability and entrepreneurship, plus
investment in other community support programmes.
See data in section 3.2.4 Community support and SN 7.6 Community
support (table 27. Community support)of this chapter.
It reflects Santander's ambition and
contribution to promoting (beyond
our business operations) the
progress and inclusive and
sustainable growth of the
communities where we are
present.
Data related to suppliers
Payments to suppliers
Total amount of payments made to suppliers outside the Group.
See data in section 4.4 Our suppliers of this chapter.
% Turnover of locally
contracted suppliers (M
EUR)
% of the Group's total turnover made to suppliers based in the same
geography where the services are purchased.
Turnover from locally contracted suppliers is divided by total turnover to
suppliers.
See data in section 4.4 Our suppliers of this chapter.
It reflects the Group's economic
contribution through the purchase
of products and services in its
operations.
It also reflects our commitment to
the local economies of the
geographies in which we operate.
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
SN 10. Non-financial information Act 11/2018 content index
Table of equivalences with reporting requirements under Spain's Act 11/2018
Correspondence
with CSRD/other
Non-financial information to be disclosed
Chapter/section of the annual report
regulations
Brief description of the Group’s business model (including
Business model and strategy (p. 7).
SBM-1
its business environment, organization and structure,
Economic and financial review (p. 384).
SBM-2
markets, objectives and strategies, plus the main factors and
1. Sustainability at Santander (p. 22) [1.3
GOV-1
trends that can affect its future performance).
Materiality assessment].
MDR-T
SN 3. Materiality assessment - Detailed
E1-4
methodology (p. 121).
S1-5
S3-5
S4-5
0.
General
Information
A description of the Group's policies that includes due
diligence procedures for identifying, assessing, preventing
and mitigating risks and significant impacts, and for verifying
and controlling, including the measures in which they have
been adopted):
1. Sustainability at Santander (p. 22) [1.4
GOV-4
Sustainability governance] [1.4.2 Human
MDR-P
rights due diligence].
E1-2
SN 2 Sustainability governance (p. 117)
S1-1
[Cross-cutting regulations to embed ESG
S3-1
standards in our business model].
S4-1
2. Our climate transition plan (p. 32) [2.3
G1-1
Embedding ESG in risk management].
3. Supporting employees, communities and
customers (p. 75) [3.2.3 Environmental,
social and climate change management].
The results of these policies, including key indicators of
2. Our climate transition plan (p. 32).
MDR-M
relevant non-financial results that allow the monitoring and
3. Supporting employees, communities and
E1
evaluation of progress and that favour the comparability
customers (p. 75).
S1
between companies and sectors, in accordance with national,
4. Business conduct (p. 100).
S3
European or international frameworks of reference used for
S4
each matter.
SN 7. Our progress in figures (p. 134).
G1
The main risks related to these matters associated with the
1. Sustainability at Santander (p. 22) [1.3
GOV-5
Group's activities (business relationships, products or
Materiality assessment].
SBM-3
services) that may have a negative effect in these areas, and
SN 3. Materiality assessment - detailed
IRO-1
how the Group manages these risks, explaining the
methodology (p. 121) [Information on
E1
procedures used to detect and assess them in accordance
impacts, risks and opportunities].
S1
with national, European or international frameworks of
2. Our climate transition plan (p. 32).
S3
reference for each matter. It must include information about
S4
3. Supporting employees, communities and
the impacts that have been detected, offering a breakdown,
G1
customers (p. 75).
in particular of the main risks in the short, medium and long
4. Business conduct (p. 100).
term.
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Correspondence
with CSRD/other
Non-financial information to be disclosed
Chapter/section of the annual report
regulations
Detailed information on the current and foreseeable effects
of the activities of the company in the environment and,
where appropriate, health and safety, environmental
evaluation or certification procedures; the resources
dedicated to the prevention of environmental risks; the
application of the principle of caution, the amount of
provisions and guarantees for environmental risks.
Contamination:
Measures to prevent, reduce or repair CO2 emissions that
seriously affect the environment, taking into account any
form of air pollution, including noise and light pollution.
2. Our climate transition plan (p. 32)
[2.4.5 Our environmental footprint].
MDR-A
E1-3
E1-7
Circular economy and waste prevention and management:
Waste prevention measures, waste recycling measures,
waste reuse measures; other forms of waste recovery and
reuse; actions against food waste.
2. Our climate transition plan (p. 32)
[2.4.5 Our environmental footprint].
E5 IRO-1
Sustainable use of resources:
1.
Environmental
Information
Use and supply of water according to local limitations
Consumption of raw materials and measures taken to
improve the efficiency of its use.
2. Our climate transition plan (p. 32)
[2.4.5 Our environmental footprint].
SN 7.1 Green transition (p. 135) [Table 2.
Environmental footprint]
2. Our climate transition plan (p. 32)
[2.4.5 Our environmental footprint].
SN 7.1 Green transition (p. 135) [Table 2.
Environmental footprint]
E3 IRO 1
E5 IRO-1
Energy: direct and indirect consumption, measures taken to
improve energy efficiency, use of renewable energies
2. Our climate transition plan (p. 32)
[2.4.5 Our environmental footprint].
SN 7.1 Green transition (p. 135) [Table 2.
Environmental footprint]
MDR-A
MDR-M
E1-3
E1-5
Climate change:
Important elements of greenhouse gas emissions generated
as a business activity (including goods and services produced)
2. Our climate transition plan (p. 32)
[2.4.5 Our environmental footprint].
SN 7.1 Green transition (p. 135) [Table 2.
Environmental footprint].
MDR-M
E1-6
Measures taken to adapt to the consequences of climate
change
2. Our climate transition plan (p. 32)
MDR-A
E1 SBM-3
E1-1
E1-3
Reduction targets voluntarily established in the medium and
long term to reduce greenhouse gas emissions and means
implemented for this purpose.
2. Our climate transition plan (p. 32)
MDR-T
E1-4
Protection of biodiversity:
Measures taken to preserve or restore biodiversity
Impacts caused by the activities or operations of protected
areas
2. Our climate transition plan (p. 32)
[2.3.5 Our approach to nature and
biodiversity].
E4 IRO-1
2. Our climate transition plan (p. 32);
At the end of the 2023 financial year, no
significant account is presented in the
Consolidated Annual Accounts of the Group
that should be included in this chapter
regarding environmental provisions or
guarantees.
SBM-3
IRO-1
MDR-A
MDR-M
E1 SBM-3
E1 IRO-1
E1-3
E1-6
E1-7
E1-9
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Non-financial information to be disclosed
Chapter/section of the annual report
Correspondence
with CSRD/other
regulations
Employment:
Total number and distribution of employees by gender, age,
country and professional classification
SN 7.3 Employees (p. 191).
MDR-M
S1-6
S1-9
Total number and distribution of contracts modes and annual
average of undefined contracts, temporary contracts, and
part-time contracts by: sex, age and professional
classification.
SN 7.3 Employees (p. 191).
MDR-M
S1-6
S1-9
Number of dismissals by: gender, age and professional
classification.
SN 7.3 Employees (p. 191).
MDR-M
S1-6
Average remuneration and its progression broken down by
gender, age and professional classification
SN 7.3 Employees (p. 191).
MDR-M
S1-16
Salary gap and remuneration of equal or average jobs in
society
3. Supporting employees, communities and
customers (p.75) [3.1.3 Inclusive culture].
MDR-M
S1-16
Average remuneration of directors and executives (including
variable remuneration, allowances, compensation, payment
to long-term savings forecast systems and any other
payment broken down by gender)
SN 7.3 Employees (p. 191).
GOV-3
MDR-M
S1-16
Implementation of work disconnection policies
3. Supporting employees, communities and
customers (p.75) [3.1.2 Working
conditions].
MDR-P
S1-1
Employees with disabilities
3. Supporting employees, communities and
customers (p.75) [3.1.3 Inclusive culture].
MDR-M
S1-12
Organization of work:
Organization of work time
3. Supporting employees, communities and
customers (p.75) [3.1.2 Working
conditions].
MDR-P
MDR-A
S1-1
S1-4
Number of absent hours
SN 7.3 Employees (p. 191).
MDR-M
S1-14
2.
Social
Measures designed to facilitate work-life balance and
encourage a jointly responsible use of said measures by
parents
3. Supporting employees, communities and
customers (p.75) [3.1.2 Working
conditions].
MDR-A
S1-4
S1-15
Health and safety:
Conditions of health and safety in the workplace
3. Supporting employees, communities and
customers (p.75) [3.1.2 Working
conditions].
MDR-A
S1-14
Occupational accidents, in particular their frequency and
severity, as well as occupational illnesses. Broken down by
gender.
SN 7.3 Employees (p. 191).
MDR-M
S1-14
Social relations:
Organization of social dialogue (including procedures to
inform and consult staff and negotiate with them)
3. Supporting employees, communities and
customers (p.75) [3.1.2 Working
conditions].
MDR-A
S1-2
S1-8
Percentage of employees covered by collective bargaining
agreements by country
Balance of the collective bargaining agreements (particularly
in the field of health and safety in the workplace)
Mechanisms and procedures that employers have for
encouraging the involvement of workers in management of
the company, in terms of information, consultation and
participation
Training:
SN 7. Our progress in figures (p. 134).
3. Supporting employees, communities and
customers (p.75) [3.1.2 Working
conditions].
SN 7.3 Employees (p. 191).
3. Supporting employees, communities and
customers (p.75) [3.1.4 Employee feedback
and experience].
4. Business conduct (p. 100) [4.3 Ethical
channels].
MDR-M
S1-8
MDR-M
S1-8
S1-14
MDR-A
S1-2
S1-8
The policies implemented in the field of training
3. Supporting employees, communities and
customers (p.75) [3.1.1 Talent and skills
development]
MDR-P
S1-1
Total number of hours of training by professional categories.
SN 7.3 Employees (p. 191).
MDR-M
S1-13
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Contents
Business model
and strategy
Non-financial information to be disclosed
Accessibility:
Sustainability
statement
Corporate
governance
Economic and
financial review
Chapter/section of the annual report
Risk management
and compliance
Correspondence
with CSRD/other
regulations
Universal accessibility of people
3. Supporting employees, communities and
customers (p.75) [3,1.3 Inclusive culture]
[3.2.4 Community support] [3.3.1 Conduct
with customers].
MDR-A
S1-4
S1-12
Equality:
2.
Measures taken to promote equal treatment and
Social
opportunities between women and men, Equality plans
(Chapter III of Organic Law 3/2007, of 22 March, for the
effective equality of women and men), measures taken to
promote employment, protocols against sexual and gender-
based harassment, Policy against all types of discrimination
and, where appropriate, integration of protocols against
sexual and gender-based harassment and protocols against
all types of discrimination and, where appropriate,
management of diversity
3. Supporting employees, communities and
customers (p.75) [3,1.3 Inclusive culture].
[3.2.4 Community support].
MDR-P
MDR-A
S1-1
S1-4
S1-12
Application of due diligence procedures in the field of Human
Rights
1. Sustainability at Santander (p.22) [1.4.2
Human rights due diligence].
GOV-4
Prevention of the risks of Human Rights violations and, where
appropriate, measures to mitigate, manage and repair any
possible abuses committed
3. Supporting employees, communities and
customers (p.75).
4. Business conduct (p. 100).
MDR-A
S1-4
S3-4
S4-4
Complaints about cases of human rights violations
4. Business conduct (p. 100) [4.3 Ethical
channels].
MDR-M
S1-17
S3-4
S4-4
3.
Promotion and compliance with the provisions of the
Human Rights
fundamental conventions of the International Labour
Organization regarding respect for freedom of association
and the right to collective bargaining.
3. Supporting employees, communities and
customers (p.75) [3.1.2 Working
conditions].
NS 7.3 Employees (p.191) [Table 12
Collective bargaining coverage and social
dialogue].
MDR-P
S1-1
Elimination of discrimination in respect of employment and
occupation; elimination of forced or compulsory labour; and
the effective abolition of child labour.
3. Supporting employees, communities and
customers (p.75) [3.1.2 Working conditions]
[Environmental, social and climate change
management].
4. Business conduct (p. 100) [4.2 Ethical
conduct] [4.3 Ethical channels]
MDR-P
S1-1
Measures taken to prevent corruption and bribery
4.
Measures to combat money laundering
Fight against
corruption
4. Business conduct (p. 100) [Financial crime
compliance (FCC)].
Risk management and compliance chapter:
6.2 Compliance risk management section (p.
543).
4. Business conduct (p. 100) [Financial crime
compliance (FCC)].
Risk management and compliance chapter:
6.2 Compliance risk management section (p.
543).
MDR-A
G1-3
MDR-A
G1-3
Contributions to non-profit foundations and entities
3. Supporting employees, communities and
customers (p.75) [3.2.4 Community
support].
MDR-A
S3-4
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Correspondence
with CSRD/other
Non-financial information to be disclosed
Chapter/section of the annual report
regulations
Commitments of the company to sustainable development:
The impact of the company’s activity on employment and
local development
Sustainability at Santander in 2024.
3. Supporting employees, communities and
customers (p.75) [3.2.1 Supporting the
economic and social development of our
communities] [3.2.3 Environmental, social
and climate change management] [3.2.4
Community support] [3.3.2 Financial
inclusion and financial health].
MDR-A
MDR-T
MDR-M
S3-4
S3-5
The impact of the company’s activity on local towns and
villages and in the country.
3. Supporting employees, communities and
customers (p.75) [3.2.4 Community
support] [3.3.2 Financial inclusion and
financial health].
MDR-A
MDR-T
MDR-M
S3-4
S3-5
Relations maintained with the representatives of local
communities and the modalities of dialogue with them.
1.Sustainability at Santander (p.22) [1.2
Stakeholder engagement].
MDR-A
S3-2
Association or sponsorship actions
Santander participates in the sectoral
associations representing financial activity
in the countries in which it operates, such as
the AEB (Spanish Banking Association) in the
case of Spain.
MDR-A
S3-4
Outsourcing and suppliers:
Inclusion of social, gender equality and environmental issues
in the procurement policy
4. Business conduct (p. 100) [4.4 Our
suppliers].
MDR-P
G1-2
5.
Consideration in relations with suppliers and subcontractors
of their responsibility
4. Business conduct (p. 100) [4.4 Our
suppliers].
MDR-A
G1-2
Information on
the company
Supervision and audit systems and resolution thereof
4. Business conduct (p. 100) [4.4 Our
suppliers].
MDR-M
G1-2
Consumers:
Measures for the health and safety of consumers
3. Supporting employees, communities and
customers (p.75).
Risk, compliance and conduct management
chapter: 7.2 Compliance and conduct risk
management section (p. 505).
MDR-A
S4-4
Systems for complaints received and resolution thereof
3. Supporting employees, communities and
customers (p.75).
Risk, compliance and conduct management
chapter: 7.2 Compliance and conduct risk
management section (p. 505).
MDR-M
S4-4
Tax information:
The profits obtained country by country
Auditor's report and 2024 annual
consolidate accounts (p. 560) (Annex VI
Annual banking report) and Auditor's Report
and 2023 annual consolidate accounts
-
(Annex VI Annual banking report).
Taxes on benefits paid
SN 7.7 Tax contribution (p. 199)
Public grants received
Grupo Santander did not receive significant
public subsidies in 2023 and 2024. Appendix
More details see VI Annual banking report,
section e)Public subsidies (p. 864).
-
6.
Other relevant
EU Taxonomy
Information related to article 8 of EU
Taxonomy:
3. Supporting employees, communities and
customers (p. 75) [3.2.2 Responsible
investment and social finances].
SN 5. EU Taxonomy (p. 131).
EU Regulation
2020/852 and
Commission
Delegated
Regulations
2021/2178 as
information
2021/2139 and
amended by
Delegated
Regulations (EU)
2022/1214,
2023/2485 and
2023/2486
Annual report 2024
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Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
SN 11. Commission Delegated Regulation (EU) 2023/2772 on sustainability
reporting standards content index
Table with references to sections and subsections of the Sustainability statement that respond to the information
requirements of the Directive (EU) 2022/2464 of the European Parliament and the Commission Delegated Regulation
(EU) 2023/2772.
ESRS 2 - General disclosures
Basis for preparation
BP-1 – General basis for preparation
of sustainability
BP-2 – Disclosures in relation to
specific circumstances
Section
About this chapter (p. 20)
Sustainability notes (p.
107)
Sustainability notes (p.
107)
Sub-section
SN 1. Introduction, basis
of presentation of the
consolidated
sustainability statement
and other information (p.
107)
SN 1. Introduction, basis
of presentation of the
consolidated
sustainability statement
and other information (p.
107)
Sub-sub-section
Comments
Governance
Section
GOV-1 – The role of the
1. Sustainability at
administrative, management and
Santander (p. 22)
supervisory bodies
Sustainability notes (p.
107)
GOV-2 – Information provided to
Sustainability notes (p.
and sustainability matters addressed 107)
by the undertaking’s administrative,
management and supervisory bodies
GOV-3 - Integration of
1. Sustainability at
sustainability-related performance
Santander (p. 22)
in incentive schemes
GOV-4 - Statement on due diligence
1. Sustainability at
Santander (p. 22)
GOV-5 - Risk management and
1. Sustainability at
internal controls over sustainability
Santander (p. 22)
reporting
Sustainability notes (p.
107)
Sub-section
1.4 Sustainability
governance (p. 29)
SN 2. Sustainability
governance (p. 117)
SN 7.3 Employees (p.
191)
SN 2. Sustainability
governance (p. 117)
1.4 Sustainability
governance (p. 29)
1.4 Sustainability
governance (p. 29)
1.4 Sustainability
governance (p. 29)
SN 2. Sustainability
governance (p. 117)
Sub-sub-section
Table 19. Senior
management
composition
1.4.1 Integration of
sustainability-related
performance in incentive
schemes
1.4.2 Human rights due
diligence
Comments
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Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Strategy
Section
Sub-section
Sub-sub-section
Comments
SBM-1 – Strategy, business model
and value chain
1. Sustainability at
Santander (p. 22)
Sustainability notes (p.
107)
1.1 Sustainability strategy
(p. 22)
2.2 Supporting our
customers in their
transition goals (p. 35)
The percentage of
revenues of concerning
sectors over the Group’s
total revenues is not
material (1.46% over the
Group’s total revenues).
3.2 Communities'
sustainable development
(p. 83)
3.2.2 Responsible
investment and social
finance (p. 83)
3.3. Our customers (p. 91)
SN 1. Introduction, basis
of presentation of the
consolidated
sustainability statement
and other information (p.
107)
3.3.2 Financial inclusion
and financial health (p.
94)
SN 7.1 Green transition
(p. 135)
SBM-2 – Interests and views of
stakeholders
1. Sustainability at
Santander (p. 22)
3. Supporting employees,
communities and
customers (p. 75)
Sustainability notes (p.
107)
SN 7.5 Financial inclusion
(p. 197)
1.2 Stakeholder
engagement (p. 24)
3.1 Our employees (p. 75)
SN 3. Materiality
assessment - Detailed
methodology (p. 121)
3.1.4 Employee feedback
and experience
SBM-3 - Material impacts, risks and
opportunities and their interaction
with strategy and business model
1. Sustainability at
Santander (p. 22)
Sustainability notes (p.
107)
1.1 Sustainability strategy
(p. 22)
1.3 Materiality
Assessment (p. 27)
SN 3. Materiality
assessment - Detailed
methodology (p. 121)
More details on the
financial impact
stemming from the
opportunities identified in
the double materiality
assessment, see:
2.2 Supporting our
customers in their
transition goals (volume
of assets aligned with the
EU Taxonomy for
mortgages and
automobiles in Europe).
2.2.1 Corporate and
Investment Banking
(Green Finance raised or
facilitated)
The potential financial
impact of the identified
risks usually comes in the
form of direct financial
losses from legal claims
(payments to third
parties, compensation,
etc.) and penalties. See
Note 25.d) and 25.e) of
the annual accounts.
Disclosures on the materiality
Section
assessment process
IRO-1 - Description of the processes
1. Sustainability at
to identify and assess material
Santander (p. 22)
impacts, risks and opportunities
Sustainability notes (p.
107)
SN 3. Materiality
assessment - Detailed
methodology (p. 121)
Sub-section
1.3 Materiality
Assessment (p. 27)
SN 3. Materiality
assessment - Detailed
methodology (p. 121)
Sub-sub-section
Comments
Annual report 2024
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Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
IRO-2 - Disclosure requirements in
Sustainability notes (p.
ESRS covered by the undertaking’s
107)
sustainability statement
SN 1. Introduction, basis
of presentation of the
consolidated
sustainability statement
and other information (p.
107)
SN 3. Materiality
assessment - Detailed
methodology (p. 121)
SN 11. Commission
Delegated Regulation
(EU) 2023/2772 content
index
Minimum Disclosure Requirement
Section
Sub-section
Sub-sub-section
Comments
MDR-P – Policies adopted to
manage material sustainability
matters
MDR-A – Actions and resources in
relation to material sustainability
matters
MDR-M – Metrics in relation to
material sustainability matters
MDR-T – Tracking effectiveness of
policies and actions through targets
2. Our climate transition
plan (p. 32)
3. Supporting employees,
communities and
customers (p. 75)
4. Business conduct (p.
100)
Sustainability notes (p.
107)
SN 1. Introduction, basis
of presentation of the
consolidated
sustainability statement
and other information (p.
107)
SN 9. Alternative
performance measures
(p. 202)
ESRS E1 - Climate change
Governance
Section
ESRS 2 GOV-3 Integration of
1. Sustainability at
sustainability related performance in Santander (p. 22)
incentive schemes
2. Our climate transition
plan (p. 32)
Strategy
Section
E1-1 – Transition plan for climate
2. Our climate transition
change mitigation
plan (p. 32)
Sustainability notes (p.
107)
ESRS 2 SBM-3 – Material impacts,
2. Our climate transition
risks and opportunities and their
plan (p. 32)
interaction with S&BM
Impact, risk and opportunity
Section
management
ESRS 2 IRO-1 – Description of the
2. Our climate transition
processes to identify and assess
plan (p. 32)
material climate-related impacts,
risks and opportunities
Sub-section
Sub-sub-section
Comments
1.4 Sustainability
1.4.1 Integration of
Governance (p. 29)
sustainability-related
performance in incentive
schemes
2.5 Further actions and
2.5.2 Governance &
enablers (p. 72)
policies
Sub-section
Sub-sub-section
Comments
2.1 Strategy (p. 32)
2.2 Supporting our
customers in their
transition goals (p. 35)
2.4 Aiming to align our
activity with the Paris
Agreement Goals (p. 59)
2.5 Further actions and
2.5.2 Governance &
enablers (p. 72)
policies
SN 4. Our transition plan
(p. 129)
2.3 Embedding ESG in risk 2.3.1 Resilience of our
management (p. 40)
strategy and business
model to climate change
2.3.2 Risk management
cycle
Sub-section
Sub-sub-section
Comments
2.3 Embedding ESG in risk 2.3.2 Risk management
management (p. 40)
cycle
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
E1-2 – Policies related to climate
2. Our climate transition
change mitigation and adaptation
plan (p. 32)
E1-3 – Actions and resources in
2. Our climate transition
relation to climate change policies
plan (p. 32)
Metrics and targets
Section
E1-4 – Targets related to climate
2. Our climate transition
change mitigation and adaptation
plan (p. 32)
Sustainability notes (p.
107)
E1-5 – Energy consumption and mix 2. Our climate transition
plan (p. 32)
Sustainability notes (p.
107)
E1-6 – Gross Scopes 1, 2, 3 and Total 2. Our climate transition
GHG emissions
plan (p. 32)
Sustainability notes (p.
107)
E1-7 – GHG removals and GHG
2. Our climate transition
mitigation projects financed through
plan (p. 32)
carbon credits
Sustainability notes (p.
107)
E1-8 - Internal carbon pricing
Sustainability notes (p.
107)
E1-9 – Anticipated financial effects
2. Our climate transition
from material physical and transition plan (p. 32)
risks and potential climate-related
opportunities
2.5 Further actions and
2.5.1 Strategy for
Further details regarding
enablers (p. 72)
engagement with other
Governance and Climate
key stakeholders
Change-related policies
2.5.2 Governance &
in: section 1.4
policies
Sustainability
Governance, SN 2
Sustainability
governance , SN 6.
Sustainable finance and
investment classification
system (SFICS) and
section 3.3 (i) Our ESCC
policies
2.2 Supporting our
customers in their
transition goals (p. 35)
2.4 Aiming to align our
activity with the Paris
Agreement Goals (p. 59)
2.5 Further actions and
enablers (p. 72)
Sub-section
Sub-sub-section
Comments
2.4 Aiming to align our
activity with the Paris
Agreement Goals (p. 59)
SN 4. Our transition plan
(p. 129)
2.4 Aiming to align our
2.4.5 Our environmental
activity with the Paris
footprint
Agreement Goals (p. 59)
SN 4. Our transition plan
(p. 129)
SN 7.1 Supporting the
Table 2. Environmental
green transition (p. 135)
footprint 2023-2024
2.4 Aiming to align our
2.4.5 Our environmental
activity with the Paris
footprint
Agreement Goals (p. 59)
SN 4. Our transition plan
(p. 129)
SN 7.1 Supporting the
Table 3. Gross Scopes 1,
green transition (p. 135)
2, 3 and Total GHG
emissions
2.4 Aiming to align our
2.4.5 Our environmental
activity with the Paris
footprint
Agreement Goals (p. 59)
SN 7.1 Supporting the
Table 4. GHG mitigation
green transition (p. 135)
projects financed through
carbon credits
SN 4. Our transition plan
(p. 129)
2.3 Embedding ESG in risk 2.3.4 Potential financial
Phase-in (partially).
management (p. 40)
effects
Response to requirements
66.a), 66.c) and 67.c).
ESRS E2, E3, E4, E5.
ESRS 2 IRO-1 – Description of the
processes to identify and assess
material climate-related impacts,
risks and opportunities
ESRS S1 - Own Workforce
Strategy
ESRS 2 SBM 2 - Interests and views
of stakeholders
Section
2. Our climate transition
plan (p. 32)
Section
1. Sustainability at
Santander (p. 22)
Sub-section
Sub-sub-section
2.3 Embedding ESG in risk 2.3.5 Our approach to
management (p. 40)
nature and biodiversity
Sub-section
Sub-sub-section
1.2 Stakeholder
engagement (p. 24)
Comments
Comments
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
ESRS 2 SBM 3 - Material impacts,
risks and opportunities and their
interaction with strategy and
business model
Impact, risk and opportunity
management
S1-1 - Policies related to own
workforce
S1-2 - Processes for engaging with
own workforce and workers'
representatives about impacts
S1-3 – Processes to remediate
negative impacts and channels for
own workers to raise concerns
S1-4 – Taking action on material
impacts on own workforce, and
approaches to mitigating material
risks and pursuing material
opportunities related to own
workforce, and effectiveness of
those actions
3. Supporting employees,
communities and
customers (p. 75)
Sustainability notes (p.
107)
Section
3. Supporting employees,
communities and
customers (p. 75)
1. Sustainability at
Santander (p. 22)
3. Supporting employees,
communities and
customers (p. 75)
3. Supporting employees,
communities and
customers (p. 75)
4. Business conduct (p.
100)
3. Supporting employees,
communities and
customers (p. 75)
3.1 Our employees (p. 75) 3.1.1 Talent and skills
development
SN 3. Materiality
assessment - Detailed
methodology (p. 121)
Sub-section
Sub-sub-section
3.1 Our employees (p. 75) 3.1.1 Talent and skills
development
3.1.2 Working conditions
3.1.3 Inclusive culture
1.2 Stakeholder
engagement (p. 24)
3.1 Our employees (p. 75) 3.1.2 Working conditions
3.1.4 Employee feedback
and experience
3.1 Our employees (p. 75) 3.1.3 Inclusive culture
3.1.4 Employee feedback
and experience
4.3 Ethical channels (p.
4.3.1 Canal abierto
104)
3.1 Our employees (p. 75) 3.1.1 Talent and skills
development
3.1.2 Working conditions
3.1.3 Inclusive culture
3.1.4 Employee feedback
and experience
Comments
Metrics and targets
S1-5 – Targets related to managing
material negative impacts,
advancing positive impacts, and
managing material risks and
opportunities
S1-6 – Characteristics of the
undertaking’s employees
S1-8 – Collective bargaining
coverage and social dialogue
S1-9 – Diversity metrics
S1-10 – Adequate wages
S1-11 – Social protection
Section
3. Supporting employees,
communities and
customers (p. 75)
3. Supporting employees,
communities and
customers (p. 75)
Sustainability notes (p.
107)
3. Supporting employees,
communities and
customers (p. 75)
Sustainability notes (p.
107)
3. Supporting employees,
communities and
customers (p. 75)
Sustainability notes (p.
107)
3. Supporting employees,
communities and
customers (p. 75)
3. Supporting employees,
communities and
customers (p. 75)
Sub-section
Sub-sub-section
3.1 Our employees (p. 75) 3.1.1 Talent and skills
development
3.1.2 Working conditions
3.1.3 Inclusive culture
3.1 Our employees (p. 75) 3.1.1 Talent and skills
development
SN 7.3 Employees (p.
Table 7. Employees by
191)
region
Table 8. Employees by
gender
Table 11. Employees by
employment contract
Table 14. Turnover by
region
3.1 Our employees (p. 75) 3.1.2 Working conditions
SN 7.3 Employees (p.
Table 13. Collective
191)
bargaining coverage and
social dialogue
3.1 Our employees (p. 75) 3.1.3 Inclusive culture
SN 7.3 Employees (p.
Table 9. Employees by
191)
management group and
gender
Table 10. Employees by
age bracket
3.1 Our employees (p. 75) 3.1.2 Working conditions
3.1 Our employees (p. 75) 3.1.2 Working conditions
Comments
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
S1-12– Persons with disabilities
S1-13 – Training and skills
development metrics
3. Supporting employees,
communities and
customers (p. 75)
3. Supporting employees,
communities and
customers (p. 75)
3.1 Our employees (p. 75)
3.1 Our employees (p. 75)
3.1.3 Inclusive culture
3.1.1 Talent and skills
development
S1-14 – Health and safety metrics
Sustainability notes (p.
107)
3. Supporting employees,
communities and
customers (p. 75)
Sustainability notes (p.
107)
SN 7.3 Employees (p.
191)
3.1 Our employees (p. 75)
SN 7.3 Employees (p.
191)
Table 20. Training
Table 21. Hours of
training by gender and
management group
3.1.2 Working conditions
Table 22. Occupational
health and safety
The Group relies on the
phase-in established by
the ESRS for specific
information of non-
Employees (ESRS S1,
S1-14, para. 89).
S1-16 – Compensation metrics (pay
gap and total compensation)
3. Supporting employees,
communities and
customers (p. 75)
3.1 Our employees (p. 75) 3.1.2 Working conditions
Sustainability notes (p.
107)
SN 7.3 Employees (p.
191)
Table 16. Remuneration
ratios
S1-17 – Incidents, complaints and
severe human rights impacts
3. Supporting employees,
communities and
customers (p. 75)
4. Business conduct (p.
75)
3.1 Our employees (p. 75)
4.3 Ethical channels (p.
104)
3.1.3 Inclusive culture
ESRS S3 - Affected communities
Strategy
ESRS 2 SBM-2 – Interests and views
of stakeholders
ESRS 2 SBM-3 - Material impacts,
risks and opportunities and their
interaction with strategy and
business model
Section
1. Sustainability at
Santander (p. 22)
3. Supporting employees,
communities and
customers (p. 75)
Sustainability notes (p.
107)
Sub-section
1.2 Stakeholder
engagement (p. 24)
3.2 Communities'
sustainable development
(p. 83)
SN 3. Materiality
assessment - Detailed
methodology (p. 121)
Sub-sub-section
3.2.1 Supporting the
economic and social
development of our
communities
Comments
TBC: Definitions of types
of affected communities
Impact, risk and opportunity
management
S3-1 – Policies related to affected
communities
S3-2 – Processes for engaging with
affected communities about impacts
Section
3. Supporting employees,
communities and
customers (p. 75)
1. Sustainability at
Santander (p. 22)
Sub-section
3.2 Communities'
sustainable development
(p. 83)
1.2 Stakeholder
engagement (p. 24)
Sub-sub-section
3.2.2 Responsible
investment and
social finance
3.2.3 Environmental,
social and climate change
management
3.2.4 Community Support
Comments
Further details on
governance and other
policies related to
affected communities:
Section 1.4 Sustainability
governance and NS 2
Sustainability governance
S3-3 – Processes to remediate
negative impacts and channels for
affected communities to raise
concerns
3. Supporting employees,
communities and
customers (p. 75)
3. Supporting employees,
communities and
customers (p. 75)
3.2 Communities'
sustainable development
(p. 83)
3.2 Communities'
sustainable development
(p. 83)
3.2.2 Responsible
investment and
social finance
3.2.3 Environmental,
social and climate change
management
3.2.4 Community Support
3.2.3 Environmental,
social and climate change
management
S3-4 – Taking action on material
impacts on affected communities,
and approaches to managing
material risks and pursuing material
opportunities related to affected
communities, and effectiveness of
those actions
3. Supporting employees,
communities and
customers (p. 75)
3.2 Communities'
sustainable development
(p. 83)
3.2.2 Responsible
investment and
social finance
3.2.3 Environmental,
social and climate change
management
3.2.4 Community Support
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governance
financial review
and compliance
Metrics and targets
Section
Sub-section
Sub-sub-section
Comments
S3-5 – Targets related to managing
material negative impacts,
advancing positive impacts, and
managing material risks and
opportunities
3. Supporting employees,
communities and
customers (p. 75)
3.2 Communities'
sustainable development
(p. 83)
3.2.2 Responsible
investment and
social finance
3.2.3 Environmental,
social and climate change
management
3.2.4 Community Support
ESRS S4 - Consumers and end-users
Strategy
Section
ESRS 2 SBM-2 – Interests and views
1. Sustainability at
of stakeholders
Santander (p. 22)
ESRS 2 SBM-3 - Material impacts,
3. Supporting employees,
risks and opportunities and their
communities and
interaction with strategy and
customers (p. 75)
business model
Sustainability notes (p.
107)
Sub-section
1.2 Stakeholder
engagement (p. 24)
3.3 Our customers (p. 91)
SN 3. Materiality
assessment - Detailed
methodology (p. 121)
Sub-sub-section
Comments
Impact, risk and opportunity
management
S4-1 – Policies related to consumers
and end-users
S4-2 – Processes for engaging with
consumers and end-users about
impacts
S4-3 – Processes to remediate
negative impacts and channels for
consumers and end-users to raise
concerns
S4-4 – Taking action on material
impacts on consumers and end
users, and approaches to managing
material risks and pursuing material
opportunities related to consumers
and end-users, and effectiveness of
those actions
Section
3. Supporting employees,
communities and
customers (p. 75)
1. Sustainability at
Santander (p. 22)
3. Supporting employees,
communities and
customers (p. 75)
3. Supporting employees,
communities and
customers (p. 75)
3. Supporting employees,
communities and
customers (p. 75)
Sub-section
3.3 Our customers (p. 91)
1.2 Stakeholder
engagement (p. 24)
3.3 Our customers (p. 91)
3.3 Our customers (p. 91)
3.3 Our customers (p. 91)
Sub-sub-section
3.3.1 Conduct with
customers
3.3.2 Financial inclusion
and financial health
3.3.3 Privacy, data
protection and
cybersecurity
3.3.1 Conduct with
customers
3.3.2 Financial inclusion
and financial health
3.3.3 Privacy, data
protection and
cybersecurity
3.3.1 Conduct with
customers
3.3.1 Conduct with
customers
3.3.2 Financial inclusion
and financial health
3.3.3 Privacy, data
protection and
cybersecurity
Comments
Further details on
governance and other
policies related to our
clients: Section 1.4
Sustainability governance
and NS 2 Sustainability
governance
Metrics and targets
S4-5 – Targets related to managing
material negative impacts,
advancing positive impacts, and
managing material risks and
opportunities
Section
3. Supporting employees,
communities and
customers (p. 75)
Sub-section
3.3 Our customers (p. 91)
Sub-sub-section
3.3.1 Conduct with
customers
3.3.2 Financial inclusion
and financial health
3.3.3 Privacy, data
protection and
cybersecurity
Comments
ESRS G1 - Business Conduct
Governance
Section
Sub-section
Sub-sub-section
Comments
ESRS 2 GOV-1 – The role of the
administrative, supervisory and
management bodies
1. Sustainability at
Santander (p. 22)
Sustainability notes (p.
107)
1.4. Sustainability
governance (p. 29)
SN 2. Sustainability
governance (p. 117)
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Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Impact, risk and opportunity
Section
management
ESRS 2 IRO-1 – Description of the
1. Sustainability at
processes to identify and assess
Santander (p. 22)
material impacts, risks and
opportunities
Sustainability notes (p.
107)
G1-1– Corporate culture and
4. Business Conduct (p.
Business conduct policies and
100)
corporate culture
G1-2 – Management of relationships 4. Business Conduct (p.
with suppliers
100)
G1-3 – Prevention and detection of
4. Business Conduct (p.
corruption and bribery
100)
Metrics and targets
Section
G1-4 – Confirmed incidents of
4. Business Conduct (p.
corruption or bribery
100)
G1-6 – Payment practices
4. Business Conduct (p.
100)
Sub-section
Sub-sub-section
1.3 Materiality
assessment (p. 27)
SN 3. Materiality
assessment - Detailed
methodology (p. 121)
4.1 Corporate culture (p.
100)
4.2 Ethical Conduct (p.
101)
4.3 Ethical channels (p.
104)
4.4 Our suppliers (p. 105)
4.2 Ethical conduct (p.
4.2.3 Financial Crime
101)
Compliance
Sub-section
Sub-sub-section
4.2 Ethical conduct (p.
4.2.3 Financial Crime
101)
Compliance
4.4 Our suppliers (p. 105)
Comments
Comments
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Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
INDEPENDENT VERIFICATION REPORT
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financial review
and compliance
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financial review
and compliance
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financial review
and compliance
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financial review
and compliance
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Economic and
Risk management
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governance
financial review
and compliance
OTHER SUSTAINABILITY
INFORMATION
1. Our progress in relation to UN (United Nations) Global Compact Principles
Santander has been a participant of the UN Global Compact since 2022.
We express our support for and disclose our progress on compliance with
the 10 Principles of the UN Global Compact on human rights, labour, the
environment and anti-corruption through the Sustainability Statement
included in this Annual Report.
Human rights
Principle 1
Businesses should support and
respect the protection of
internationally proclaimed
human rights.
For more details, see sections
2.5.2. Governance & policies,
4.2.1. Conduct standards, and
4.4.1. Acting responsibly
towards suppliers
Labour
Principle 3
Businesses should uphold the
freedom of association and the
effective recognition of the
right to collective bargaining.
For more details see section
3.1.2.i. Employee health and
well-being
Principle 5
Businesses should uphold the
effective abolition of child
labour.
For more details, see sections
3.2.3.i. Our ESCC policy, and
4.2.3. Financial crime
compliance
We aim to act responsibly and
broadly throughout our value
chain by upholding the
protection of human rights. We
achieve this aim by focusing on
our business conduct, internal
regulations and governance,
and other prevention,
mitigation and remediation
mechanisms.
We recognize freedom of
association and the right to
collective bargaining for all
employees. We look after our
employees’ health and promote
decent employment, a living
wage and the preservation of
freedom of association and
collective bargaining.
We combat child labour by
including environmental, social
and climate change (ESCC)
matters in our analysis, and
applying the guidelines of the
Equator Principles, as well as
analysing our suppliers.
Principle 2
Businesses should make sure
that they are not complicit in
human rights abuses.
For more details, see sections
1.4.2. Human rights due
diligence, 3.2.3.i. Our ESCC
policy, 4.2.3 Financial crime
compliance, and 4.3.1. Canal
Abierto
Principle 4
Businesses should uphold the
elimination of all forms of
forced and compulsory labour.
For more details, see sections
3.2.3.i. Our ESCC policy, and
3.2.3.ii. Equator Principles
Principle 6
Businesses should uphold the
elimination of discrimination
in respect of employment and
occupation.
For more details, see sections
3.1.3 Inclusive culture, 3.2.3.i.
Our ESCC policy, and 4.2.1
Conduct standards.
Human rights form part of our
management and governance,
based on process type. We
follow responsible business
and customer data protection
practices and are making
headway with embedding
human rights in our supply
chain management. We also
assess the impact of
transactions on human rights
and adopt responsible practices
with our employees.
We follow the highest
standards when running
initiatives to combat forced
labour, including analysis of
environmental, social and
climate change (ESCC) matters
and applying the guidelines of
the Equator Principles as well
as analysing our suppliers.
We promote equal opportunity,
diversity and non
discrimination, and an inclusive
workplace. We are signatory to
the UN Women’s
empowerment Principles and
Valuable 500 which help us to
inform our activity in this area.
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governance
financial review
and compliance
Environment
Principle 7
Businesses should
support a
precautionary
approach to
environmental
challenges.
We tackle climate
change through our
ambition to be net
zero by 2050.
Principle 8
Businesses should
undertake
initiatives to
promote greater
environmental
responsibility.
For more
details, see
section 2.4
Aiming to align
our activity with
the Paris
Agreement
Goals
For more
details, see
section 2.4
Aiming to align
our activity with
the Paris
Agreement
Goals
We help our
customers
transition to a low
carbon economy
and reduce our
carbon footprint.
Principle 9
Businesses should
encourage the
development and
diffusion of
environmentally
friendly
technologies.
For more
details, see
sections
2.2 Supporting
our customers
in the green
transition, and
2.3 Embedding
ESG in risk
management
We're a global
leader in renewable
energy financing
and energy
efficiency initiatives
and we offer
opportunities in
green transition
technologies. We
aim to consume
100% renewable
electricity by 2025.
We contribute to
this goal by
increasing self
supply
Anti-corruption
Principle 10
Businesses should work
against corruption in all its
forms, including extortion and
bribery.
For more details, see sections
2.5.2. Governance & policies,
4.2.1 Conduct standards, and
4.3.1 Canal Abierto
We promote transparency, the
fight against corruption and
robust governance across our
organization. We use reporting
channels to raise any conduct
contrary to tour policies and
codes of conduct regulate our
business and behaviour.
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Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
2. Our contribution to United Nations Sustainability Development Goals
In line with our purpose to help people and companies thrive, we grow
as a business while helping to address society's challenges
The SDGs on which our operations have the greatest impact
SDGs 1.2, 1.4, 1.5
SDGs 4.3, 4.4, 4.5, 4.6
SDGs 5.1, 5.5
We want to help reduce
We help people and
We promote an inclusive
poverty, boost well-being
businesses prosper
workplace to have equal
and power economic
through our education,
opportunity and diversity
growth wherever we
employability and
operate. Our financial
entrepreneurship free
inclusion strategy and
programmes, available at
community support
our platforms: Santander
For more details,
For more details,
For more details,
programmes empower
Open Academy, Santander
see sections 3.3.2.i
see section 3.2.4.ii.
see section 3.1.3.i
millions of people every
X, Universia and Campus
and 3.2.4.iii
year.
Digital.
SDGs 7.1, 7.2, 7.3
SDGs 8.3, 8.4, 8.5, 8.6,
SDG 10.2
We're a global leader in
8.8, 8.10
We help people access
renewable energy
As an employer and
basic banking services like
financing and a European
financier, we help people
accounts and promote
leader in electric vehicle
and businesses, and
financial education to teach
financing. We also finance
contribute to economic
them the skills they need
initiatives on energy
growth and job creation in
to manage their finances
efficiency, sustainable
the markets where we
effectively
For more details,
For more details,
For more details,
mobility and cleaner
operate.
see sections 2.2
see sections 2.3,
see section 3.3.2.i
transport solutions.
and 2.4.2.
2.4.2, 3.3.2.i and
3.2.4.ii
SDGs 11.1, 11.4, 11.6
SDGs 12.2, 12.5, 12.6
SDG 13.1
We finance sustainable
We are committed to
We tackle climate change
infrastructure, real estate
reducing our
by helping our customers
and mobility solutions and
environmental footprint by
transition to a sustainable
run community support
implementing energy
economy and reducing our
initiatives to meet the basic
efficiency plans and cutting
carbon footprint.
needs of the communities
our consumption of paper,
we serve.
single-use plastics and
For more details,
For more details,
For more details,
other resources.
see sections 2.4.4,
see sections 1.2,
see sections 2.1.1,
2.5.1, 3.3.2.i,
2.2.5, and 4.4.1
and 2.3
3.2.2.i, and
3.2.4.iii
SDGs 16.5, 16.6, 16.7
SDG 17
We promote transparency,
We participate in
the fight against corruption
prominent local and
and robust governance
international initiatives and
across our organization.
working groups.
Our policies and codes of
conduct regulate our
business and behaviour
For more details,
For more details,
and steer our objectives
see sections 1.2,
see section 1.2
towards a more
and 4.2.3
responsible banking
system.
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3. Our progress in relation to the Principles for Responsible Banking UNEP FI
Principle 1
Alignment
Grupo Santander has integrated
sustainability into its corporate strategy.
Our sustainability strategy focuses on
issues that are material to Santander, i.e.
those that pose the biggest risks to, and
create the best opportunity for, the bank;
and where we can have the biggest
impact.
For more details on our Strategy
alignment and our business model, please
see section 1.1 'Sustainability strategy' .
Principle 2
Impact & target
setting
In 2024 we performed a double
materiality assessment to identify the
material impacts, risks and opportunities
(IROs). As results we found five matters.
For the impact estimation we used, among
others, the UNEP FI tool.
For more details on the Impact analysis,
please see section 1.3 'Materiality
assessment'. For more details on the
progress towards our objectives see,
regarding climate, section 2.1.3 and,
regarding employees, customers and
communities sections 3.1., 3.2 and 3.3.
Principle 3
Clients &
customers
Our Responsible Banking and
Sustainability policy sets out the general
principles, targets, objectives and strategy
that should guide the Group's progress in
sustainability. Two of our strategic pillars
focus on supporting our customers in their
transition to a low-carbon economy and
being the trusted reference for our
customers with a product and service
offering tailored to their needs and
supporting their inclusion.
For more details on how we support
customers in their transition see section
2.2 Supporting our customers in their
transition goals, while supporting
customers in their financial inclusion can
be found on section 3.3.2 Financial
inclusion and financial health
Principle 4
Stakeholders
We proactively and continuously engage
with our key stakeholders - customers,
employees, investors, and NGOs - through
various channels, mainly surveys. This
helps us to understand their priorities and
concerns. In addition, we also interact with
other stakeholders such as our suppliers,
rating agencies and supervisors and
regulators, and engage and learn through
initiatives on key issues on our agenda.
For more details see section 1.2.
Stakeholder Engagement
Principle 5
Governance &
culture
The Group's board of directors is
responsible for approving the
sustainability strategy. The board's
responsible banking, sustainability and
cultural committee oversees the
development of the strategy and policies.
At the executive level, the management
meeting periodically reviews sustainability
issues. Sustainability is also present in
both short and long term remuneration
schemes. There is mandatory
sustainability training for employees, and
other courses cover specific needs of some
teams.
For more details see sections 1.4
Sustainability governance and 3.1.1 Talent
and skills development
Principle 6
Transparency &
accountability
Our sustainability report has been verified
through a limited review by an
independent third party. For more details
on verification see section SN 12.
'Independent verification report'.
Santander Group, based in Europe, is
required to comply with the new
sustainability disclosure directive and
Spanish law 11/2018. Santander has also
published a table of equivalences with the
global sustainability standard, ISSB, and
has provided information on how it
complies with objectives such as the
Global Compact.
For more details see sections 1.2.
Stakeholder Engagement and
Sustainability notes.
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statement
governance
financial review
and compliance
4. GFANZ transition planning content index
GFANZ recommendations
Reference in this report
Foundations
Objectives and priorities
2.1 Strategy
Implementation
Products and services
2.2 Supporting our customers in their transition goals
strategy
Activities and decision-making
1.4 Sustainability governance; SN 2. Sustainability governance
2.5.2 Governance & policies
Policies and conditions
SN 2. Sustainability governance
Engagement
strategy
Engagement with clients and portfolio companies
2.2 Supporting our customers in their transition goals; 3.2.3
Environmental, social and climate change management
Engagement with industry
1.2. Stakeholder engagement; 2.5.1 Engagement strategy with
other key stakeholders
Engagement with government and public sector
1.2. Stakeholder engagement; 2.5.1 Engagement strategy with
other key stakeholders
Metrics and
Targets
Metrics and targets
2.4 Aiming to align our activity with the Paris Agreement
Goals ; SN 4. Our transition plan; SN 7.1 Green transition
Governance
Roles, responsibilities, and remuneration
1.4 Sustainability governance; SN 2. Sustainability governance
2.5.2 Governance & policies;
Skills and culture
2.5.2 Governance & policies; 3.1.1 Talents and skills
development
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Economic and
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and strategy
statement
governance
financial review
and compliance
5. Task Force on Climate related Financial
Disclosure (TCFD) content index
TCFD Recommendations
Reference in this Annual Report
Governance
a
Describe the board’s oversight of climate-related risks and
opportunities.
1.4 Sustainability governance; SN 2. Sustainability
governance
b
Describe management’s role in assessing and managing climate
related risks and opportunities.
1.4 Sustainability governance; SN 2. Sustainability
governance 2.5.2 Governance & policies; 2.3 Embedding
ESG in risk management
Strategy
a
Describe the climate-related risks and opportunities the
organization has identified over the short, medium, and long term.
b
Describe the impact of climate-related risks and opportunities on
the organization’s businesses, strategy, and financial planning.
2.1 Strategy; 2.3 Embedding ESG in risk management
c
Describe the resilience of the organization’s strategy, taking into
consideration different climate-related scenarios, including a 2°C
or lower scenario.
Risk
Management
a
Describe the organization’s processes for identifying and assessing
climate-related risks.
b
Describe the organization’s processes for managing climate
related risks.
2.3 Embedding ESG in risk management
c
Describe how processes for identifying, assessing, and managing
climate-related risks are integrated into the organization’s overall
risk management.
Metrics and
Targets
a
Disclose the metrics used by the organization to assess climate
related risks and opportunities in line with its strategy and risk
2.3 Embedding ESG in risk management; 2.4 Aiming to
align our activity with the Paris Agreement Goals
management process.
b
Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse
gas (GHG) emissions, and the related risks.
2.4.5 Our environmental footprint; SN 4. Our transition
plan; SN 7.1 Green transition
c
Describe the targets used by the organization to manage climate
related risks and opportunities and performance against targets.
2.4.1 Alignment targets; SN 4. Our transition plan
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and compliance
6. Table of equivalence between CSRD and ISSB
This table reflects the equivalence of the ESRS standards with the sustainability-related disclosure standards of the
International Sustainability Standards Board (ISSB). In the consolidated management report and, to a greater extent, the
sustainability statement (as well as in the audit report and annual accounts), the Group includes information that is
equivalent to the requirements under the SASB standards that apply to the financial sector (for more details, see the
note under the table).
ESRS 2 - General disclosures
ISSB
Basis for preparation
BP-1 – General basis for preparation of sustainability
IFRS S2.10(d)
BP-2 – Disclosures in relation to specific circumstances
Governance
GOV-1 – The role of the administrative, management and supervisory bodies
IFRS S1.21(b)
IFRS S2.6(a)
IFRS S2.6(a)(i)
IFRS S2.6(a)(ii)
IFRS S2.6(a)(v)
IFRS S2.6(b)
IFRS S2.6(b)(i)
IFRS S2.6(b)(ii)
GOV-2 – Information provided to and sustainability matters addressed by the undertaking’s administrative, management
and supervisory bodies
IFRS S2.6(a)(iii)
IFRS S2.6(a)(iv)
GOV-3 - Integration of sustainability-related performance in incentive schemes
IFRS S2.29(g)(i)
IFRS S2.6(a)(v)
IFRS S1.21(b)
GOV-4 - Statement on due diligence
GOV-5 - Risk management and internal controls over sustainability reporting
Strategy
SBM-1 – Strategy, business model and value chain
SBM-2 – Interests and views of stakeholders
SBM-3 - Material impacts, risks and opportunities and their interaction with strategy and business model
IFRS S2.10(a)
IFRS S2.10(c)
IFRS S2.13(a)
IFRS S2.13(b)
IFRS S2.14(a)(i)
IFRS S2.15(a)
IFRS S2.15(b)
IFRS S2.16(a)
IFRS S2.16(b)
IFRS S2.16(c)(i)–(ii)
IFRS S2.16(d)
Disclosures on the materiality assessment process
IRO-1 - Description of the processes to identify and assess material impacts, risks and opportunities
IFRS S2.25(a)(i)
IFRS S2.25(a)(iii)
IFRS S2.25(a)(iv)
IFRS S2.25(a)(v)
IFRS S2.25(a)(vi)
IFRS S2.25(b)
IFRS S2.25(c)
IRO-2 - Disclosure requirements in ESRS covered by the undertaking’s sustainability statement
ESRS E1 - Climate change
Governance
ESRS 2 GOV-3 Integration of sustainability related performance in incentive schemes
IFRS S2.29(g)(i)
IFRS S2.29(g)(ii)
IFRS S2.6(a)(v)
IFRS S1.21(b)
Strategy
E1-1 – Transition plan for climate change mitigation
IFRS S2.14(a)(iv)
IFRS S2.14(c)
IFRS S2.29(e)
ESRS 2 SBM-3 – Material impacts, risks and
opportunities and their interaction with S&BM
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Impact, risk and opportunity management
ESRS 2 IRO-1 – Description of the processes to identify and assess material climate-related impacts, risks and opportunities
E1-2 – Policies related to climate change mitigation and adaptation
IFRS S1.23
IFRS S1.B42(c)
IFRS S2.22(b)(i)(1)
IFRS S2.22(b)(i)(2)
IFRS S2.22(b)(i)(3)
IFRS S2.22(b)(i)(4)
IFRS S2.22(b)(i)(5)
IFRS S2.22(b)(i)(6)
IFRS S2.22(b)(ii)
IFRS S2.25(a)
IFRS S2.25(a)(ii)
IFRS S2.10(d)
IFRS S2.25(b)
E1-3 – Actions and resources in relation to climate change policies
IFRS S2.14(a)(ii)
IFRS S2.14(a)(iii)
IFRS S2.14(a)(v)
IFRS S2.14(b)
Metrics and targets
E1-4 – Targets related to climate change mitigation and adaptation
E1-5 – Energy consumption and mix
E1-6 – Gross Scopes 1, 2, 3 and Total GHG emissions
E1-7 – GHG removals and GHG mitigation projects financed through carbon credits
E1-8 – Internal carbon pricing
E1-9 – Anticipated financial effects from material physical and transition risks and potential climate-related opportunities
IFRS S2.33
IFRS S2.33(b)
IFRS S2.33(d)
IFRS S2.33(e)
IFRS S2.33(g)
IFRS S2.33(h)
IFRS S2.34(a)
IFRS S2.36(a)
IFRS S2.36(b)
IFRS S2.36(d)
IFRS S2.29(a)(i)(1–2)
IFRS S2.29(a)(i)(3)
IFRS S2.B38–B57
IFRS S2.29(a)(ii)
IFRS S2.29(a)(iii)(1–3)
IFRS S2.29(a)(iv)
IFRS S2.29(a)(v)
IFRS S2.B30
IFRS S2.B31
IFRS S2.29(a)(vi)(1)
IFRS S2.B32
IFRS S2.29(a)(vi)(2)
IFRS S2.B19
IFRS S2.B34
IFRS S2.B56(a)
IFRS S2.B56(b)
IFRS S2.36(e)(i)
IFRS S2.36(e)(ii)
IFRS S2.36(e)(iii)
IFRS S2.36(e)(iv)
IFRS S2.29(f)
IFRS S2.17
IFRS S2.22(a)(iii)(1–3)
IFRS S2.25(b)
IFRS S2.29(b)
IFRS S2.29(c)
IFRS S2.29(d)
IFRS S2.31
IFRS S2.B65(e)
IFRS S1.21(b)
In the consolidated management report and, to a greater extent, the sustainability statement (as well as in the audit report and annual accounts), the Group includes
information that is equivalent to the requirements under the SASB standards that apply to the financial sector, mainly in relation to 'commercial banking (FN-CB)', but also in
relation to other sub-industries such as: 'Asset management and custody activities (FN-AC)', 'consumer finance (FN-CF)', and 'investment banking and intermediation (FN-IB)'.
Specifically, the information disclosed by the Group in these reports allows us to respond, to a greater or lesser extent, to the following SASB metrics: FN-CB-230a.1 (y FN
CF-230a.1), FN-CB--230a.2, FN-CF-230a.3, FN-CB-240a.1, FN-CB-240a.2, FN-CB-240a.3, FN-CB-240a.4, FN-CB-410a.1, FN-CB-410a.2 (y FN-IB-410a.2), FN-IB-410a.3, FN
CB-510a.1 (y FN-AC-510a.1 y FN-IB-510a.1), FN-CB-510a.2 (y FN-AC-510a.2 y FN-IB-510a.2), FN-CB-550a.2 (y FN-IB-550a.2), FN-AC-330a.1 (y FN-IB-330a.1), FN-CB-000.A,
FN-CB-000.B.
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CORPORATE
GOVERNANCE
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Annual general meeting
Active involvement of our shareholders
in the general meeting
Responsible for setting the strategy and
overseeing its execution and the
management of the Group.
Board of directors
Solid committee structure to support the
board
Board committees
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Clear and robust corporate
governance to ensure
a long-term, sustainable
business model
Our governance bodies
Broad and balanced shareholder base
Share capital distribution by geography
1
Aligned with high
corporate governance
standards
Banco Santander has the highest
score in the Spanish Association for
Standardisation and Certification's
(AENOR) Good Corporate
Governance Index (GCGI V2.0),
which verifies aspects such as
composition and functioning of the
board and its committees,
shareholders' general meeting,
remuneration policy, compliance
and transparency.
1. Figures as at 31 December 2024.
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Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
1. 2024 OVERVIEW
235
Statement from Glenn Hutchins, Lead Independent
235
Director
1.1 Board skills and diversity
236
1.2 Board effectiveness
236
1.3 Remuneration policy
237
1.4 Engagement with our shareholders
237
1.5 Achievement of our 2024 priorities
238
1.6 Priorities for 2025
240
2. OWNERSHIP STRUCTURE
241
2.1 Share capital
241
2.2 Authority to increase capital
241
2.3 Significant shareholders
242
2.4 Shareholders’ agreements
243
2.5 Treasury shares
243
2.6 Stock market information
246
3. SHAREHOLDERS AND GENERAL MEETING
247
3.1 Shareholder communication and engagement
247
3.2 Shareholder rights
249
3.3 Dividends and shareholder remuneration
251
3.4 2024 AGM
251
3.5 Our next AGM in 2025
253
4. BOARD OF DIRECTORS
255
4.1 Our directors
256
4.2 Board composition
264
4.3 Board functioning and effectiveness
270
4.4 Executive committee activities in 2024
277
4.5 Audit committee activities in 2024
279
4.6 Nomination committee activities in 2024
285
4.7 Remuneration committee activities in 2024
289
4.8 Risk supervision, regulation and compliance
293
committee activities in 2024
4.9 Responsible banking, sustainability and culture
297
committee activities in 2024
4.10 Innovation and technology committee activities
300
in 2024
4.11 International advisory board
302
4.12 Related-party transactions and other conflicts
303
of interest
5. SENIOR MANAGEMENT TEAM
305
6. REMUNERATION
307
Introduction
307
6.1 Principles of the remuneration policy
308
6.2 Remuneration of directors for supervisory
308
and collective decision-making duties: policy
applied in 2024
6.3 Remuneration of directors for executive duties
311
6.4 Directors' remuneration policy for 2025, 2026
324
and 2027
6.5 Preparatory work and decision-making for the
333
remuneration policy; remuneration committee
involvement
6.6 Remuneration of non-director members of senior
334
management
6.7 Prudentially significant disclosures document
335
7. GROUP STRUCTURE AND INTERNAL
336
GOVERNANCE
7.1 Corporate Centre
336
7.2 Internal governance
336
8. INTERNAL CONTROL OVER FINANCIAL
339
REPORTING (ICFR)
8.1 Control environment
339
8.2 Risk assessment in financial reporting
340
8.3 Control activities
340
8.4 Information and communication
342
8.5 Monitoring of system functioning
342
8.6 External auditor report
343
9. OTHER CORPORATE GOVERNANCE
346
INFORMATION
9.1 Reconciliation with the CNMV’s corporate
346
governance report model
9.2 Statistical information on corporate governance
350
required by the CNMV
9.3 References on compliance with
371
recommendations of Spanish Corporate
Governance Code
9.4 Reconciliation to the CNMV’s remuneration
373
report model
9.5 Statistical information on remuneration required
374
by the CNMV
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Statement from Glenn Hutchins, Lead Independent Director
Contents
Business model
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Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
1. 2024 OVERVIEW
Glenn Hutchins,
Vice Chair and Lead Independent Director
"In 2024, the board remained committed to increasing shareholder
value by delivering strong, sustainable results in line with our
Investor Day targets. We believe that board oversight is critical in
aligning the interests of our shareholders –and other
stakeholders– with the strategies of our enterprise and driving
success. This corporate governance report sets out how the board
and its committees work to ensure that the Group continues to
deliver shareholder value with prudence and careful risk
management.
Notably, we made important progress over the year in our
technology transformation agenda and in our shift to five global
businesses, enabling us to serve our customers better, gain
operating efficiencies and clarify external reporting. We also
removed the regional layer of management, facilitating fast
decision-making, clear accountability and enhanced agility. We
further held several meetings in session with our Executive Chair
and with our CEO in order to assist in their work and evaluate their
progress.
Every year the board visits one of our key markets to get an on-the
ground perspective of the businesses, opportunities and challenges
faced locally. In November 2024, we travelled to Brazil in
recognition of the strategic importance of that geography for the
Group, meeting with key staff, important clients and external
stakeholders. During the year, we also held two sessions with high
potential younger executives to evaluate the quality of our internal
talent pipeline. We welcomed the opportunity to engage with so
many of our valued colleagues and clients around the world and
will continue to do this in the future.
Critical to created shareholder value is our capacity to attract,
develop and retain the best talent world-wide to support our
transformation. We compete in a global market for skills not just
with the world’s largest financial institutions but also with large
scale technology companies. Our ability to offer market-based
compensation for our top talent is vital to our capacity to compete
and succeed. During the year, we met with our largest
shareholders and their proxy advisers to explain our compensation
philosophy and to gather feedback. The remuneration committee,
which I chair, discussed the lessons from this consultation and
made related changes during the year (see section 6.
‘Remuneration’ ).
As part of our ambition to be a technology-first company, we will
be holding an entirely virtual Annual General Meeting (AGM) in
2025 supported by advanced technology to improve interaction
with our shareholders. During 2024, I conducted an extensive
engagement with shareholders on this topic to understand their
expectations and to inform the design of our virtual AGM. We are
confident that this approach, which positions us as a digital-first
and sustainable company, will ensure equal access for all
shareholders worldwide (see more details in 'Virtual AGM' in
section 3.5).
Leveraging the diverse skills, experience and strengths of our
board members, we implemented on a number of committee
changes throughout the year. We also strengthened the board with
the addition of Carlos Barrabés and Antonio Weiss. The impact and
benefit of these changes was evidenced in the results of the
internal board effectiveness review conducted in 2024, the details
of which can be found in ‘Board effectiveness review in 2024’, in
section 4.3.
Looking forward, we will sharpen our focus on increasing
shareholder value through the transformation of Santander into a
technology-defined enterprise offering high quality products,
providing world-class customer service and managing costs
efficiently world-wide – while remaining true to our purpose and
corporate culture".
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1.1 Board skills and diversity
Appointments in 2024
In 2024 board composition has remained commensurate with the
required skills, experience and diversity required to oversee and
drive the Group's strategy, reinforced by our board refreshment
activity in the year.
Two thirds of our board members are independent directors and
40% are women. This meets the 40% minimum requirement for
the less represented gender at the board set out in the Organic Law
on Equal Representation and Balanced Presence of Women and
Men, that will be required from June 2026.
At the annual general shareholders' meeting held on 22 March
2024 (2024 AGM) it was agreed to appoint Carlos Barrabés and
Antonio Weiss who both joined the board once they obtained their
corresponding regulatory approvals, filling the vacancies left by
Bruce Carnegie-Brown and Ramiro Mato, respectively. These
changes have continued to reinforce the board's financial,
technological and digital expertise and its geographical diversity,
with a key focus on US, which is one of our core markets.
Changes to the committees
Changes to the committees that the board agreed to in 2024 were
partly driven by the departures of Bruce Carnegie-Brown and
Ramiro Mato from the board, and the need to rotate the audit
committee chair after the four-year legal term has elapsed, in line
with applicable legal provisions. The board also considered other
factors including the distribution of work amongst its members as
well as ensuring an optimised mix of skills and experience. In
addition, it has also considered the importance of observing best
practice committee composition disciplines as well as alignment
with regulatory guidance, therefore ensuring their ongoing
effectiveness.
Changes can be summarised as follows:
• Executive committee: Ramiro Mato stepped down on 27 June
2024.
• Audit committee: Germán de la Fuente was appointed Chair on
23 March 2024 replacing Pamela Walkden, who remained as a
member. Ramiro Mato stepped down on 27 June 2024.
• Nomination committee: Belén Romana, who joined the
committee on 1 January 2024, was appointed committee Chair
on 23 March 2024, succeeding Bruce Carnegie-Brown. Carlos
Barrabés joined with effect from 27 June 2024.
• Remuneration committee: Bruce Carnegie-Brown stepped down
on 22 March 2024. Antonio Weiss was appointed to the
committee on 1 January 2025.
• Risk supervision, regulation and compliance committee: Pamela
Walkden was appointed Chair on 23 March 2024, replacing
Belén Romana, who remained as a member. Ramiro Mato
stepped down on 27 June 2024 and José Antonio Álvarez became
a member on 1 January 2025.
• Responsible banking, sustainability and culture committee: Sol
Daurella assumed the chairship on 23 July 2024. Both Pamela
Walkden and Carlos Barrabés were appointed to the committee
on 23 March 2024 and 27 June 2024, respectively, replacing
Belén Romana and Ramiro Mato, who stepped down on those
same dates, respectively.
• Innovation and technology committee: Glenn Hutchins was
appointed committee Chair on 23 March 2024, replacing Ana
Botín, who remained as a member. Carlos Barrabés joined with
effect from 27 June 2024.
1.2 Board effectiveness
Board effectiveness review and actions to
continuously improve
Corporate governance is a priority for Santander. Our governance
model has consistently received strong support from shareholders,
as evidenced by their high participation in general meetings and
strong approval rates for corporate management, the appointment
and re-election of directors. Governance practices need to adapt to
business and strategic needs, so we continuously look for
opportunities for improvement.
The annual board effectiveness review, in which we periodically
enlist the help of external independent advisors, is key to our
commitment to good governance and allows us to verify the
quality and effectiveness of the functioning of our governance
bodies. It also ensures that the board is able to support
management appropriately and to oversee it through constructive
challenge. During 2024, the nomination committee monitored
execution of the action plan derived from the 2023 board
effectiveness review, which was conducted in cooperation with
Spencer Stuart as external independent firm and successfully
completed in June 2024.
In 2024, the board conducted its annual effectiveness review
internally. The areas for improvement were reviewed by the
nomination committee and the board of directors and the resultant
action plan was approved in January 2025. See 'Board
effectiveness review in 2024' in section 4.3.
Group and subsidiary board relations
The ongoing strength of the ties between the Group's and its
subsidiaries' boards of directors is key to effective oversight of
policies, controls and corporate culture. The challenges of the
current macroeconomic landscape evidence the need for effective
cross-border cooperation within the Group, which our proven
Group Subsidiary Governance Model (GSGM) facilitates.
The strength of our governance model is maintained through a
number of coordination mechanisms that are in place between the
Group and subsidiaries, as follows:
Group nominated directors
A number of Group directors and top managers are also members
of the boards of our subsidiaries, which facilitates the management
bodies' coordination and the strategic alignment of the local
boards. See section 7. 'Group structure and internal governance'.
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Group and subsidiary committee relations
In 2024, the audit committee and risk supervision, regulation and
compliance committee Chairs attended subsidiary committee
meetings. In turn, they invited their local counterparts to join the
respective Banco Santander committee meetings throughout the
year. This helped to enhance communication and the sharing of
topics of common interest and best practices between the Group
and its subsidiaries.
The Chairs of the Group audit committee and risk supervision,
regulation and compliance committee also organised several
virtual meetings with their local counterparts, which enriched the
communication among them and allowed them to share priorities
and common matters of interest. Therefore, this practice will
continue going forward.
Finally, in 2024 we also held an audit committee Chairs convention
at our headquarters in Boadilla del Monte. The aim was to foster
further collaboration between the Group and its subsidiaries, raise
awareness about global initiatives and expectations, collectively
discuss topical issues and encourage networking. As in previous
occasions, the event was both successful and productive, with
universal positive feedback received from participants.
Coordinated induction and training plans
We continued to share our training, induction and development
methodology and associated content with the subsidiaries to
promote best practices and drive a consistent approach on a group
wide basis. In 2024 we scheduled training sessions for subsidiary
board members with local directors covering the consolidation of
all our activities across our footprint under five global businesses.
See 'Director training and induction programmes' in section 4.3.
Group and subsidiary board visits
Every year at least one board session is held in one of the Group's
key geographies. As part of these visits, directors meet top
management in the unit in order to better understand the country
business. In 2024, the board of directors met in São Paulo, Brazil,
where we also organised branch visits and meetings with senior
management and clients. In addition, directors met with top talent
in the region as part of our proactive approach to talent
management.
Furthermore, subsidiary boards are encouraged to hold their board
meetings at our corporate centre in Boadilla del Monte, Madrid, or
in Santander, Cantabria, to foster further collaboration and
engagement with the corporate teams. In 2024, the boards of
Santander Bank Polska, Santander UK and Santander Brazil held
specific meetings at our corporate centre, while Santander Mexico
held a board meeting in Santander, Cantabria. The above
mentioned practices will continue in 2025 and beyond.
1.3 Remuneration policy
Santander's remuneration policy has traditionally received strong
support from our investors. At our 2024 AGM, shareholders
approved the policy with 74.82% votes in favour. As this
percentage is lower than in other years, our board of directors
engaged with our top shareholders and with major proxy advisory
firms to ensure that our remuneration policy continues to align
with their expectations. Meetings were led by Glenn Hutchins, our
Lead Independent Director and remuneration committee Chair.
Following careful consideration by our remuneration committee
and the board of directors of the feedback received, the
remuneration policy for 2025, 2026 and 2027 includes the
following changes compared to the existing one:
• increase in the component paid in instruments from 50% to 60%;
• raise of the minimum long-term metric on relative TSR threshold
for vesting from percentile 40 to percentile 50;
• increase of the weight of the long-term metric on relative TSR
from 40% to 50%; and
• enhancement of the weight of the part of the remuneration that
is subject to long-term metrics from 36% to 40%.
In addition, we provide further detail on the committee's process
for setting and reviewing the remuneration policy, providing
additional information on how we set executive remuneration and
how pay aligns with performance, including our peers selection
criteria for this analysis. Banco Santander conducts a rigorous
process that includes an annual review of comparable market
information to make sure that our remuneration remains
competitive.
We believe these adjustments bolster the alignment of our
management and shareholders’ interests. For more details, see
section 6. 'Remuneration'.
1.4 Engagement with our shareholders
In 2024 we continued to combine traditional and virtual channels
in shareholder engagement, which enabled us to meet the needs
of our approximately 3.5 million shareholders, and encourage their
involvement in our corporate governance. For more details, see
'Engagement with shareholders in 2024' in section 3.1.
At the 2024 AGM, we once again gave our shareholders, spread
around the world, the option to attend in person or remotely. This
flexibility enables them to participate without needing to travel.
The high shareholder participation through remote means at
general meetings shows our shareholders’ satisfaction with this
option and has been considered by the board of directors, among
other reasons, in its decision to convene the annual general
meeting in virtual format (see 'Virtual AGM' in Section 3.5).
We are firmly committed to reporting information of the highest
quality to align our interests with those of our shareholders
through sustainable growth and long-term value creation. Against
this backdrop, the sustainability information we disclose for 2024
considers the new European Sustainability Reporting Standards
(ESRS) adopted by the European Commission and the International
Sustainability Standards Board's (ISSB) global sustainability
disclosure standards, which will enable our shareholders to
compare this information more easily within the EU and globally
while complying with the disclosure obligations under Spanish law
(until the implementation of EU legislation takes place). For more
details, see the 'Sustainability statement' chapter.
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1.5 Achievement of our 2024 priorities
The 2023 annual report disclosed our priorities for 2024. The following chart describes how we delivered on each priority.
2024 priorities
Transformation
To oversee the execution of
agreed plans to build a digital
bank with branches with a
single platform, optimizing the
product portfolio and
enhancing the customer
experience, simplifying
processes and implementing
the new operating model.
Five global businesses
To oversee the consolidation of
our activities across all markets
under five global businesses
and the change of reporting of
financial results aligned to this
model, with the support of the
audit committee.
People
Continue to enhance our
employee value proposition,
ensuring that they are aligned
with our corporate culture and
that we are focused on
attracting and retaining the
best talent to fulfil our
strategy.
How we delivered
The board continued to oversee our operating model, so called One Santander, which completely
captures the value and potential of our scale and network effects, simplifying our structure and
decision making and eliminating legacies. The board confirmed the positive progress made by global
businesses and corporate functions working in partnership as one team.
The board also kept monitoring our transformation journey based on three strategic pillars, to better
serve our customers, improve efficiency, and drive value creation:
• Simplification of product portfolio and customer experience to enlarge our customer base: a key
focus was placed on improving digital onboarding (including associated onboarding time
reduction) across the Group, on the significant simplification of our product portfolio, and on
reducing operating costs and associated complexity.
• Automation and simplification of processes: we remain focused on making the business more
efficient by undertaking specific Group-wide automation and digitalization of processes initiatives.
• Deployment of best-in-class global tech platform and associated commonality across our
footprint: the board monitored specific initiatives launched throughout 2024 together with the
implementation of our own common tech global platforms. As part of that, we are evolving into an
organization where the software is the product, by developing successful 'banking as a service'
initiatives, such as Openbank, Zinia, Getnet, PagoNxt Payments, and Ebury.
One key strategic initiative announced in 2023 was to consolidate all activities across our footprint
under five global businesses. During 2024, the board monitored the execution of this strategy to
ensure that it accomplishes the intended outcomes, including customer benefits and operating
efficiencies. In addition, the board oversaw, with the assistance of the audit committee, the change
of reporting of financial results to global businesses as primary segments, to better align the
information with the manner we manage the Group.
The board considers that the consolidation under five global businesses was well executed, which
enables the Group to enter into the next phase of its transformation journey. This phase is marked by
a renewed focus on streamlining our structure to achieve greater agility and increasing our
profitability through accelerating the roll out of our global business platforms and products.
The consolidation under five global businesses represented a foundational step toward becoming a
truly global, digital-first financial institution. These units enable us to deliver innovative solutions
tailored to customer needs, leverage efficiencies at scale, and drive significant value creation across
geographies, thanks to the network effects of being One Santander.
To help us achieve this next level of transformation, the board agreed to remove the regional layer of
management in January 2025. This simplification ensures that our global businesses operate directly
across all countries, enabling faster decision-making, clear accountability, and enhanced agility.
The board holds the belief that having the right talent and skills in place and attracting and engaging
the best talent with a best-in-class employee value proposition, will enable our transformation. As a
result, senior management succession planning remained high on the board's agenda in 2024.
Furthermore, the board monitored that the employee is always placed at the centre of all we do,
promoting an inclusive culture, as well as health and wellbeing initiatives. In addition, the board
placed a key focus on the merits of listening to employees so the Group can continuously improve in
this regard.
The board also approved specific organizational changes and associated appointments, with the aim
of having a more dynamic and efficient organization, being well placed to face the challenges ahead
with a positive impact on society, utilizing new ways of working to drive value, and reflecting the
Group strategy and culture in our relation with clients, supervisors and other stakeholders.
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Contents
2024 priorities
How we delivered
Progressing in our sustainability targets
To oversee the fulfilment of our
sustainability targets to ensure
that we remain on track to fulfil
our plans in this area and
accelerate finance to help our
customers in their transition to
a low carbon economy. In
addition, we will continue
taking care of the sustainability
agenda, including our
objectives on financial inclusion
and customer welfare.
Long-term shareholder value
To promote the generation of
long-term and sustainable
shareholder value creation
through consistent returns
growth while maintaining our
capital management discipline.
This will ensure strong
shareholder remuneration and
the resources required to
deliver our strategic
transformation.
We continued to progress on our sustainability targets. In particular:
• We hit our target of EUR 120 billion in green finance raised or facilitated between 2019 and 2025
in advance (with more than EUR 129 billion in total as from 2019).
• We have financially included 2.6 million people and we have supported microentrepreneurs
through programs like Prospera, Tuiio and Surgir.
• We invested EUR 103.8 million to support education, employability and entrepreneurship through
Santander Universidades (EUR 208.9 million as from 2023).
• We have progressed towards equality, achieving a greater representation of women in senior
positions, from 22.7% in 2019 to 31.2% in 2024.
• We accomplished the equal pay gap target for 2025 (~0%) in advance. We continued to supervise
the measures in place to eliminate the pay gap.
• We closed 2024 with 4,828 persons with disabilities employed within the Group (over 2.3% of our
global workforce), in line with our commitment to boost the inclusion of people with disabilities by
increasing the number of hires and promotions and foster accessibility.
• We continued to supervise the execution our community support programmes, in line with our aim
to improve people's access to education and culture and support their well-being. In 2024, we
monitored our response to the effects of the flash flood in eastern Spain. We took immediate
action to help our people and customers, including fee waivers, the proactive communication to
provide financial support to affected customers and employees, payment holidays on loans and
leasing, replacement of vehicles for affected customers, among other measures.
See the 'Sustainability statement' chapter for additional details.
In 2024, we continued to deliver a strong performance in terms of shareholder value creation, as
outlined at the 2023 Investor Day. As part of that, the board continued to drive our potential through
leveraging our unique business model based on the customer (building a digital bank with branches),
scale (global and in-market scale) and diversification (business, geography and balance sheet) as
follows:
• Revenue and customer growth: revenue increased 10% in constant euros (8% in current euros) up
to EUR 62,211 million and with customer numbers climbed eight million to 173 million (vs. 165
million customers in 2023).
• Strength: CET1 above12%, closing the year at 12.8% (vs. 12.3% in 2023), where we have
maintained a disciplined capital allocation methodology and prudent risk management.
• Profitability: RoTE between 15-17%, closing the year with a 16.3% RoTE (vs. 15.1% in 2023).
• Cost discipline: the efficiency ratio improved in 2024 to 41.8% (vs. 44.1% in 2023), in line with the
target of c.42%.
• Conservative risk appetite: the Group cost of risk was 1.15% at the end of 2024 (vs. 1.18%).
• Shareholder remuneration: the remuneration paid to shareholders in 2024 was 34% higher than
in 2023. We paid out approximately EUR 3,000 million in a cash dividend (EUR 19.50 cents per
share with the right to receive a dividend, of which we paid out EUR 9.50 cents per share in May
and EUR 10.00 cents per share in November), which is a 39% increase on the cash dividend paid
out in 2023. Moreover, we also paid out approximately EUR 3,000 million through share buyback
programmes.
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2024 priorities
How we delivered
Governance effectiveness
To remain focused on the
overall effectiveness and
composition of the board and
its committees, ensuring that
their role is discharged in the
most tangible and effective
manner.
In 2024, we continued to refresh the board of directors ensuring diversity in its broadest sense
(gender, backgrounds, geographical provenance, new skills and experience) to ensure that we are
well placed to address the challenges faced in our business and taking into account feedback from
previous board effectiveness reviews.
The board holistically analysed committee composition and agreed on specific changes, partly driven
by the departures of Bruce Carnegie-Brown and Ramiro Mato from the board, and the need to rotate
off the audit committee chair in line with applicable provisions. The agreed changes took into
consideration best practice committee composition disciplines, regulatory guidance, appropriate
workload distribution amongst members and optimised mix of skills and experience on each
committee, among other factors. See 'Changes to the committees' in section 1.1.
In 2024, the nomination committee monitored execution of the action plan derived from the 2023
board effectiveness review, which was conducted with the collaboration of an external independent
firm, which was successfully completed in June 2024. In addition, the board conducted its annual
effectiveness review in 2024 internally. The findings of the review concluded that the board and its
committees continue to operate effectively and that the board's contribution is highly valuable for
management. See 'Board effectiveness review in 2024' in section 4.3.
1.6 Priorities for 2025
The board set the following priorities for 2025:
→Transformation
We will oversee the implementation of our operating model,
ensuring that we operate as a truly global-local organization
with five global businesses, simplifying processes, reducing costs
and improving customer experience by further optimizing our
product portfolio.
→People
We will remain focused on attracting and retaining the best
talent to fulfil our strategy now and in the future. We will
maintain our proactive approach to senior management
succession planning, based on the Group's strategic needs.
→Culture
We will continue to monitor the embeddedness of agile
methodologies and more flexible organizational structures
across the Group to promote a more collaborative and
multidisciplinary way of working that results in a greater
customer focus.
→Progressing in our sustainability goals
We will oversee the fulfilment of our sustainability goals striking
a balance between financing our customers in their transition to
a low carbon economy and the different political and regulatory
approaches. In addition, we will continue taking care of the
sustainability agenda, in line with our aim to help people and
businesses prosper.
→Long-term shareholder value
The board will promote the generation of long-term and
sustainable shareholder value creation through consistent
returns growth while maintaining our robust capital
management discipline. This will ensure strong shareholder
remuneration and the resources required to deliver our strategy.
→Governance effectiveness
We will continue to enhance the overall effectiveness of the
board and its committees, with an appropriate composition and
ensuring that their role is discharged in the most tangible and
effective manner.
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2. OWNERSHIP STRUCTURE
→ Broad and balanced shareholder base
→ A single class of shares
→ Authorized capital consistent with best practice to provide the necessary flexibility
2.1 Share capital
Our share capital comprises ordinary shares, each with a par value
of EUR 0.50. Every share belongs to the same class and carries the
same voting, dividend and other rights.
We do not have any bonds or securities that can be converted into
shares other than the contingent convertible preferred securities
(CCPS) mentioned in section 2.2 'Authority to increase capital'.
As at 31 December 2024, Banco Santander's share capital
amounted to EUR 7,576,246,161, divided into 15,152,492,322
shares.
In 2024, we amended our share capital three times, reducing it on
each occasion:
• Two through the cancellation of the shares repurchased under
the buyback programmes that formed part of the shareholder
remuneration policy for 2023:
• one by EUR 179,283,744 (c. 2.22% of share capital), under the
authorization of the 2023 AGM and registered with the
Commercial Registry on 5 February 2024; and
• another one by EUR 165,652,500 (c. 2.09% of share capital), in
the terms agreed at the 2024 AGM and registered with the
Commercial Registry on 1 July 2024.
• One through the cancellation of the shares repurchased under
the first buyback programme that formed part of the shareholder
remuneration policy for 2024 (First 2024 Buyback Programme),
by EUR 170,890,625 (c. 2.21% of share capital), under the
authorization of the 2024 AGM and registered with the
Companies Register on 20 December 2024.
Since November 2021, when we completed the first buyback
programme of those executed within the framework of the
shareholder remuneration policy, Banco Santander has reduced its
share capital by c.12.62% of the outstanding shares as of that date.
At the 2025 AGM, the board of directors submitted a share capital
reduction proposal to cancel the shares that will be acquired
through the second share buyback programme charged against
2024 results (Second 2024 Buyback Programme); as well as, if
appropriate, a further proposal to cancel the shares that are
acquired in any new buyback programme that the board may
implement or by other legally permitted means.
See sections 2.5 'Treasury shares' and 3.5 'Our next AGM in 2025'.
We have a diversified and balanced shareholder structure, with
3,485,134 shareholders as at 31 December 2024, broken down by
type, geographical provenance and number of shares as follows:
Type of investor
% of share capital
Board
A
1.29%
Institutional
58.70%
Retail
40.01%
Total
100%
A. Shares owned or represented by directors. For more details, see 'Tenure and
equity ownership' in section 4.2 and subsection A.3 in section 9.2 'Statistical
information on corporate governance required by CNMV'.
Geographic distribution
% of share capital
Europe
72.73%
The Americas
25.72%
Rest of the world
1.55%
Total
100%
Number of shares
% of share capital
1-3,000
8.82%
3,001-30,000
16.92%
30,001-400,000
11.56%
Over 400,000
62.70%
Total
100%
2.2 Authority to increase capital
Under Spanish law, shareholders at the general meeting have the
authority to increase the share capital and may delegate power to
the board of directors to increase the share capital by no more than
50%. Our Bylaws are consistent with Spanish law and do not set
out special conditions for share capital increases.
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As at 31 December 2024, our board of directors had received
authorization from shareholders to approve or carry out the
following capital increases:
• Authorized capital to 2027: Shareholders at the 2024 AGM
granted authorization to the board to increase share capital on
one or more occasions by up to EUR 3,956,394,643 (50% of the
capital at the time of that AGM). The board was granted this
authorization for a period of three years (until 22 March 2027).
The board can issue shares for cash consideration with or without
pre-emptive rights for shareholders, and for capital increases to
back any convertible bonds or securities issued under its
authority granted at the 2023 AGM.
Shares without pre-emptive rights under this authorization can
be issued up to EUR 791,278,928.50 (10% of the capital at the
time of the 2024 AGM). However, under the Spanish Companies
Act, this limit does not apply to capital increases to convert CCPS
(which shall be converted into newly-issued shares if the CET1
ratio falls below a predetermined threshold). This authorization
was used for the two CCPS issues carried out in 2024.
Issues of contingent convertible preferred securities (CCPS)
Date of
• Capital increases approved for contingent conversion of CCPS:
We issued contingent convertible preferred securities that
qualify as regulatory Additional Tier 1 (AT1) instruments and
would be converted into newly-issued shares if the CET1 ratio
fell below a predetermined threshold. Each issue was backed by
a capital increase approved under the authorization granted to
the board by shareholders in force at the time of the CCPS issue.
The chart below shows the outstanding CCPS at the time of this
report, with details about the capital increase resolutions that
back them. Those capital increases are, therefore, contingent and
have been delegated to the board of directors. The board is
authorized to issue additional CCPS and other convertible
securities and instruments in accordance with a resolution
passed at the 2023 AGM that allows convertible instruments and
securities to be issued for up to EUR 10 billion or an equivalent
amount in another currency (under this authorization, two CCPS
issues were executed in 2023 and two in 2024). Any capital
increase resulting from the conversion of shares and other
convertible instruments will occur according to the capital
increase authorization made at the time those instruments were
issued.
Maximum number
Conversion predetermined
of shares in case
issuance
Nominal amount
Discretionary remuneration per annum
threshold
of conversion
A
19/03/2018
EUR 1,500 million
4.75% for the first 7 years
416,666,666
14/01/2020
EUR 1,500 million
4.375% for the first 6 years
604,594,921
06/05/2021
USD 1,000 million
4.75% for the first 6 years
391,389,432
06/05/2021
EUR 750 million
4.125% for the first 7 years
352,278,064
If, at any time, the CET1 ratio of
21/09/2021
EUR 1,000 million
Banco Santander or the Group is
498,007,968
lower than 5.125%
3.625% for the first 8 years
16/11/2023
USD 1,150 million
9.625% for the first 5 years and 6 months
447,470,817
16/11/2023
USD 1,350 million
9.625% for the first 10 years
525,291,828
20/05/2024
EUR 1,500 million
7% for the first 6 years
501,672,240
01/08/2024
USD 1,500 million
8% for the first 10 years
461,964,890
A. The figure corresponds to the maximum number of shares that could be required to cover the conversion of these CCPS, calculated as the quotient (rounded off by default) of
the nominal amount of the CCPS issue divided by the minimum conversion price determined for each CCPS (subject to any antidilution adjustments and the resulting
conversion ratio).
2.3 Significant shareholders
As at 31 December 2024, no Banco Santander shareholder
individually held over 3% of the voting rights (the minimum
threshold provided under Spanish law to issue a mandatory
notification of a significant holding in a listed company).
Though the following shareholding held by an asset manager was
registered with the CNMV as at 31 December 2024, its related
notification states that the shares and financial instruments to
which voting rights the notification refers are being held on behalf
of third parties (funds or other investment entities or the portfolios
they manage) and that none of them exceeds 3% of the voting
rights that Banco Santander shares afford.
Significant shareholding as at 31 December 2024
Date of entry in
CNMV register
Shareholder name
% voting rights
A
04/10/2024
BlackRock Inc
6.875
A. Includes voting rights attached to shares and financial instruments.
The changes notified to the CNMV in 2024 with regard to
significant shareholdings are detailed below:
Significant shareholding. Changes in 2024
Date of entry in Shareholder
CNMV register
name
Previous %
A
Subsequent %
A
18/06/2024
Dodge & Cox
3.038
2.937
04/10/2024
Blackrock Inc
5.426
6.875
A. Includes voting rights attached to shares and financial instruments.
Likewise, though as 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 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 (3.99%) and BNP Paribas
(3.36%).
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There may be some overlap in the holdings declared by these
custodians and the above mentioned asset manager.
Lastly, as at 31 December 2024, neither our shareholder register
nor the CNMV's register showed any investor residing in a non
cooperative jurisdiction holding at least 1% of our voting rights
(which is the mandatory disclosure threshold applicable to such
investors under Spanish law).
Our Bylaws and the Rules and regulations of the board of directors
set out a regime to analyse and approve transactions with
shareholders holding more than 10% of the voting rights. See
section 4.12 'Related-party transactions and other conflicts of
interest'.
2.4 Shareholders’ agreements
In February 2006, several persons linked to the Botín-Sanz de
Sautuola y O’Shea family entered into a shareholders’ agreement
to set up a syndicate for their shares in Banco Santander. The
CNMV was informed of the execution of this agreement and the
subsequent amendments the parties made. This information can
be found on the CNMV website.
The main provisions of the agreement are:
• Transfer restrictions. Any transfer of Banco Santander shares
expressly included in the agreement requires prior authorization
from the syndicate meeting (which can freely authorise or reject
it), except when the transferee is also a party to the agreement
or Fundación Botín. These restrictions apply to the shares they
expressly cover under the agreement and to shares subscribed
for, or acquired by, syndicate members in exercising any
subscription, bonus share, grouping or division, replacement,
exchange or conversion rights that pertain or are attributed to, or
derive from, those syndicated shares.
• Syndicated voting. Under the agreement, the parties will pool the
voting rights attached to all their shares so that syndicate
members may exercise them and engage Banco Santander in a
concerted manner, in accordance with the instructions and the
voting criteria and orientation the syndicate establishes. This
covers the shares subject to the transfer restrictions mentioned
above as well as any voting rights attached to any other Banco
Santander shares held either directly or indirectly by the parties
to the agreement, and any other voting rights assigned to them
by virtue of usufruct, pledge or any other contractual title, for as
long as they hold those shares or are assigned those rights.
Representation of the syndicated shares is attributed to the
syndicate chair, who will be the chair of Fundación Botín
(currently Javier Botín, one of our directors and brother of our
Group Executive Chair (Ana Botín)).
Though the agreement initially terminates on 1 January 2056, it
will extend automatically for additional 10-year periods unless one
of the parties notifies of its intention not to extend six months
before the initial term or extension period ends. The agreement
may only be terminated early if all the syndicated shareholders
agree unanimously.
As at 31 December 2024, the parties to this agreement held
109,810,101 shares in Banco Santander (0.72% of its capital at
such time), which were therefore subject to the voting syndicate.
They include 80,355,819 shares (0.53% of its capital by close of
2024) that are also subject to the referred transfer restrictions.
Subsection A.7 of section 9.2 'Statistical information on corporate
governance required by CNMV' contains a list of parties to the
shareholders' agreement and the relevant information filed with
CNMV.
2.5 Treasury shares
Shareholder approval
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 following
two: the price of the last independent transaction 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.
Treasury shares policy
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 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.
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• 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.
See section 2.1 'Share capital'.
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.
For more details on the share capital reductions, see section 2.1
'Share capital'
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 programme for a
maximum amount of EUR 1,587 million. The appropriate
regulatory authorization had 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. See section 3.5 'Our next AGM in 2025'.
Activity in 2024
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).
The chart below summarizes the monthly average proportion of
treasury shares to share capital throughout 2023 and 2024.
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Monthly average of daily positions in treasury shares
% of Banco Santander’s share capital at month end
2024
January
1.83%
February
0.13 %
March
0.54 %
April
0.98 %
May
1.49 %
June
1.54 %
July
0.02 %
August
0.06 %
September
0.45 %
October
0.94 %
November
1.60 %
December
1.36%
2023
1.75%
2.16%
1.46%
1.50%
1.72%
1.68%
0.08%
0.08%
0.08%
0.64%
1.25%
1.56%
In 2024, Banco Santander and its subsidiaries' treasury share trades amounted to the following values:
Acquisitions and transfers of treasury shares in 2024
Acquisitions
Transfers
EUR (except
Average
Average
number of
Number of
Total cash
purchase
Number of
Total cash
purchase
Profit (loss)
shares)
shares
Total par value
amount
price
shares
Total par value
amount
price
net of taxes
Discretionary
trading
72,223,881
36,111,941
298,048,000
4.13
67,667,779
A
33,833,890
A
268,877,000
A
4.14
B
7,804,000
B
Client induced
trading
C
113,575,334
56,787,667
484,880,000
4.27
113,575,334
56,787,667
484,880,000
4.27
Buyback
programmes
744,811,421
372,405,711
3,255,024,000
4.37
N/A
N/A
N/A
N/A
N/A
Total
930,610,636
465,305,318
4,037,952,000
4.34
181,243,113
A
90,621,557
A
753,757,000
A
4.22
B
7,804,000
B
A. Including the donations that Banco Santander made to Fundación Banco Santander during the year totalling 22,167,105 treasury shares. For more details, see section 3.2.4
'Community Support' of the 'Sustainability statement' chapter.
B. Excluding the donations mentioned in footnote A above.
C. Transactions on Banco Santander's shares to hedge market risks or provide brokerage or hedging for customers.
The chart below shows significant changes in treasury shares that required disclosure to the CNMV in the year. Companies must report to
the CNMV when purchases of treasury shares exceed 1% of the total voting rights (without discounting transfers) or there is a change in the
number of total voting rights.
Significant changes in treasury shares in 2024
A
% of voting rights represented by shares
Reported on
acquired since last notice
transferred since last notice
held at reference date of notice
26/01/2024
B
1.13%
0.20%
1.61%
08/02/2024
1.00%
2.57%
0.08%
05/04/2024
1.05%
0.36%
0.76%
23/05/2024
1.01%
0.25%
1.53%
04/07/2024
0.87%
2.42%
0.01%
07/10/2024
1.02%
0.28%
0.75%
19/11/2024
1.04%
0.12%
1.67%
27/12/2024
0.81%
2.35%
0.17%
A. Percentages calculated with share capital at the date of disclosure.
B. It amends report dated 13 December 2024.
Transactions with financial instruments
The transactions with financial instruments with Banco Santander
shares as the underlying asset carried out by Banco Santander of
its own accord in 2024 for the purpose of discretionary treasury
share management are as follows:
• In Q1'24, we reduced the investment position by a delta (i.e. net
exposure to share price changes) equalling 860,000 shares. In
Q2'24, we increased the investment position by a delta equalling
1,450,000 shares.
• The final position at year end was a positive aggregated delta
equalling 1,500,000 shares worth a total EUR 6,785,815.
• The instruments used were total return equity swaps and listed
options, to be settled at maturity exclusively in cash.
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2.6 Stock market information
Markets
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).
Market capitalization and trading
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 Banco Santander share
2024
Shares (million)
15,152.5
Price (EUR)
Closing price
4.465
Change in the price
18%
Maximum for the period
4.928
Date of maximum for the period
29/04/2024
Minimum for the period
3.563
Date of minimum for the period
30/01/2024
Average for the period
4.352
End-of-period market
capitalization (EUR million)
67,648.3
Trading
Total volume of shares traded
(million)
7,712.6
Average daily volume of shares
traded (million)
30.1
Total cash traded (EUR million)
33,409.9
Average daily cash traded (EUR
million)
130.5
2023
16,184.1
3.780
35%
3.970
06/12/2023
2.812
03/01/2023
3.447
61,168.0
11,132.3
43.7
38,143.5
149.6
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3. SHAREHOLDERS
AND GENERAL MEETING
→ One share, one vote, one dividend
→ No takeover defences in our Bylaws
→ High shareholder participation at the general meeting, mostly through virtual means
→ Bylaws authorization to hold virtual-only meetings ensuring equal treatment of our shareholders
3.1 Shareholder communication
and engagement
Policy on communication and engagement with
shareholders and investors
Banco Santander aims to ensure its interests are in line with those
of its shareholders, through sustainable growth and long-term
value creation, retaining shareholders' and broader society's trust.
To do that, we:
• provide information to shareholders and investors that meets
their expectations and upholds our culture and values; and
• communicate and engage with them regularly so that senior
managers and governance bodies consider their views.
Our policy on communication and engagement with shareholders
and investors, available on our corporate website, sets out the
principles that govern the aforementioned activities:
• Protection of all shareholders' rights and lawful interests. We
facilitate exercising of shareholders' rights, provide them with
information and give them opportunities to have a say in our
corporate governance.
• Equal treatment and non-discrimination. We treat investors in
the same situation equally.
• Fair disclosure. We make sure that the information we disclose
is transparent, truthful and consistent according to applicable
law.
• Appropriate disclosure of information. We report appropriate
and relevant information to meet our shareholders’ and
investors’ needs and expectations, and make sure it is clear,
concise and accurate.
• Compliance with the law and corporate governance rules. We
adhere closely to the laws and regulations on inside and price
sensitive information in addition to following the principles of
cooperation and transparency with supervisory and regulatory
bodies.
The policy also sets out:
• the roles and responsibilities of the main governance bodies and
internal functions involved in communication and engagement;
• the channels for information disclosure and communication;
and
• the ways in which we engage with shareholders and investors.
The policy also applies to relations with agents that advise,
recommend or guide our shareholders and investors, such as
financial and ESG analysts, proxy advisers and ratings agencies.
Moreover, Banco Santander has board-approved frameworks on
accounting, financial management and sustainability information
and management, on responsible banking and on branding and
communications. They set out the general principles, roles and key
processes on the communication of financial, non-financial and
corporate information, which help ensure that all our shareholders
and other stakeholders are properly informed about our strategy,
targets and results, as well as about our culture and values.
Engagement with shareholders in 2024
As part of our policy on communication and engagement with
shareholders and investors, we carried out the following activities
during the year:
• The annual general meeting. The ordinary general meeting is
the most important annual event for our shareholders. We strive
to encourage them to attend and participate in the meeting, in an
informed way. See 'Participation at general meetings' and 'Right
to information' in section 3.2.
The annual general meeting is broadcast live on our corporate
website, where its recordings are made available in full
afterwards. This enables shareholders who cannot attend the
meeting and other stakeholders who want to access the
recording to remain fully informed of the resolutions that are
submitted for approval.
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The 2024 AGM was hybrid, allowing shareholders to attend in
person or remotely. Our general meeting attendance app
ensures shareholders can fully exercise their rights to attend and
participate in real time and remotely. They can watch the entire
meeting through a live feed, vote, make remarks, propose
resolutions, see the remarks and proposals of other shareholders
who attend remotely and contact the notary public. Our high
shareholder participation rate at the most recent general
meetings proves the effectiveness of our electronic means of
attendance, delegation and remote voting.
As usual, an external auditor reviewed our 2024 AGM procedures,
where it verified that our meeting call, preparation,
communication and holding of the event were up to standard, as
well as certifying the security, integrity and consistency of the
means available for shareholders to participate.
Also, Banco Santander's management system for the 2024 AGM
received once again AENOR certification for sustainable events in
compliance with the UNE-ISO 20121.
The vast quorum and voting results at our 2024 AGM show just
how important we consider shareholder engagement through
general meetings. See section 3.4 '2024 AGM'.
• Lead Independent Director meetings with key investors. Since
September 2024, our Lead Independent Director held several
meetings with institutional investors, bringing forward the dates
of the planned agenda. Though meetings primarily focused on
understanding their concerns about remuneration, they also
addressed other topics of interest such as the structure of the
board, our sustainability strategy and their opinion on virtual
AGMs. In total, he met with 16 large institutional investors, who
account for approximately 24% of our share capital.
• Quarterly results presentations. We present our results at the
end of each quarter on the same day we make them public. The
presentation can be followed live, via conference call or
streamed on our website. We release the related quarterly
financial report and presentation material on the same day
before the markets open. During the presentation, questions can
be asked or emailed to investor@gruposantander.com.
In 2024, we gave our first, second and third quarter results
presentations on 30 April, 24 July and 29 October, respectively.
Our fourth quarter results presentation took place on 5 February
2025.
• Investor days. We organize investor days where we explain our
strategy and targets for the next three years to investors and
other stakeholders in a broader context than in results
presentations. Investors can interact directly with senior
managers and some directors. We publish announcements about
these meetings and provide related documents well in advance.
We held our most recent investor day in London on 28 February
2023.
• Other activities. We know that a single format for
communicating with shareholders and investors is not valid for
everyone. For this reason, in 2024 and early 2025, we carried out
the activities detailed in the table below to meet their diverse
needs and expectations.
Other activities
→Investor roadshows
Our Shareholder and Investor Relations team had 1,269 meetings (both in person
and virtually) with 511 investors, including 109 meetings focused on ESG matters.
We engaged with 37.91% of share capital.
→Interaction with retail shareholders
Our Shareholder and Investor Relations team held 229 events (online, in person
and hybrid). Attendees accounted for 8.25% of the capital held by retail
shareholders in Spain. Shareholders engaged with the Group’s senior management
at several of these events.
→Studies and surveys
We received 157,632 shareholders and investors opinions through quality surveys
and studies, of which 9,136 corresponded to opinions received in the SPF (Simple,
Personal and Fair) survey of Banco Santander.
Communication with proxy advisors and
other analysts
We have always recognized the value our investors place on open
dialogue with proxy advisers, ESG analysts and other influential
entities. We make sure they understand our corporate governance
and sustainability priorities and messages in order to convey them
properly to investors.
In 2024, we continued to engage with the main proxy advisers.
Moreover, we provided information and explanations about
proposed resolutions submitted to vote at the 2024 AGM so they
could make voting recommendations.
We also engaged in dialogue with ESG analysts. For more details,
see the 'Sustainability statement’ chapter.
Corporate website
Our corporate website includes all the information on corporate
governance as required by law and, in particular, (i) Banco
Santander’s key internal regulations (Bylaws, Rules and
regulations of the board, Rules and regulations for the general
shareholders meeting, etc.); (ii) information on the board of
directors and its committees, as well as directors’ skills and
professional biographies; and (iii) all the information related to
general meetings.
Information on our corporate governance can be found at https://
www.santander.com/en/shareholders-and- investors/corporate
governance (included for information purposes only). The contents
of our corporate website are not incorporated by reference to this
annual report nor should be considered part of it for any purpose.
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In addition, our corporate website provides extensive institutional,
financial and sustainability information about the Group as well as
other information we consider to be of interest to our shareholders
and, in general, to all our stakeholders worldwide. Its design
enables us to be transparent and enhance user experience by
providing quality information about Santander.
Other channels
In order to maximize the dissemination and
quality of information, we offer shareholders and
investors an app (Santander Shareholders and
Investors) compatible for Android and Apple iOS
that contains a broad range of information about
the Group.
We also engage with shareholders through various channels,
such as an email address, telephone lines, WhatsApp, postal
service and virtual office.
In addition, we regularly post information about Banco Santander
on our official X and LinkedIn accounts. The contents included in
these profiles are not incorporated by reference to this annual
report nor should be considered part of it for any purpose.
3.2 Shareholder rights
One share, one vote, one dividend
Our Bylaws provide for one share class only (ordinary shares),
which grant all shareholders the same rights. Each Banco
Santander share entitles its holder to one vote and there is no
preferential treatment in dividend payouts. The Bylaws fully
adhere to the one share, one vote, one dividend principle.
Voting rights and unrestricted share transfers
There are no non-voting or multiple-voting shares, nor limitations
to the number of votes a shareholder can cast, or any other
restriction on exercising voting rights, except for those prescribed
by law or set out in our Bylaws should the acquisition of the shares
infringe regulations. There are no quorum requirements or
qualified majorities other than those prescribed by law.
Neither Banco Santander's Bylaws nor any other means restrict the
transferability of shares, which is subject only to restrictions
prescribed by law.
Furthermore, our Bylaws do not include any neutralization
provisions, as set out in the Spanish Securities Market Act, which
would apply in takeover bids.
The shareholders' agreement mentioned in section 2.4
'Shareholders' agreements’ contains transfer and voting
restrictions on the shares that are subject to it.
Acquisition of significant shareholdings
Because banking is a regulated sector, the acquisition of a
significant shareholding or influence in Banco Santander is subject
to regulatory approval or non-objection, as applicable, by the
supervising authority. Furthermore, as Banco Santander is a listed
company, any parties wishing to acquire control over it and/or
enter into any other lawful scenario must launch a tender offer for
its shares.
Such acquisitions are largely regulated by:
• Regulation (EU) 1024/2013 of the Council of 15 October 2013,
conferring specific tasks on the ECB relating to the prudential
supervision of credit institutions.
• Act 10/2014, of 26 June, on the organization, supervision and
solvency of credit institutions and its implementing regulation,
Spanish Royal Decree 84/2015, of 13 February.
• Act 6/2023, of 17 March, on the Securities Markets and on
Investment Services.
The acquisition of a significant holding in Banco Santander may
also require approval by other domestic and foreign regulators
with supervisory powers over Banco Santander or its subsidiaries'
operations and shares listings, or other actions concerning such
regulators or subsidiaries; and other authorities pursuant to foreign
investment regulations in Spain or other countries where we
operate.
Participation at general meetings
All registered holders of shares found on record at least five days
prior to the day of a general meeting are entitled to attend. Banco
Santander facilitates shareholder participation by allowing them to
exercise their rights to attend, delegate, vote and participate at
general meetings using remote communications systems.
Shareholders can attend general meetings virtually. They can
follow them through real-time means of communication, vote,
make remarks, propose resolutions and contact the notary public.
Our Bylaws allow for general meetings to be virtual-only, without
the physical attendance of shareholders or their proxies, provided
that we can guarantee their identity and standing and that they can
participate effectively in the meeting by remote means of
communication, exercise their rights in real time and follow the
presentations of other attendees, considering the state of the art
and Banco Santander’s circumstances, particularly the number of
shareholders.
The electronic shareholders’ forum, available on the corporate
website at the time the meeting is called, allows shareholders to
add to the agenda items included in the meeting notice, requests
for support for their proposals, initiatives to reach the percentage
required to exercise minority shareholder rights legally, and offers
or requests to act as a voluntary proxy.
Supplement to the notice and proposal of
resolutions
Shareholders representing at least 3% of the share capital are able
to request the publication of a supplement to the annual general
meeting notice, adding one or more items to the agenda, with an
explanation or substantiated resolution proposal and any other
relevant documents.
Shareholders representing at least 3% of the share capital may
also propose reasoned resolutions on any matters that have been,
or should be, added to the agenda of a called annual general
meeting.
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To exercise these rights, shareholders must send a certified notice
to Banco Santander’s registered office within five days after the
annual general meeting notice is posted.
Any shareholder, irrespective of their stake, can also request the
removal of directors or the filing of corporate liability action
against any director to be put to a vote at the general meeting,
even when not on the agenda.
Right to information
From the time the general meeting notice is posted until the fifth
day before the general meeting date on first call, shareholders can
submit the written requests for information or clarification they
may deem pertinent, or any written questions they deem relevant
to the items on the meeting agenda.
Moreover, in the same manner and within the same period,
shareholders can submit written requests for clarification about
information Banco Santander has sent to the CNMV since the last
general meeting or about auditor’s reports. Banco Santander posts
all shareholder-requested information and the answers it provides
on its corporate website.
Shareholders who attend either in person or virtually may also
exercise their right to receive information at the meeting. Where
information cannot be given during the course of the meeting, it
will be provided in writing within seven days and posted on our
corporate website.
Quorum and majorities for passing resolutions
at the general meeting
The quorum and majorities set out in our Bylaws and Rules and
regulations for general meetings in order to hold a valid meeting
and adopt corporate resolutions are those provided for under
Spanish law.
Except for certain matters mentioned below, on first call,
shareholders accounting for at least 25% of the subscribed share
capital with voting rights must be in attendance for the valid
constitution of the general shareholders' meeting. If sufficient
quorum is not reached, general meetings will be held on second
call, which does not require a quorum.
In accordance with our Rules and regulations for general meetings,
shareholders voting by remote means, by post or direct delivery or
by electronic means before the meeting are counted as present in
order to determine the general meeting quorum.
With the exception of certain matters mentioned below, general
meeting resolutions pass when shareholders attending in person
or by proxy cast more votes in favour than against.
The quorum and majorities required to amend the Bylaws, issue
shares and bonds, make structural changes and vote on other
significant resolutions permitted by law are those set out below for
amending the Bylaws. Furthermore, in accordance with laws
applying to credit institutions, if over 50% of the share capital is
present at a general meeting, a qualified two-thirds majority is
required to raise the proportion of variable remuneration
components to fixed components above 100% (up to 200%) for
executive directors and other employees whose professional
activities have a material impact on the Group's risk profile;
otherwise, a three-quarters majority will be necessary.
Decisions about acquiring, selling or contributing core assets to
another company or similar corporate transactions shall require
shareholder approval at general meetings when the law so
dictates. Our Bylaws have no further requirement in this regard.
Rules for amending our Bylaws
Shareholders at the general meeting have the authority to approve
any amendment to the Bylaws. However, the board can also decide
to change the registered office within Spain.
The directors or, as applicable, the shareholders who have drafted
a proposed amendment to the Bylaws, must write it out in full and
prepare a report justifying it, which shall be provided to
shareholders at the time the general meeting to debate the
proposed amendment is called.
The general meeting notice must clearly state the items to be
amended as well as the rights of all shareholders to examine the
full text of proposed amendments and the related report at Banco
Santander’s registered office and to have them delivered free of
charge.
If shareholders are convened to debate amendments to the
Bylaws, the quorum on first call will be reached if 50% of the
subscribed share capital with voting rights is in attendance. If a
sufficient quorum cannot be reached, the general meeting will be
held on second call, where 25% of the subscribed share capital
with voting rights must be in attendance.
When less than 50% of the subscribed share capital with voting
rights is in attendance, resolutions on amendments to the Bylaws
can only be validly adopted if two-thirds of shareholders attending
the meeting in person or by proxy vote for them. However, when
50% or more of the subscribed share capital with voting rights is
present, resolutions may pass by way of absolute majority.
Resolutions to amend the Bylaws that involve new obligations for
shareholders must be accepted by those affected.
Bylaw amendments are subject to ECB approval. However,
amendments that are exempt from authorization but must still be
reported to the ECB include a change of the registered office within
Spain, share capital increases, adding mandatory or prohibitive
laws or regulations to the Bylaws, changing the wording in order to
comply with court or administrative rulings and any others the ECB
has declared exempt due to a lack of materiality in response to
prior consultations.
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3.3 Dividends and shareholder
remuneration
Remuneration 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). See 'First 2024 Buyback Programme' in section 2.5.
• 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 EUR 1,587 million, for which the
appropriate regulatory authorization has been obtained, and
the execution of which began on 6 February 2025. For more
details, see 'Second 2024 Buyback Programme' in section 2.5.
• 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.
3.4 2024 AGM
We held our annual general meeting on 22 March 2024, on second
call, in a hybrid format, allowing attendance both in person and by
electronic means.
Quorum and attendance
The quorum (among shareholders present and represented) was
66.646%, broken down as follows:
Share capital with
Quorum breakdown
voting rights
Present
4.168 %
In person and virtual attendance
0.819 %
In person attendance
0.073%
A
Virtual attendance
0.007%
Remote voting
3.349%
By post or direct delivery
0.523 %
By electronic means
2.826%
Represented
62.478 %
By post or direct delivery
5.987 %
By electronic means
56.491 %
Total
66.646 %
A. The portion corresponding to shares directly or indirectly held by directors or
represented by them at the meeting is not included in this percentage. For more
details on directors' voting rights, see subsection A.3 of section 9.2 'Statistical
information on corporate governance required by the CNMV'.
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Approved resolutions and voting results
All items on the agenda were approved. Votes in favour of the board’s proposals averaged 97.16%. 99.36% of votes approved the corporate
management for 2023 and 74.82% of the votes approved the directors' remuneration policy for 2024, 2025 and 2026.
The following chart summarizes the resolutions approved and voting results:
VOTES
A
For
B Against
B Blank
C
Abstention
C
Quorum
D
1. Annual accounts and corporate management
1A. Annual accounts and directors’ reports for 2023
99.71
0.29
0.05
0.30
66.65
1B. Consolidated statement of non-financial information for 2023
99.70
0.30
0.06
0.38
66.65
1C. Corporate management for 2023
99.36
0.64
0.06
1.63
66.65
2. Application of results for 2023
99.70
0.30
0.05
0.21
66.65
3. Board of directors: appointment and re-election of directors
3A. Setting of the number of directors
99.63
0.37
0.07
0.28
66.65
3B. Appointment of Mr Juan Carlos Barrabés Cónsul
99.62
0.38
0.07
0.33
66.65
3C. Appointment of Mr Antonio Francesco Weiss
99.61
0.39
0.06
0.34
66.65
3D. Re-election of Mr Javier Botín-Sanz de Sautuola y O'Shea
96.77
3.23
0.06
0.33
66.65
3E. Re-election of Mr Germán de la Fuente Escamilla
99.62
0.38
0.07
0.32
66.65
3F. Re-election of Mr Henrique de Castro
95.45
4.55
0.06
0.33
66.65
3G. Re-election of Mr José Antonio Álvarez Álvarez
97.70
2.30
0.06
0.31
66.65
3H. Re-election of Ms Belén Romana García
99.21
0.79
0.07
0.35
66.65
4. Re-election of the external auditor for financial year 2024
99.48
0.52
0.05
0.31
66.65
5. Share capital
5A. Authorisation to the board of directors to increase the share capital of the Bank on
one or more occasions and at any time, within a 3-year period, through cash contributions
in the maximum nominal amount of EUR 3,956,394,643. Delegation of the power to
exclude pre-emptive rights.
95.16
4.84
0.04
0.22
66.65
5B. Reduction in share capital in the maximum amount of EUR 783,428,928.50 , through
the cancellation of a maximum of 1,566,857,857 own shares. Delegation of powers.
99.44
0.56
0.04
0.19
66.65
5C. Reduction in share capital in the maximum amount of EUR 791,278,928.50, through
the cancellation of a maximum of 1,582,557,857 own shares. Delegation of powers.
99.22
0.78
0.04
0.22
66.65
6. Remuneration
6A. Directors' remuneration policy
74.82
25.18
0.05
0.29
66.65
6B. Setting of the maximum total annual remuneration of directors in their capacity
as such
97.43
2.57
0.05
0.29
66.65
6C. Approval of the maximum ratio of fixed and variable components of total
remuneration of executive directors and other employees belonging to categories with
professional activities that have a material impact on the risk profile
98.84
1.16
0.06
0.27
66.21
6D. Deferred Multiyear Objectives Variable Remuneration Plan
95.63
4.37
0.06
0.29
66.65
6E. Application of the Group’s buy-out regulations
98.75
1.25
0.07
0.32
66.65
6F. Annual directors' remuneration report (consultative vote)
90.18
9.82
0.06
1.31
66.65
7. Authorisation to the board and granting of powers for conversion into a public
instrument
99.70
0.30
0.06
0.25
66.65
8 to 23. Corporate action to demand director liability and dismissal and removal
of directors
E
0.00
100.00
0.00
0.05
63.30
A. Each Banco Santander share grants one vote.
B. Percentage of votes for and against.
C. Percentage of share capital present and attending by proxy at the 2024 AGM.
D. Percentage of Banco Santander's share capital on the date of the 2024 AGM.
E. Items 8 to 23, not included on the agenda, were put to a separate vote. They refer to the proposal to bring corporate action to demand director liability (acción social de
responsabilidad) against all directors in office (8) and to the proposal of dismissal and removal of the following directors: Ms Ana Botín-Sanz de Sautuola y O'Shea (9), Mr
Héctor Blas Grisi Checa (10), Mr Glenn Hogan Hutchins (11), Mr José Antonio Álvarez Álvarez (12), Ms Homaira Akbari (13), Mr Javier Botín-Sanz de Sautuola y O'Shea (14),
Mr Bruce Carnegie-Brown (15), Ms Sol Daurella Comadrán (16), Mr Henrique de Castro (17), Mr Germán de la Fuente Escamilla (18), Ms Gina Lorenza Díez Barroso (19), Mr
Luis Isasi Fernández de Bobadilla (20), Mr Ramiro Mato García-Ansorena (21), Ms Belén Romana García (22) and Mrs Pamela Walkden (23).
The full texts of the resolutions passed can be found on our corporate website and on the CNMV’s website, as they were filed as other
relevant information on 22 March 2024.
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3.5 Our next AGM in 2025
Resolution proposals submitted to shareholders' approval
The board of directors agreed to call the 2025 AGM on 3 April on first call or on 4 April on second call, and to propose the following
resolutions:
Annual accounts and corporate management
→To approve the annual accounts and the directors’ reports of Banco Santander and its consolidated Group for the financial year ended
on 31 December 2024. For more details, see 'Consolidated financial statements'.
→To approve the consolidated non-financial statement for the financial year ended on 31 December 2024, which is part of the
consolidated directors' report. See the 'Sustainability statement' chapter.
→To approve the corporate management for financial year 2024.
Application of results of financial year 2024
→To approve the application of results obtained by Banco Santander during financial year 2024. See note 4.a) to the consolidated
financial statements.
Board of directors: appointments and re-elections
→To set the number of directors at 15, within the maximum and minimum limits stated in the Bylaws.
→To re-elect Luis Isasi, Héctor Grisi, Glenn Hutchins, Pamela Walkden and Ana Botín for a three-year period. See section 4.1 'Our
directors'.
External auditor
→To re-elect the firm PricewaterhouseCoopers Auditores, S.L. (PwC) as external auditor of Banco Santander and its consolidated group
for financial year 2025.
Independent verifier
→To appoint the firm PricewaterhouseCoopers Auditores, S.L. (PwC) as verifier of the sustainability information of Grupo Santander for
financial year 2025.
Share capital
→To reduce the share capital of Banco Santander with the following purposes:
• Cancelling a maximum of 1,413,743,296 treasury shares purchased under the Second 2024 Buyback Programme.
• Cancelling a maximum of 1,515,249,232 treasury shares acquired through one or more share buyback programmes or by other
legally permitted means, authorizing the board of directors to cancel them on one or several occasions within the earlier of one year
or the date of the next annual general meeting.
See sections 2.1 'Share capital' and 2.5 'Treasury shares'.
Remuneration. See section 6. 'Remuneration'
→To approve the director's remuneration policy for 2025, 2026 and 2027.
→To set the maximum amount of annual remuneration to be paid to all the directors in their capacity as such.
→To approve a maximum ratio of 200% of variable components to fixed components of total remuneration for executive directors and
certain employees belonging to professional categories that have a material impact on the Group’s risk profile.
→To approve the Deferred Multiyear Objectives Variable Remuneration Plan.
→To approve the Group's buy-out regulations.
→To hold a non-binding vote on the annual directors’ remuneration report.
Related documents and information are available for consultation on our corporate website from the date the meeting notice is published.
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Virtual AGM
The 2025 AGM will be held as a virtual-only meeting broadcast live
from our corporate centre in Boadilla del Monte. Holding the
meeting in this format is possible thanks to the legal and statutory
authorisation to hold this type of meeting that was approved by the
vast majority of our shareholders, it is consistent with the
Santander Group’s digitalisation policy, and is motivated by the
following reasons:
• First, holding the meeting exclusively by remote means allows us
to ensure equal treatment of all our shareholders and facilitates
their participation and full exercise of their rights at the meeting
from anywhere, in line with our ongoing efforts to incentivise and
increase the flexibility in the relationship with its shareholders.
Banco Santander has several million shareholders, who are very
diversified geographically, and only a few dozen of them attend
the general meetings in person. Data on the 2024 AGM quorum
and attendance, which endorse the above, are available in section
3.4 '2024 AGM'.
• Additionally, we have spent over two decades promoting remote
participation of the shareholders in the general meeting and
developing a remote participation platform (the General
Shareholders’ Meeting Platform), which proved to be ideal during
the pandemic, for which reason it is now considered perfectly
possible to hold the general meeting exclusively by remote
means with sufficient guarantees, thereby making more effective
use of the opportunities provided by technology. In this regard,
the General Shareholders’ Meeting Platform has sufficient
guarantees, replicates the functioning of the traditional meeting
and safeguards the exercise of shareholders' rights at the same
level as in a physical or hybrid meeting. The platform is
technologically tested and all the processes of the meeting are
subject to an external audit, which verifies compliance with the
procedures relating to the call, preparation, communication and
holding of the meeting, certifying the security, integrity and
consistency of the means made available to the shareholders
regarding their participation in the meeting. All of this is also part
of the Group's digitalisation and transformation process.
• Moreover, this initiative is aligned with the current digital
paradigm. This is shown by the experience of countries such as
the United States, Canada or Germany, where virtual-only
meetings are the majority practice among the major listed
companies. This is also attested by the evolution of Spanish
legislation after the experience of the pandemic, with the
admission of the possibility of holding meetings and assemblies
exclusively by remote means and with the express statutory
authorisation to this effect agreed by the vast majority of our
shareholders.
• Fourthly, the initiative allows for a more effective allocation of
the Group’s resources and a relative reduction in the costs
associated with a meeting of this nature, benefiting Banco
Santander and all the shareholders.
• Finally, a virtual AGM will considerably reduce the environmental
impact of a meeting held in a format requiring the physical travel
of attendees, employees and other persons involved in the
preparation and holding of the general meeting, particularly
when an equivalent result can be achieved without such travel
thanks to existing technology developed by the Group.
Attendance at the 2025 AGM shall be necessarily through the
General Shareholders' Meeting Platform accessible on the
corporate website www.santander.com, through the "General
Shareholders' Meeting" site, or on the website
www.juntasantander.com.
Since attendance at general meetings is not paid, a general policy in
this regard is not necessary. However, Banco Santander offers
shareholders that participate in our general meeting a
commemorative courtesy gift, as has been tradition for decades.
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4. BOARD OF DIRECTORS
A balanced board
→ 15 directors: 13 non-executive
→ Majority of independent
→ Balanced presence of women
and 2 executive
directors (66.67%)
and men (40%-60%)
3 Ana Botín
Executive Chair
Executive
director
òC•
11 Javier Botín
Member
Non-executive
director
4 Glenn
Hutchins
Vice Chair
and Lead
Independent
Director
Non-executive
director
(independent)
¢¢CpC
12 Homaira
Akbari
Member
Non-executive
director
(independent)
5 José Antonio
Álvarez
Vice Chair
Non-executive
director
13 Carlos
Barrabés
Member
Non-executive
director
(independent)
6 Germán
de la Fuente
Member
Non-executive
director
(independent)
òC•
14 Henrique
de Castro
Member
Non-executive
director
(independent)
7 Belén Romana
Member
Non-executive
director
(independent)
òò¢Cp•
15 Gina Díez
Barroso
Member
Non-executive
director
(independent)
8 Luis Isasi
Member
Non-executive
director
16 Jaime Pérez
Renovales
General
Counsel and
secretary of
the board
1 Pamela
Walkden
Member
Non-executive
director
(independent)
òpC•
9 Sol Daurella
Member
Non-executive
director
(independent)
¢¢ŸC
2 Héctor Grisi
CEO
Executive
director
10 Antonio
Weiss
Member
Non-executive
director
(independent)
• Executive committee
• Audit committee
• Nomination committee
• Remuneration committee
• Risk supervision, regulation and compliance committee
• Responsible banking, sustainability and culture committee
• Innovation and technology committee
C Chair of the committee
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4.1 Our directors
Ana
Botín-Sanz de Sautuola y O’Shea
EXECUTIVE CHAIR
Executive director
Board member since 1989.
Nationality: Spanish. Born in 1960 in Santander, Spain.
Education: Degree in Economics from Bryn Mawr College of
Pennsylvania.
Experience: Ms Botín joined Banco Santander, after working at JP
Morgan (New York, 1980-1988). In 1992, she was appointed
Senior Executive Vice President (director general). Between 1992
and 1998, she led Santander’s expansion into Latin America. In
2002, she was appointed Executive Chair of Banesto. Between
2010 and 2014, she was CEO of Santander UK PLC and was a non
executive director until April 2021. In 2014 she was
appointed Executive Chair of Banco Santander. She was also a non
executive director of Santander UK Group Holdings PLC
(2014-2021) and Chair of the European Banking Federation
(2021-2023).
Other positions of note: Ms Botín is a member of the board of
directors of The Coca-Cola Company and Chair of the Institute of
International Finance (IIF). She is also founder and Chair of the CyD
Foundation (which supports higher education) and the Empieza por
Educar Foundation (the Spanish subsidiary of international NGO
Teach for All), and sits on the advisory board of the Massachusetts
Institute of Technology (MIT).
Positions in other Group companies: Ms Botín is non-executive
Chair of Open Bank, S.A., Santander Consumer Finance, S.A., Open
Digital Services, S.L., PagoNxt, S.L., Universia España Red de
Universidades, S.A. and Universia Holding, S.L.; and is a non
executive director of Santander Holdings USA, Inc. and Santander
Bank, N.A.
Membership of board committees: Executive committee (Chair)
and innovation and technology committee.
Skills and competencies: Ms Botín has extensive international
experience in top executive roles in banking. She has also led
Grupo Santander’s strategic and cultural transformation, and her
philanthropy underscores her ongoing commitment to sustainable
and inclusive growth.
Héctor
Grisi Checa
CHIEF EXECUTIVE OFFICER
Executive director
Board member since 2023.
Nationality: Mexican. Born in 1966 in Mexico City, Mexico.
Education: Degree in Finance from Universidad Iberoamericana
(Mexico City).
Experience: Mr Grisi joined the Group in 2015 as Executive Chair
and CEO of Banco Santander México and Grupo Financiero
Santander México, S.A. de C.V. He was named Regional Head for
North America (2019-2022). Before joining Santander he worked in
Mexico and the US. Mr Grisi spent 18 years in several leadership
roles at Crédit Suisse, including Head of investment banking for
Mexico, Central America and the Caribbean, and Chair and CEO of
Crédit Suisse México. He also held several roles in corporate and
investment banking at Grupo Financiero Inverméxico and at Casa
de Bolsa Inverlat. From 2011 to 2014, Mr Grisi was Vice Chair of
Asociación de Bancos de México ("Bank Association of Mexico").
Other positions of note: Mr Grisi is non-executive Chair of
Cogrimex, S.A. de C.V.
Positions in other Group companies: Mr Grisi is a non-executive
director of Grupo Financiero Santander México, S.A. de C.V. and
PagoNxt, S.L.
Membership of board committees: Executive committee and
innovation and technology committee.
Skills and competencies: Mr Grisi has gained vast experience and a
unique strategic vision from his many years of executive service at
several banking and financial institutions. He is well-versed in
Grupo Santander’s businesses and global strategy, especially in
such key markets as Mexico and the US. He brings to the board
geographic and international diversity and a strong, international
track record of management, leadership, business transformation
and connectivity between the Group’s markets.
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Glenn Hogan
Hutchins
VICE CHAIR AND LEAD INDEPENDENT DIRECTOR
Non-executive director (independent)
Board member since 2022.
Nationality: American. Born in 1955 in Virginia, US.
Education: Graduated with a AB, MBA and JD from Harvard
University.
Experience: Mr Hutchins co-founded US technology and
investment firm Silver Lake, where he was CEO until 2011. Prior,
Mr Hutchins had been a senior managing director at The
Blackstone Group (1994-1999) and Thomas H. Lee Co.
(1985-1994), and a consultant at Boston Consulting Group. He has
also served on the boards of SunGard Data Systems (Chair,
2005-2015), NASDAQ (2005-2017) and Virtu Financial
(2017-2021). He served as a director and Chair of the audit and risk
committees of the Federal Reserve Bank of New York from 2011 to
2021. Additionally, he served on the board of the Harvard
Management Company, which manages Harvard University’s
endowment. Mr Hutchins worked with President Clinton in his
transition to power and the White House as special advisor on
economic and healthcare policy.
Other positions of note: Mr Hutchins is non-executive Chair of
investment firm North Island Ventures, an independent director of
AT&T and Lead Independent Director of CoreWeave, Inc. He is a
member of the international advisory board and investment board
of Singapore’s Government Investment Corporation (GIC), co-Chair
of the Brookings Institution, Chair emeritus of not-for-profit
organization CARE, and Vice Chair of the Obama Foundation. He
also serves on the executive committee of the Boston Celtics
basketball team.
Membership of board committees: Nomination committee,
remuneration committee (Chair), and innovation and technology
committee (Chair).
Skills and competencies: As a long-time investor in technology
and fintech companies, Mr Hutchins has expertise in financial
markets and is well-known among investors and stakeholders. He
brings to the board his acumen in technology, telecommunications,
innovation, finance and investment as well as extensive knowledge
of financial regulation as a result of his leadership roles in
government, especially with financial regulators and supervisors.
He works closely with not-for-profit entities committed to fighting
poverty, designing effective public policy and promoting social
justice.
José Antonio
Álvarez Álvarez
VICE CHAIR
Non-executive director
Board member since 2015.
Nationality: Spanish. Born in 1960 in León, Spain.
Education: Degree in Economics and Business Administration. MBA
from the University of Chicago.
Experience: Mr Álvarez joined Banco Santander in 2002. He was
appointed Senior Executive Vice President (director general) and
Head of the Financial Management and Investor Relations division
in 2004 (Group Chief Financial Officer) and was Group CEO from
2015 to 2022.
He served as director at SAM Investments Holdings Limited,
Santander Consumer Finance, S.A., Santander Holdings USA, Inc.,
and as non-executive Vice Chair of Banco Santander (Brasil) S.A. He
sat on the supervisory boards of Santander Consumer Bank AG,
Santander Consumer Holding GmbH and Santander Bank Polska,
S.A. He was also a board member of Bolsas y Mercados Españoles,
S.A.
Other positions of note: Mr Álvarez is an independent director of
Aon PLC and a member of the advisory committee of Grupo
Buenavista.
Positions in other Group companies: Mr Álvarez is a non-executive
director of PagoNxt, S.L.
Membership of board committees: Executive committee, risk
supervision, regulation and compliance committee, and innovation
and technology committee.
Skills and competencies: Mr Álvarez is a highly qualified and
talented leader with a distinguished career in banking. He brings
significant strategic and international management expertise, in
particular financial planning, asset management and consumer
finance, and has vast knowledge of the Group from his tenure as
CEO. He has extensive experience and an established reputation
with such key stakeholders as regulators and investors.
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Contents
Homaira
Akbari
Non-executive director (independent)
Board member since 2016.
Nationality: American and French. Born in 1961 in Tehran, Iran.
Education: PhD in Experimental Particle Physics from Tufts
University of Massachusetts and MBA from Carnegie Mellon
University.
Experience: Ms Akbari was a non-executive director of Gemalto NV
and Veolia Environment S.A. She was Chair and CEO of SkyBitz,
Inc., managing director of TruePosition Inc., and a non-executive
director of Covisint Corporation and US Pack Logistics, LLC. She also
held various roles at Microsoft Corporation and Thales Group, was
non-executive Chair of WorkFusion, Inc., and an independent
director of Temenos, AG.
Other positions of note: Ms Akbari is CEO of AKnowledge Partners,
LLC, a global consultancy firm on the Internet of Things,
cybersecurity and artificial intelligence. She is an independent
director of Landstar System, Inc. and a member of the security
advisory board of Telefónica Soluciones de Criptografía, S.A.U. She
is also a trustee of the French Institute Alliance Française.
Positions in other Group companies: Ms Akbari is a non-executive
director of Santander Consumer USA Holdings Inc. and PagoNxt,
S.L.
Membership of board committees: Audit committee, responsible
banking, sustainability and culture committee, and innovation and
technology committee.
Skills and competencies: Ms Akbari brings significant experience
of technology companies. Her knowledge of digital transformation
challenges and cybersecurity is an asset to the board. She also has
extensive experience in diverse regions and knowledge of water,
energy and waste management and treatment, which are of
particular value to the Group's sustainability policy.
Juan Carlos
Barrabés Cónsul
Non-executive director (independent)
Board member since 2024.
Nationality: Spanish. Born in 1970 in Huesca, Spain.
Education: Tour Operator Management from the School of Tourism
of Aragón and Global Leadership and Public Policy for the XXI
Century Program from Harvard Kennedy School.
Experience: Mr Barrabés sat on the board of Santander España and
the advisory council of Vodafone. He was also director of the
master’s degree in Strategic Design Lab at Istituto Europeo di
Design (IED) and of the MBA at Escuela de Organización Industrial
(EOI) in Madrid, and a trustee of Fundación Ashoka Emprendedores
Sociales.
Other positions of note: Mr Barrabés is the founder and Chair of
Grupo Barrabés, which advises large corporates on digital
transformation, innovation, new technologies, e-commerce and
the Internet, and SMEs on innovation and using technology
efficiently in business processes. He founded and sits on the
advisory council of Escuela de Negocios del Pirineo (ESPENI);
founded and sits on the management board of Épsilon Ecología,
Asociación para la Defensa del Medio Ambiente; founded and is a
trustee of Fundación Empieza por Educar; and is an adviser to
Centro de Finanzas Sostenibles y Responsables de España (centre
for sustainable and responsible finance, FINRESP).
Membership of board committees: Nomination committee,
responsible banking, sustainability and culture committee, and
innovation and technology committee.
Skills and competencies: With a lengthy track record as an
entrepreneur and e-commerce pioneer, he brings to the board
extensive experience in Spain's digital and innovation areas,
especially the integration of digital technology in socio-economic
development, retail distribution, the promotion of talent and the
benefits of digital transformation for people and institutions. His
experience as founder and trustee of multiple non-profit
organizations that focus on education, entrepreneurship and
environmental protection enriches the board's expertise in
responsible business and sustainability.
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Javier
Botín-Sanz de Sautuola y O’Shea
Non-executive director
Board member since 2004.
Nationality: Spanish. Born in 1973 in Santander, Spain.
Education: Degree in Law from the Complutense University of
Madrid.
Experience: Mr Botín founded JB Capital Markets, S.V., S.A.U. in
2008 and has been its Executive Chair ever since. He was co
founder and executive director of the equities division of M&B
Capital Advisers, S.V., S.A. (2000-2008). Previously, he had been a
legal adviser within the International Legal department of Banco
Santander (1998-1999).
Other positions of note: In addition to the financial sector, Mr
Botín works with several not-for-profit organizations. He has been
Chair of the Botín Foundation since 2014 and is also a trustee of
the Princess of Girona Foundation.
Skills and competencies: Mr Botín brings international and
managerial expertise to the board, particularly in finance and
banking. He also brings a deep understanding of Grupo Santander,
its operations and its strategy from his tenure as a non-executive
director.
Sol
Daurella Comadrán
Non-executive director (independent)
Board member since 2015.
Nationality: Spanish. Born in 1966 in Barcelona, Spain.
Education: Degree in Business and MBA from ESADE.
Experience: Ms Daurella sat on the board of Círculo de Economía
de Barcelona and was an independent director of Banco Sabadell,
S.A., Ebro Foods, S.A. and Acciona, S.A. She was also honorary
consul general of Iceland in Barcelona (1992-2021).
Other positions of note: Ms Daurella is Chair of Coca-Cola
Europacific Partners PLC, Executive Chair of Olive Partners, S.A.,
and holds several roles in Grupo Cobega companies. She is also
Vice Chair of the board of trustees of the FERO Oncology Research
Foundation and a board member of Instituto de la Empresa
Familiar.
Membership of board committees: Nomination committee,
remuneration committee, and responsible banking, sustainability
and culture committee (Chair).
Skills and competencies: Ms Daurella brings to the board excellent
strategy and high-level management skills from her international
top-executive experience at listed and large privately-held entities,
particularly distributors. She has vast experience of corporate
governance as the former Chair of several boards and having
served on several audit committees. As a trustee of various health,
education and environmental foundations, she provides
responsible business and sustainability insight to the board.
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Henrique
de Castro
Non-executive director (independent)
Board member since 2019.
Nationality: Portuguese. Born in 1965 in Lisbon, Portugal.
Education: Degree in Business Administration from the Lisbon
School of Economics & Management and MBA from the University
of Lausanne.
Experience: Mr de Castro was Chief Operating Officer at Yahoo.
Previously, he had been the manager of worldwide devices, media
and platforms at Google, European sales and business
development manager at Dell Inc., and a consultant at McKinsey &
Company. He was also an independent director at First Data
Corporation.
Other positions of note: Mr de Castro is an independent director of
Fiserv Inc.
Positions in other Group companies: Mr de Castro is a non
executive director of PagoNxt, S.L.
Membership of board committees: Audit committee,
remuneration committee, and innovation and technology
committee.
Skills and competencies: Mr de Castro brings to the board valuable
international experience in technological and digital strategy due
to his executive roles in the world's top technology companies.
Germán
de la Fuente Escamilla
Non-executive director (independent)
Board member since 2022.
Nationality: Spanish. Born in 1964 in Madrid, Spain.
Education: Degree in Economics and Business Administration with
a diploma in auditing from the Complutense University of Madrid.
Experience: Mr de la Fuente has spent his professional career at
Deloitte, where he has been Head of the audit business for the
financial services industry (2002–2007), managing partner of Audit
& Assurance (2007-2021) in Spain, and Chair and CEO of Deloitte,
S.L. (2017-2022). He was also a member of the global board of
directors of the firm from 2012 to 2016 and of the global audit and
risk services committee until June 2021. He has been involved in
auditing major Spanish financial groups and in multiple consulting
and advisory projects.
Membership of board committees: Audit committee (Chair) and
risk supervision, regulation and compliance committee.
Skills and competencies: Mr de la Fuente brings extensive
experience in the auditing industry and sound knowledge in
auditing, accounting and internal and risk control, and the banking
sector, all of which uphold his recognition as a financial expert.
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Gina
Díez Barroso Azcárraga
Non-executive director (independent)
Board member since 2020.
Nationality: Mexican. Born in 1955 in Mexico City, Mexico.
Education: Degree in Design from Centro de Diseño of Mexico City.
Experience: Ms Díez Barroso was an independent director of Banco
Santander México and other Grupo Santander companies in Mexico
until 2020. She has been member of the board of directors of
Americas Society and Council of the Americas, Laurel Strategies
and Qualitas of Life Foundation. She was also a founder and a
trustee of the Pro-Educación Centro and Diarq foundations.
Other positions of note: Ms Díez Barroso is the founder and non
executive Chair of Grupo Diarq, S.A. de C.V. and Centro de Diseño y
Comunicación, S.C. (Universidad Centro). She is also a non
executive director of Bolsa Mexicana de Valores (BMV) and Dalia
Women, S.A.P.I de C.V. (Dalia Empower), a member of Comité de
200 (C200) and represents Mexico at the W20, the G20 women's
initiative to promote gender diversity.
Positions in other Group companies: Ms Díez Barroso is a non
executive director of Universia México, S.A. de C.V.
Membership of board committees: Nomination committee and
responsible banking, sustainability and culture committee.
Skills and competencies: Ms Díez Barroso brings to the board vast
experience in the real estate and education sectors, and has
extensive knowledge of, and an ever-lasting commitment to,
sustainability, inclusion and responsible business, having been a
founder and trustee of foundations that focus on education, gender
diversity and social support.
Luis
Isasi Fernández de Bobadilla
Non-executive director (*)
Board member since 2020.
Nationality: Spanish. Born in 1956 in Jerez de la Frontera, Spain.
Education: Degree in Economics and Business Administration and
MBA from Columbia Business School.
Experience: Mr Isasi began his career at Abengoa, before holding
various executive positions at JP Morgan in New York and First
National Bank of Chicago in London.
In 1987, he joined Morgan Stanley where he was managing
director of investment banking for Europe and Chair and Country
Head for Spain (1997-2020) and senior advisor (2020-2023). He
has also been director of Madrileña Red de Gas, S.A. and Sociedad
Rectora de la Bolsa de Madrid, S.A., as well as an independent
director of Grifols, S.A.
Other positions of note: Mr Isasi is the non-executive
(independent) Chair of the board of directors of Logista Integral,
S.A. (LOGISTA).
Positions in other Group companies: Mr Isasi is non-executive
Chair of the board of Santander España.
Membership of board committees: Executive committee,
remuneration committee, and risk supervision, regulation and
compliance committee.
Skills and competencies: Mr Isasi has vast experience in a wide
range of sectors and international markets (in particular, finance
and investment banking) as well as a strong institutional network
within Spain.
(*) In the opinion of the nomination committee and the board of directors, Mr Isasi meets the requirements to be considered independent, despite being categorized as other
external based on a standard of prudence. For more details, see subsection 'Other external directors' in section 4.2.
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Belén
Romana García
Non-executive director (independent)
Board member since 2015.
Nationality: Spanish. Born in 1965 in Madrid, Spain.
Education: Degree in Economics and Business Administration from
Universidad Autónoma de Madrid. She is also a State Economist for
Spain.
Experience: Ms Romana was formerly director general of Economic
Policy, director general of the Treasury of the Spanish Ministry of
Economy, and director at Banco de España and the CNMV. She was
also a director at the Instituto de Crédito Oficial and other entities
on behalf of the Ministry of Economy. She served as a non
executive director at Banesto and as Executive Chair of Sociedad de
Gestión de Activos Procedentes de la Reestructuración Bancaria,
S.A. (SAREB). She has also been non-executive director of Aviva PLC
and Aviva Italia Holding S.p.A.
She has also been co-Chair of the board of trustees of The Digital
Future Society and advisory board member at Inetum and
TribalData.
Other positions of note: Ms Romana is an independent director of
Industria de Diseño Textil, S.A. (Inditex), SIX Group AG and its
subsidiary Bolsas y Mercados Españoles, Sociedad Holding de
Mercados y Sistemas Financieros, S.A.U. She is also the non
executive Chair of its other subsidiaries, SIX Digital Exchange AG
and SDX Trading AG. Furthermore, she is an independent director
of Werfen, S.A.; an advisory board member at Rafael del Pino
Foundation; senior adviser to Artá Capital; and academic director of
the IE Leadership & Foresight Hub Programme.
Positions in other Group companies: Ms Romana is the non
executive (independent) Chair of Santander Insurance, S.L.
Membership of board committees: Executive committee, audit
committee, nomination committee (Chair), risk supervision,
regulation and compliance committee, and innovation and
technology committee.
Skills and competencies: Given her background as a government
economist and overall executive and non-executive experience in
finance (particularly from serving on the audit committees of listed
companies), Ms Romana is a recognized financial expert. Having
held key positions in credit institutions and the regulatory and
supervisory bodies of the financial industry and securities markets
in Spain, she also provides strategic insights into banking, financial
regulations and government relations in Spain and Europe.
Pamela
Walkden
Non-executive director (independent)
Board member since 2019.
Nationality: British. Born in 1960 in Worcester, England.
Education: Master's Degree in Economics from Cambridge
University.
Experience: Mrs Walkden has served in a number of senior
management positions at Standard Chartered Bank, including as
Group Head of Human Resources, Chief Risk Officer, Group
Treasurer, Group Head of Asset and Liability Management and
Regional Markets, Group Head of Internal Audit, Group Head of
Corporate Affairs and Group Manager of Investor Relations. In
addition, she served as an independent member of the UK
Prudential Regulation Authority (PRA) Regulatory Reform Panel, as
member of the European Banking Authority Stakeholder Group,
and was a lay member of the Welfare and Ethics Committee of the
Royal Veterinary College.
Other positions of note: Mrs Walkden is a member of the advisory
board of JD Haspel Limited.
Positions in other Group companies: Mrs Walkden is a non
executive director of Santander UK PLC and Santander UK Group
Holdings PLC.
Membership of board committees: Audit committee, risk
supervision, regulation and compliance committee (Chair), and
responsible banking, sustainability and culture committee.
Skills and competencies: She brings to the board extensive
experience in the international banking industry and deep expertise
in auditing, which underscores her recognition as a financial expert.
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Antonio Francesco
Weiss
Non-executive director (independent)
Board member since 2024.
Nationality: American and Italian. Born in 1966 in New York, US.
Education: Degree in Comparative Literature from Yale University
and MBA from Harvard University.
Experience: Mr Weiss was Counselor to the Secretary of the US
Department of the Treasury from 2015 to 2017, where he led the
Department of Domestic Finance, working on matters related to
financial markets, regulatory reform, job creation and economic
growth. He previously held a number of senior management
positions at Lazard, including Global Head of Investment Banking,
Global Head of Mergers and Acquisitions, and Vice Chair of
European Investment Banking.
Other positions of note: Mr Weiss is a founder and partner of
investment firm SSW Partners, LP. He is a research fellow of the
Mossavar-Rahmani Center for Business and Government at the
Harvard Kennedy School of Government, a member of the Council
on Foreign Relations, and a trustee of several non-profit, economic
policy organizations, including the Volcker Alliance, the Citizens
Budget Commission and the Bretton Woods Committee. He is non
executive director of Société Familiale d' Investissements, S.A.,
associate of AFWCo LP and senior advisor to the investment
company JAB Holdings. He is a director and former publisher of The
Paris Review.
Membership of board committees: Remuneration committee.
Skills and competencies: Mr Weiss has a lengthy track record in
financial services, public policy and non-profit organizations. He
also has vast international experience in executive positions in the
US, Europe and other regions. Having held key positions in both the
public and private sectors, he contributes extensive knowledge of
the US market and financial sector to the board, most notably in
matters of economic policy.
Jaime
Pérez Renovales
General Counsel and secretary of the board
Joined the Group in 2003.
Nationality: Spanish. Born in 1968 in Valladolid, Spain.
Education: Degree in Law and Business Administration from
Universidad Pontificia Comillas (ICADE E-3) and State Attorney for
Spain.
Experience: Jaime Pérez Renovales was director of the office of the
second deputy Prime Minister for Economic Affairs and Minister of
Economy, deputy secretary to the Spanish Prime Minister, Chair of
the Spanish State Official Gazette and the committee for
Government Reform. Previously, he had been Vice General
Counsel, vice secretary of the board and Head of Grupo Santander’s
legal department, General Counsel and secretary of the board at
Banesto, and deputy director of legal services at the CNMV. He is
the Banco Santander representative on the board of trustees of the
Princess of Asturias Foundation and is a member of the jury for its
award for Social Sciences. He is Chair of the ICADE Business Club,
Chair of the board of trustees of the Fundación Universitaria
Comillas-I.C.A.I. and professor of Constitutional Law in the Faculty
of Law at Universidad Pontificia Comillas (ICADE).
Jaime Pérez Renovales is the secretary of every board committee.
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4.2 Board composition
Size
As at 31 December 2024, the board of directors comprised 15
members, whose profile and background are described in section
4.1 'Our directors'. The Bylaws dictate that the board must be
composed of no less than 12 and no more than 17 members.
Composition by type of director
The board of directors has a balanced composition between
executive and non-executive directors, most of whom are
independent. Each director’s status has been verified by the
nomination committee.
Our board composition
Independent
directors
66.67%
Executive
directors
13.33%
Other external
directors
20.00%
Executive directors
• Ana Botín, Group Executive Chair
• Héctor Grisi, Chief Executive Officer
Section 4.3 provides a detailed description of their respective roles
and duties under 'Group Executive Chair and Chief Executive
Officer'.
Independent directors
• Glenn Hutchins (Lead Independent Director)
• Homaira Akbari
• Carlos Barrabés
• Sol Daurella
• Henrique de Castro
• Germán de la Fuente
• Gina Díez Barroso
• Belén Romana
• Pamela Walkden
• Antonio Weiss
Every year, the nomination committee verifies the independence of
the board members. It considers potentially significant business
relations that could affect their independence and other pertinent
circumstances. For more details on this analysis, see section 4.6
'Nomination committee activities in 2024' and in subsection C.1.3
of section 9.2 'Statistical information on corporate governance
required by the CNMV'.
Independent non-executive directors account for 66.7% of board
members. This conforms to best corporate governance practices as
well as to the Rules and regulations of the board, which require
that the board be predominantly made up of non-executive
directors with at least 50% independent directors.
Other external directors
• José Antonio Álvarez
• Javier Botín
• Luis Isasi
These directors are not classified as independent directors for the
following reasons:
• Mr Álvarez, because he was the former CEO of Banco Santander
until 31 December 2022.
• Mr Botín, because he has been a director for over 12 years.
• Mr Isasi, because it is considered preferable to classify him as an
external director under prudent criteria, in view of his
remuneration as non-executive chair of Santander España in
addition to his remuneration as a director and the special nature
of this body as supervisor of a business unit without its own
corporate identity separate to Banco Santander, despite the
nomination committee and the board believing that he meets the
requirements to be classed as an independent director.
Board tenure
0 to 3 years
33.33%
4 to 11 years
53.33%
12 years or more
13.33%
At the end of 2024, the average term of directors was 8.03 years
and the average term of independent directors was 4.76 years. For
more details, see 'Board skills and diversity matrix' and 'Tenure and
equity ownership' in this section 4.2.
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Tenure and equity ownership
A
Board of directors
Tenure
Banco Santander shareholding
D
% of
Date of first
appointment
B
Date of last
appointment
End date
C
Direct
Indirect
Shares
represented
Total
share
capital
Executive Chair
Ana Botín
04/02/1989
31/03/2023
31/03/2026
1,893,028
31,506,972
—
33,400,000
0.220%
Chief Executive
Officer
Héctor Grisi
20/12/2022
31/03/2023
31/03/2026
2,123,907
—
—
2,123,907
0.014%
Vice Chair and Lead
Independent Director Glenn Hutchins
20/12/2022
31/03/2023
31/03/2026
732,330
—
—
732,330
0.005%
Vice Chair
José Antonio Álvarez
25/11/2014
22/03/2024
22/03/2027
2,617,170
—
—
2,617,170
0.017%
Homaira Akbari
27/09/2016
31/03/2023
31/03/2026
67,826
100,913
—
168,739
0.001%
Carlos Barrabés
22/03/2024
22/03/2024
22/03/2027
100
—
—
100
0.000%
Javier Botín
25/07/2004
22/03/2024
22/03/2027
5,502,083
25,601,761 157,304,169
E
188,408,013
1.243%
Sol Daurella
25/11/2014
31/03/2023
31/03/2026
149,483
476,837
—
626,320
0.004%
Henrique de Castro
12/04/2019
22/03/2024
22/03/2027
2,982
—
—
2,982
0.000%
Members
Germán de la Fuente
01/04/2022
22/03/2024
22/03/2027
10,000
—
—
10,000
0.000%
Gina Díez Barroso
22/12/2020
31/03/2023
31/03/2026
27,000
—
—
27,000
0.000%
Luis Isasi
03/04/2020
01/04/2022
01/04/2025
45,000
—
—
45,000
0.000%
Belén Romana
22/12/2015
22/03/2024
22/03/2027
208
—
—
208
0.000%
Pamela Walkden
29/10/2019
31/03/2023
31/03/2026
82,608
—
—
82,608
0.001%
Antonio Weiss
22/03/2024
22/03/2024
22/03/2027
—
—
—
—
0.000%
Total
13,253,725 57,686,483
157,304,169
194,844,377
1.286%
General Counsel and
secretary of the
board
Jaime Pérez
Renovales
A. Figures as at 31 December 2024.
B. The date of first appointment referred herein may not match with the date of acceptance of the position.
C. The date provided does not take into account the additional period that may apply under article 222 of the Spanish Companies Act, nor the annual renewal of one-third of the
board established in article 55.1 of the Bylaws. For more details, see 'Election, appointment, re-election and succession of directors' in section 4.2.
D. Banco Santander’s shareholding policy aims to align our executive directors and shareholders’ long-term interests. It includes the obligation for each executive director to
maintain a significant investment in Banco Santander's shares, equivalent to twice their annual salary. Executive directors have five years from the time they were appointed
to reach the required level of investment. Any shares they receive as remuneration are subject to a mandatory three-year holding period from their date of delivery, unless
they already hold the mentioned investment equivalent, in addition to the regulatory obligation not to sell them for one year from delivery, which applies in all cases.
E. Includes shares owned by Fundación Botín, chaired by Javier Botín, and syndicated shares, including shares corresponding to Ana Botín that are also included within her direct
or indirect shareholdings above, but excluding those corresponding to Javier Botín. For more details, see section 2.4 'Shareholders’ agreements'. In subsection A.3 of section
9.2 'Statistical information on corporate governance required by the CNMV', we adapted this information to the CNMV’s format.
As of 31 December 2024, Ana Botín, Héctor Grisi and José Antonio Álvarez had 903,995, 151,395 and 610,123 Banco Santander share
options, respectively. Each option has one share as underlying asset. These options come from the Group's remuneration plans.
For more details, see section 9.2 'Statistical information on corporate governance required by the CNMV'.
Diversity
A diverse board of directors is essential to its effectiveness. Mixed
skills, experiences and points of view create an environment that
promotes independent opinion and constructive debate and
ensures proper decision-making. Thus, we seek to achieve a sound
balance of technical expertise, experience and broad diversity in
the composition of the board.
Our policy on the selection, suitability assessment and succession
of directors helps make our board more diverse in terms of gender,
age, geographical provenance, experience and knowledge.
• Gender. The nomination committee and the board of directors
understand the importance of fostering equal opportunity
between men and women as well as the need for women board
members who meet the suitability requirement. In this regard,
the policy includes the gender equality target set by the
nomination committee for women and men to account for
between 40% and 60% of the total members of the board.
40% of our board members are women, meeting the target for
the less represented gender at the board set out in the Organic
Law on Equal Representation and Balanced Presence of Women
and Men, which from June 2026 will require the boards of the 35
companies with the highest market capitalization to have the
least-represented gender account for 40% or more of its
members.
• Age. Our policy also considers that selection must promote age
diversity. There are no age limits for becoming a director nor for
the roles of chair and chief executive officer.
• Country of origin/international education. Selection considers
cultural diversity, geographical provenance, and international
education and experience, especially in the Group's core markets.
• Education and career. Selection considers candidates' academic
training and career history to ensure they are qualified to
understand our Group’s businesses, structure and markets, and
that they fit within the Santander culture and other aspects
deemed material to the Group.
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Moreover, our policy stipulates that board member selection must
not have any implicit bias that could lead to any form of
discrimination, based for instance on disability, race or ethnic
origin.
The policy follows the European Banking Authority (EBA) and
European Securities and Markets Authority (ESMA) joint guidelines
on the suitability assessment of board members and key functions
holders, as well as the ECB's Guide to fit and proper assessments.
Board skills and diversity matrix
The nomination committee updates a 'Board skills and diversity
matrix' that reflects the balance of the knowledge, skills,
qualifications, diversity and experience required to pursue our
long-term strategy in an ever-changing market.
It considers the recommendations of the EBA and ESMA guidelines
on the suitability assessment of board members and key functions
holders, as well as the ECB´s Guide to fit and proper assessments.
The matrix follows this structure:
• We distinguish between thematic (technical) and horizontal
skills.
• We include a separate diversity section that details gender,
country of origin/ international education, and age.
• We show each member's tenure.
The matrix discloses each board member's particular expertise and
skills, some of which are further detailed in section 4.1 'Our
directors', and is a sign of our commitment to transparency.
We continuously review the suitability of skills and diversity to
ensure a diverse board that can meet Banco Santander's strategy
needs. The matrix enables us to pinpoint areas we need to
strengthen in the succession and election of new board members.
Last, the 'Committees skills and diversity matrix', which we also
continuously update, shows the diverse composition of each
committee and members' knowledge and expertise relevant to
their committee's remit.
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Board skills and diversity matrix
Ana
Botín
Héctor
Grisi
Glenn
Hutchins
José
Antonio
Álvarez
Homaira
Akbari
Carlos
Barrabés
Javier
Botín
Sol
Daurella
Henrique
de Castro
Germán de
la Fuente
Gina Díez
Barroso
Luis Isasi
Belén
Romana
Pamela
Walkden
Antonio
Weiss
Executive
Chair
CEO
Vice Chair
Lead
Independent
Director
Vice Chair
Non
executive
Independent Independent
Non
executive
Independent Independent Independent Independent
Non
executive
Independent Independent Independent
SKILLS AND EXPERIENCE
THEMATIC SKILLS
Banking (100%)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Other financial services (80%)
•
•
•
•
•
•
•
•
•
•
•
•
Accounting, auditing and financial literacy (100%)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Retail (73.3%)
•
•
•
•
•
•
•
•
•
•
•
Digital & information technology (53.3%)
•
•
•
•
•
•
•
•
Risk management (86.7%)
•
•
•
•
•
•
•
•
•
•
•
•
•
Business strategy (100%)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Responsible business & sustainability (73.3%)
•
•
•
•
•
•
•
•
•
•
•
Human resources, culture, talent & remuneration (93.3%)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Legal and regulatory (13.3%)
•
•
Governance and control (80%)
•
•
•
•
•
•
•
•
•
•
•
•
Continental Europe (80%)
•
•
•
•
•
•
•
•
•
•
•
•
US/UK (86.7%)
•
•
•
•
•
•
•
•
•
•
•
•
•
International experience
Latam (60%)
•
•
•
•
•
•
•
•
•
Others (26.7%)
•
•
•
•
HORIZONTAL SKILLS
Top management (100%)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Government, regulatory and public policy (20%)
•
•
•
Academia and education (40%)
•
•
•
•
•
•
Significant directorship tenure (93.3%)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
DIVERSITY
Female (40%)
•
•
•
•
•
•
Gender
Male (60%)
•
•
•
•
•
•
•
•
•
Continental Europe (60%)
•
•
•
•
•
•
•
•
•
Country of origin/
US/UK (60%)
•
•
•
•
•
•
•
•
•
international education
Latam (13.3%)
•
•
Others (6.7%)
•
Under 55 (13.3%)
•
•
Age
55 to 65 (66.7%)
•
•
•
•
•
•
•
•
•
•
Over 65 (20%)
•
•
•
BOARD TENURE
0 to 3 years (33.3%)
•
•
•
•
•
4 to 11 years (53.3%)
•
•
•
•
•
•
•
•
12 years or more (13.3%)
•
•
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Contents
Committees skills and diversity matrix
Risk supervision,
Responsible banking,
Executive
Audit
Nomination
Remuneration
regulation and
sustainability and
Innovation and technology
committee
committee
committee
committee
compliance committee
culture committee
committee
SKILLS AND EXPERIENCE
THEMATIC SKILLS
Banking
100%
100%
100%
100%
100%
100%
100%
Other financial services
100%
80%
60%
80%
80%
40%
87.5%
Accounting, auditing and financial literacy
100%
100%
100%
100%
100%
100%
100%
Retail
100%
80%
60%
60%
80%
80%
87.5%
Digital and information technology
80%
60%
60%
40%
40%
40%
100%
Risk management
100%
80%
80%
80%
100%
80%
87.5%
Business strategy
100%
100%
100%
100%
100%
100%
100%
Responsible business and sustainability
80%
40%
100%
60%
40%
80%
87.5%
Human resources, culture, talent and remuneration
100%
100%
100%
100%
100%
100%
100%
Legal and regulatory
20%
20%
40%
20%
20%
–
25%
Governance and control
100%
80%
80%
60%
100%
80%
87.5%
Continental Europe
80%
100%
60%
80%
100%
80%
75%
International experience
US/UK
Latam
100%
80%
100%
60%
60%
20%
100%
40%
100%
60%
60%
40%
87.5%
62.5%
Others
–
60%
20%
40%
40%
40%
12.5%
HORIZONTAL SKILLS
Top management
100%
100%
100%
100%
100%
100%
100%
Government, regulatory and public policy
20%
20%
40%
40%
20%
–
25%
Academia and education
20%
20%
60%
40%
–
80%
37.5%
Significant directorship tenure
100%
100%
100%
80%
100%
100%
100%
DIVERSITY
Gender
Female
40%
60%
60%
20%
40%
80%
37.5%
Male
60%
40%
40%
80%
60%
20%
62.5%
Continental Europe
80%
60%
60%
60%
80%
40%
62.5%
Country of origin/international education
US/UK
Latam
80%
20%
60%
–
60%
20%
60%
–
80%
–
60%
20%
62.5%
12.5%
Others
–
20%
–
–
–
20%
12.5%
Under 55
–
–
20%
–
–
20%
12.5%
Age
55 to 65
80%
100%
40%
60%
80%
60%
75%
Over 65
20%
–
40%
40%
20%
20%
12.5%
BOARD TENURE
0 to 3 years
20%
20%
40%
40%
20%
20%
37.5%
4 to 11 years
60%
80%
60%
60%
80%
80%
50%
12 years or more
20%
–
–
–
–
–
12.5%
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Election, appointment, re-election and
succession of directors
Election
Our internal policy for the selection, suitability assessment and
succession of directors dictates standards for the board’s
composition, the process of identifying and selecting candidates,
and the suitability assessment of new directors.
Directors must meet specific requirements dictated by laws for
credit institutions and our Bylaws and must also fulfil the
obligations and duties of their position prescribed therein and in
the Rules and regulations of the board.
Our directors must be of renowned business and professional
integrity, and have the knowledge and experience needed to
perform their role and exercise good governance. Director
candidates will also be selected on the basis of their professional
contribution to the entire board.
The board of directors will endeavour to have significantly more
external or non-executive directors than executive directors, and
for the number of independent directors to make up at least half of
all members.
Appointment and re-election
Shareholders appoint and re-elect directors at the general
meeting. Furthermore, if directors step down during their term of
office, the board of directors may provisionally designate another
director by co-option until the shareholders at the general meeting
confirm the appointment at the next meeting.
Each appointment, re-election and ratification of directors is
submitted to a separate vote at the general meeting.
Proposals for appointment, re-election and ratification of directors
(regardless of their category), which the board of directors submits
to the shareholders, as well as appointments of the board in cases
of co-option, should be preceded by the corresponding reasoned
proposal of the nomination committee.
Proposals to be submitted to the general meeting must include a
duly substantiated report by the board, containing an assessment
of the qualifications, experience and merits of the proposed
candidate. Re-election and ratification proposals will also provide
an assessment of the work and dedication to the position during
the last period in which the proposed director held office. If the
board disregards the nomination committee's opinion, it must
explain its decision and record its reasons in the minutes of the
meeting.
Term and cessation
Our directors are appointed for three-year terms. However, one
third of board members are renewed each year in order of their
tenure. Outgoing directors may be re-elected.
Our directors shall cease to hold office when the term for which
they were appointed ends, unless they are re-elected, when the
general meeting so resolves, or when they resign. When a director
ceases to hold office prior to the end of their term (i.e. by general
meeting resolution or by resignation), they shall explain the
reasons for resignation or, for non-executive directors, their
opinion on the reasons for their cessation in office by the general
meeting in a letter to the other board members, unless they report
them at a meeting of the board and this is recorded in the minutes.
To the extent relevant to our shareholders, the resignation shall be
publicly disclosed, including sufficient information on the reasons
or circumstances that the director provides.
Directors must tender their resignation to the board and formally
step down from their position if the board, on the nomination
committee's recommendation, deems it appropriate in cases that
may adversely affect the board's functioning or Banco Santander’s
credit or reputation. In particular, they must resign if they find
themselves in a circumstance of ineligibility or prohibition provided
by law, without prejudice to the honourability requirements for
directors and the consequences deriving from subsequent failure
to meet those requirements, set out in Royal Decree 84/2015, that
implements Act 10/2014.
Directors must notify the board as soon as possible of any
circumstances affecting them, whether related to their
performance in Banco Santander or not, that might damage Banco
Santander's credit or reputation, especially if under criminal
investigation, and of the developments of any such criminal
proceedings. When the board is informed or becomes otherwise
aware of any such situations, it will examine them as soon as
possible and decide, based on the particulars and on a report from
the nomination committee, any measures to adopt, such as
opening an internal investigation, calling on directors to resign or
proposing their dismissal.
Proprietary directors must also tender their resignation when the
shareholder they represent sells off or significantly reduces its
equity holding.
Succession planning
Succession planning is a key element of our good governance as it
ensures orderly role transitions as well as board continuity and
stability and its adequate renewal, composition and independence.
This planning follows a well-defined methodology and clear
allocation of responsibilities. Our aim is to identify candidates with
the necessary talent for each function.
Banco Santander's director succession plan focuses on diversity
standards and the suitability assessment policy, as well as the
regular review of the composition of the board and its committees,
and the identification of potential board member candidates.
The policy has specific core performance indicators, reviewed each
year, for such aspects as succession effectiveness (vacancies
filled by identified candidates); the number of internal and external
candidates immediately available to succeed executive directors;
training and development plans for potential candidates to succeed
executive directors in one to three years; gender diversity and
country of origin or international education; updated board
member tenure; the strength of the list of successors to executive
directors, committee chairs and the Lead Independent Director; and
the percentage of candidates to succeed directors who are
immediately available (or candidates for a one-to-three year
period).
The nomination committee and the board prioritize succession
planning, with sound and appropriate plans in place that are
regularly revisited to make sure they meet regulatory
requirements and align with industry best practice.
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4.3 Board functioning and
effectiveness
Board functions
Banco Santander's board of directors is our highest decision
making body, except in matters reserved to shareholders at the
general meeting. It performs its duties with unity of purpose and
independent judgement.
The board’s policy is to designate executive bodies and managers
to run day-to-day operations and implement the strategy. It
focuses on general supervision and other functions it cannot
delegate by law, the Bylaws or the Rules and regulations of the
board, including:
• General policies and strategies including, among others, capital
and liquidity; tax; new products, operations and services;
corporate culture and values, including policies on responsible
business and sustainability and, in particular, on environmental
and social matters; crisis management and resolution planning;
risk (including tax risk) control and management; remuneration
policy; and compliance.
• Financial and non-financial reporting, and - more generally
information reported to shareholders, investors and the general
public, as well as the processes and controls that ensure full
disclosure.
• Policies on reporting and communication with shareholders,
markets and public opinion, and supervision of the disclosure of
information.
• Internal audit plan.
• The selection, succession and remuneration of directors, senior
management and other key positions.
• Effectiveness of Grupo Santander’s corporate and internal
governance system, including the GSGM, corporate frameworks
and internal regulations.
• Significant corporate transactions and investments.
• Calling the general shareholders’ meeting.
• Related-party transactions.
Board regulation
The board is governed by the rules set out in the Bylaws and the
Rules and regulations of the board, both of which are available on
our corporate website.
• Bylaws. These dictate the basic rules that apply to the
composition and operation of the board and its members' duties,
and are supplemented and implemented by the Rules and
regulations of the board. They can only be amended by
shareholders at the general meeting. See 'Rules for amending
our Bylaws' in section 3.2.
• Rules and regulations of the board. These set the rules for
running and internally organizing the board of directors and its
committees through the development of applicable laws and
Bylaws provisions and good governance recommendations. They
set out the principles governing its actions and the duties of its
members.
The Rules and regulations of the board adhere to all legal
provisions as well as the principles and recommendations set out
in the Spanish Corporate Governance Code; Corporate
Governance Principles for Banks of the Basel Committee on
Banking Supervision; and the EBA's in Guidelines on internal
governance.
Our rules on the audit committee also adhere to the good
operating practices set out in the CNMV's Technical Guide 1/2024
on Audit Committees of Public Interest Entities, published on 27
June; as well as with the applicable regulations because our shares
are listed as ADS on the NYSE and, in particular, with Rule 10A-3
under the Securities Exchange Act (SEA) on standards relating to
audit committees.
Our rules on the nomination and the remuneration committees
also adhere to the good operating practices set out in the CNMV’s
Technical Guide 1/2019 on Nomination and Remuneration
Committees.
Structure of the board
The board’s corporate governance structure ensures that it
discharges its duties effectively.
Group Executive Chair and Chief Executive Officer
The Executive Chair is Ana Botín and the Chief Executive Officer is
Héctor Grisi. They are the most senior executives in the Group’s
strategic and ordinary management, which the board is
responsible for overseeing, ensuring that their roles are clearly
separated and complementary. Both report exclusively to the
board of directors.
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The roles of our Executive Chair and Chief Executive Officer can be summarized as follows:
Roles of the Executive Chair and the Chief Executive Officer
Executive Chair
Chief Executive Officer
• The Chair is the highest-ranking executive in Grupo Santander
and its main representative with regulators, authorities and
other major stakeholders.
• The Chair is responsible for the long-term strategy of the Group,
including new tech and digital growth engines, namely PagoNxt
and the Digital Consumer Bank.
• The Chair is also responsible for other corporate functions and
units that help drive the Group's long-term strategy and
transformation, comprising Technology and Data & Architecture,
People & Culture, Financial Accounting & Control, Strategy and
Corporate Development, General Secretariat and
Communications & Corporate Marketing. This reflects the
Chair's ultimate accountability for Transformation.
• The Chair also leads the appointment and succession planning
of Grupo Santander senior management, to be submitted to the
nomination committee and board for approval.
• The Chief Executive Officer is entrusted with the day-to-day
management of the business with the highest executive
functions and reports exclusively to the board.
• Accordingly, the Chief Executive Officer’s direct reports are the
senior managers in charge of the business units: the local CEO /
Country Heads and those in charge of the global businesses
(Wealth Management & Insurance, Corporate & Investment
Banking, Payments and Retail & Commercial Banking (including
Transformation
A)), encompassing the relevant support and
control functions. Whilst the Chair is accountable for Digital
Consumer Bank, given that it is a global business, the Group CEO
remains fully accountable for the Countries through which
Digital Consumer Bank operates.
• As responsible for day-to-day management, the CFO also
reports to the Chief Executive Officer.
• Additionally, the Chief Executive Officer is responsible for
Regulatory & Supervisory Relations and for embedding the
Group's sustainability policy in the day-to-day management of
Group businesses and the support and control functions.
A. Whilst Retail & Commercial Banking reports directly to the Chief Executive Officer (with no functional line to the Executive Chair), ultimate accountability for Transformation
remains with the Executive Chair.
The duties of the Executive Chair, the Chief Executive Officer, the
board, and its committees are clearly separated. Various checks
and balances give Grupo Santander’s corporate governance
structure the appropriate equilibrium. In particular:
• The board and its committees supervise both the Executive Chair
and the Chief Executive Officer. Both the Executive Chair and
Chief Executive Officer report directly to the board of directors.
• The board has delegated all its powers to the Executive Chair and
the Chief Executive Officer, except for those that cannot be
delegated by law and under the Bylaws and the Rules and
regulations of the board. The board directly exercises those
powers to perform its general supervisory function.
• The Lead Independent Director leads the Group Executive Chair’s
succession and appointment in coordination with the nomination
committee.
• The audit committee is chaired by an independent director who is
considered a ‘financial expert’ as defined in Regulation S-K of the
Securities and Exchange Commission (SEC).
• The audit; nomination; responsible banking, sustainability and
culture; remuneration; risk supervision, regulation and
compliance; and innovation and technology committees are
chaired by, and have a majority of, independent directors. The
first three committees are also composed entirely of
independent directors.
• The Executive Chair may not simultaneously act as Banco
Santander’s Chief Executive Officer.
• The corporate Risk, Compliance and Internal Audit functions
report as independent units to a committee or a member of the
board of directors and have direct, unfettered access to the
board.
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Lead Independent Director
Our Lead Independent Director is Glenn Hutchins. The Lead Independent Director is key to our corporate governance arrangements. He is
responsible for the effective coordination of the non-executive directors and makes sure they serve as an appropriate counter-balance to the
executive directors.
The following chart shows the Lead Independent Director's functions and activities in 2024. He provides a detailed report to the nomination
committee and board of directors on his activities and the discharge of his duties on an annual basis.
Duties of the Lead Independent Director and activities during 2024
Duties
Activities in 2024
Facilitate discussion and open dialogue among independent
Held six meetings with non-executive directors where they were
directors, holding private meetings of non-executive directors
able to voice their views and opinions. These meetings provided a
without the executive directors present and proactively engaging
valuable opportunity to reflect on the overall board and
with them to consider their views and opinions.
committee cycle throughout the year, to discuss board training
topics, strategy execution, executive director and top
management performance and objectives (including the CEO
performance assessment given his reporting line to the board),
and reflections on areas of continuous improvement.
The non-executive directors held a meeting with the Chief
Executive Officer without the Executive Chair present (and vice
versa), in recognition of their direct reporting line to the board.
Direct the periodic evaluation of the Chair of the board of directors
Led the Executive Chair's annual performance review in order to
and coordinate her succession plans.
determine her variable pay. Furthermore, he coordinated her
succession planning activity, facilitated through his membership
of the nomination committee.
Engage with shareholders and other investors to learn of their
See section 3.1 'Shareholder communication and engagement' for
concerns, especially with regard to Banco Santander's corporate
full details of the Lead Independent Director’s activities.
governance.
Replace the Chair in her absence, with such key rights as the
Whilst the Executive Chair was able to chair all board meetings,
ability to call board meetings under the terms of the Rules and
there were specific instances where the Lead Independent
regulations of the board.
Director assumed the chairship of the board, mainly driven by the
nature of the topic being discussed and the Executive Chair's
potential vested interest, being therefore recused for those
discussions.
Request a board meeting or that new items be added to the
agenda.
While the Lead Independent Director did not need to request
additional board meetings to be called, he remained fully engaged
in, and informed of, board meeting agendas to add additional
items as required.
Structure of board committees
Board committees support the board in three main areas:
• Managing the Group by exercising decision-making powers
through the executive committee.
• Formulating strategy for core areas through the responsible
banking, sustainability and culture committee, and the
innovation and technology committee.
• Supervising and making important decisions through the audit
committee, nomination committee, remuneration committee
and risk supervision, regulation and compliance committee.
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The board has seven committees under this structure:
Mandatory
committees
A
Risk supervision,
Executive
Audit
Nomination
Remuneration
regulation and
committee
committee
committee
committee
compliance committee
Supervision, information, advice and recommendations regarding functions in risk,
Decision-making
powers
financial reporting and audit, nomination and remuneration matters
Voluntary
committees
Responsible banking, sustainability and
culture committee
Innovation and
technology committee
Support and proposal in strategic areas
A. Required by law, the Bylaws or the Rules and regulations of the board.
Secretary of the board
Jaime Pérez Renovales is the secretary of the board. He assists the
chair and ensures the formal and substantial legality of all the
board’s actions. He also makes sure that good governance
recommendations and procedures are observed and remain under
continuous review.
The secretary of the board is also the General Counsel of Banco
Santander. He acts as the secretary of all board committees and
facilitates a fluid and effective relationship between the
committees and the Group's units that must collaborate with
them.
The appointment of the secretary of the board is a matter for the
board to approve, taking into account the prior opinion of the
nomination committee. The secretary does not need to be a
director.
The board has two vice secretaries, F. Javier Illescas Fernández-
Bermejo (Group Head of Legal) and Adolfo Díaz-Ambrona Moreno
(General Counsel of Santander España). They assist the secretary
with his duties on the board and its committees, and replace him in
the event of absence, inability to act or illness.
Board operation
The board of directors held 18 meetings (14 ordinary and four
extraordinary) in 2024. The Rules and regulations of the board
dictate that it must hold at least nine annual ordinary meetings and
one quarterly meeting.
Though board meetings follow a calendar approved annually and a
provisional agenda of items to discuss among the matters that fall
under its remit, new items can be added and additional meetings
can be called. Directors may also propose items to be added to the
agenda and are duly informed of changes to the calendar and
meeting agendas.
To help directors prepare effectively for each meeting, they are
given relevant documents sufficiently in advance and in a secure
electronic format. In the board’s opinion, these documents are
appropriately detailed and received in good time which enables
members to make appropriate decisions.
The Rules and regulations of the board of directors also expressly
acknowledge directors’ rights to request and obtain information on
anything related to Banco Santander and its domestic and foreign
subsidiaries. They also acknowledge their right to inspect the
books, files, documents and any other records of corporate
transactions, in addition to premises and facilities. Furthermore,
directors can request and obtain any information and advice they
deem necessary from the secretary in order to perform their duties.
Additionally, the board meets at the Chair’s discretion or at the
request of at least three directors. The Lead Independent Director
is also authorized to request a board meeting or that new items be
added to the agenda for a meeting that has already been called.
Directors must attend meetings in person, either physically or
virtually, and endeavour to limit their absence to situations of
absolute necessity. The nomination committee checks that
directors attend at least 75% of board and committee meetings
and that any absence has a valid excuse without raising doubt
about the director's commitment to good governance. For more
details, see 'Board and committee preparation and attendance' in
this section 4.3.
If directors are unable to attend a meeting, they can designate (in
writing and on a special basis for each session) another director to
act on their behalf. Proxies are granted with instructions. Non
executive directors may only be represented by other non
executive directors. A director can hold more than one proxy.
The board may meet in various rooms at the same time, provided
that members can interact in real time to ensure interactivity and
intercommunication via audio-visual means or telephone.
Board meetings are validly quorate when more than half of its
members attend in person or by proxy.
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Resolutions are adopted by absolute majority of the directors in
attendance. The chair has the casting vote in the event of a tie. The
Bylaws and the Rules and regulations of the board only require the
qualified majorities according to law.
The secretary of the board keeps the board’s documents on file and
records the content of meetings in meeting minutes. Meeting
minutes of the board and committees include statements
members expressly request to be put on record. Moreover, the
secretary oversees the monitoring of the actions that the board and
its committees must perform that the parties responsible for are
dully informed of.
The board may hire legal, accounting or financial advisers and
other experts at Banco Santander’s expense for assistance with
their duties.
Comparison of number of meetings held
A
Banco
Spain
US
UK
Santander
average
average
average
Board
18
11.2
7.7
8.2
Executive committee
24
7.6
NA
NA
Audit committee
15
8.8
8.1
5.3
Nomination
committee
13
7.5
4.6
3.9
Remuneration
committee
14
7.5
5.8
4.9
Risk supervision,
regulation and
compliance
committee
18
12.3
NA
6.4
A. Source: Spencer Stuart Board Index 2024 (Spain, United States and United
Kingdom).
NA: Not available.
The following chart shows the board’s approximate time allocation
to each function in 2024.
Approximate allocation of the board’s time in 2024
Internal and external audit and
review of the financial and non-
financial information
8%
Business performance
25%
Risk management
17%
General policies, governance
and regulation
6%
Capital & liquidity
11%
Strategy
33%
Committee operation
Board committees follow a calendar and an annual work plan
established every year. Each committee meets as often as is
required to fulfil its duties, with a minimum of four meetings,
except for the innovation and technology committee, which holds
at least three meetings.
A committee meeting is quorate if it is attended by more than half
the committee's members in person or through an appointed
proxy. A committee resolution passes with a simple majority of
votes. In the event of a tie, the committee chair has the casting
vote. Committee members may appoint a proxy to vote for them
and, as in board meetings, non-executive directors can only
appoint a non-executive director proxy.
Committee members are given relevant meeting materials
sufficiently in advance of each meeting to facilitate suitable
meeting preparation and therefore promote overall committee
effectiveness.
Though they cannot vote, any director can attend and participate in
meetings of committees on which they do not serve if invited by
the chair of the board and the chair of the respective committee,
upon request to the chair of the board. Furthermore, all board
members who are not executive committee members may attend
executive committee meetings at least twice a year, for which they
are to be called by the chair.
Committees have the authority to summon executives, who will
appear at meetings at the invitation of, and under the terms
dictated by, the respective chair. Their attendance will be recorded
in the meeting minutes. Committees may also submit a request to
the General Counsel to hire legal, accounting or financial advisers
or other experts to assist with their duties at Banco Santander’s
expense.
The role of committee secretary is non-voting and falls on the
General Counsel and secretary of the board. This fosters a fluid and
efficient relationship between the board, its committees, and
senior management. The board should encourage communication
and engagement through these and other means with the
committees to boost efficiency and ensure effective coordination in
the performance of their respective support duties, through,
among others, the following mechanisms:
• Joint meetings. The committees (mainly the audit and risk
supervision, regulation and compliance committees and the
latter with the remuneration committee) hold joint meetings on
topics of mutual interest.
• Information to the board. At each board meeting, the committee
chairs present on the matters that they have discussed in
previous sessions of those meetings. They also provide the board
members with copies of their committee meeting minutes and
all other documents handed out.
• Common members between committees. We strive to have
board members sit on several committees.
• Cross-sectoral review of agendas. A periodic review of the work
plans of the various committees is carried out to ensure that
meeting agendas are complete and coherent.
• Informal events. Continue to leverage informal time between
board members, acknowledging the value that this brings to
board culture.
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Board and committee preparation and attendance
The following table shows the attendance rate of board and committee meetings in 2024.
Committees
Risk
Directors
Board
Executive
Audit
Nomination
Remuneration
supervision,
regulation
and
compliance
Responsible
banking,
sustainability
and culture
Innovation
and
technology
Average attendance
98%
95%
99%
89%
93%
98%
91%
100%
Individual attendance
Ana Botín
18/18
24/24
_
_
_
_
_
5/5
Héctor Grisi
18/18
23/24
_
_
_
_
_
5/5
Glenn Hutchins
18/18
_
_
12/13
14/14
_
_
5/5
José Antonio Álvarez
18/18
24/24
_
_
_
_
_
5/5
Homaira Akbari
17/18
_
15/15
_
_
_
5/5
5/5
Carlos Barrabés
A
7/8
_
_
4/6
_
_
1/2
3/3
Javier Botín
17/18
_
_
_
_
_
_
_
Sol Daurella
17/18
_
_
11/13
11/14
_
5/5
_
Henrique de Castro
18/18
_
14/15
_
14/14
_
_
5/5
Germán de la Fuente
18/18
_
15/15
_
_
18/18
_
_
Gina Díez Barroso
17/18
_
_
12/13
_
_
4/5
_
Luis Isasi
18/18
24/24
_
_
13/14
18/18
_
_
Belén Romana
B
18/18
23/24
15/15
13/13
_
17/18
2/2
5/5
Pamela Walkden
C
18/18
_
15/15
_
_
18/18
3/3
_
Antonio Weiss
D
8/8
_
_
_
_
_
_
_
Note: This table shows each director's in-person attendance at ordinary and extraordinary board or committee meetings except when they attended by proxy. The nomination
committee was informed of directors’ excused absences and verified that they raised no doubt about their capability of good governance. Some directors did not attend
extraordinary meetings that were not scheduled in the annual meeting calendar. Health reasons were behind attendance lower than 75%.
A. Member of the board and of the nomination, responsible banking, sustainability and culture; and innovation and technology committees since 27 June 2024.
B. Stepped down as a member of the responsible banking, sustainability and culture committee on 23 March 2024.
C. Member of the responsible banking, sustainability and culture committee since 23 March 2024.
D. Member of the board since 27 June 2024.
The following table shows the average preparation of directors in
the exercise of their functions on the board and committees
in 2024:
Average of
Average of
Meetings
hours per
member
A
hours per
chair
A
Board
18
229
B
458
B
Executive committee
24
144
288
Audit committee
15
150
300
Nomination committee
13
52
104
Remuneration committee
14
56
112
Risk supervision,
regulation and compliance
committee
18
180
360
Responsible banking,
sustainability and culture
committee
5
25
50
Innovation and technology
committee
5
20
40
A. Includes hours of meeting preparation and attendance. Estimated preparation
time considers travel to attend meetings in person, where appropriate.
B. Not including four extraordinary sessions held in 2024 due to their short duration
and low impact on the directors’ required commitment.
Directors’ average time commitment is calculated by taking the
number of members on the board and on each committee, the
number of times each body meets during the year, average
meeting length, and an estimate of the time each director needs to
prepare for every meeting. We estimate that the board chair and
the committee chairs have a greater time commitment than the
other directors because of the added functions their roles require.
We also consider the commitment to attend sessions that form
part of directors’ training and development programme, the
meetings of non-executive directors with the Lead Independent
Director, and additional unstructured Board time on other activities
that enables greater informal engagement between directors.
Considering the above mentioned criteria, on average, directors
dedicate approximately 63 eight-hour days a year to preparing and
attending board and committee meetings.
Directors must report to the nomination committee any
professional activity or role that they are going to perform outside
the Group so that the committee can check that they can dedicate
enough time to the Group and the professional activity or role does
not pose conflicts of interest.
The annual suitability reassessment our nomination committee
conducts (see section 4.6 'Nomination committee activities in
2024') enables us to update information on the estimated time
directors dedicate to roles or professional activities outside the
Group and demonstrates their ability to exercise good governance.
This makes sure the number of board roles that our directors have
at once is within the legal limit (i.e. no more than one executive
and two non-executive roles, or four non-executive roles; roles in
the same group are considered a single role and roles in not-for
profit or non-commercial organizations -such as, among others,
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organisations for the sole purpose of managing the private
economic interests- are not included).
Director training and induction programmes
The board has an annual training and development programme to
help directors continue to develop skills and increase their
understanding of the Group and industry, taking into account their
experience and expertise. The board selects contents on an annual
basis based on feedback from its members and supervisory and
regulatory requirements, among others.
Programme workshops are delivered collectively to all board
members and in 2024, they covered the following topics:
• Recovery and Resolution Plan.
• Cybersecurity.
• Sustainability, with a key focus on CSRD.
• Generative Artificial Intelligence.
• Inorganic growth analysis.
• Financial crime compliance, bribery and corruption risks,
sanctions and anti-money laundering regulation.
• Regulatory updates covering DORA, Data Privacy and Basel IV,
amongst others.
• Customer experience.
Directors can also request one to one and ad-hoc training on
specific topics tailored to their own needs, if deemed helpful. The
objective of such sessions would be to enable directors to deep
dive into specific areas in order to ensure that their knowledge is
optimal and up to date.
Banco Santander shares its training, induction and development
methodology with subsidiaries to promote best practices and drive
consistency of approach across our footprint. Some Group
executives facilitated special sessions for subsidiary directors
throughout the year to keep them up to date with relevant Group
matters such as the consolidation under five global businesses
across our footprint.
Every board member receives a directors' manual. It is a support
guide that provides both new and existing directors with a
complete reference of information relevant to their role. In
addition, the board has robust induction programmes so new
directors can deeply understand the industry and Grupo
Santander’s business model and structure, risk profile and
governance arrangements, taking into account their existing skills,
competencies and knowledge. They are completed within six
months after taking up their position as new directors and include
document reviews, tailored meetings, site visits and training
sessions with senior managers of the Group, as appropriate.
Both Carlos Barrabés and Antonio Weiss completed their induction
programmes, which were tailored to their experience and
particular needs.
“
The induction programme played a key role
during my onboarding as a member of the
board. Both the sessions and supporting
materials dealt with all key topics, ensuring that
my onboarding was seamless and complete.
I also benefited from early engagement with a
number of senior leaders across the Group, who
provided me with valuable insights into
Santander’s values and culture. Overall, the
programme was excellent and ensured that I
was well prepared to discharge my role".
Antonio Weiss, director
Board effectiveness review in 2024
The board undergoes a yearly assessment of its performance and
effectiveness, composition, quality of its work, and individual
performance of its members. The review includes its committees.
Every three years, it is conducted by an external consultant, whose
independence is verified by the nomination committee.
Methodology and scope of the assessment
In 2024, the review was conducted internally. The scope of the
internal assessment included the structure of the board, its
organisation and functioning, dynamics and internal culture and
the functioning and effectiveness of its committees. In addition,
the assessment covered the individual performance of the
Executive Chair, Chief Executive Officer, Lead Independent Director
and General Secretary. The assessment also facilitated the
opportunity for performance feedback on the remaining individual
directors.
The Executive Chair and the nomination committee Chair led the
assessment, with the involvement of the Lead Independent
Director. The review followed the methodology and structure of
previous internal reviews, based on a confidential questionnaire
that was fully completed by all board members. In addition, the
review also took into account the feedback received from senior
executives on the overall value they get from the board as a whole
and reflections received as part of additional interactions
throughout 2024 (including non-executive director sessions and
assessment questionnaires for board training and development
programmes, among others).
Findings and action plan
The results of the 2024 assessment process were discussed by the
nomination committee and board of directors in January and
February 2025, with a consensus view that the board and its
committees continue to operate effectively. In particular, the
results revealed the following:
• The board has undergone an appropriate degree of refreshment
and is appropriately composed, with a depth of skills and
experience, as well as high degree of independence and diversity.
• The Executive Chair model continues to work effectively and
there remains clarity and universal understanding of the division
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of responsibilities between the Executive Chair and the CEO,
which is clearly documented. The checks and balances in place
are considered to be highly effective.
• There is a strong and healthy internal board culture, where
dynamics encourage open and transparent discussions, critical
thinking, constructive challenge to senior management and
sound decision making.
• The Executive Chair, Chief Executive Officer, Lead Independent
Director and General Secretary had a positive and effective
performance with the competence expected. The remaining
directors also performed positively with an overall effective
contribution.
• The board agenda focuses on the right priorities and the quality
of reporting and information flows support robust and timely
decision-making.
• Committees are considered to work effectively, with appropriate
coordination mechanisms in place, and the support they give to
the board is highly valued. The committee composition changes
made throughout the period, including committee Chair rotation,
were considered favourably and in support of an appropriate
distribution of work among members, acknowledging that this
would be kept under review.
• The executive team has a favourable opinion of the board,
positively rating the constructive challenge and support
provided.
As a result of the review, the nomination committee and board of
directors discussed potential areas for improvement and the latter
approved an associated action plan in February 2025. Each
committee will be engaged on specific actions applicable to their
remit to ensure effective and efficient operation, as appropriate.
The key action plan highlights can be summarised as follows:
• Structure of the board. As part of any future board refreshment,
continued consideration will be given to maintaining an
appropriate composition taking into account relevant factors
such as our strategic direction, and the skills and experience
required to oversee its delivery, and our core markets and
associated geographical footprint.
• Effectiveness of the Executive Chair model. The split of roles
and responsibilities between the Executive Chair and the CEO will
be kept under continuous review and refinement, as appropriate,
to ensure its ongoing effectiveness and robustness.
• In-person engagement. Increase in person formal and informal
engagements in recognition of director preference for in-person
meetings and the value they attribute to their time together.
• Organisation and functioning. Continue to optimise Board and
committee time facilitated by keeping the volume of supporting
documentation under continuous review.
• Committees. A proactive approach to committee composition
will be retained, ensuring optimal performance, effectiveness
and efficient distribution of work among board members, among
other factors. In addition, meeting frequency will be kept under
continuous review to identify streamlining opportunities to the
extent possible.
The resulting actions and associated outcomes of the review have
supported our continued priority focus on effective governance.
4.4 Executive committee activities
in 2024
COMPOSITION
Position
Category
Appointed on
Chair
Ana Botín
Executive
11/12/1989
A
Héctor Grisi
Executive
01/01/2023
Members José Antonio Álvarez
Luis Isasi
Other external
Other external
13/01/2015
20/05/2020
Belén Romana
Independent
01/07/2018
Secretary
Jaime Pérez Renovales
A. Committee Chair since 10 September 2014.
Functions
The executive committee is a key governance body in Banco
Santander and the Group. The board delegated to it all its powers
except those that cannot be delegated by law or under the Bylaws
and Rules and regulations of the board. Its meeting frequency and
the nature of its decisions enable the board to focus on general
oversight. It also reports regularly to the board on its core matters
and decisions adopted, and provides all directors with the minutes
and documents from its meetings.
Committee performance
The board, supported by its nomination committee, determines the
committee's size and composition, to ensure its effectiveness. As
well as the board, the committee has an external director majority,
ensuring a balance of opinions and compliance with
Recommendation 37 of the Spanish Corporate Governance Code.
Its secretary is the secretary of the board.
The committee frequency ensures the discharge of its duties and it
is generally convened every two weeks, although it can meet as
many times as required by the Chair.
Main activities in 2024
In 2024, the committee addressed a breadth of matters relating to
the business of the Group and its main subsidiaries, risk
management, corporate transactions and other proposals that
were subsequently submitted to the board, which can be
summarised as follows:
• Results. Regularly reviewed the Group's results and stakeholder
reaction to them.
• Business performance. Regularly received updated information
on the performance of the Group’s business areas and other
related matters.
• Report by the Executive Chair. The Executive Chair regularly
reported on the Group´s management, strategy and institutional
matters.
• Report by the CEO. The CEO regularly reported on the Group´s
performance and on the budget and execution of plans for all the
global businesses and units that report to him.
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• Corporate transactions. Analysed and approved, where
appropriate, corporate transactions on investments and
divestments, joint ventures and capital transactions.
• Risks. Received regular holistic risk and compliance reports. The
committee also authorized or declined material transactions
within the framework of the risk governance model.
• Global businesses and subsidiaries. Received regular updates on
global businesses, subsidiaries and other business lines'
performance against agreed plans. This helped the committee
support the board with the oversight and control of its global
business and subsidiary operations, and with the fulfillment of
the targets announced at the 2023 Investor Day.
• Capital and liquidity. Received regular reports on capital ratios
and optimization measures, pricing (originations) and portfolio
profitability. By virtue of the board's delegation and within capital
and funding plans, the committee agreed non-convertible debt
issuances and securitizations.
• Supervisors and regulatory matters. Agenda and projects to
ensure compliance with supervisory recommendations and
regulatory reforms.
• Governance matters. Approved specific internal regulation under
its remit. In particular, the committee reviewed and approved key
governance documents associated with the five global
businesses. Furthermore, the committee analysed the
effectiveness of the executive first level committee structure and
approved the associated improvement plans.
In 2024, the committee held 24 meetings. See 'Board and
committee preparation and attendance' in section 4.3 for
members’ meeting attendance and the estimated average time
each one spent on meeting preparation and attendance.
2025 priorities
The committee set the following priorities for 2025:
• Monitor the performance of the Group's global businesses and
subsidiaries, including progress in the execution of their strategic
plans.
• Continue to assess proposed corporate transactions relating to
investments and divestments, joint ventures and capital
transactions.
• Continue to oversee the execution and achievement of specific
public targets, including those disclosed at the 2023 Investor
Day.
• Continue to facilitate timely and efficient decision making,
supporting the board and enabling it to focus on general
oversight and strategy matters.
• Continue to ensure the committee’s effectiveness and efficient
coordination with the board, its committees and the executive
first level committees.
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4.5 Audit committee activities in 2024
The committee oversaw and led an external auditor selection
process according to applicable regulation in order to propose
the appointment of our external auditor at the 2026 AGM. After
a rigorous and competitive selection process, the committee
recommended the board to propose the appointment of
PricewaterhouseCoopers.
We monitored the independence and effectiveness of the
Internal Audit function as part of our fundamental duties,
ensuring the resources to fulfil its responsibilities, including the
Germán de la Fuente
Chair of the audit committee
"During 2024, the committee continued to benefit from a
comprehensive mix of experience and skills, and each provided
appropriate advice and challenge to the top management. I
would like to expressly thank Pamela Walkden, who chaired the
committee during the last four years until I took over in March
2024. Her devotion and excellent service have been key for
discharging our responsibilities. Pamela remains a member of
the committee, offering her experience and commitment. Our
smooth transition has facilitated the ongoing effectiveness of
the committee, ensuring that its role is discharged in the most
tangible and effective manner. As part of that, we received
confirmation on our overall alignment with the provisions of the
new CNMV Technical Guide on audit committees and we are
taking proactive steps to remain fully prepared for the
implementation of the CSRD in Spain.
The committee maintained its focus on the effective oversight of
the financial information integrity and the internal controls and
kept a professional and open relationship with the external
auditor. Specifically, we oversaw the change of reporting of
financial results to global businesses as primary segments to
effectively align the way we report with the manner we manage
the Group. Non-financial information also remained high on our
agenda last year and, in particular, we discussed at length on
the need to maintain robust processes and controls in the
current complex legislative framework, and monitor the greater
independent assurance required going forward.
COMPOSITION
Position
Category
Appointed on
Chair
Germán de la Fuente
Independent
21/04/2022
A
Homaira Akbari
Independent
26/06/2017
Members
Henrique de Castro
Belén Romana
Independent
Independent
21/10/2019
22/12/2015
Pamela Walkden
Independent
29/10/2019
Secretary
Jaime Pérez Renovales
A. Committee Chair since 23 March 2024.
The board of directors appointed the committee's members based
on their expertise, skills and experience in the matters within the
committee's scope. For more details, see section 4.1 'Our directors'
and 'Board skills and diversity matrix' in section 4.2.
According to SEC Regulation S-K, committee Chair Germán de la
Fuente is considered a financial expert based on his credentials,
extensive experience in accounts auditing and strong expertise in
accounting and internal and risk control, as well as in the banking
industry.
Internal Audit
54%
Financial and
non-financial
information and
external auditor
33%
Internal Control
Systems
9%
Others
4%
need to complement the existing workforce with new skillsets
and expertise. We remained cognisant of the importance of
allowing for the appropriate level of flexibility when overseeing
the internal audit plan execution, to ensure that we are well
prepared for any new challenges and associated risks.
As we have done in previous years, we proactively shared
emerging themes, concerns and views with our subsidiary audit
committees on an ongoing basis, which enabled us to harness
their vast collective expertise and helped to further instil our
‘One-Santander’ vision.
In January 2024, the succession process for a new Group Chief
Audit Executive was invoked in order to identify a suitable
successor for Juan Guitard, after almost ten years in the role.
The committee conducted a rigorous process in coordination
with the nomination committee, which resulted in the
appointment of Julia Bayón (former Head of Business Legal, CIB
Legal, and Vice-Secretary of the board), as new Group CAE. Julia
brings different skills that will enrich the role. I wish her all the
best and the committee is confident on her success in this new
position. In turn, I would like to thank Juan for so many years of
excellent performance, his strong commitment to the Group,
and especially, for his assistance to the committee I have the
privilege to chair."
TIME ALLOCATION
In 2024, the committee held 15 meetings, including four joint
sessions with the risk supervision, regulation and compliance
committee. See 'Board and committee preparation and attendance'
in section 4.3 for members' attendance and the estimated average
time each one spent on meeting preparation and attendance.
The chart below shows the committee's approximate time
allocation in 2024:
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Duties and activities in 2024
This section summarizes the audit committee's activities in 2024.
Duties
Actions taken
Financial and non-financial information
Review the financial
statements and other
financial information
• Reviewed the individual and consolidated annual financial statements and directors' report for 2024, as
well as consolidated half-yearly financial report, and submitted them to the board for approval. Monitored
compliance with legal requirements and accounting principles, and ensured that the external auditor issued
a report on the effectiveness of the Group’s system of internal control over financial reporting (ICFR).
• Reviewed quarterly financial information (dated 31 December 2023, 31 March, 30 June and 30 September
2024, respectively), inclusive of reporting five global businesses as primary segments, prior to board
approval and subsequent release to the market and supervisory bodies.
• Reviewed supplementary financial information to the annual report: the Universal Registration Document
filed with the CNMV; Form 20-F and Form 6-K filed with the SEC.
• Verified, on a quarterly basis, the consistency of the financial information published on our website and the
CNMV’s website (when required), ensuring that it was up to date and consistent with the information
approved by the board.
Review the non-financial
• Oversaw and assessed the preparation and reporting processes of non-financial information, including
information
sustainability information, in coordination with the responsible banking, sustainability and culture
committee and informed the board accordingly.
• Received regular updates from the Group Chief Accounting Officer (CAO) and the Head of Sustainability on
progress with sustainability reporting within the Group, including the associated scope of metrics and
action plans and the impacts of the CSRD. As part of this, acknowledged the future requirement to appoint
a verifier of sustainability information and associated governance upon implementation of the CSRD in
Spain.
• Reviewed the Climate Finance and Green Bond reports in coordination with the responsible banking,
sustainability and culture committee, prior to their submission to the board for approval, assessing the
integrity of such disclosures and the review conducted by the external auditor.
• Endorsed the Pillar III disclosures report and submitted to the board for approval.
Information on applied tax
• Was informed by the Head of Tax on applied tax policies based on Spain's Code of Good Tax Practices, prior
policies
to their submission to the board for approval, as well as on the annual review of the tax strategy and policy
tax risk management and control.
• Was informed on the filing of the 2023 Tax transparency report to the Spanish tax agency (Agencia Estatal
de Administración Tributaria).
Relations with the external auditor
Information on the
• Received updates on the planning, progress and execution of the audit plan, including the work conducted
external audit plan
in connection with the non-financial information.
• Was informed of the impact of legal and regulatory developments in connection with financial and non
financial information, as well as their relevance regarding timelines and assurance scope of the
independent external verification.
• Obtained the external auditor's confirmation of its full access to all information necessary to conduct the
audit.
• Analysed the audit reports for the annual financial statements before the external auditor submitted them
to the board. It also received the external auditor's additional report explaining the results of the audit
conducted, in accordance with the applicable regulation.
Interaction with the
• The lead audit partner, who met regularly with the committee Chair, was invited to all committee
external auditor
meetings, which facilitated effective communication between the external auditor and the board. In
addition, the committee met him without executives present to ensure a fluent communication and the
independent performance of its function.
Assessment of the
external auditor’s
performance
• Conducted the final evaluation of the external auditor's performance and how it has contributed to the
integrity of the financial information based on, among other parameters: its knowledge of the business, the
quality and efficiency of its services and sufficiency of resources (including the composition and level of
seniority of the team involved); the frequency and quality of its communications; its independence;
transparency reports and quality controls; and the opinions of the audit committee Chairs and the
controllers of the main subsidiaries or relevant subgroups within the Group.
• Received the 2024 PwC Transparency report from the lead audit partner, who also informed the committee
about the public outcomes of quality controls conducted by the ICAC or other supervisors and other
relevant investigations.
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6.4
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Duties
Actions taken
External auditor independence
PwC’s remuneration for
• Monitored PwC’s remuneration, including the following fees for audit and non-audit services provided to
audit and non-audit
the Group:
services
EUR million
2024
2023
2022
Audit
120.1
117.5
Audit-related services
13.6
8.6
Tax advisory services
0.9
1.6
Other services
7.4
5.9
Total
142.0
133.6
The audit 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 Grupo Santander's entities;
limited reviews of financial statements; and regulatory reports to the external auditors on Grupo
Santander’s entities.
• Audit-related services: issuance of comfort letters, verification services of financial and non-financial
information (as 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, are shown in note 47.b) in the 'Notes to the
consolidated financial statements' for each year for comparison purposes. The fees corresponding to the
rest of the services are shown by reference to when the audit committee approved them.
• Verified that the ratio of PwC's fees paid for all services for Banco Santander and the Group to its annual
revenue in Spain and worldwide did not exceed the 15% limit for three consecutive years. In 2024 the ratio
stood at 0.27% of PwC's total revenues worldwide.
• Verified every quarter, according to Regulation (EU) No 537/2014 of the European Parliament and of the
Council, that the fees approved in 2024 for non-audit services provided by PricewaterhouseCoopers
Auditores, S.L. (PwC), (including for ‘Other services’ and ‘Audit-related services’, and not including services
that the external auditor is required to perform under domestic or EU laws) were significantly less than
70% of the average fees paid specifically to PwC in the past three consecutive years for the ‘Audit’ of Banco
Santander and its subsidiaries in Spain (not including fees for reviews with more limited assurance than
required for accounts auditing, which are included as non-audit services). In 2024, the ratio stood at
25.98%; and it would be 21.49% if services approved for PwC and other firms in its network and provided
to Grupo Santander in and outside Spain were included.
See subsection C.1.32 of section 9.1 'Reconciliation with the CNMV’s corporate governance report model'
for the reconciled amounts of the above mentioned fees listed, with the numerator and denominator values
of each ratio found in section C.1.32 of section 9.2 'Statistical information on corporate governance
required by the CNMV'.
• In 2024, Grupo Santander contracted for services by audit firms other than PwC in the amount of EUR 206.2
million (EUR 174.1 and 185.5 million in 2023 and 2022, respectively).
Non-audit services
• Approved, on a monthly basis, all non-audit services rendered by the Group's external auditor verifying that
all of them met the independence requirements under Spanish and European regulation and SEC and Public
Company Accounting Oversight Board (PCAOB) rules, as well as complying with our internal Policy on the
approval of services other than audits provided by the external auditor.
Personal and financial
• Received confirmation from PwC that the designated audit team, PwC as the auditor firm, everyone else
relations
that forms part of PwC or of other firms in its network, including all applicable extended relations to them
complied with the requirements on external auditor independence, analysing possible threats and taking
appropriate safeguarding measures in line with their internal policies and procedures.
• Received information about the results of the internal review, carried out every six months, according to our
internal regulation, on possible financial ties between Grupo Santander and PwC and its related parties,
which concluded that no existing ties compromised the independence of PwC as external auditor.
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Duties
Actions taken
External auditor
• Verified the external auditor's independence prior to the issuance of the 2024 auditor’s report on the
independence report
financial statements, considering:
• the remuneration it has received for audit and non-audit services;
• all non-audit services rendered by the external auditor; and
• the personal circumstances and financial dealings, that the external auditor or persons performing the
audit may have with the Group.
• Received written confirmation from PwC of its independence from Grupo Santander in accordance with
applicable European and Spanish law and the SEC and the PCAOB rules.
• Concluded that, in its opinion, it had no objective reason to question the external auditor's independence
and issued this annual report on its independence.
External auditor mandate
Re-election
• Proposed to the board, for approval, and subsequent submission to the 2025 AGM, the re-election of PwC
as external auditor of Banco Santander and its consolidated group for financial year 2025, which will be the
tenth and final year of PwC's initial mandate as the Group's external auditor. Since 2021, the lead audit
partner has been Julián González, PwC's banking sector audit leader who has experience as a global group
audit partner (mainly in Spain and the UK) and a strong background in the Spanish financial sector. He also
regularly participates in various international forums on banking supervisory and regulatory forums.
Selection process
• Oversaw a rigorous and comprehensive selection process, through a public tender according to applicable
regulation, to propose to the board the appointment of the external auditor for Banco Santander and its
consolidated group's at the 2026 AGM, after PwC's ten-year mandate ends.
• Received the favourable opinion from Internal Audit function on the transparency, objectivity and
independence of the selection process conducted.
• Rated PwC's proposal the best for its technical offer, assigned team, and economic terms, among other
parameters, and recommended selecting it, as preferred firm, to the board for approval and, subsequent, to
propose its appointment as external auditor of Banco Santander and its consolidated group at the 2026
AGM.
Internal audit
Oversight of the Internal
• Supervised the Internal Audit function and ensured its independence and effectiveness in 2024.
Audit function
• Reviewed the external quality assessment performed by the Institute of Internal Auditors in Spain to
continue ensuring the effectiveness of the function and its alignment with best practice and Global Internal
Audit Standards.
• Oversaw, in coordination with the nomination committee, the selection process of the Group Chief Audit
Executive (CAE) which resulted in the proposal to appoint Julia Bayón to the nomination committee and to
the board. Monitored her onboarding process to ensure its robustness, enabling her to be truly effective in
her role.
• Invited the CAE to all committee meetings and held two private sessions with her without other executives
or the external auditor present. The committee also invited additional internal audit officers to meetings
throughout 2024, when required.
• Endorsed the 2024 Internal Audit function budget, ensuring that the function had the resources and
skillsets needed to discharge its duties effectively.
• Reviewed and approved the Internal Audit function strategic plan for 2024-2027.
• Was kept apprised of the initiatives launched and hubs created to improve the efficiency of Internal Audit's
work and associated digital initiatives, including artificial intelligence capabilities.
• Assessed the preparedness and effectiveness of the Internal Audit function to fulfil its duties.
• Endorsed the former and new CAE's 2024 objectives for onward submission to the board for approval.
Reviewed their performance against those objectives and reported the results to the remuneration
committee and to the board to set their variable remuneration.
• Verified the suitability of the subsidiary CAEs, in coordination with the Group nomination committee.
Monitoring of internal
• Reviewed the annual internal audit plan for 2024 and submitted it to the board for approval, ensuring that
audit activities
it covered the Group's relevant risks, with a key focus on credit risk, third party risk management, model
risk and financial crime compliance, among others; and oversaw its progress with internal audit
recommendations and ratings of businesses, units and corporate functions. Each subsidiary CAE reported to
the committee at least once in 2024.
• Received regular information on internal audit activities carried out in 2024, monitoring progress in audit
ratings, and further promoting a continued focus on maintaining a robust control environment; and
conducted an additional review of issued audit reports, requiring certain areas to present their action plans.
• Continued promoting the first line’s further involvement in internal audit recommendations and ensured
that senior management and the board understood the conclusions of internal audit reports.
• Received holistic reviews of internal audit coverage of cybersecurity, IT risks, financial crime, sustainability,
model risk, credit risk, capital and solvency, operational risk, access control and vendor management,
among other topics, to ensure proper oversight, with first and second line of defence representatives
invited to provide additional feedback, as appropriate.
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Duties
Actions taken
Internal control systems
Monitoring the
• Received information on the Group's internal control system and monitored related action plans, together
effectiveness of internal
with the internal control strategic plan, including those associated with sustainability reporting.
control systems
• Received reports and certification on the Group’s 2023 internal control system (ICS) and assessed its
effectiveness in compliance with the CNMV's (ICFR) and the SEC's (SOx) regulations.
Other activities
Coordination with Risk and
• Held four joint meetings with the risk supervision, regulation and compliance committee to review risk,
with Compliance
compliance and internal audit aspects of the global businesses and subsidiaries, with first line of defence
representatives present.
• Received information in a joint meeting with the risk supervision, regulation and compliance committee on
the Group's whistleblowing channel (Canal Abierto) with a special focus on matters within the committee's
remit to ensure the Group's culture empowers employees and other persons related to Banco Santander to
speak up, be heard and report irregular practices without fear of reprisal.
• Collectively discussed with the risk supervision, regulation and compliance committee additional topics of
mutual interest, such as risk culture and the internal control environment, and received an update on
internal audit matters of the Risk and Compliance functions.
• Received biannual reports on the main legal contingencies, associated provisions and applicable public
information, in coordination with the risk supervision, regulation and compliance committee.
• Invited the CRO to all 2024 committee meetings.
• The Chairs of the audit committee and of the risk supervision, regulation and compliance committee
remained in constant communication, ensuring ongoing coordination and collaboration.
• Received reports from Santander España's joint audit and risk committee on the main items covered at the
meetings throughout the year.
Committee's operation and
• Reviewed the CNMV's Technical Guide 1/2024 on audit committees at public-interest entities,
effectiveness
acknowledging the committee's overall alignment with its recommendations, and endorsed specific actions
mainly on sustainability-related matters to be taken following the implementation of the CSRD in Spain.
• Invited subsidiary audit committee chairs to specific committee meetings throughout the year. In turn, the
committee Chair attended specific subsidiary audit committee meetings to further enhance communication
between them.
• Held a subsidiary audit committee Chairs convention at our headquarters in Boadilla del Monte to foster
further collaboration across the Group. For more details, see 'Group and subsidiary board relations' in
section 1.2.
Related-party and corporate transactions
Creation or acquisition of
• Was informed of the activities of the Group’s offshore entities by the Head of Tax, providing this
special-purpose vehicles
information to the board. See note 3.c) in the 'Notes to the consolidated financial statements'.
and entities based in
• Reported favourably to the board, for its approval, on proposals to create or acquire interests in entities
countries considered non
domiciled in non-cooperative jurisdictions or in special purpose entities and received the Special Purpose
cooperative jurisdictions
Entities Annual Update.
Authorization and
oversight of related-party
transactions
• Reviewed the details and balances of the related-party transactions reported in the annual and half-yearly
financial statements. Checked that those transactions were carried out under market conditions.
• Supervised and reported to the board on a bi-annual basis that the related-party transactions, including
those authorized with delegated board powers, complied with the law, the Rules and regulations of the
board and/or the conditions set by board resolution; verified the alignment with the internal reporting and
monitoring procedure and that those transactions met the fairness and transparency requirements
established in the aforementioned rules and were fair and reasonable.
• Issued the Related-party transactions report. For more, details see section 4.12 'Related-party transactions
and other conflicts of interest'.
Information for general meetings and corporate documents
Shareholder information
• Was represented by the former committee Chair, Pamela Walkden, who reported at the 2024 AGM on the
committee's activities in 2023.
Corporate documents for
• Prepared this activities report on 20 February 2025, which includes a performance review of the
2024
committee's functions and key priorities identified for 2025. The board of directors approved it on 25
February 2025.
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2025 priorities
The committee set the following priorities for 2025:
• Continue to supervise the Group's global business and units,
from a control perspective with a special focus on those more
linked to transformation, in coordination with the risk
supervision, regulation and compliance committee, to ensure
that appropriate controls remain effective.
• Continue to focus on the oversight of the internal audit plan
execution with an ongoing focus on fundamental risks, such as
credit risk, cyber, third party risk management and risk derived
from emerging technologies such as artificial intelligence.
• Remain focused on the independence and effectiveness of the
Internal Audit function, ensuring its preparedness to fulfil its
duties, including the required resources, skills and expertise of its
people.
• Continue to monitor the implementation of the CSRD in Spain
and the appointment of the verifier of sustainability information.
In addition, remain focused on the overall analysis and reporting
processes for the non-financial information, including
sustainability information, and its associated integrity, to meet
increasing stakeholder expectations, in coordination with the
responsible banking, sustainability and culture committee.
• Remain focused on ensuring that the committee discharges its
role in the most tangible and effective manner.
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4.6 Nomination committee activities in 2024
Belén Romana
Chair of the nomination committee
"The committee plays a key role overseeing that both the board
and the executive team are well placed to help the Group achieves
its strategic goals. As part of that, we continued to apply and
supervise succession arrangements for the board as a whole so
that succession planning more generally continued to be
discharged in an effective manner. We have carefully analysed
board composition, ensuring that its depth of skills and experience
remained optimal to contribute to the Group's success.
In addition, in 2024 we analysed committee composition more
broadly, to ensure that committees remained well equipped to
discharge their duties, balancing continuity, refreshed membership
and time commitment, relevant skills and experience, and value
added. As part of that, the committee continued to benefit from a
great mix of experience and skills, complemented with the
appointment of Carlos Barrabés as a member in June 2024. In
addition, we recommended specific committee Chair rotation
movements to the board, evidencing once again the strength and
depth of expertise of its members. I would like especially to thank
Bruce Carnegie-Brown for his service over the last years as Chair of
the committee until I took over in March 2024, when he stepped
down from the board.
The committee devoted significant time to senior executive
succession planning in 2024 to ensure that we have the
appropriate people to lead and execute our transformation
strategy. We also remain committed to the continued
development of our internal succession pipeline. As part of that,
the board held two informal sessions with top talent across our
footprint to remain sighted on the depth of talent within the
Group. However, we understand that we also need to attract
external talent required to deliver our strategic targets. For such
purposes, the committee remained focused on ensuring the
suitability of the new profiles and the creation of an inclusive
workplace that facilitates a more diverse composition of our top
management and its success.
In line with our commitment to continuous governance
improvements, the committee monitored the effective
implementation of the action plan derived from the 2023 board
effectiveness review, with was conducted with the assistance of an
external expert. We also conducted an internal evaluation of the
board and its committees in 2024 with a view to improving our
overall effectiveness, where possible. We were pleased with the
results which concluded that the board continues to operate
effectively, with an efficient committee structure, and that
management positively values the constructive challenge and the
contribution they get from the board as a whole.
We consider that effective Group-wide governance is an essential
element of business success and strategy execution. As a result,
corporate and internal governance has been a key feature in the
year, driving continuous improvement across the Group and
ensuring adequate oversight and control of subsidiary operations.
The committee has tracked governance developments and the
implications for the Group and kept these under continuous
review. As a good example of the continuous adaptation to current
trends, the committee recommended the organization of a virtual
only AGM in 2025, after checking that the measures in place fully
preserved shareholders rights. A virtual AGM should foster the
active participation of our shareholders, assuring their equal
treatment since eliminating the differences between those
attending physically and remotely, and will be more consistent
with our sustainability policy, since it will avoid travel to where the
AGM would take place otherwise.
Looking ahead, we will continue working on ensuring that we have
the best team and robust governance in place, leveraging on our
strong culture to attract, develop and retain the best people to
support our transformation".
COMPOSITION
TIME ALLOCATION
Position
Category
Appointed on
Chair
Belén Romana
Independent
01/01/2024
A
Carlos Barrabés
Independent
27/07/2024
Sol Daurella
Members Gina Díez Barroso
Independent
Independent
23/02/2015
22/12/2021
Glenn Hutchins
Independent
20/12/2022
Secretary Jaime Pérez Renovales
A. Committee Chair since 23 March 2024.
The board of directors appointed the committee's members based
on their expertise, skills and experience in the matters within the
committee's scopes. For more details, see section 4.1 'Our
directors' and 'Board and committees skills and diversity matrix' in
section 4.2.
In 2024, the committee held 13 meetings, including one joint
session with the risk supervision, regulation and compliance
committee. See 'Board and committee preparation and attendance'
in section 4.3 for members' attendance and the estimated average
time each one spent on meeting preparation and attendance.
The chart below shows the committee’s approximate time
allocation in 2024:
Key roles suitability
assessment
6%
Board and
board
committees
composition,
succession
planning
36%
Governance
19%
Senior management
succession planning and
effectiveness monitoring,
talent and related
activities
39%
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Duties and activities in 2024
This section summarizes the nomination committee's activities in 2024.
Duties
Actions taken
Board and committees composition and succession planning
Selection and succession of
the board and its
committees
Appointment, re-election
and ratification of directors
• Ensured board member selection procedures guaranteed directors’ individual and collective suitability;
fostered diversity in its broadest sense; and analysed the required expertise, skills and time commitment
for effective board membership.
• Continued to oversee, together with the Executive Chair, succession planning activities for the board.
• Assessed the composition of the committees and the international advisory board in order to ensure they
had the right skills and experience to perform their duties successfully and proposed composition changes
for certain committees to further enhance their performance and ongoing effectiveness. For more details,
see 'Changes to the committees' in section 1.1.
• Continued monitoring the board's overall skills and competencies, therefore ensuring that the collective
board and its committees composition remained appropriate to oversee and lead the strategic direction of
the Group.
• Considered areas of expertise and experience required to complement the board by reference to the board
skills and diversity matrix as well as the annual board effectiveness review in order to target appropriate
searches and recruitment.
• Ensured that any proposed appointment had been drawn from a depth of candidate pool which recognised
diversity in its broadest sense, therefore ensuring the best possible outcomes.
Annual verification of
directors' status
• Verified each director category (i.e. executive, independent and other external) and submitted a proposal to
the board for it to be confirmed or reviewed in the annual corporate governance report and at the 2025
AGM. For more details, see section 4.2 'Board composition'.
• Assessed directors’ independence, verifying that there were no significant business ties between the Group
and companies in which they are, or have been, significant shareholders, directors or senior managers, in
particular regarding financing extended by the Group to such companies. In all cases, the committee
concluded that existing ties were not significant because (i) financing (a) did not constitute economic
dependency for such companies because other sources of funding were available, and (b) was consistent
with the Group’s share of the relevant market; and because (ii) business ties did not reach comparable
materiality thresholds used in other jurisdictions as benchmarks (e.g. New York Stock Exchange (NYSE),
Nasdaq and Canada’s Bank Act), among other reasons.
Directors' potential
conflicts of interest and
other professional activities
Director induction, training
and development
programmes
• Examined the information provided by directors about their intention to carry out other professional
activities or positions outside the Group and the related time commitment and concluded that those
commitments were compliant with applicable legislation regarding the maximum number of directorships
they may hold, and did not interfere with their obligations as Banco Santander directors nor entail any
conflict of interest.
• Assessed the effectiveness of the director induction, training and development programmes, guaranteeing
that such programmes are designed according to each director’s circumstances and needs.
• Identified areas for improvement and additional topics for the 2025 board training programme.
Senior management succession planning and effectiveness monitoring, talent and related activities
Succession planning for
• Oversaw the discipline applied to senior executive succession planning, which included key positions in
executive directors and
subsidiaries, and made sure plans were orderly being implemented through a rigorous, transparent, merit
senior management
based and objective process that promotes diversity in its broadest sense.
• Oversaw appointments of key positions and monitored the effectiveness of the top management
succession plans.
• Endorsed the proposed changes to the Group succession policy for senior executives to enhance process
robustness with a more strategic approach, improving effectiveness and simplicity.
Appointment of senior
• Recommended specific appointments, later agreed by the board, in coordination with certain committees,
management team
as needed. For more details, see section 5. 'Senior management team'.
members
People and culture
• Recommended the full integration of Human Resources and Talent functions under the common leadership
of the Global Head of People and Culture.
• Discussed People and Culture's activities to continue supporting progress on inclusive culture, in
coordination with the remuneration and the responsible banking, sustainability and culture committees.
• Assessed and challenged proposals on senior executives' mission, career development plans, mobility and
talent retention initiatives Group-wide.
Governance
Board effectiveness review
• Reviewed the execution of the action plan to address the areas for improvement revealed in the 2023
board effectiveness annual review, which was conducted with the collaboration of an independent external
consultant.
• Oversaw the 2024 board effectiveness review, which was conducted internally, and endorsed the resultant
action plan. For more details, see 'Board effectiveness review in 2024' in section 4.3.
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Duties
Actions taken
Corporate governance
• Reviewed the key highlights of the 2024 AGM.
• Analysed evolving practices and market trends with regard to the general shareholder meeting format
(either physical, hybrid or fully virtual), and requested updated information on our investors and proxy
advisors' insights and experiences in this respect to be considered in the proposal to the board on the
format for the 2025 AGM. In view that (i) the Bank has several million shareholders very diversified
geographically, only a few dozen of which attend the general meetings in person, and holding a virtual
only meeting allows to offer all of them the same opportunities to participate, ensuring their equal
treatment; (ii) the remote participation platform developed by the Bank as part of its digitalization process
proved to be ideal during the pandemic, as it replicates the functioning of a traditional shareholder meeting
and safeguards the exercise of shareholders' rights at the same level as in a physical or hybrid meeting; (iii)
holding a virtual-only meeting is aligned with the current digital paradigm, which is shown by the
experience of countries such as the United States, Canada or Germany where virtual-only meetings are a
majority practice among major listed companies, and which is also attested by the evolution of Spanish
legislation and the broad support of the amendment of our Bylaws to allow for virtual-only meetings
received from our investors at the 2021 AGM; and (iv) the feedback received from institutional investors
during the corporate governance roadshow hosted by our Lead Independent Director, who also had open
communication with proxy advisors on this topic; the committee concluded that there are well-grounded
reasons and sufficient assurance regarding the effectiveness of shareholders rights for holding a virtual
only 2025 AGM, and recommended to the board to call it in this format, taking into account that this does
not necessarily mean that future AGMs will be virtual-only.
• Reviewed the activities conducted by the Lead Independent Director, ensuring the discharge of his duties,
as evidenced through a summary of his activities in the year, which was also submitted to the board.
• Reviewed the activities conducted by the Shareholder and Investor Relations team, as well as the Lead
Independent Director's engagement with investors, shareholders and proxy advisors, and their feedback on
the Group's corporate governance arrangements.
• Verified the independence of the external advisers hired by the committee and the remuneration
committee in 2024, analysing their services and the amounts they received, among others.
• Reviewed the annual corporate governance report to verify that information contained therein conforms to
the applicable law and assisted the board in the periodic review of our corporate governance system for the
board to fulfill its mission to promote the corporate interest and consider stakeholders' expectations.
Internal governance
• Monitored the split of the roles and responsibilities between the Executive Chair and the CEO to ensure its
ongoing effectiveness and alignment with the board approved allocation of the same. For more details, see
'Structure of the board' in section 4.3.
• Assessed the suitability of certain proposed key position appointments at Group and subsidiary level,
subject to the Group’s appointments and suitability procedure.
• Oversaw subsidiary board composition to ensure consistent suitability in line with expectations across the
Group.
• Endorsed Group director nominations for subsidiary boards to ensure they were suitable and correctly
perform their duties.
• Verified the suitability of the subsidiary CAEs, and CROs and CCOs with the Group audit and risk
supervision, regulation and compliance committees, respectively.
• Remained apprised on new governance regulation, trends, best practices and implications for the Group, as
well as on the actions taken to simplify and streamline internal regulation and executive level governance
bodies' effectiveness with no loss of governance.
• Verified that subsidiaries followed the provisions of the GSGM relating to board and committee structure
and their functions pursuant to best practices. In addition, the committee tracked subsidiary actions and
progress in implementing internal regulation required by the Group. For more details, see section 7. 'Group
structure and internal governance'.
• Analysed the outcomes of the subsidiary board and board Chairs annual effectiveness reviews.
Suitability assessment
Suitability assessment of
directors, senior
management and key
positions
• Conducted the annual suitability assessment of directors, senior management, heads of internal control
functions and the Group's key position holders, confirming their continued business and professional good
reputes and appropriate knowledge and experience to perform their duties.
• Concluded that board members continue to discharge good governance, having analysed notifications from
them regarding their other professional obligations, confirming that they are able to devote the necessary
time and have no conflict of interest; and overseeing directors' attendance at board and committee
meetings, ensuring that it did not fall below 75% and, in the specific cases of lower attendance, that
absences were duly justified and do not undermine their capacity to devote sufficient time to discharge
their duties. Furthermore, average board attendance was verified as 98%. For more details, see 'Board and
committee preparation and attendance' in section 4.3.
• Analysed and informed the board of potential circumstances or unforeseen situations affecting directors
over the course of the year that could harm the Group's credit and reputation and, in particular, legal
proceedings in which a director is subject to investigation. Based on the information received from said
director on the events under investigation, and given the stage of proceedings, the nomination committee
concluded that the director remained suitable to exercise his duties, though the committee will continue to
monitor the case.
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Duties
Actions taken
Information for general meetings and corporate documents
Shareholder information
• Was represented by the former committee Chair, Bruce Carnegie-Brown, who reported at the 2024 AGM
on the committee's activities in 2023.
Corporate documents for
• Prepared this activities report on 24 February 2025, which includes a performance review of the
2024
committee's functions and key priorities identified for 2025. The board of directors approved it on 25
February 2025.
2025 priorities
The committee set the following priorities for 2025:
• Continue to supervise succession arrangements for the board as
a whole, playing an important role in ensuring that succession
planning more generally is discharged in an effective manner.
Continue to take its proactive approach to board refreshment and
associated succession planning, considering previous board
effectiveness review outcomes and other relevant factors.
• Keep a proactive focus on senior executive succession planning
based on the Group’s strategic needs, and the potential
challenges the business may face, maintaining our attention to
the continued development of our internal succession pipeline
and to a merit-based culture of equal opportunity and inclusion.
Ensure that people and other talent related risks are properly
understood and addressed in coordination with the risk
supervision, regulation and compliance committee.
• Continue to promote that leadership and talent traits and
associated characteristics as a catalyst of The Santander Way,
ensuring that it serves as the glue to keep everyone committed
together to the transformation. Further promote an inclusive
workplace to facilitate the success of our senior leaders and
teams.
• Keep our corporate governance arrangements under constant
review to make sure they continue to consider all stakeholders’
interests with strategic relevance for the Group by closely
monitoring shareholder engagement and, together with the Lead
Independent Director, by taking into account their feedback and
insights. In particular, monitor shareholder experience and
results of the 2025 AGM, including the feedback received on the
format under which it was held and reporting on this to the
board.
• Monitor the implementation of CSRD in Spain and assess
changes to the internal regulation that may be required in
coordination with the audit committee.
• Remain focused on ensuring that the board and its committees
discharge their role in the most tangible and effective manner. As
part of that, monitor the effective implementation of the action
plan derived from the 2024 board effectiveness review, in line
with our commitment to continuous governance improvements.
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4.7 Remuneration committee activities in 2024
Glenn Hutchins
Chair of the remuneration committee
"The committee is guided by key principles, which include
shareholder value, meritocracy, risk management and fairness.
Aligned with these principles, our remuneration philosophy is
focused on strengthening our employee value proposition while
meeting regulatory expectations and serving the best interests
of all stakeholders. Our goal is to implement our remuneration
policies and plans in a manner that serves these interests across
our entire global footprint.
Critical to creating shareholder value is our capacity to attract,
develop and retain the best talent world-wide to support our
transformation. We compete in a global market for skills not
just with the world’s largest financial institutions but also with
the biggest and most successful technology companies. Our
ability to offer market-based compensation for our top talent is
vital to our capacity to compete and succeed.
Taking account of the support received for our remuneration
policy at the 2024 AGM, we met during the year with our largest
shareholders and their proxy advisers to explain our
compensation philosophy and to gather feedback. The
remuneration committee discussed the lessons from this
consultation and made a series of adjustments to our incentive
plans that strengthen the alignment between pay and long-term
performance. Additionally, we have expanded our disclosure to
provide more detail on the committee’s process for determining
pay and selecting appropriate pay comparators, given our global
scale and peer group.
In coordination with the nomination committee, we continued to
focus on fairness across the Group, ensuring the avoidance of
pay gaps, meeting all relevant requirements and making
fulsome disclosure. An external review has affirmed that the
Group’s policies, procedures, and practices fully comply with
applicable legislation.
Committee members bring diverse expertise, providing valuable
insights and challenges to management that enhance our
decision-making and oversight. During the year, we
strengthened our committee by the including a new director,
Antonio Weiss, as a member.
Looking ahead, we remain committed to ensuring that the
Group can attract and retain the very best talent to drive our
success and deliver long-term, sustainable value for all our
stakeholders. To this end, we intend to continue our dialogue
with shareholders and other key stakeholders who share our
interest in the prosperity of the Group".
COMPOSITION
TIME ALLOCATION
Position
Category
Appointed on
Chair
Glenn Hutchins
Independent
20/12/2022
Sol Daurella
Independent
23/02/2015
Henrique de Castro
Independent
29/10/2019
Members
Antonio Weiss
Independent
01/01/2025
Luis Isasi
Other external
19/05/2020
Secretary Jaime Pérez Renovales
A. Committee Chair since 1 October 2023.
The board of directors appointed the committee's members based
on their expertise, skills and experience in the matters within the
committee's scope. For more details, see section 4.1 'Our directors'
and 'Board and committees skills and diversity matrix' in
section 4.2.
In 2024, the committee held 14 meetings, including one joint
session with the risk supervision, regulation and compliance
committee. See 'Board and committee preparation and attendance'
in section 4.3 for members’ attendance and the estimated average
time each one spent on meeting preparation and attendance.
The chart below shows the committee's approximate time
allocation in 2024:
Governance
15%
Remuneration
of directors
4%
Remuneration of
senior management
and other key
executives
29%
Remuneration
schemes and
policies
52%
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Sustainability
Corporate
Economic and
Risk management
and strategy
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governance
financial review
and compliance
Duties and activities in 2024
This section summarizes the remuneration committee's activities in 2024.
Duties
Actions taken
Remuneration schemes and policies
Remuneration policy for
executive directors, senior
management and other key
executives
• Remained focused on simplifying executive directors and senior management remuneration, shaping
remuneration schemes consistent with our Simple, Personal and Fair values, with a special focus on
shareholder value creation.
• Recommended the 2023 individual variable remuneration for senior management, based on annual
performance targets and their weightings as set by the board.
• Proposed to the board the global annual executive variable remuneration for 2024 (payable immediately
and deferred executive remuneration), based on achievement of previously set quantitative and qualitative
targets. In addition, reviewed the ex-ante risk adjustments of total variable remuneration assigned to the
global businesses and units, based on actual risk outcomes and their management, in conjunction with the
risk supervision, regulation and compliance committee.
• Recommended to the board the annual performance indicators to calculate variable remuneration for 2025
with limited variations versus the previous year in order to maintain focus on risk, Group-wide
collaboration and shareholder value creation, among others.
• Set the achievement scales for the annual and multi-year performance targets and weightings for
submission to the board.
• Reviewed and considered the results of the say on pay at our 2024 AGM, as well as the feedback received
from top shareholders and major proxy advisory firms, proposing to the board a remuneration policy for
2025, 2026 and 2027 that includes changes compared to the existing policy to strengthen its alignment
with shareholders’ expectations.
Assist the board of
• Checked that remuneration schemes were aligned with the Group's performance, corporate culture, risk
directors in supervising
appetite and applicable regulation, and created no incentive to breach risk appetite.
compliance with
• Reported to the board on Group remuneration practices and assessed their effectiveness, receiving
remuneration policies
confirmation on their alignment with the Group remuneration policy.
• Reported to the board on an external advisor assessment of the remuneration policy that concluded that
the Group's policies, procedures and practices comply with the regulatory requirements for credit
institutions.
• Reviewed the adoption of ex-post risk adjustments, including the application of malus and clawback
arrangements within the Group.
Director remuneration
• Reviewed the Lead Independent Director’s report on engagement with key shareholders and proxy advisors
policy report
regarding executive director remuneration.
• Reviewed and proposed to the board the annual directors' remuneration report for an advisory vote at the
2024 AGM.
• Assisted the board in overseeing compliance with the director remuneration policy.
• Positively recommended the directors' remuneration policy for 2025, 2026 and 2027 that will be
submitted by the board of directors at the 2025 AGM as a separate item on the agenda pursuant to Article
529 novodecies of the Spanish Companies Act and is an integral part of the director remuneration policy
report. See sections 6.4 Directors' remuneration policy for 2025, 2026 and 2027' and 6.5 'Preparatory work
and decision-making for the remuneration policy; remuneration committee involvement'. As part of that,
the committee considered the voting results of the remuneration proposals at the 2024 AGM, the inputs
from shareholder and stakeholder engagement during the year. It also considered any recommendations
from regulators, legal requirements or applicable regulation concerning remuneration matters and verified
that the policy is consistent with the Group's culture and Simple, Personal and Fair values. The main
changes incorporated in the policy compared to the previous one include four key actions in the variable
remuneration scheme:
• increase in the component paid in instruments from 50% to 60%;
• raise of the minimum long-term metric on relative TSR threshold for vesting from percentile 40% to
percentile 50%;
• increase of the weight of the long-term metric on relative TSR from 40% to 50%; and
• enhancement of the weight of long-term metrics from 36% to 40%.
Further detail on the committee's process for setting and reviewing the remuneration policy is provided.
• Confirmed that the directors' remuneration policy for 2025, 2026 and 2027 is consistent with the
remuneration scheme set out in the Bylaws.
People and culture
• Reviewed gender pay gap reduction and equal pay with a view to promoting greater diversity in its
broadest sense.
• Reviewed internal 'equal pay for equal work' data against the previous year and targets and focused on
measures to enhance them in each unit.
• Discussed People and Culture activities, with a key focus on the avoidance of associated pay gaps, in
coordination with the nomination and the responsible banking, sustainability and culture committees.
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Economic and
Risk management
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governance
financial review
and compliance
Duties
Actions taken
Remuneration of senior management and other key executives
Performance reviews
• Reviewed the calibration of executives’ performance reviews for the senior management and, in particular,
for the Executive Chair, the CEO and the main executives in coordination with non-executive directors; for
the CRO and CCO with the risk supervision, regulation and compliance committee; and for the CAE with the
audit committee.
Fixed remuneration for
• Checked that executive directors' fixed remuneration remained appropriate to their duties based on market
executive directors and
rates.
senior management
• Made sure remuneration for senior management remained fair and competitive, recommending
adjustments where appropriate to the board, based on a benchmark analysis and specific pay principles.
Variable remuneration for
• Proposed to the board variable remuneration for the preceding year payable either immediately or in
executive directors and
deferred amounts.
senior management
Share plans
• Submitted a proposal to the board for approval and subsequently for vote at the 2024 AGM on
remuneration plans that involve the delivery to executive directors of shares (deferred multiyear target
variable remuneration plan; deferred and conditional variable remuneration plan; application of the Group
buy-out policy).
• Analysed and submitted to the board tailored incentive schemes for different units to drive talent retention
and alignment with the Group’s strategic priorities.
Remuneration of directors
Individual remuneration of
• Reviewed the directors’ remuneration in their capacity as such, based on the positions they held on the
directors in their capacity
collective decision-making body, their membership and attendance at committee meetings, benchmark
as such
information and other objective circumstances and submitted to the board the relevant proposals. For more
details, see section 6.2 'Remuneration of directors for supervisory and collective decision-making duties:
policy applied in 2024'.
Remuneration of Identified Staff
Remuneration of executives
• Reviewed the number of executives who are part of the Identified Staff (Material Risk Takers) in 2024
who are Identified Staff
pursuant to applicable law, trends versus previous years and fixed and variable remuneration ratios for
control functions to ensure they remained consistent with regulation and targets.
• Set key remuneration components for Identified Staff in coordination with the risk supervision, regulation
and compliance committee.
• Submitted a proposal to the board, for subsequent submission to the 2024 AGM, regarding the approval of
maximum variable remuneration of up to 200% of the fixed component for certain Identified Staff,
including executive directors and senior management.
• Checked that remuneration schemes supported attraction and retention of key talent to help drive the
Group's strategy, the application of the incentives implemented in the Group, and the level of achievement
of long-term deferred remuneration metrics.
Governance
Coordination with
• Received information on remuneration practices, trends and challenges in different local markets.
subsidiaries
• Held a joint session with the risk supervision, regulation and compliance committee to review the
subsidiary action plans on internal sales force pay and conduct risk for the external sales force.
• Verified that remuneration schemes factor in capital and liquidity, and do not offer incentives to assume
risks that exceed Banco Santander's tolerance, thus promoting and being compatible with adequate and
effective risk management.
Information for general meetings and corporate documents
Shareholders information
• Was represented by the former committee Chair, Bruce Carnegie-Brown, who reported at the 2024 AGM
on the committee's activities in 2023.
Corporate documents for
• Prepared this report on 24 February 2025, which includes a performance review of the committee's
2024
functions and key priorities identified for 2025. The board of directors approved it on 25 February 2025.
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Risk management
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governance
financial review
and compliance
2025 priorities
The committee set the following priorities for 2025:
• Keep incentive measures under continuous review to ensure that
they continue to incentivize shareholder value creation and
remain aligned with our organization based on five global
businesses and with our solid risk management and control
model. This includes a continued focus on customers, sustainable
profitability and our corporate culture and behaviours.
• Continue to monitor trends and best practices in executive
remuneration to further enhance our employee value
proposition, promoting effective attraction and retention of key
talent to deliver the Group's strategy while maintaining focus on
investors and proxy advisors’ expectations.
• Keep our performance management system under constant
review, with a set of conversations planned between managers
and teams to bring attention to what we do and how we do it, all
within a solid risk culture, while driving everyone's development.
• Continue working with the nomination committee on supporting
progress on inclusive culture, ensuring the avoidance of pay gaps
in this regard.
• Remain focused on ensuring that the committee discharges its
role in the most tangible and effective manner.
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Risk management
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4.8 Risk supervision, regulation and compliance committee activities in 2024
Pamela Walkden
Chair of the risk supervision, regulation
and compliance committee
"In 2024 the economic and political environment remained
dynamic and constantly evolving. We continued to monitor the
macroeconomic conditions and arising risks affecting the Group,
while remaining vigilant and identifying emerging risks that
could impact on our business model.
The committee’s agenda is closely interconnected with the
Group’s strategy and operating context. As part of that, risks
associated with the transformation of the retail and commercial
businesses and the creation of the five global businesses
remained as a top priority. We continued to supervise, in
coordination with the audit committee, all the Group's global
businesses and units, to ensure the robustness of our control
environment.
We closely monitored credit risk and non-performing assets;
market risk; operational risk; and IT and cyber risks; among
others, to ensure they all remain within acceptable limits. Third
party risk management was a key area of focus throughout the
year in coordination with the innovation and technology
committee and it will remain high on our agenda this coming
year, reinforced by the alignment with new regulation on
operational resilience.
Compliance and conduct risk, and in particular, financial crime
has been a key feature of the committee’s work during the year.
We oversaw the positive progress made on our One FCC
programme implementation across the Group and reviewed
sanction screening activity. The valuable discussions held
provided useful and constructive challenge to management,
which will be taken forward in 2025.
We also ran a rigorous selection process in coordination with the
nomination committee, which resulted in the appointment of
David Hazell as the new Chief Compliance Officer in February
2024. David moved from Santander US to take up this role and
the committee looks forward to continuing to work with him as
he evolves the Compliance function to further support the Group
in its transformation.
The committee remains well equipped to discharge its role with
a great mix of experience and skills. We have complemented
this with the appointment of José Antonio Álvarez as a member
with effect from 1 January 2025. I would also like to thank Belén
Romana for her service over the last years as Chair of the
committee until I took over in March 2024. I am delighted that
Belén is staying on the committee as a member.
In 2024 I have continued to host meetings with the subsidiary
risk committee Chairs, exchanging views and best practices, and
have also attended a number of the subsidiary risk committee
meetings. I believe both of these are important to strengthen
subsidiary governance linkages and engagement, as well as
effectively utilise the experience and local knowledge. Finally, I
would like to thank the Risk and Compliance teams who have
put in a huge amount of time and effort to help guide the Group
through 2024.
For the coming year we sadly expect a complex geopolitical
context to remain. The committee will continue to remain
focused and do everything possible to ensure efficient and
effective risk management across the Group".
COMPOSITION
TIME ALLOCATION
Position
Category
Appointed on
Chair
Pamela Walkden
Independent
01/05/2021
A
José Antonio Álvarez
Other external
01/01/2025
Germán de la Fuente
Members Luis Isasi
Independent
Other external
01/01/2023
19/05/2020
Belén Romana
Independent
28/10/2016
Secretary Jaime Pérez Renovales
A. Committee Chair since 23 March 2024.
The board of directors appointed the committee's members based
on their expertise, skills and experience in the matters within the
committee's scope. For more details, see section 4.1 'Our directors'
and 'Board and committees skills and diversity matrix' in
section 4.2.
In 2024, the committee held 18 meetings, including one strategy
session, four joint sessions with the audit committee, one joint
session with the nomination committee and one joint session with
the remuneration committee. See 'Board and committee
preparation and attendance' in section 4.3 for members’
attendance and the estimated average time each one spent on
meeting preparation and attendance.
The chart below shows the committee’s approximate time
allocation in 2024:
Capital & Liquidity
7%
Compliance
25%
Additional oversight
activities
4%
Risk
64%
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Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Duties and activities in 2024
This section summarizes the risk supervision, regulation and compliance committee's activities in 2024.
Duties
Actions taken
Risk
Assist the board in (i)
• Reviewed and proposed to the board for approval the annual risk appetite statement proposal for 2024,
defining the Group's risks
including new metrics and limits.
policies, (ii) determining
• Reviewed risk appetite metrics, compliance with the approved limits and any breaches on a quarterly
the risk appetite, strategy
and culture, and (iii)
basis.
supervising their alignment
• Reviewed the three-year strategic plan, the annual budget and the recovery and resolution plans before
with the Group’s corporate
the board approved them. Reviewed and challenged the identified risks and mitigating factors
values
associated with those key processes, their consistency, and their alignment with the Group's risk
appetite.
Risk management and
• Reviewed the risk profile and risk management of the Group's global businesses and main subsidiaries
control
in coordination with the audit committee, with a special focus on credit risk, operational risk, financial
crime compliance and risks associated with our transformation.
• Reviewed the risks of strategic projects and their mitigation measures, with a special focus on the
global businesses, before their submission to the board.
• Checked that the Group's risk management and control, most notably the risk profile assessment (RPA)
and the risk control self-assessment (RCSA), remained robust.
• Analysed the potential impact and opportunities associated with emerging risks and how they would
affect our business model, including the different businesses and subsidiaries.
• Supported the board in conducting stress tests of Banco Santander through the assessment of scenarios
and assumptions, analysing the results and the measures proposed by the Risk function.
• Ensured that the stress test programme was aligned with the EBA Guidelines 2018/04 on institutions'
stress testing.
• Received and analysed specific information on credit risk, with a special focus on non-performing
assets; market, counterparty, liquidity and structural risk; operational risk (including legal and
reputational risk); and social and environmental risk. The committee conducted this analysis in
cooperation with the audit committee.
• Received and analysed updated information on third party risk management and compliance with the
requirements of DORA; and on cybersecurity and technological obsolescence, in cooperation with the
innovation and technology committee. Oversaw the actions taken on the back of unauthorized access
to a Banco Santander database hosted by a third party and analysed in detail the lessons learned
following an investigation of the incident.
• Supported the board in the supervision of crisis management and resolution planning and of the
business continuity and contingency plans.
• Held a strategy session with a key focus on emerging risks, the macroeconomic and geopolitical
landscape, cybersecurity and the risks stemming from artificial intelligence.
Supervise the Risk function
• Reviewed the Risk function’s activities, strategy, strengths and potential areas for improvement.
• Ensured the ongoing independence and effectiveness of the Risk function, including the assessment of
the sufficiency and appropriateness of its resourcing.
• Endorsed the CRO's 2024 objectives for onward submission to the board for approval. Reviewed the
CRO's annual performance against those objectives and reported the results to the remuneration
committee and board of directors to set his variable remuneration.
• Verified the suitability of the subsidiary CROs and participated in subsidiary CRO selection and
appointment, in coordination with the Group nomination committee.
Collaboration to establish
• Held a joint session with the remuneration committee to review the subsidiary action plans on internal
rational remuneration
sales force pay and conduct risk for the external sales force.
policies and practices
• Verified that remuneration schemes factor in capital and liquidity, and do not offer incentives to assume
risks that exceed Banco Santander's tolerance, thus promoting and being compatible with adequate
and effective risk management.
• Reviewed the ex-ante risk adjustment of total variable remuneration assigned to the global businesses
and units, based on actual risk outcomes and their management, in conjunction with the remuneration
committee.
• Reviewed the 2024 bonus pools and the results of the exercise carried out annually to identify
employees whose professional activities had a material impact on the Group´s risk profile (Identified
Staff).
Regulatory and supervisory
• Received information on regulatory and supervisory relations, with focus on those related to the Single
relations
Supervisory Mechanism (SSM), the Single Resolution Board (SRB), the supervisors of all the Group’s
subsidiaries and the Supervisory Review and Evaluation Process (SREP) and specific on-site inspections
related to risk and compliance matters, as appropriate.
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Duties
Actions taken
Compliance
Supervise the Compliance
• Supervised the Compliance function's activities, strategy, strength and potential areas of improvement,
function
as well as the development of the 2024 compliance programme, with a key focus on its support to the
Group's transformation.
• Ensured the ongoing independence and effectiveness of the Compliance function, including the
appropriateness and sufficiency of its resourcing.
• Reviewed monthly reports on regulatory issues, product governance and consumer protection,
reputational risk, internal and external events, notifications and inspections by supervisors, among
others.
• Received updates on compliance and conduct risks from the Group's main subsidiaries and global
businesses, with a special focus on the status of the implementation of the One Financial Crime
Compliance programme.
• Oversaw, in coordination with the nomination committee, the selection process to identify a new Chief
Compliance Officer (CCO), which resulted in the appointment of David Hazell that the committee
reported favourably. Monitored his onboarding process to ensure its robustness, enabling him to be
truly effective in his role.
• Held two private sessions with the CCO to discuss strategic compliance topics as well as to discuss
independently and directly any potential material issue relating to the Compliance function.
• Endorsed the CCO's 2024 objectives for onward submission to the board for approval. Reviewed the
CCO's performance against those objectives and reported the results to the remuneration committee
and board of directors to set his variable remuneration.
• Verified the suitability of the subsidiary CCOs and participated in subsidiary CCO selection and
appointment, in coordination with the Group nomination committee.
Regulatory compliance
• Reviewed our compliance with data protection regulation across the Group and received the Data
including Canal Abierto
Protection Officer's annual report.
• Endorsed, prior to presentation to the board, amendments to the general code of conduct.
• Received information, in a joint meeting with the audit committee on the Group's whistleblowing
channel (Canal Abierto) with a special focus on matters within the committee's remit to ensure the
Group's culture empowers employees and other persons related to Banco Santander to speak up, be
heard and report irregular practices without fear of reprisal.
Financial crime compliance
• Oversaw the Group's observance of FCC regulations as well as the activities carried out by the
(FCC)
Compliance function:
• Was provided quarterly progress updates on the One FCC programme implementation either on a
Group, global business and/or local business perspective, including information on sanction screening
activity.
• Reviewed recommendations and observations stemming from the annual independent expert report
on Banco Santander in accordance with Act 10/2010 and Royal Decree 304/2014 (on anti-money
laundering and counter terrorism financing).
Product governance and
• Reviewed reports on customer and other stakeholders' complaints, to ensure that their root causes
consumer protection
were assessed and the action plans set to reduce and mitigate any identified deficiencies were ongoing.
• Reviewed risk management and the main risks identified, as well as the concerns, priorities and actions
taken by the Product Governance and Consumer Protection area regarding conduct risk with retail and
vulnerable customers.
Capital and liquidity
Assist the board in
• Reviewed and reported favourably to the board on the annual ICAAP run by the Finance division and
reviewing and approving
challenge made by the Risk function in accordance with industry best practices and supervisory
capital and liquidity
guidelines.
strategies and supervising
their implementation
• Reviewed the capital plan according to the scenarios envisaged over a three-year period.
• Reviewed and reported favourably to the board on the ILAAP, which was challenged by the Risk
function and developed in line with the Group´s business model and its liquidity needs.
• Reviewed liquidity risk and liquidity levels of the Group and its subsidiaries.
• Continuously monitored capital levels, capital management and associated tools, the 2024
securitizations plan and the analysis of the portfolio profitability versus the risk undertaken.
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Risk management
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governance
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Duties
Actions taken
Additional oversight activities
Additional oversight
• Held four joint meetings with the audit committee to review risk, compliance and internal audit aspects
activities
of the global businesses and regions, with first line of defence representatives present.
• Collectively discussed with the audit committee additional topics of mutual interest, such as risk culture
and internal control environment, and received an update on internal audit matters of the Risk and
Compliance functions.
• The committee Chair attended specific subsidiary risk supervision, regulation and compliance
committee meetings to further enhance communication between them.
• Held a number of subsidiary risk supervision, regulation and compliance committee Chair meetings
remotely to foster further collaboration across the Group. See 'Group and subsidiary board relations' in
section 1.2 for further details.
• The committee Chair and the Chair of the audit committee maintained a smooth communication,
ensuring ongoing coordination and collaboration.
Information for general meetings and corporate documents
Shareholder information
• Was represented by the former committee Chair, Belén Romana, who reported at the 2024 AGM
committee's activities in 2023.
Corporate documents for
• Prepared this activities report on 21 February 2025, which includes a performance review of the
2024
committee's functions and key priorities identified for 2025. The board of directors approved it on 25
February 2025.
2025 Priorities
The committee set the following priorities for 2025:
• Continue to monitor the macroeconomic landscape and supervise
all the Group's risks to ensure that those risks remain within our
approved risk appetite. Remain focused on credit; third party risk
management (including alignment with DORA, in coordination
with the innovation and technology committee); operational;
market; model; IT; cyber and risk derived from emerging
technologies such as artificial intelligence; and financial crime
compliance.
• Continue to identify emerging and non-traditional risks to
anticipate potential impacts on our business model and work in
partnership with the nomination committee to ensure that
people and other talent related risks are properly understood and
addressed.
• Supervise the main risks associated with our transformation and
the five global businesses.
• Continue to monitor the overall effectiveness of the Risk and
Compliance functions in discharging their critical role in the
Group.
• Remain focused on ensuring that the committee discharges its
role in the most tangible and effective manner.
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4.9 Responsible banking, sustainability and culture committee activities in 2024
Sol Daurella
Chair of the responsible banking, sustainability
and culture committee
"In 2024 we continued to advise the board on the climate
change strategy, monitoring the development of our green
finance proposition and how the global businesses support our
customers’ transition to a low-carbon economy. As part of that,
we ensured that actions for climate material exposure and
strategy to align our activity with the Paris Agreement goals
were consistent with the relevant disclosure requirements and
standards, and supported the delivery of our public targets.
Financial inclusion, health and community support remained
high on our agenda in 2024. We continued to make progress on
our sustainability targets related to green finance and financial
inclusion, among others, and towards equality within the Group.
Santander Universidades continues to play a key role in
supporting education, employability and entrepreneurship
across our footprint, in line with our commitment to help people
and business prosper and benefit from platforms such as
Santander Open Academy, Universia and Santander X, among
others.
The committee continued to analyse the divergence in public
policies and actions of authorities and institutions in the
countries where we operate, as well as their associated risks
and the potential impact on our sustainability strategy. We kept
our strong coordination with the audit committee to monitor the
implementation of CSRD and non-financial disclosures in order
to meet the greater expectations from stakeholders in the
current complex legislative framework.
As part of the 2023 board effectiveness review conducted with
the assistance of an external provider, we agreed to further
develop the role and functioning of the committee given its
important sustainability agenda, whilst leveraging on the work
of other committees. These steps, together with our focus on
continuous improvement, helped ensure that the committee
remains effective.
The committee´s mix of experience and skills helped the board
with the significant sustainability challenges ahead, further
complemented with the appointment of both Pamela Walkden
and Carlos Barrabés as members during the year. I would like to
thank Ramiro Mato for his service over the last years as
committee Chair until he stepped down from the board in June
2024; and to Belén Romana who remained as a committee
member until March 2024.
In 2025, we will remain focused on the Group’s green finance
strategy, and closely monitor sustainability progress across our
footprint, with a key focus on our five global businesses".
COMPOSITION
TIME ALLOCATION
Position
Category
Appointed on
Chair
Sol Daurella
Independent
01/07/2018
A
Members
Homaira Akbari
Independent
01/07/2018
Carlos Barrabés
Independent
27/06/2024
Gina Díez Barroso
Independent
31/01/2023
Pamela Walkden
Independent
23/03/2024
Secretary
Jaime Pérez Renovales
A. Committee Chair since 23 July 2024.
The board of directors appointed the committee's members based
on their expertise, skills and experience in the matters within the
committee's scope. For more details, see section 4.1 'Our directors'
and 'Board and committees skills and diversity matrix' in section
4.2.
In 2024, the committee held five meetings. See 'Board and
committee preparation and attendance' in section 4.3 for
members’ attendance and the estimated average time each one
spent on meeting preparation and attendance.
The chart below shows the committee’s approximate time
allocation in 2024:
Governance (G)
36%
Environmental (E)
50%
Social (S)
14%
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Duties and activities in 2024
This section summarizes the responsible banking, sustainability and culture committee’s activities in 2024.
Duties
Actions taken
Environmental (E)
Climate transition plan
• Reviewed the Group's climate change strategy and challenged it to ensure that it remained a key enabler to
achieve our ambition towards net zero emissions by 2050.
• Reviewed the alignment in thermal coal, power generation, energy (oil and gas), aviation, steel and auto
manufacturing sectors with the Paris Agreement goals.
• Reviewed the subsidiary plans to ensure their alignment with supervisory expectations and the Paris
Agreement goals, covering activity regarding mortgages, commercial real estate and agriculture.
• Endorsed the Group priorities for 2024 in relation to sustainability, including supporting our customers in
their green transition and promoting a sustainable culture.
ESG in risk management
• Reviewed ESG factors introduced in the credit approval process, associated action plans and related
achievements.
• Worked with the risk supervision, regulation and compliance committee to review the progress made in
embedding climate-related and environmental risks, as well as to monitor the implementation of controls
and processes to mitigate ESG risks, including greenwashing.
Sustainable finance
• Reviewed the green finance strategy and its execution, including the Group´s exposure in green finance
more generally.
• Oversaw the sustainability strategy, including support to our customers in their green transition.
• Reviewed the global businesses' progress in sustainability.
• Received specific training on sustainability matters, with a key focus on CSRD to further enhance board and
committee members knowledge on this matter. See 'Director training and induction programmes' in
section 4.3.
Environmental footprint
• Monitored our own environmental footprint, value chain emissions and carbon neutral claim, including
analysis of the associated CSRD reporting implications.
Social (S)
Social agenda
• Reviewed our social agenda, which includes financial inclusion; financial health; business with social
output; and corporate social responsibility or philanthropic activities.
• Reviewed the outcomes of the holistic human rights due diligence exercise conducted and suggested to the
board its associated disclosures.
Education and other
• Reviewed the progress made within our community support strategy, which includes our support to
support to communities
education, employability and entrepreneurship.
• Reviewed Santander Universidades strategy and its alignment with the Group's transformation agenda and
endorsed the associated course of action.
People and culture
• Discussed People and Culture's activities to continue supporting progress on inclusive culture, in
coordination with the nomination and remuneration committees, with a key focus on the representation of
women in senior positions within the Group.
Governance (G)
Governance
• Assisted the board in ensuring that sustainability targets and metrics were embedded in the Group's
remuneration schemes. As part of that, reviewed, in coordination with the remuneration committee, a
proposal to further increase the alignment of the long-term incentive for 2024-2026 with our
sustainability agenda.
• Monitored and assessed the Group's progress on its targets to ensure that its KPIs remained relevant and
aligned with committee expectations.
• Identified priority sustainability areas for action based on the outcomes of a materiality assessment that
the Sustainability team conducts every year.
• Verified that the proposed sustainability agenda and targets remained aligned with the Group´s strategy.
• Reviewed ESG global ratings' assessments of Banco Santander, identifying strengths, areas for
improvement and areas of focus. Reviewed any resulting action plans after engaging with investors and
NGOs on ESG-related matters.
• Considered the findings and suggested areas for improvement concerning its remit derived from the 2023
board effectiveness review conducted with the assistance of an external provider and agreed on specific
changes to further develop its role and functioning given the importance of the sustainability agenda,
while leveraging on the work of other committees, to ensure that it remains effective.
• Reviewed the progress made regarding the management of the supply chain in regards to ESG, including
the compliance of associated regulatory requirements.
ESG reporting
• Supported the audit committee on the supervision and assessment of the process to prepare and present
non-financial information according to the applicable regulations and international standards.
• Reviewed the 2024 Group statement on non-financial information and the independent expert's report.
See the 'Sustainability statement' chapter.
• Reviewed the Climate Finance and Green Bond Reports in coordination with the audit committee, prior to
their submission to the board for approval.
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Duties
Actions taken
Regulatory landscape
• Reviewed the main European and international financial regulatory and supervisory initiatives and
priorities related to sustainability.
• Received information on local regulatory developments to remain abreast of local challenges and
opportunities.
Information for general meetings and corporate documents
Shareholder information
• Was represented by the former committee Chair, Ramiro Mato, who reported at the 2024 AGM
committee's activities in 2023.
Corporate documents for
• Prepared this activities report on 27 January 2025, which includes a performance review of the
2024
committee's functions and key priorities identified for 2025. The board of directors approved it on 25
February 2025.
2025 Priorities
The committee set the following priorities for 2025:
• Continue to advise the board on the climate change strategy and
our ambition towards net zero by 2050, monitoring the
development of our sustainable finance proposition and how the
global businesses support our customers’ transition to a low
carbon economy.
• Oversee that actions and targets for climate material exposure
and strategy to align our activity with the Paris Agreement goals
are consistent with the relevant disclosure requirements and
standards, and support the delivery of our targets.
• Continue to prioritize our financial inclusion, financial health and
community support strategy in line with our aim to help people
and businesses prosper.
• Analyse developments in public policies and actions of
authorities and institutions in the markets where we operate, as
well as their associated risks, and the potential impact on our
sustainability strategy.
• Continue to enhance data quality and monitor sustainability
disclosures and associated strategy in coordination with the audit
committee, in order to meet increasing expectations from
stakeholders in the current complex legislative framework.
• Remain focused on ensuring that the committee discharges its
role in the most tangible and effective manner.
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4.10 Innovation and technology committee activities in 2024
Glenn Hutchins
Chair of the innovation and technology committee
“Our goal as a bank is to deploy the most robust and efficient
open financial services technology platform and, in particular, to
become a digital bank with branches. We endeavor to do this in
a manner which improves customer offerings, reduces costs,
safeguards our security, meets regulatory expectations and
promotes innovation. The committee’s role is to support the
bank in these initiatives.
In 2024, the committee held its first strategy session as an
addition to our regular, quarterly meetings. We invited all board
members to review and assess our global technology strategy
plan to ensure that it remains aligned with the Group’s priorities,
with a key focus on our transformation agenda.
Over the year, the committee took a close look at our global
business strategic platforms, digitalization initiatives, process
automation and risk management disciplines. In particular, we
focused on our common operating and business model for retail
and commercial banking. The committee believes that this will
enable our in-branch and service teams to free up time for
customer-facing activities and to offer personal service across
all channels.
The committee also reviewed our cyber security strategy and
the global threat landscape with key focus on our defenses and
resilience. We looked closely at third party risk management
throughout the year, working in partnership with the risk
committee.
We continued to position data and analytics at the core of our
business strategy and, in the future, to pursue the benefits of
emerging uses of artificial intelligence. We recognize that we
need take advantage of the commercial opportunities inherent
in AI while meeting regulatory expectations on data
management and customer safety. We also remain vigilant to
other emerging technologies and approaches to computation
what will allow us to improve customer offerings, lower costs
and improve security in the future. In this regard, we benefit
from the insights and experiences of our committee members.
In June, we welcomed Carlos Barrabés, who is experienced in
the commercial application of technology, as a member of the
committee. Looking forward, we will continue to support the
board and management team in the transformation of
Santander into a technology-first enterprise".
COMPOSITION
TIME ALLOCATION
Position
Category
Appointed on
Chair
Glenn Hutchins
Independent
20/12/2022
A
Homaira Akbari
Independent
27/09/2016
José Antonio Álvarez
Other external 23/02/2015
Carlos Barrabés
Independent
27/06/2024
Members
Ana Botín
Executive
23/04/2007
Henrique de Castro
Independent
23/07/2019
Héctor Grisi
Executive
01/01/2023
Belén Romana
Independent
19/12/2017
Secretary
Jaime Pérez Renovales
A. Committee Chair since 23 March 2024.
The board of directors appointed the committee's members based
on their expertise, skills and experience in the matters within the
committee's scope. For more details, see section 4.1 'Our directors'
and 'Board and committees skills and diversity matrix' in section
4.2.
In 2024, the committee held five meetings, including one strategy
session. See 'Board and committee preparation and attendance' in
section 4.3 for members’ attendance and the estimated average
time each one spent on meeting preparation and attendance.
The chart below shows the committee’s approximate time
allocation in 2024:
Digital & innovation
43%
Cybersecurity
15%
Technology and
operations
32%
Data Management
6%
Others
4%
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Duties and activities in 2024
This section summarizes the innovation and technology committee’s activities in 2024.
Duties
Actions taken
Digital & innovation
Digital
• Monitored metrics in connection with the Group's digitalization and associated transformation, with a
special focus on customer experience, simplification and efficiency.
• Reviewed core digital strategies to transform the business and accelerate new businesses growth.
• Reviewed strategic technological tools developed internally to further increase value creation across the
Group, improving efficiency and driving appropriate synergies.
• Reviewed the execution and progress of One Transformation and its overall alignment with our strategy.
• Monitored execution of the Group’s digital strategy with a key focus on ensuring alignment with
supervisors’ expectations and regulatory demands.
Cloud
• Reviewed the cloud strategy, which focuses on improving innovation, time–to-market and efficiency with a
business-based approach, ensuring alignment with applicable regulatory requirements at all times.
Innovation framework
• Reviewed the implementation of the Group's innovation agenda, leveraging on our digital and data
management capabilities.
• Identified the challenges and capabilities in terms of innovation to increase end-to-end business agile
transformation.
• Identified new opportunities to accelerate innovation across the Group and ensured that we were well
placed to succeed with new business models, technologies, systems and platforms.
Technology and operations
Technology and operations
• Assisted the board in supervising technological risks in coordination with the risk supervision, regulation
(T&O)
and compliance and audit committees.
• Reviewed the global technology strategy plan, reported to the board on T&O planning and activities, and
ensured that the T&O strategy was properly focused on the Group's key priorities, supervising its execution
progress through defined top-level strategic KPIs, including those specific to the execution of One
Transformation and the common architecture.
• Endorsed the Group's core strategic technology priorities to integrate key digital capabilities, leveraging
five pillars: agile, cloud, core system evolution, artificial intelligence and deep technology related skills and
data.
• Monitored the deployment of Gravity, a Santander’s in-house award-winning banking platform and a
software, to help the bank become a fully digital company.
• Reviewed specific projects being deployed throughout the Group and their associated T&O investment
through a common tool to further ensure efficiencies, synergies and robust decision-making processes.
• Analysed the priorities of the T&O function and specifically, and their alignment with the Group’s aim to be
the best open financial services platform with innovative customer centric capabilities.
• Reviewed the strategy to further simplify Group-wide processes with the aim of reducing manual
operational activity, analysing alternatives for further optimization, automation and process improvement.
Cybersecurity
Strategy
• Reviewed the Group's cybersecurity strategy, with a key focus on resilience and three main action lines:
protecting the Group, bolstering its defences, and generating trust among stakeholders, customers, and
broader society; and recommended it for onward submission to the board for approval.
• Monitored the status and progress made on the fraud prevention plan, including its associated impacts and
the actions underway to further harmonize fraud prevention capabilities across the Group.
Risk management
• Assisted the board in the supervision of cybersecurity risks and those related to artificial intelligence, and
oversight
associated regulatory developments in coordination with the risk supervision, regulation and compliance
and audit committees.
• Supervised defences against increasing threats and reviewed security controls and automated security
processes.
• Analysed cyber incidents (including third party risk management implications) and reviewed associated
lessons learnt in coordination with the risk supervision, regulation and compliance committee. Moreover,
analysed specific incidents outside the Group according to their relevance and impact.
• Monitored the global cybersecurity threat landscape closely.
• Received regular updates on cybersecurity risks. In 2024 it received updates at four meetings, with a
special focus on crisis simulation exercises and internal data leakage protection.
• Reviewed external threats such as ransomware and analysed the strategy designed to shorten data
recovery time and reduce its potential impact.
Data management
Data management
• Reviewed the data management strategy including priorities for the year, focusing on the business model
and how data contributes to boost business growth and customer experience.
• Reviewed the Group's approach to artificial intelligence usage as a key driver of the data and the overall
Group strategy, all within a specific governance and risk management framework.
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Duties
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Information for general meetings and corporate documents
Corporate documents for
• Prepared this activities report on 14 January 2025, which includes a performance review of the
2024
committee's functions and key priorities identified for 2025. The board of directors approved it on 25
February 2025.
2025 Priorities
The committee set the following priorities for 2025:
• Continue to support the Group’s innovation strategy, including
the embedding of our operating model based on a global-local
organization, through our own global technology platform.
• Continue to drive a culture of innovation using artificial
intelligence to enhance decision-making processes, improve
customer experience and drive operational savings.
• Remain abreast of emerging technologies and their potential
business impact. In addition, the committee will continue
monitoring associated developments in the financial sector and
market players’ activities, including technology companies.
• Continue to evolve our cyber security defences, with a special
focus on emerging threats, as well as to continue to monitor
third party risk management and alignment with DORA in
coordination with the risk supervision, regulation and compliance
committee.
• Remain focused on ensuring that the committee discharges its
role in the most tangible and effective manner.
4.11 International advisory board
Composition
Position
Background
Chair
Larry Summers
Former Secretary of the US Treasury
and President Emeritus and Charles
W. Eliot University Professor of
Harvard University
Members Sheila C. Bair
Former Chair of the Federal Deposit
Insurance Corporation and former
President of Washington College
Mike Rhodin
Supervisory board member of
TomTom and director of HzO. Former
IBM Watson Senior Vice President
Francisco D’Souza Managing Partner and co-founder at
Recognize
James Whitehurst Senior Advisor at IBM and former CEO
of Red Hat
George Kurtz
CEO and co-founder of CrowdStrike.
Former Chief Technology Officer of
McAfee
Nadia Schadlow
Former Deputy National Security
Advisor for Strategy and former
Assistant to the President of the
United States
Andreas Dombret
Former board member of Deutsche
Bundesbank, of Supervisory Board of
the ECB and of Bank International
Settlements and former Vice Chair of
Bank of America in Europe
Carolyn Everson
Director at The Coca-Cola Company
and The Walt Disney Company.
Former chair of Instacart and former
vice-president of Global Business
Group at Facebook (Meta)
Juan Ignacio
Chair of Organización Cultiba, Grupo
Gallardo Thurlow
Azucarero México and Grupo GEPP
(PepsiCo bottling company in Mexico)
Secretary
Jaime Pérez Renovales
Functions
Since 2016, Banco Santander’s international advisory board has
provided the Group with expert insight into innovation, digital
transformation, cybersecurity, new technologies, capital markets,
corporate governance, branding, reputation, regulation and
compliance.
Its members are external and not members of the board. They are
prominent and respected leaders who have extensive experience in
the most relevant areas for the strategy of the Group, particularly
in terms of innovation, digital transformation and the US and
European markets.
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Meetings
The international advisory board meets at least twice a year. In
2024, it met in May and October. It addressed key strategic topics
for the near future within the overall context of our transformation
agenda and our global-local organization with five global
businesses. In particular, it covered specific topics such as the
merits of the agile methodology and the implications of artificial
intelligence in the financial sector, with a key focus on the Group's
activity. In addition, the international advisory board analysed in
depth the strategic importance of certain global businesses and
geographies on a go-forward basis.
4.12 Related-party transactions and
other conflicts of interest
Related-party transactions
This section contains the related-party transactions report referred
to in recommendation six of the CNMV´s Corporate Governance
Code, which the audit committee prepared on 20 February 2025.
Directors, senior managers and shareholders
Pursuant to the Rules and regulations of the board, a transaction
that Banco Santander or its subsidiaries make with directors,
shareholders who hold at least 10% of voting rights or sit on the
board, and parties considered "related parties" under the
International Financial Reporting Standards must be authorized:
• at the general meeting if it is worth 10% or more of assets on the
last consolidated balance sheet; or
• by the board of directors in all other cases. Nonetheless,
according to relevant rules and on the audit committee’s
recommendation, our board delegated authority to executive
bodies, committees and competent proxies to approve related
party transactions if they:
• are carried out under agreements with standard terms that
would generally apply to customers who contract for the same
product or service;
• are made at prices or rates set by the supplier of such products
or service or, where such products or service have no existing
prices or rates, under regular market conditions as in business
relations with similar customers; and
• do not exceed 0.5% of the net annual income as stated in the
last consolidated financial statements approved at the general
meeting.
The board approved an internal reporting and monitoring
procedure in which the audit committee confirms twice a year that
such transactions authorized with delegated board powers are fair
and transparent and meet the above-mentioned requirements.
The board also has an internal approval mechanism for non
banking and other transactions that do not meet the delegation
requirements. It sets out minimum transaction terms and
conditions in order to protect corporate and shareholder interests.
The board and audit committee check that transactions with
related parties are fair and reasonable to Banco Santander and to
the other shareholders.
If a related-party transaction must be approved at the general
meeting or by the board, the law stipulates that the audit
committee must issue a preliminary report about it. However, the
law does not require the report for related-party transactions if
they are approved under the board's delegated authority and meet
the audit committee’s requirements.
Board members must recuse themselves from all deliberations and
votes on resolutions about a related-party transaction if they have
a conflict of interest with it.
In 2024, the audit committee found that no director or related
party, in the terms of International Financial Reporting Standards,
carried out transactions deemed 'significant' or material to
Santander and the related party, or under non-market conditions.
The audit committee confirmed that all related-party transactions
in 2024, including those authorized with delegated board powers,
had been performed correctly after conducting a bi-annual review
on their conformity to the law, the Rules and regulations of the
board and the conditions set by board resolution; verified the
alignment with the internal reporting and monitoring procedure
and that those transactions met the fairness and transparency
requirements established in the aforementioned rules, and were
considered fair, reasonable and under market conditions (see the
audit committee activities report under section 4.5 'Audit
committee activities in 2024').
Banco Santander has a policy for the admission, authorisation and
monitoring of financing transactions to directors and senior
managers as well as to their spouse (or similar partner), a child
who is a minor or legal adult and their financial dependent, or a
company controlled by a director or a senior manager whose
business is to hold assets for the sole purpose of managing their
personal or family wealth. The policy applies to financing
transactions carried out by Banco Santander, or any of its
subsidiaries, and sets out general maximum borrowing rules,
interest rates and other conditions that apply to related-party
transactions, which are the same for all other employees. It
dictates that the board must authorize loans, credit facilities and
guarantees extended to Banco Santander's directors and senior
managers, and, except in the cases listed below, subsequently by
the ECB:
• Transactions guaranteed in a collective agreement signed by
Banco Santander, with similar terms and conditions to
transactions with any employee.
• Transactions made under agreements with standard conditions
that generally apply to a large number of customers, if the
amount granted to the beneficiary or their related parties does
not exceed EUR 200,000.
Note 5.f) 'Loans' to the consolidated financial statements describes
the direct risk Grupo Santander maintained with board members as
at 31 December 2024. Those transactions are consistent with
market conditions, have the same terms and conditions as
transactions with employees, and allocate payments in kind where
appropriate.
No Banco Santander shareholder holds 10% or more of voting
rights or has a seat on the board.
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Intra-group transactions
The law does not consider direct or indirect transactions with a
wholly-owned subsidiary or investee to be "related-party" if no
party related to Banco Santander holds an interest in it. Thus,
Santander monitors subsidiaries or investees’ observance of these
rules if they can be affected by related-party transactions.
The rules and approval bodies and procedures that apply to
intragroup transactions are the same as for transactions with
customers to make sure they are conducted at market prices and
conditions.
Note 53 'Related parties' to the consolidated financial statements
and note 47 'Related parties' to the individual financial statements
state the balance of transactions with subsidiaries, affiliates,
jointly-owned entities, directors, senior managers and related
parties.
Other conflicts of interest
Banco Santander has internal rules and procedures for preventing
and managing conflicts of interest that can arise from the Group´s
operations or with directors and senior managers. Our General
code of conduct and an internal policy for Group employees,
directors and entities set out the guidelines we follow to prevent
and manage conflicts of interest.
Directors and senior managers
The Rules and regulations of the board stipulate that our directors
must adopt necessary measures to avoid situations in which their
direct or indirect interests may enter into conflict with corporate
interests or their duty towards Banco Santander.
Directors must refrain from using Santander’s name or their
position to exert undue influence on private transactions; using
corporate assets for private purposes; using business opportunities
for personal gain; obtaining favours or remuneration from others
for being directors; and engaging in activities for themselves or
others that will put them and Banco Santander in competition or
permanent conflict.
Directors must report to the board conflicts of interest that they or
their related parties may have with Banco Santander, which are to
be disclosed in the financial statements. The nomination
committee oversees compliance with the rules set from time to
time to avoid potential conflicts of interest in other roles held by
directors.
In 2024, no director reported a conflict of interest with Santander.
Nonetheless, in 2024 there were 41 abstentions in votes on
matters deliberated at board and committee meetings, including
19 instances where directors did not vote on resolutions on
nominations, re-elections or board committee or Chair
assignments; nine instances concerning remuneration; one
instance relating to a transaction between Banco Santander and a
director; and 12 instances where directors removed themselves
during the review of their status and suitability.
The Code of conduct in security markets (CCSM), which directors
and senior managers follow, provides mechanisms to recognize
and resolve conflicts of interest. It also dictates that directors and
senior managers must provide the Compliance area with a
statement on their relations, and they must keep it up to date.
Subjected persons must also disclose any matter that could put
them in a conflict of interest because of their ties or otherwise, and
the chief officer of their area, their common senior officer (where
several areas are involved), or whoever the Compliance area
decides will resolve it.
The CCSM also dictates that directors, senior managers and related
parties should not trade Grupo Santander’s securities within 30
days either from the time they are bought or sold or before the
quarterly, half-year or annual results are announced and
published.
The CCSM can be found on our corporate website.
Group companies
Banco Santander is the Group’s only company listed in Spain,
where it’s not required to have mechanisms in place to resolve
conflicts of interest with a listed subsidiary.
In a conflict of interest with a listed subsidiary, Banco Santander, as
the parent company, must consider the interests of all its
subsidiaries, the presence of minority shareholders in them, and
how these conflicts may affect the long-term interests of the
Group. Subsidiaries should also consider the interests of Grupo
Santander when making decisions within their remit.
The Group structures governance on a system of rules that
guarantees proper oversight over subsidiaries. We have a Group
subsidiary governance model that sets out the key rules for Group
subsidiary relations and conflict of interest resolution mechanisms.
For more details, see section 7. 'Group structure and internal
governance'.
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5. SENIOR MANAGEMENT TEAM
The table below shows the profiles of Banco Santander’s senior management team (Senior Executive Vice Presidents). It does not include
executive directors, whose profiles are described in section 4.1 'Our directors').
Name
Position
Profile
Mahesh Aditya
GROUP CHIEF RISK OFFICER
Mahesh Aditya joined Grupo Santander in 2017 as Chief Operating Officer of
Santander Holdings USA and became Chief Risk Officer in 2018. He was
appointed Chief Executive Officer of Santander Consumer USA in 2019, and
Group Senior Executive Vice President and Group Chief Risk Officer in 2023.
Previously, he had been Chief Risk Officer at Visa (2017-2019) and Chief Risk
Officer of Retail & Mortgage Banking at JP Morgan, Capital One and Citibank.
Daniel Barriuso
Julia Bayón
Juan Manuel Cendoya
GLOBAL HEAD OF RETAIL &
COMMERCIAL BANKING AND
GROUP CHIEF
TRANSFORMATION OFFICER
GROUP CHIEF AUDIT
EXECUTIVE
GROUP HEAD OF
COMMUNICATIONS,
CORPORATE MARKETING AND
RESEARCH
Daniel Barriuso joined Grupo Santander in 2017 as Global Head of
Cybersecurity (CISO) and Fraud Prevention. In 2023, he was named Senior
Executive Vice President, Chief Transformation Officer, and Global Head of
Retail and Commercial Banking. Previously, he had held several executive
roles at BP, Credit Suisse and ABN AMRO.
Julia Bayón joined Grupo Santander in 1994 and was Head of Banesto’s
International and Wholesale Banking legal service from 2001 to 2013, when
she moved on to running the legal service for Global Transaction Banking,
Credit and Restructuring at Banco Santander. In 2016, she became Head of
Legal for Corporate and Investment Banking. In 2021, she was appointed Head
of the Legal Service for Business and deputy secretary of the Banco Santander
board of directors. In 2024, she became Group Senior Executive Vice President
and Chief Audit Executive.
Juan Manuel Cendoya joined Grupo Santander in 2001 as Group Senior
Executive Vice President (director general) and Group Head of the
Communications, Corporate Marketing and Research division. In 2016, he was
appointed Vice Chair of the board of directors and Head of Institutional and
Media Relations of Santander España. Previously, he had been Head of the
Legal and Tax department of Bankinter, S.A. He is also a State Attorney for
Spain.
José Doncel
José Antonio García
Cantera
GROUP CHIEF ACCOUNTING
OFFICER
GROUP CHIEF FINANCIAL
OFFICER
José Doncel joined Grupo Santander in 1989 as Head of Accounting. He had
also served as Head of Accounting and Financial Management at Banesto
(1994-2013). He was appointed Senior Executive Vice President (director
general) and Head of the Internal Audit division in 2013 and Group Chief
Accounting Officer in 2014.
José Antonio García joined Grupo Santander in 2003 as Group Senior Executive
Vice President (director general) of Global Wholesale Banking of Banesto and
was appointed CEO in 2006. He was appointed Senior Executive Vice President
of Global Corporate Banking at Banco Santander in 2012 and Group Chief
Financial Officer in 2015. Previously, he had served on the executive
committee of Citigroup EMEA, as well as on the board of directors of Citigroup
Capital Markets, Ltd and Citigroup Capital Markets UK.
Javier García-Carranza
GLOBAL HEAD OF WEALTH
MANAGEMENT & INSURANCE
Javier García-Carranza joined Grupo Santander in 2016 as Global Head of
Corporate Holdings and Investment Platforms before being appointed Global
Head of Wealth Management & Insurance in 2024. Previously, he was Head of
Principal Investments and Investment Banking for Europe, the Middle East and
North Africa at Morgan Stanley.
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Name
Position
Profile
David Hazell
GROUP CHIEF COMPLIANCE
OFFICER
David Hazell joined Grupo Santander in 2012 as Chief Conduct & Compliance
Officer of Santander UK. In 2018, he was named Chief Compliance Officer of
Santander Holdings USA and in 2022 took the same role at Santander Bank
NA. In 2024, he became Group Senior Executive Vice President and Group
Chief Compliance Officer. Previously, he was Head of Risk and Regulation
(2004-2009) and of Governance, Risk and Compliance (2009-2010) at
PricewaterhouseCoopers LLP, and Operational & Regulatory Risk Director at
Aviva PLC (2010-2012).
José María Linares
GLOBAL HEAD OF CORPORATE
José María Linares joined Grupo Santander in 2017 as Senior Executive Vice
& INVESTMENT BANKING
President (director general) and Global Head of Corporate and Investment
Banking. Previously, he served as director and senior equity analyst at Société
Générale (1997-1999). He joined J.P. Morgan in 1999 and was subsequently
appointed managing director and Head of Global Corporate Banking at J.P.
Morgan Chase & Co. (2011-2017).
Mónica López-Monís
GROUP HEAD OF
SUPERVISORY AND
REGULATORY RELATIONS
Mónica López-Monís joined Grupo Santander in 2009 as General Counsel and
secretary of the board of Banesto. In 2015, she was appointed Group Senior
Executive Vice President (director general) of Banco Santander and Group
Chief Compliance Officer until her appointment in 2019 as Group Head of
Supervisory and Regulatory Relations. Previously, she had been General
Counsel at Aldeasa, S.A. She also was General Counsel at Bankinter, S.A., as
well as independent director at Abertis Infraestructuras, S.A. She is also a
State Attorney for Spain.
Dirk Marzluf
GROUP CHIEF OPERATING &
Dirk Marzluf joined Grupo Santander in 2018 as Group Senior Executive Vice
TECHNOLOGY OFFICER
President and Head of IT and Operations. Previously, he had held several roles
at AXA Group, where he became CIO, leading the insurance group’s technology
and information security transformation and co-sponsoring its digital strategy.
He also held global senior management roles at Accenture, Daimler Chrysler
and Winterthur Group.
José Luis de Mora
GROUP HEAD OF CORPORATE
José Luis de Mora joined Grupo Santander in 2003 to Head the Group’s
DEVELOPMENT AND
Strategic Plan Development and Acquisitions. In 2015, he was appointed
FINANCIAL PLANNING
Group Senior Executive Vice President (director general) and Group Head of
Financial Planning and Corporate Development. He was also Head of Strategy
(2019-2023) and Global Head of Digital Consumer Bank (2020-2025).
Jaime Pérez Renovales GROUP GENERAL COUNSEL
See profile in section 4.1 'Our directors'.
Nitin Prabhu
GLOBAL HEAD OF DIGITAL
CONSUMER BANK
Nitin Prabhu joined Grupo Santander in January 2025 as Senior Executive Vice
President and Global Head of Digital Consumer Bank. From 2012, he worked
at PayPal, where he held leadership roles spanning the payments, consumer,
and merchant businesses, and where he became the Senior Vice President of
Small and Medium Sized Businesses and Financial Services Products. Prior to
PayPal, he worked at eBay and consulted with Fortune 1000 companies
globally.
Javier Roglá
GROUP HEAD OF PEOPLE &
CULTURE
Javier Roglá joined Grupo Santander in 2016 as Global Head of Santander
Universities and CEO of Universia. In 2021 he became Group Senior Executive
Vice President and Chief Talent Officer, and in 2024 was appointed Head of
the Group’s People & Culture division. He sits also on the board of Teach for All
and was previously a business development consultant at Endesa and
principal at Boston Consulting Group, as well as co-founding and running
Fundación Empieza por Educar.
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6. REMUNERATION
Sections 6.1, 6.2, 6.3, 6.5, 6.6, 6.7, 9.4 and 9.5 comprise the annual
report on directors’ remuneration that will be submitted to the
consultative vote of the general shareholders' meeting.
In addition, sections 6.4 and 6.5 sets out the directors'
remuneration policy for 2025, 2026 and 2027, which will be put to
the binding vote of the general shareholders' meeting.
The annual report on directors' remuneration and the directors'
remuneration policy for 2025, 2026 and 2027 were approved by
our board of directors on 25 February 2025. All directors were
present at the time of vote casting and voted in favour.
The remuneration policy for directors in force as of the date of this
report is available on our corporate website.
Introduction
Brief summary of strategic accomplishments in 2024
• Santander achieved an attributable profit of EUR 12,574 million
in 2024, a 14% increase versus 2023, thanks to strong revenue
growth across all global businesses and regions, as well as the
addition of eight million new customers to 173 million.
• The group maintained disciplined and rigorous cost control, with
the best efficiency ratio in 15 years and continued to increase
profitability and shareholder value creation, with a return on
tangible equity of 16.3%; earnings per share of EUR 0.77, up
18%, and tangible net asset value per share of EUR 5.24 at the
end of the year. Total shareholder return during the year was
23.2%.
• These accomplishments enabled us to exceed our strategic goals
set for 2024 bonus pool, mainly in capital and customer growth,
so total executive variable remuneration increased by 4%
compared to the previous year.
Shareholder engagement and responsiveness
Santander has historically received strong support for our
remuneration policy proposals — averaging 90% between 2019
and 2023. However, at our 2024 annual shareholder meeting, the
remuneration policy proposal received support from 74.8% of
votes for. This lower-than-usual support prompted our board of
directors to engage with our top shareholders to understand their
perspectives on our remuneration system, identify any concerns
leading to votes against our proposed policy and make changes to
assume best possible alignment with shareholders.
Meetings were held with the16 top investors (controlling
approximately 24% of the Banco Santander's share capital) and
with the major proxy advisory firms, ISS and Glass Lewis (regarding
their methodologies and vote recommendations). All of these
discussions were led by Glenn Hutchins, our Lead Independent
Director and Chairman of our remuneration committee (see
'Statement from Glenn Hutchins, Lead Independent Director' in
section 1 and 'Engagement with shareholders in 2024' in section
3.1). While primarily focused on remuneration, these meetings
also covered additional topics of interest to our investors including
board structure, sustainability strategy and virtual shareholder
meetings.
Changes approved based on shareholder feedback
Overall feedback and insights received for many aspects of our
remuneration programme were positive, since the company is
committed to paying for performance and a significant portion of
pay is at risk, but some general themes emerged during
discussions, including expectations around an increase of the
percentage of variable pay which is long-term oriented and higher
threshold for TSR vesting. Our remuneration committee and the
board of directors carefully reviewed our shareholders’ feedback
and have taken steps to address these concerns. This has resulted
in a number of changes to our remuneration policy for 2025, as
summarized below (for more details on these actions, see section
6.4):
1. The portion of variable remuneration paid in equity has
increased from 50% to 60%.
2. The minimum relative TSR threshold for vesting has increased
from the 40
th percentile versus peers to the 50
th percentile in
the long-term award, as several investors have indicated this as
a preference, in order to avoid vesting below median peer
performance levels.
3. The weight of relative TSR within the long-term metrics has
increased from 40% to 50%.
4. Long-term metrics application has increased from 36% of total
variable remuneration to 40%, to reinforce long-term value
creation in the company.
Additionally, Santander has enhanced its public remuneration
disclosures to provide further detail on our Committee’s process
for setting the Remuneration policy.
In response to feedback from investors, this reports also contains
further explanations on how we set executive remuneration and
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align pay with performance, including the peer selection criteria for
this analysis. Banco Santander follows a rigorous process which
includes an annual review of comparative market data to ensure
our pay remains competitive in the marketplace (section 6.3).
We believe these changes further strengthen the alignment of
management and shareholders’ interest.
6.1 Principles of the remuneration
policy
Directors' remuneration in their capacity as such
The board of directors sets the individual remuneration of directors
(including executive directors) for the performance of supervisory
and collective decision-making duties within the amount fixed by
shareholders and commensurately with the roles they perform on
the collective decision-making body, their committee membership
and attendance, and other objective circumstances the board might
consider.
Remuneration of directors for executive duties
Banco Santander’s remuneration policy for executive duties (which
also generally applies to Banco Santander employees) dictates
that:
1
Remuneration must be in line with shareholders and
customers' interests, conducive to creating long-term
value and compatible with our rigorous risk
management, long-term strategy and values, as well as
with maintaining a sound capital base.
2
Fixed remuneration must make up a significant
proportion of total compensation.
3
Variable remuneration must reward performance for
achieving individual, business unit and, as the case may
be, Group targets.
4
The global remuneration package and its structure must
be competitive in order to attract and retain talent.
5
Remuneration decisions must be free of conflicts of
interest and discrimination of any kind different from that
based on the performance assessment of objectives and
corporate behaviours. Remuneration must be free of
gender-based bias and help eliminate inequalities that
could result from it.
The remuneration elements the policy lays down include necessary
mechanisms to ensure remuneration will be conducive to achieving
strategic and long-term sustainability objectives of Banco
Santander.
Accordingly, it bases executive directors and senior managers’
variable pay on pre-determined, specific and quantifiable financial,
sustainability-based and value-creation targets that are consistent
with Banco Santander’s interests, including in regard to
environmental, social and governance matters.
For more details, please see section 6.3 about the policy's
application in 2024 and section 6.4 about the remuneration policy
for 2025 and subsequent years.
Lastly, the remuneration committee and the board enlisted the
assistance of Willis Towers Watson to:
• Compare markets and entities similar to the Group in size,
characteristics and operations using relevant data for setting
remuneration.
• Estimate the fair value of variable remuneration linked to long
term objectives.
6.2 Remuneration of directors for
supervisory and collective decision
making duties: policy applied in 2024
A. Composition and limits
According to our Bylaws, the remuneration of directors in their
roles consists of a fixed annual amount set at the general
shareholders' meeting. This amount remains in effect until
shareholders vote to amend it, even though the board may reduce
it in the years it deems appropriate. At the AGM, remuneration for
2024 was set at EUR 6 million (limit that has not been updated
since 2012 and whose amount finally consumed has been
systematically lower), which included (a) an annual allotment and
(b) attendance fees.
Santander has taken out a civil liability insurance policy for
directors and other executives of the Group, subject to usual terms
proportionate to its circumstances.
Directors can receive shares, share options or other forms of share
based compensation, subject to prior approval at the general
meeting. Directors can also receive other compensation following
a proposal made by the remuneration committee and upon
resolution by the board of directors, as may be deemed
appropriate, in consideration for the performance of other duties in
Banco Santander, whether they are executives' duties or not, in
addition to their oversight and collective decision-making as board
members.
Non-executive directors do not have the right to receive any benefit
on the occasion of their removal from office.
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B. Annual allotment
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.
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 thousand, thus equalizing its remuneration to
other committees of mandatory existence, considering the importance and complexity of the matters addressed in it. Applicable amounts
were:
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 nomination 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 nomination 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 director
A
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.
C. Attendance fees
Pursuant to board-approved resolutions on the remuneration committee’s recommendations, attendance fees for board and committees
meetings (with the exception of the executive committee, for which no fees are set) added up to the amounts included in the chart below for
the last two years.
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.
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
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D. Breakdown of Bylaw-stipulated emoluments
Total director Bylaw-stipulated emoluments and attendance fees received in 2024 amounted to EUR 5.4 million (EUR 5.3 million in 2023).
This is 11% less than the amount approved at the general meeting. Each director earned the following amounts for these items:
Amount in euros
2024
2023
Board and
Total By-law
stipulated
emoluments
Directors
Category
Board
F
EC
AC
1
Annual allotment
NC
2
RC
RSRCC
3
RBSCC
4
ITC
5
Total
committee
attendance
fees
and
attendance
fees
Ana Botín
Executive
98,000
170,000
—
—
—
—
—
43,944
311,944
56,472
368,416
411,000
Héctor Grisi
Executive
98,000
170,000
—
—
—
—
—
28,000
296,000
56,472
352,472
339,500
José
Antonio
Álvarez
Other
external
128,000
170,000
—
—
—
—
—
28,000
326,000
56,472
382,472
371,000
Glenn
Hutchins
Independent
414,912
—
— 28,000
78,000
—
—
82,055
602,967
97,032
700,000
371,600
Bruce
Carnegie-
Brown
A
Independent
22,322
—
— 17,767
6,378
—
—
—
46,467
31,408
77,875
576,000
Homaira
Akbari
Independent
98,000
—
43,000
—
—
—
28,000
28,000
197,000
88,088
285,088
265,000
Javier Botín
B
Other
external
98,000
—
—
—
—
—
—
—
98,000
45,968
143,968
137,000
Sol Daurella
Independent
98,000
—
— 28,000
28,000
—
50,083
—
204,083
88,088
292,171
248,500
Henrique de
Castro
Independent
98,000
—
43,000
—
28,000
—
—
28,000
197,000
103,064
300,064
283,800
Gina Díez
Independent
98,000
—
— 28,000
—
—
28,000
—
154,000
70,928
224,928
210,050
Luis Isasi
Other
external
98,000
170,000
—
—
28,000
43,000
—
—
339,000
100,776
439,776
416,800
Ramiro
Mato
C
Independent
47,911
83,111
21,022
—
—
21,022
38,133
—
211,200
60,008
271,208
517,600
Belén
Romana
Independent
98,000
170,000
43,000 66,750
—
58,944
6,378
28,000
471,072
127,816
598,888
571,600
Pamela
Walkden
Independent
98,000
—
58,944
—
—
97,056
21,622
—
275,622
104,624
380,246
340,600
Germán de
la Fuente
Independent
98,000
—
97,056
—
—
43,000
—
—
238,056
99,944
338,000
270,600
Carlos
Barrabés
D
Independent
50,089
—
— 14,311
—
—
18,060
14,311
96,771
31,408
128,179
—
Antonio
Weiss
E
Independent
50,089
—
—
—
—
—
—
—
50,089
21,632
71,721
—
Total
1,791,323
933,111
306,022 182,828 168,378 263,022 190,277 280,310 4,115,270
1,240,200
5,355,470
5,330,650
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.
EC: executive committee. AC: audit committee. NC: nomination committee. RC: remuneration committee.
RSRCC: risk supervision, regulation and compliance committee. RBSCC: responsible banking, sustainability and culture committee. ITC: innovation and technology committee.
Changes in the chairship of the committees:
1. Germán de la Fuente was appointed Chair of the AC on 23 March 2024, replacing Pamela Walkden.
2. Belén Romana was appointed Chair of the NC on 23 March 2024, succeeding Bruce Carnegie-Brown.
3. Pamela Walkden was appointed Chair of the RSRCC on 23 March 2024, replacing Belén Romana.
4. 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.
5. Glenn Hutchins was appointed Chair of ITC on 23 March 2024, replacing Ana Botín.
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BBVA
ING
BNP Paribas
Itaú
Citi
Scotiabank
Crédit Agricole
Unicredit
HSBC
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6.3 Remuneration of directors
for executive duties
i) How we set executive directors pay
We set the remuneration structure for executive directors by
considering company performance as well as Santander's unique
individual circumstances such as multiple stock exchange listings,
the geographical distribution of the company’s operations, sales
and employees, and the clear industry-specific pressures in terms
of talent attraction and retention. As explained below, we conduct
a benchmarking analysis for the executive chair and CEO positions
every year in order to establish a framework of reference for what
competitors are paying.
ii) How we determine our peer group
Banco Santander conducts an annual comparative review of
executive directors’ and top management remuneration against a
peer group comprised of global banks. Because we have extensive
international operations and we compete for talent on a global
scale, our peer group appropriately reflects these characteristics.
While two-thirds of the companies in our comparator group are
European, we include banks from the US and Brazil due to the
strong presence of Santander in those countries. For instance, over
50% of revenues and nearly half of profits from our secondary
business segments came from the Americas in 2024, making this
region a critical market for us both from a business perspective and
as a source of talent.
%
Attributable
DCB
North
South
to the
Europe Europe America
America
Americas
Revenue (EUR
million)
23,510
5,679
13,915
19,783
54%
Attributable
profit (EUR
million)
6,644
642
2,579
3,863
47%
Total customers
(thousands)
46,821 19,550
25,762
80,405
62%
Total
employees
65,746 16,792
42,846
79,571
60%
As % of total operating areas, excluding the Corporate Centre.
To select the peer group, Group governing bodies follows a robust
process that takes into account and ranks potential peers on the
following criteria: market capitalization, scale, brand recognition,
geographical diversification, business model and regulatory
framework.
We regularly review the validity of our peer group and make the
necessary changes to ensure it properly reflects our business and
talent markets. Following an assessment in autumn of 2024, we
determined that for 2025 our peer group should remain unchanged
from 2024 and also from 2023. The group comprises the following
companies:
Why did we choose these banks for the peer analysis?
• To ensure a comparison under similar macroeconomic and
regulatory landscape.
• To be able to identify market trends and dynamics.
• To capture the latest developments in the banking industry.
• To monitor banks with similar size, performance, geographic
footprint, business model and strategy.
• To identify outliers and best practices across the sector.
Market Cap (EUR bn) at 2024 closing date
170.5
128.6
67.6
67
64.5
59.8
54.5
47.6
44
40.4
HSBC
Citi
Santander
BNP
Scotiabank
Unicredit
BBVA
ING
Itaú
Crédit Agricole
iii) Performance-based Pay and alignment with
shareholder value
Our remuneration programme mainly focuses on paying for
performance, with a significant portion of each executive's
remuneration at-risk. Additionally, variable pay outcome depends
on the achievement of performance targets that align with our
corporate strategy and lead to enhanced value for our
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shareholders. The main purpose of this incentive programme is to
incentivise long-term value creation.
In this sense, for year 2024:
• 61% of our Executive Chair’s total compensation is performance
based and 57% of our CEO`s total compensation is performance
based.
• 36% of our executive director’s total variable remuneration is
subject to long-term metrics that include relative TSR, return on
tangible equity and other sustainability metrics and therefore
strengthen the alignment of our executive director’s interests
with the shareholder’s interests in the long-term. This will
increase from 36% to 40% in year 2025.
• Additionally, 50% of their variable remuneration is delivered in
the form of equity instruments (mainly Banco Santander S.A.
shares), with this portion to be increased up to 60% in year 2025.
v) Summary of executive remuneration composition
The policy on directors’ remuneration for executive duties in 2024
was approved by the board of directors and put to a binding vote at
the 2024 AGM, with 74.8% votes in favour. The table below
summarizes the main items of remuneration policy of Ana Botín
and Héctor Grisi.
Targets related to performance metrics are intended to be
challenging, with payout levels established after considering
upside/downside scenarios, sensitivity analysis and year-over-year
growth comparisons, to ensure rigorous alignment of payouts to
performance.
iv) How we include sustainability metrics in the
variable incentive scheme
The current remuneration policy incorporates mechanisms that link
variable remuneration to the achievement of financial,
sustainability, and value creation objectives. These objectives are
specific, measurable, and aligned with the bank's interests,
encompassing environmental, social, and governance
(sustainability) factors. For further details, please see section I.
Component
Gross annual
salary
Type
Fixed
Policy
→ Paid in cash on a monthly basis (+5% vs 2023).
Effective in 2024
Ana Botin: EUR 3,435 thousand.
Héctor Grisi: EUR 3,150 thousand.
Variable
Variable
→Individual target bonus updated (+5% vs 2023).
• See section 6.3 B ii for details on annual
remuneration
→ Calculated against annual quantitative metrics and
a qualitative assessment, and taking into account
individual performance.
→50% of each payment is instruments, consisting of
Banco Santander, S.A instruments, and restricted
stock units (RSUs) of PagoNxt, S.L.
→The number of instruments is set at the time of the
award.
→40% paid in 2025.
→60% deferred in five years.
◦24% paid in equal parts in 2026 and 2027.
◦36% paid in equal parts in 2028, 2029 and 2030,
provided certain long-term objectives are met
(2024-2026).
metrics and assessment.
• See section 6.3 B iii for details on individual
variable pay.
• See section 6.3 B iv for details on long
term metrics.
Pension scheme
Fixed
→ Annual contribution of 22% of base salary.
• No changes.
Variable
→ Annual contribution of 22% of 30% of the average
of variable remuneration in the last three years.
• See section 6.3 C for details on annual
contributions and pension balance.
Other
Fixed
→ Includes life, accident and medical insurance, and
• Regarding fixed remuneration supplement,
remuneration
other in-kind compensation.
→ Includes for the Executive Chair a fixed
remuneration supplement in cash (not considered
salary or pensionable) since supplementary death
and disability benefits were eliminated.
→ Payment for non-compete commitment
no change for Ana Botín since 2018.
• Héctor Grisi will not receive supplement in
his fixed remuneration.
No changes.
Shareholding
N/A
→ Executive directors also have the obligation to hold
• Policy updated during 2020 to assure
policy
them for three years from their award date, unless
the director already holds shares for an amount
equivalent to 200% of their net annual salary
(calculated on the basis of their gross annual
salary). In such case, the regulatory obligation to
hold shares is for one year from their grant date.
compliance with recommendation 62 to
the Good Governance Code for Listed
Companies of the CNMV.
• Both Ana Botín and Héctor Grisi maintain
an amount in shares higher than 200% of
their fixed pay.
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-
-
2024 AWARD
%
1
Component
Fixed
Fixed
Fixed and Variable
Fixed
Deferred
Upfront
Feb 2025
2026
2027
2028
2029
2030
40%
12%
12%
12%
12%
12%
20%
6%
6%
6%
6%
6%
20%
6%
6%
6%
6%
6%
36%
Additionally subject to long-term
goals achievement
2
Sustai-
RoTE
rTSR
nability
40%
40%
20%
Malus/Clawback clauses
All payments in shares
3 are subject to a one-year retention period and the
prohibition of hedging
Gross Annual
Salary
24%
Board of
Directors' by
law stipulated
emoluments
3%
Pension
Contribution
9%
Rest of
components
7%
Variable
remuneration
(Target Bonus
x
Achievement
level of Bonus
pool
+/
Individual
performance)
57%
Cash/
Shares
(%)
50%
50%
100%
Cash
Shares
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Remuneration scheme applicable to Executive Chair and CEO.
1. Example with Executive Chair 2024 percentages over total remuneration.
2. Long-term metrics shown for 2024 award at fair value of 70%, as have been determined by an independent expert.
3. Executive directors also have the obligation to hold them for three years from their award date, unless the director already holds shares for an amount equivalent to 200% of
their net annual salary (calculated on the basis of their gross annual salary). In such case, the regulatory obligation to hold shares is for one year from their grant date.
A. Gross annual salary
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.
Fixed pension contribution continues to be 22% of gross annual
salary for 2024.
Executive directors’ gross annual salary and fixed annual
contribution to pensions for 2024 and 2023 were as follows:
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2024
2023
Fixed annual
Fixed annual
EUR thousand
Gross annual
salary
pension
contribution
Total
A
Gross annual
salary
pension
contribution
Total
A
Ana Botín
3,435
756
4,191
3,271
720
3,991
Héctor Grisi
3,150
693
3,843
3,000
660
3,660
Total
6,585
1,449
8,034
6,271
1,380
7,651
A. Additionally, Ana Botín received in 2024 and 2023 EUR 525 thousand as a fixed remuneration supplement. Héctor Grisi did not receive fixed remuneration supplement.
B. Variable remuneration
i) General policy for 2024
The board approved the executive directors’ variable remuneration
on the remuneration committee’s recommendation, according to
the policy approved at the general shareholders' meeting:
• Variable components
1 of executive directors’ total remuneration
in 2024 should represent less than 200% of fixed components, as
established by resolution of the AGM on 22 March 2024.
• At the beginning of 2025, on the remuneration committee’s
recommendation, the board approved the final amount of the
2024 incentive, based on the bonus pool calculated in accordance
with the directors' remuneration policy approved at the general
shareholders' meeting on 22 March 2024, and in consideration
of:
• Short-term quantitative metrics measured against annual
objectives.
• A qualitative assessment that cannot adjust the result by more
than 25 percentage points upwards or downwards. While the
metrics considered are qualitative, the assessment is not
discretionary. Rather, it is based on an assessment of objective,
measurable and audited goals, as described below.
• An exceptional adjustment that, if applicable, must be
supported by evidence.
• The final 2024 individual incentive is determined based on the
bonus pool payout, the executive director’s target bonus and
the individual performance resulting from (i) their individual
objectives (which generally match the Group’s and cover
financial, risk management and solvency position, as well as
fostering the five global businesses: Payments, Digital
Consumer Bank, Retail & Commercial Banking, CIB and Wealth;
and accelerating the transformation of the Bank into One
Santander, with a special focus on IT, people and the
sustainability agenda); and (ii) how they achieve them in
consideration of how they manage employees and follow the
corporate values.
Individual
target bonus
Quantitative
metrics and
qualitative
assessment
A
Individual
performance
Final
individual
variable
remuneration
A. Any exceptional adjustment supported by evidence
Quantitative metrics and qualitative assessment aspects are
described below.
• Payment of the approved incentive is split equally into cash and
instruments, the latter as follows:
• EUR 500,000 and EUR 420,000 in PagoNxt, S.L. RSUs for Ana
Botín and Héctor Grisi, respectively.
• The rest, all in shares of Banco Santander.
• 40% is paid in 2025, once the final amount has been set. The
remaining 60% will be deferred in equal parts over five years
(subject to long-term metrics) as follows:
• The deferred amounts payable in 2026 and 2027 (24% of the
total), will be paid if none of the malus clauses described
below are triggered.
• The deferred amounts payable in 2028, 2029 and 2030 (36%
of the total), will be paid if the malus clauses are not triggered
and the multi-year targets described below are reached. 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.
• Deferred amounts in cash may be adjusted for the inflation
related to the deferral period.
• All payments in shares are subject to a three-year retention
period, unless the director already holds shares for an amount
equivalent to twice his/her annual fix remuneration, in which
case the shares would be subject only to the regulatory one-year
retention period obligation.
• The hedging of the instruments received during the retention and
deferral periods is expressly prohibited. The sale of shares is also
prohibited for one year from time they are received.
• All deferred payments can be subject to malus. Similarly,
Santander can claw back paid incentives in the scenarios and for
the period dictated in the Group’s malus and clawback policy.
ii) Quantitative metrics and qualitative assessment
for 2024
Executive directors’ variable remuneration for 2024 has been
based on the corporate centre executives' common bonus pool,
which calculation comes from the quantitative metrics and
qualitative assessment approved by the board at the beginning of
2024 on the remuneration committee’s recommendation. This also
takes into account the input from the human resources committee,
which for this purpose counts on the participation of the senior
management in charge of the group's Risk, Compliance, Audit,
Human Resources and Legal and Financial accounting and control
functions, who among others provided input on risk, solvency,
liquidity, results' quality and recurrence, and compliance and
control. The results for the bonus pool (shown in the chart below)
resulting from the process above and reviewed and approved by
1 As indicated in the first chart in section 6.3 pension contributions include both fix and variable components, the latter of which also form part of total variable remuneration.
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the board, upon recommendation from the remuneration
committee, are shown in the chart below.
Category
A. Quantitative metrics
A
and (weight) of Bonus
pool
Targets
Achievement over
target
Assessment
Total customers (growth) (10%)
Target: 5.31 million. Achievement: 8.9 million.
150.00%
Transformation: (45%)
Active customers (growth) (10%)
Revenue per active customer (10%)
Target: 2.1 million. Achievement: 4.1 million.
Target: EUR 600. Achievement: 617 EUR.
150.00%
102.79%
Cost (15%)
Target: EUR 24,799 million. Achievement: EUR 24,808 million.
100.00%
Capital
B (30%)
CET1 ratio
Target: 12.45%. Achievement: 12.76%
252.59%
Profitability (25%)
RoTE (Return on tangible equity)
Target: 16.09%. Achievement: 16.27%.
108.86%
TOTAL metrics
158.27%
A. For this purpose, these metrics may be adjusted upwards or downwards by the board, following a proposal from the remuneration committee, when inorganic transactions,
material changes to the Group’s composition or size or other extraordinary circumstances (such as extraordinary impacts of macroeconomic environment, impairments,
restructuring procedures or regulatory changes) have occurred which affect the suitability of the metric and achievement scale established in each case and resulting in an
impact not related to the performance of the executive directors and executives being evaluated.
B. The related score has been calculated as per the pay-out scale approved, which factors in not only performance vs target as per CRR2 but also vs CRR3, risk transfer and net
RWAs targets.
B. Qualitative assessment
Indicators
Level of achievement
Assessment
Performance vs. Market (+/
10%)
The Group achieved record results in 2024 for the third year in a row. This enabled us to i) place above our global
peers’ average in terms of profitability adjusted to cost of risk (NIM-CoR); keep a lid on cost growth more or less in
line with inflation and increasing at a rate half that of our peers; and iii) continue boosting our profitability (RoTE) by
+5.00%
climbing two positions and widening the gap with the market average. By business, Retail performed strongly in
almost every market, as did Consumer, which remained a leader in NIM-CoR and profitability. Wealth grew at a
faster rate than our peers.
During the year, we have strengthened synergy between global businesses, countries and support functions, driving
collaboration within our Organization as a key factor in capturing the value of our Group, reinforcing our competitive
Network Collaboration (+/- 5%)
+3.41%
and operational advantages. This allows us to continue to strengthen our global network and transform
collaboration into a real advantage for the Group.
Compliance and Risk (+/- 5%)
Strengthened oversight units, including in global processes (e.g. P-27). Delivered on various regulatory/supervisory
issues (closure of 4 SREP recommendations, maintained SREP operational rating, delivered EBA repair programme,
full implementation of ECB IFRS9 operational act). Delivered a new Group-wide IRB strategy. Significant progress on
strategic and transformational initiatives and further integration of advanced risk management techniques fostering
profitable growth (automated credit decisioning, use of machine learning and artificial intelligence).
+2.50%
Also continued to deliver an effective Compliance program in 2024, meeting the defined priorities with tangible
deliverables focused on regulatory priorities such as One FCC, Unit and Global Division oversight and advice, and
broader issues such as talent enhancement and mobility.
Sustainability targets (+/- 5%)
We made significant progress in sustainability-related lines of work, most notably our strong performance in
financial inclusion and sustainable business (including climate).
+3.13%
TOTAL qualitative assessment
+14.03%
C. Exceptional adjustment
approved by board of directors
upon recommendation of
remuneration committee
Despite very strong results and outstanding performance in capital management, the Board, upon recommendation
from the Remuneration Committee, approved a discretionary reduction of -27.3 p.p. to best align the bonus pool
results with shareholder performance
-27.30 %
Final bonus pool 2024
145%
The payout relative to the level of achievement of the targets for
the quantitative metrics (158.27%) and the ones relative to the
qualitative evaluation (+14.03%) and exceptional adjustment
(-27.30%) are added up:
A + B +C = Final bonus pool result in 2024 (as a percentage of
target).
The following section details the individual variable remuneration
approved by the board.
iii) Determination of the individual variable
remuneration for executive directors set in 2024
The board approved executive directors' variable remuneration for
2024 on the remuneration committee’s recommendation, based on
the bonus pool detailed above, their individual target bonuses for
2024 and the evaluation of their individual contributions.
The board also verified that none of the following circumstances
have occurred:
• The Group's ONP
2 for 2024 was not more than 50% less than for
2023. Otherwise, variable remuneration would not have been
greater than 50% of the individual target.
2 For this purpose, ONP is attributed ordinary net profit, adjusted upwards or downwards for transactions the board believes have an impact not connected to the performance
of evaluated directors, for which extraordinary profit, corporate transactions, impairments, or accounting or legal adjustments that may occur during the year are evaluated.
The exclusion in the calculation for these purposes of goodwill impairments is aligned with the supervisors' criteria on their recommendations on dividend distributions.
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• The Group’s ONP was not negative. Otherwise, the incentive
would have been zero.
The board of directors, upon recommendation of the remuneration
committee, resolved to increase 5% the target bonuses for the
Executive Chair and the CEO in 2024.
Variable contributions to pensions in terms of percentage were
not modified in 2024, remaining at 22% of the 30% of the last
three assigned bonus' average. 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.
Breakdown of immediately payable and deferred
remuneration
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 return, the
board approved a negative adjustment of 27.30%.
Furthermore, the ratio of executive directors’ total remuneration to
underlying attributable profit fell from 0.19% in 2023 to 0.18% in
2024, as shown in section 6.3.I.
In this context, total executive variable remuneration increased by
4% compared to the previous year.
The immediately payable variable remuneration in deferred
amounts not contingent on long-term metrics and variable
remuneration deferred and contingent on long-term objectives
approved by the board of directors, following a proposal by the
remuneration committee, resulting from the aforementioned
process are:
Immediately payable and deferred (not linked to long-term objectives) variable remuneration
2024
2023
EUR thousand
In cash
In shares
A
In RSUs
A
Total
In cash
In shares
B
In RSUs
B
Total
Ana Botín
2,961
2,761
200
5,922
2,848
2,648
200
5,696
Héctor Grisi
2,046
1,878
168
4,092
1,952
1,784
168
3,904
Total
5,007
4,639
368
10,015
4,800
4,432
368
9,600
A. The amounts in the foregoing table correspond to a total of 1,014 thousand shares of Banco Santander and 7 thousand RSUs of PagoNxt, S.L.
B. The amounts in the foregoing table correspond to a total of 1,168 thousand shares in Banco Santander and 6 thousand RSUs in 2023.
The following chart states deferred variable remuneration at fair value, which will only be received in 2028, 2029 and 2030 if the long-term
multi-year targets are met (see section 6.3 B iv)) and beneficiaries continue to be employed at Grupo Santander, in accordance with the
terms approved in the general shareholders' meeting, and no circumstances triggering malus clauses occur
3:
Deferred variable remuneration linked to long-term objectives (fair value)
2023
EUR thousand
In cash
In shares
A
In RSUs
A
Total
In cash
In shares
B
In RSUs
B
Total
Ana Botín
1,166
956
210
2,332
1,121
911
210
2,243
Héctor Grisi
806
629
176
1,611
769
592
176
1,537
Total
1,972
1,585
386
3,943
1,890
1,504
386
3,780
A. The number of shares in the table correspond to a total of 346 thousand shares of Banco Santander and 7 thousand RSUs of PagoNxt S.L.
B. The number of shares in the table correspond to a total of 396 thousand shares and 6 thousand RSUs of PagoNxt S.L in 2023.
Fair value has been determined on the grant date based on the
valuation of an independent expert, Willis Towers Watson. Based
on the design of the plan for 2024 and success levels of similar
plans at peer entities, the fair value was considered to be 70% of
total value linked to long-term objectives assigned.
The maximum amount of shares to be delivered under the plan is
within the maximum amount of the award to be delivered in shares
(EUR 11.5 million) approved at the 2024 AGM for executive
directors. This number of shares has been calculated with the
weighted average daily volume of weighted average listing prices
of Banco Santander shares in the 50 trading sessions prior to the
Friday (not inclusive) before 4 February 2025 (the date on which
the board approved the 2024 bonus for executive directors), which
was EUR 4.576 per share. According to an independent experts'
valuation, the price per PagoNxt, S.L. RSU equals EUR 54.14.
3 Corresponds to the fair value of the maximum amount to be received over a total of 3 years, subject to continued service -with certain exceptions-, non- applicability of malus
clauses and compliance with set goals. Fair value was estimated at the plan award date on account of several scenarios for the variables in the plan during the measurement
periods.
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iv) Multi-year targets linked to the payment of
deferred amounts in 2028, 2029 and 2030
The multi-year targets linked to the payment of the deferred
amounts payable in 2028, 2029 and 2030 are:
Metrics
Weight
Target and compliance scales (metrics ratios)
A
Banco Santander’s
If RoTE in 2026 is ≥ 18%, then metric ratio is 1.5
consolidated Return on
40%
If RoTE in 2026 is ≥ 15% but <18%, then metric ratio is 0 – 1.5
B
tangible equity (RoTE)
target in 2026
If RoTe in 2026 is < 15%, then metric is 0
B
If ranking Santander equal percentile 100, then metric ratio is 1.5
Relative Total Shareholder
If ranking Santander between percentiles 75 and 100 (not inclusive), then metric ratio is
Return (TSR)
A in
40%
1 – 1.5
C
2024-2026 within a peer
If ranking Santander between percentiles 40 and 75 (not inclusive), then metric ratio is 0.5 – 1
C
group
If ranking Santander below percentile 40, then metric ratio is 0
Four sustainability
(environmental, social and
governance) metrics with
the following weighting:
2/10 x Coefficient 1 + 2/10 x
Coefficient 2 + 1/10 x
Coefficient
3 +5/10 x Coefficient 4
If % women in senior executive positions in 2026 is ≥ 37%, then metric ratio is 1.25
If % women in senior executive positions in 2026 is ≥ 36% but <37%, then metric ratio is
1)
1 – 1.25
D
If % women in senior executive positions in 2026 is ≥ 34% but <36%, then metric ratio is 0 – 1
D
If % women in senior executive positions in 2026 is < 34%, then metric ratio is 0
If number of financially included people
E between 2024 and 2026 (in million) is ≥ 6,3, then
metric ratio is 1.25
If number of financially included people
E between 2024 and 2026 (in million) is ≥ 5,3 but <6,3,
then metric ratio is 1 – 1.25
D
2)
If number of financially included people
E between 2024 and 2026 (in million) is ≥ 3,5 but <5,3,
then metric ratio is 0 – 1
D
If number of financially included people
E between 2024 and 2026 (in million) is < 3,5, then
metric ratio is 0
20%
If socially responsible investment
F in 2026 is ≥ 21%, then metric ratio is 1.25
If socially responsible investment
F in 2026 is ≥ 18% but < 21%, then metric ratio is 1 –1.25
D
3)
If socially responsible investment
F in 2026 is ≥ 15% but < 18%, then metric ratio is 0 –1
D
If socially responsible investment
F in 2026 is < 15%, then metric ratio is 0
If finance raised and facilitated
G (in EUR billions) between 2024 and 2026 is ≥ 180, then metric
ratio is 1.25
If finance raised and facilitated
G (in EUR billions) between 2024 and 2026 is ≥ 150 but < 180,
then metric ratio is 1 –1.25
D
4)
If finance raised and facilitated
G (in EUR billions) between 2024 and 2026 is ≥ 110 but < 150,
then metric ratio is 0 –1
D
If finance raised and facilitated
G (in EUR billions) between 2024 and 2026 is < 110, then metric
ratio is 0
A. TSR refers to the difference (%) between the final and initial values of capital invested in ordinary shares of Banco Santander. The final value is calculated based on the
dividends or other similar concepts (such as the Santander Scrip Dividend programme) shareholders receive for this investment during the corresponding period -as if they
had invested in more shares of the same type at the first date on which the dividend or similar concept was payable to shareholders- and the weighted average share price at
that date. To calculate TSR, the weighted average daily volumes of the weighted average listing prices for the fifteen trading sessions prior to 1 January 2024 (exclusive) is
considered (to calculate the initial value) and the fifteen trading sessions prior to 1 January 2027 (exclusive) (to calculate the final value). The peer group consists of BBVA,
BNP Paribas, Citi, Crédit Agricole, HSBC, ING, Itaú, Scotia Bank and Unicredit.
B. Straight-line increase in the RoTE ratio based on the percentage of specific RoTE in 2026 within this bracket of the scale.
C. Proportional increase in the TSR ratio based on the number of positions moved up in the ranking.
D. Increase of the coefficient is proportional to its position on this line of the scale.
E. Financial inclusion: the banking proposals or tailored finance refer to the number of people unbanked, underbanked, in financial distress or with difficulty to access credit to
whom we provide tailored access and finance solutions, aiming to meet local financial inclusion needs in a recurrent, comprehensive, affordable and effective way.
F. Assets under management that meet the criteria of Santander’s Sustainable Finance and Investment Classification System (SFICS) as a percentage of total assets under
management.
G. Grupo Santander's contribution to our customers’ transition (2024-2026): CIB green finance raised and facilitated (target), Retail & Commercial banking green finance and
sustainable linked-loans, and Digital Consumer Bank green finance.
To determine the annual amount of the deferred portion linked to
• 'A' is the RoTE coefficient according to the scale in the table
objectives corresponding to each executive director in 2028, 2029
above, based on RoTE at year-end 2026.
and 2030, the following formula shall be applied to each of these
• 'B' is the TSR ratio calculated as the scale in the table above,
payments ('final annuity') without prejudice to any adjustment
according to the relative performance of Banco Santander’s TSR
deriving from the malus clauses:
within its peer group in 2024- 2026.
Final annuity = Amt. x (2/5 x A + 2/5 x B + 1/5 x C)
• 'C' is the coefficient resulting from the sum of weighted
coefficients for each of the four sustainability targets for 2026
where:
described above.
• 'Amt.' is one third of the variable remuneration amount deferred
• In any event, if the result of (2/5 x A + 2/5 x B +1/5 x C) is greater
conditional on performance (i.e. Amt. will be 12% of the total
than 1.25, the multiplier will be 1.25.
variable pay set in early 2025).
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v) Malus and clawback
Deferred amounts (whether or not contingent on multi-year
targets) will be earned if the beneficiary continues to work with the
Group
4, and none of the circumstances triggering malus clauses
arise before each payment, according to the section on malus and
clawback clauses in the remuneration policy.
Similarly, Banco Santander can clawback any paid variable
amounts in the scenarios and for the period dictated by the terms
and conditions in the said policy.
Variable remuneration for 2024 can be clawed back until the
beginning of 2031.
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:
Category
Factors
Significant failures in risk management by Banco
Risk
Santander, or by a business or risk control unit.
An increase in capital requirements at the Banco
Santander or one of its business units not
Capital
planned at the time that exposure was
generated.
Regulatory penalties or legal convictions for
events that might be attributable to the unit or
Regulation and
staff responsible for them. In addition, failure to
internal codes
comply with Banco Santander’s internal codes of
conduct.
Improper conduct, whether individual or
collective. Negative effects deriving from the
marketing of unsuitable products and the
Conduct
liability of persons or bodies making such
decisions will be considered especially
significant.
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.
The application of malus or clawback clauses for executive
directors shall be determined by the board of directors, at the
proposal of the remuneration committee, and cannot be proposed
once the retention period for the final payment in shares under the
plan has elapsed in early 2031. Therefore, the board determines
the specific deferred incentive amount to be paid as well as any
amount that could be subject to clawback, upon on the
remuneration committee’s recommendation and depending on the
level of compliance with the conditions for applying malus clauses.
C. Main features of the benefit plans
Executive directors participate in the defined contribution pension
scheme created in 2012, which covers contingencies due to
retirement, disability and death.
According to the 2012 system, contracts for Ana Botín and other
senior managers with defined benefit pension obligations were
transformed into a defined contribution system. The new system
gives executive directors the right to receive benefits upon
retirement, even if they are not active at Banco Santander at the
time, based on contributions to the system. It also replaced their
previous right to receive a pension supplement in the event of
retirement.
The initial contribution for Ana Botín in the new defined
contribution pension scheme corresponded to the market value of
the assets for which the provisions for due obligations were
recognized when the previous pension commitments had been
transferred to the new pension scheme.
Every year since 2013, Banco Santander has been contributing to
the pension scheme for executive directors and other members of
the executive team in proportion to their pensionable bases until
their departure from the Group, retirement, death or disability. In
general terms, the pensionable base for executive directors is the
sum of their fixed remuneration plus 30% of the average of their
last three variable remuneration amounts. Contributions will be
22% of pensionable bases in all cases.
This means complying in both cases 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.
Pursuant to remuneration regulations, contributions calculated on
the basis of variable remuneration are subject to the discretionary
pension benefits scheme. Therefore, under the policy, malus and
clawback clauses can be enforced on them in place at any given
time and during the same period in which variable remuneration is
deferred. Furthermore, these contributions must be invested in
Banco Santander shares for five years from the date of the
executive director's retirement, or from the date on which the
executive directors leave the group. Once that period has elapsed,
the amount invested in shares will be paid to them or their
beneficiaries if some contingency covered by the pension scheme
was happened or will be added to the remainder of their
4 When the beneficiary’s relationship with Banco Santander or another Group entity terminates because of retirement, early retirement or pre-retirement; a dismissal ruled by
the courts to be wrongful; unilateral withdrawal for good cause by an employee (which includes the situations set forth in article 10.3 of Royal Decree 1382/1985, of 1
August, governing the special relationship of senior management, for the persons subject to these rules); permanent disability or death; mandatory redundancy; or because an
employer other than Banco Santander ceases to belong to Grupo Santander, the right to receive shares and deferred amounts in cash and any amounts of the deferred
amounts in cash adjusted for inflation will remain under the same conditions in force as if none of such circumstances had occurred. In the case of death, the right will pass to
the beneficiary’s heirs.
In cases of justified temporary leave due to temporary disability, suspension of contract due to maternity or paternity leave, or leave to care for children or a relative, there will
be no change in the beneficiary’s rights. If the beneficiary goes to another Group company (even through international assignment and/or expatriation), these rights will
likewise not change. If the relationship terminates by mutual agreement or because the beneficiary obtains a leave not mentioned above, the terms of the termination or
temporary leave agreement will apply.
None of the above circumstances shall give the right to receive the deferred amount in advance. If the beneficiary or the successors thereof maintain the right to receive the
deferred remuneration in shares and cash and, where applicable, the amounts arising from the adjustment for inflation of the deferred amounts in cash, it shall be delivered
within the periods and under the terms provided in the rules for the plans.
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cumulative balance until their retirement age when the total
amount will be paid.
The benefit plan is outsourced to Santander Seguros y Reaseguros,
Compañía Aseguradora, S.A. The economic rights of the directors
previously mentioned belong to them even if they are not active at
Banco Santander at the time of their retirement, death or disability.
Their contracts do not stipulate any severance payment outside the
extent of the law for termination of contract.
The provisions recognised in 2024 for retirement pensions
amounted to EUR 2,445 thousand (EUR 2,110 thousand in 2023),
as broken down below.
EUR thousand
2024
2023
Ana Botín
1,339
1,144
Héctor Grisi
1,105
966
Total
2,445
2,110
The amounts corresponding to each director as of 31 December
2024 and 2023 in the pension scheme are:
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. Other remuneration
Grupo Santander also takes out insurance policies for life, health
and other contingencies for its executive directors. This other
remuneration component includes the fixed supplement approved
for Ana Botín to replace the supplementary benefits from the
pension scheme eliminated in 2018, in addition to the cost for
insuring death or disability until they retire. Directors are covered
under the Group’s civil liability insurance policy.
Note 5 to the Group’s consolidated financial statements describes
other benefits received by executive directors in detail.
E. Shareholdings
In 2016, on the remuneration committee’s recommendation, the
board of directors approved a shareholding policy to better align
executive directors with shareholders’ long-term interests.
According to this policy, in addition to the executive directors’
commitment to maintaining a significant holding of shares in
Banco Santander for as long as they have their role, executive
directors have five years to demonstrate that their personal assets
include shares in Banco Santander that amount (net of taxes) to
twice their gross annual salary on that date. The following table
show the ratio, with a share price of EUR 4.465
5:
2024
Gross
annual
salary
(thousand)
Number of shares
(thousand)
Number
of times
Likewise, in addition to the regulatory obligation for executive
directors not to sell the shares they receive as remuneration for a
year from their award, which is included in the shareholding policy,
and will apply to all cases, this policy has also been updated in
2020 to include the obligation for executive directors not to sell the
shares they receive as remuneration for a period of three years
from their award date, unless the executive director already holds
Banco Santander shares for an amount equivalent to twice his/her
annual salary.
F. Remuneration of board members as
representatives of Banco Santander
The executive committee resolved that the remuneration accrued
by executive directors who represent Banco Santander on boards
of companies where it owns equity and were appointed after 18
March 2002 will accrue to the Group. No executive director
received remuneration for this type of representation in 2024.
The following table includes the remuneration received by non
executive directors on a personal basis in other Group entities:
Director
Position
Remuneration
Homaira
Akbari
Member of the board of
Santander Consumer USA
Holdings, Inc.
Member of the Board of
PagoNxt, S.L.
USD 100 thousand
(EUR 96 thousand)
EUR 200 thousand
Henrique
de Castro
Member of the Board of
PagoNxt, S.L.
EUR 200 thousand
José
Antonio
Álvarez
Member of the Board of
PagoNxt, S.L.
Member of the Board of Banco
Santander (Brasil) S.A.
EUR 200 thousand
BRL 1,135 thousand
(EUR 183 thousand)
Pamela
Walkden
Member of the Santander UK,
plc and Santander UK Group
Holdings Limited
GBP 109 thousand
(EUR 129 thousand)
Likewise, Luis Isasi received EUR 1,000 thousand for his role as
non-executive Chair of the Santander España business unit and for
attending its board and committee meetings (amount included in
the chart below as "other remuneration" as it is paid by Banco
Santander, S.A.).
And finally, José Antonio Álvarez received a fixed remuneration of
EUR 1,750 thousand as strategic adviser of Grupo Santander, as
well as the life and health insurance contributions and the
supplement for having waived the death and disability policy
disclosed in the table in section G below.
G. Individual remuneration of directors for all
items in 2024
Below is a breakdown of each director’s short-term salary (payable
immediately) and deferred remuneration not based on long-term
performance for 2024 and 2023. Statistical information on
remuneration required by the CNMV (9.5) and Note 5 to the
Group’s consolidated financial statements contains disclosures on
shares delivered in 2024 under the deferred remuneration
schemes of previous years where conditions for their delivery were
met in the related years.
Ana Botín
3,435
33,400
43.4
Héctor Grisi
3,150
2,124
3.0
5 This share price corresponds to the share price as of closing of stock markets on 31 December 2024.
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EUR thousand
2024
2023
Bylaw-stipulated
emoluments
Salary and bonus of executive directors
Board and
Immediate
Deferred
Directors
board
committees
annual
allotment
Board and
committee
attendance
fees
Fixed
Salary
payment
bonus (50%
in
instruments)
payment
bonus (50%
in
instruments)
Total
Pension
Contribution
Other
remuneration
F
Total
Total
Ana Botín
312
56
3,435
3,702
2,221
9,358
1,339
1,062
12,127
11,544
Héctor Grisi
296
56
3,150
2,558
1,535
7,243
1,105
437
9,137
8,257
José Antonio Álvarez
326
56
—
—
—
—
—
3,316
3,698
3,553
Glenn Hutchins
603
97
—
—
—
—
—
—
700
372
Bruce Carnegie-Brown
A
46
31
—
—
—
—
—
—
78
576
Homaira Akbari
197
88
—
—
—
—
—
—
285
265
Javier Botín
B
98
46
—
—
—
—
—
—
144
137
Sol Daurella
204
88
—
—
—
—
—
—
292
249
Henrique de Castro
197
103
—
—
—
—
—
—
300
284
Gina Díez
154
71
—
—
—
—
—
—
225
211
Luis Isasi
339
101
—
—
—
—
—
1,000
1,440
1,417
Ramiro Mato
C
211
60
—
—
—
—
—
—
271
518
Belén Romana
471
128
—
—
—
—
—
—
599
572
Pamela Walkden
276
105
—
—
—
—
—
—
381
341
Germán de la Fuente
238
100
—
—
—
—
—
—
338
271
Carlos Barrabés
D
97
31
—
—
—
—
—
—
128
—
Antonio Weiss
E
50
22
—
—
—
—
—
—
72
—
Total 2024
4,115
1,240
6,585
6,260
3,756
16,601
2,444
5,815
30,214
—
Total 2023
4,238
1,097
6,271
6,000
3,600
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. Member of board of directors since 27 June 2024.
E. Member of board of directors since 27 June 2024.
F. Other remuneration includes for Luis Isasi EUR 1,000 thousand for his role as non-executive Chair of the Santander España business unit and for attending its board and
committee meetings. 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).
The following table provides each executive director’s salary
contingent on multi-year targets. It is only paid if they remain
active in the group, malus clauses do not apply and set multi-year
targets are achieved (as depending on their achievement, the
amounts will be increased (limited to 125%), reduced, or even be
zero, if the related minimum thresholds are not achieved):
EUR thousand
2024
2023
Ana Botín
2,332
2,243
Héctor Grisi
1,611
1,537
Total
3,943
3,780
A. Fair value of the maximum amount receivable over a total of 3 years (2028, 2029
and 2030), which was estimated when the plan was granted, based on several
scenarios relating to variables in the plan during the measurement periods.
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H. Ratio of variable to fixed pay components in
2024
At the 2024 AGM, shareholders approved a maximum ratio of
200% of variable to fixed components in executive directors’ pay.
The table below shows the ratio of variable components to fixed
components for each executive director’s total pay in 2024. This
ratio increased slightly from 2023 by 3 pp for Ana Botín and
decreased 11 pp for Héctor Grisi.
172% 175%
Ana Botín
158% 147%
Héctor Grisi
2023
2024
For these purposes:
• Variable components include all items of this nature, such as any
contributions to the pension scheme calculated on directors’
variable pay.
• Fixed components consist of the other items each director
receives for executive duties, including contributions to pension
schemes calculated on the basis of fixed remuneration and other
benefits, as well as all Bylaw-stipulated emoluments that the
director is entitled to receive in his or her capacity as such.
I. How we include sustainability metrics in 2024
variable incentive scheme
Banco Santander's current remuneration policy is designed to align
executive pay with our strategic goals, including long-term
sustainability. The policy incorporates mechanisms that link
variable remuneration to the achievement of financial,
sustainability, and value creation objectives. These objectives are
specific, measurable, and aligned with the bank's interests,
encompassing environmental, social, and governance
(sustainability) factors.
Sustainability metrics are included in the two different incentive
schemes, the short-term incentive and the long-term incentive.
Both structures are in place to reward performance and promote a
balance between immediate results and sustainable growth over
time.
1. Short-term incentive (measured by the Bonus pool result):
• Variable pay calculated against annual quantitative metrics and a
qualitative assessment based on objective factors, while also
considering individual performance. We consider sustainability
accomplishments in the qualitative assessment, with a weight of
+/- 5%.
• Our top 236 Groups' executives (including the Executive Chair
and CEO), as well as employees of the global Corporate Centre
and global corporate centres of our subsidiaries, are subject to
this general Bonus pool framework and their respective local
adaptations.
• The proposed parameters for sustainability performance reviews
aim to reward progress both in key metrics and in embedding
sustainability in management. For the 2024 award, the
sustainability component of the qualitative assessment
considered the following sustainability-related accomplishments
vs the targets budgeted for the year: progress with inclusive
culture, financial inclusion, sustainable business volume, climate
and governance and data.
2. Long-term incentive:
• A portion of variable compensation (36%), which is deferred and
earned based on the achievement of pre-determined multi-year
goals, including sustainability metrics (for the 2024 award, 20%
of total multi-year goals). These metrics are progress with
inclusive culture, financial inclusion, socially responsible
investment and supporting the transition to a low carbon
economy (for more details, please see section 6.3.B iv)).
• Our top 36 Groups' executives have their long-term incentive
linked to these metrics, including the Executive Chair and CEO.
J. Comparative analysis of directors'
remuneration, company performance and
average remuneration of employees
This chart summarizes directors’ compensation (short-term
remuneration, deferred variable remuneration and/or deferred
variable remuneration linked to multi-year targets included,
excluding pension contributions) for executive duties in relation to
underlying attributable profit as evidenced below. The weight of
executive directors’ remuneration relative to underlying
attributable profit continues to decline since 2013.
Ratio of executive directors’ total remuneration
to underlying attributable profit
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The following chart shows the comparative analysis between the directors' remuneration, the company performance (underlying profit
attributable to the Group, audited profit before taxes and ordinary ROTE) and the average remuneration of Santander employees (other than
directors and in a full time equivalent basis) in the last 5 years:
Directors' remuneration
1 (EUR thousand)
2024
% var.
24/23
2023
% var.
23/22
2022
% var.
22/21
2021
% var.
21/20
2020
• Executive Directors
Ana Botín
12,127
5%
11,544
5%
11,001
(4)%
11,435
68%
6,818
Héctor Grisi
9,137
11%
8,257
—
—
—
—
—
—
• Non-Executive Directors
2
José Antonio Álvarez
3,698
4%
3,553
(61%)
9,086
(1%)
9,160
52%
6,018
Glenn Hutchins
700
88%
372
—%
10
—%
—
—%
—
Bruce Carnegie-Brown
A
78
(86%)
576
(18%)
700
—
700
18%
595
Homaira Akbari
285
8%
265
9%
244
(2%)
248
23%
202
Javier Botín
B
144
5%
137
6%
129
—
129
6%
122
Sol Daurella
292
17%
249
8%
230
(4%)
239
12%
214
Henrique de Castro
300
6%
284
9%
261
(2%)
267
23%
217
Gina Díez Barroso
225
7%
211
23%
172
32%
130
—
4
Luis Isasi
C
1,440
2%
1,417
E
—
1,412
E
—
1,406
E
49%
943
Ramiro Mato
D
271
(48%)
518
4%
500
—
499
16%
430
Belén Romana
599
5%
572
4%
549
3%
533
28%
417
Pamela Walkden
381
12%
341
6%
323
7%
303
42%
214
Germán de la Fuente
338
25%
271
—
137
—
—
—
—
Carlos Barrabés
E
128
—
—
—
—
—
—
—
—
Antonio Weiss
F
72
—
—
—
—
—
—
—
—
Company’s performance
Underlying profit attributable to the Group (EUR mn)
12,574
14%
11,076
15%
9,605
11%
8,654
70%
5,081
Consolidated results of the Group
3 (EUR mn)
19,027
16%
16,459
8%
15,250
5%
14,547
—
(2,076)
Ordinary RoTE
16.27%
8%
15.06%
13%
13.37%
5%
12.73%
71%
7.44%
Employees' average remuneration
4 (EUR thousand)
61
5%
58
3%
56
1%
56
18%
47
Employees' average remuneration in Spain
5 (EUR
thousand)
75
3%
73
6%
68
10%
62
(2%)
63
1. Deferred variable remuneration linked to long-term objectives is not included.
2. Non-executive directors' remuneration fluctuations are caused by joining or leaving the board of directors and the difference in the amount of meetings they assist during the
year. Hence there is no correlation between their remuneration and the company performance.
3.Group operating profit/(loss) before tax.
4. Employee average remuneration includes all concepts, including other remuneration. Normally the increases or decreases in remuneration are greater for the executive
directors, depending on the results of the entity, because the percentage of variable remuneration over fixed remuneration in an average employee is lower than that of the
executive directors. Variable remuneration data accrued in the current year, both for employees and executive directors. Evolutive data also impacted by exchange rate
performance in the group's geographies. Full time equivalent data considered.
5.Total employees in Spain geography. Fixed remuneration + effective bonus received in the year. Not all concepts are included. Not impacted by exchange rates.
A. Stepped down as director on 22 March 2024.
B. All amounts received were reimbursed to Fundación Botín.
C. Includes EUR 1,000 thousand for his role as non-executive Chair of the Santander España business unit and for attending its board and committee meetings.
D. Stepped down as director on 27 June 2024.
E. Member of board of directors since 27 June 2024.
F. Member of board of directors since 27 June 2024.
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K. Performance of the long-term metrics under the 2021 plan (2021-2023)
In 2024, the board of directors, at the remuneration committee’s recommendation, approved the level of performance of the long-term
metrics for the sixth cycle of the deferred multi-year objectives variable remuneration plan (2021). The table below details each metric and
its result at the close of period.
Metric
Target
Result
Coefficient
Weight
Weighted coefficient
CET1 fully loaded in 2023
12%
12.3%
100%
1/3
33.3%
Earnings per share growth in 2023 vs
2020
100%
149.6%
150%
1/3
50%
TSR in 2021-2023
33 - 66 percentile
(0% and 100%)
Percentile 33
25%
1/3
8.3%
Total
91.6%
L. Summary of link between risk, performance and remuneration
Banco Santander's remuneration policy and its application in 2024 have promoted sound and effective risk management, at the same time
as supported the fulfilment of long-term business objectives.
The key elements of the remuneration policy for executive directors making alignment between risk, performance and reward in 2024 were
as follows:
Key words
Aspect aligning risk, performance and remuneration
Metrics balance
The balance of quantitative metrics and qualitative assessments, including customer, risk, capital and profitability
in relation to risk, used to determine the executive directors’ variable remuneration.
Financial thresholds
The adjustment to variable remuneration if certain financial thresholds are not reached, which may limit the
variable remuneration to 50% of the previous year's amount or lead to it not being awarded at all.
Long-term objectives
The long-term objectives linked to the last three portions of the deferred variable remuneration. These objectives
are directly associated with return to shareholders relative to a peer group, return on tangible equity (RoTE) and
the five targets linked to our sustainability agenda.
Individual performance
The discretion of the board to consider the performance of each executive director in the award of their individual
variable remuneration.
Variable remuneration cap
200% of fixed remuneration.
Control functions involvement
The work undertaken by the human resources committee aided by senior managers leading Control functions in
relation to the analysis of quantitative metrics information and undertaking qualitative analysis.
Malus and clawback
Shareholding policy
Payment in instruments
Malus can be applied to unvested deferred pay and clawback can be applied to vested or paid compensation under
the conditions dictated by the Group’s remuneration policy.
We have demanding executive stock ownership requirements whereby they have the obligation to hold an amount
of Santander shares of at least twice their annual salary, thus reducing the incentive for short-term risk taking.
At least 50% of variable pay is in instruments and subject to retention or prohibition from exercise of at least one
year from their delivery.
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6.4 Directors' remuneration policy for
2025, 2026 and 2027
Remuneration policy principles and
remuneration system
A. Directors' remuneration in their capacity as such
Director’s remuneration is regulated by article 58 of Banco
Santander’s Bylaws and article 33 of the Rules and regulations of
the board of directors. For 2025, 2026 and 2027, no changes to the
principles and composition of directors’ remuneration for
supervisory and collective decision-making duties are planned with
respect of those in 2024. They are described in sections 6.1 and
6.2.
B. Executive directors' remuneration
Executive directors are entitled to be paid the remuneration (e.g.,
salaries, incentives, bonuses, severance payments for early
termination from such duties, and amounts to be paid by Banco
Santander for insurance premiums or contributions to savings
schemes) deemed appropriate for performing executive functions
following a proposal from the remunerations committee and by
resolution of the board of directors, subject to the limits set by law.
C. Shareholder engagement
In response to the lower-than-usual support our 2024
remuneration policy proposal received in the 2024 annual general
meeting, we engaged with a significant portion of our shareholders
and proxy advisors to discern and address any concerns related to
remuneration. These engagement efforts are described in greater
detail on the introduction section of this chapter.
As a result of these conversations, the remuneration committee
proposed several changes to the remuneration structure of the
executive directors for the 2025 incentive award and beyond, as
well as updates to our disclosure:
Key issues raised by shareholders
Actions taken in response
→ Investors expressed their wish to increase
the weight of the long-term components
of variable remuneration.
• First, to provide even greater alignment with shareholders, the portion of variable
remuneration paid in equity will be increased from 50% to 60%. In this regard, in
2025, for executive directors, variable remuneration will be paid 40% in cash and
60% in instruments, the latter whose long-term valuation replicate the interests of
our shareholders. The portion they will receive in instruments is split as follows:
i. EUR 500 thousand and EUR 420 thousand in PagoNxt, S.L. RSUs for Ana Botín and
Héctor Grisi, respectively.
ii. The rest, all in shares of Banco Santander.
• Second, to strengthen the long-term vision and value creation of the company, the
percentage of variable pay subject to long-term metrics will be increased from
36% to 40%.
• And third, to increase the alignment with shareholders return, we have increased
the weight of the relative TSR long-term performance metric from 40% to 50%.
→ Investors viewed favourably that we had
increased the minimum relative TSR (rTSR)
vesting from 33
rd
percentile to
th
40
percentile. Still, several indicated a
preference for no vesting below median
peer performance levels.
→ Some investors raised how executive
remuneration levels are determined.
• Starting with the 2025 awards, we have increased the minimum vesting threshold
for rTSR from
40
th percentile to 50
th
percentile.
• Santander has enhanced the remuneration disclosures to provide further detail on
our Committee’s process for setting the Remuneration Policy.
• This report contains further explanations detailing how executive remuneration is
set and how pay is aligned with performance, including the peer selection criteria
for this analysis. Santander follows a rigorous process that includes an annual
review of comparative market data to ensure our pay remains competitive in the
marketplace.
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The remuneration committee proposes to maintain the current
long-term performance metrics, thus prioritizing shareholder
returns and the Group's profitability in the long-term, as well as
the sustainability of the balance sheet and its activities and how we
carry them out. Therefore these metrics will continue to be:
• Relative performance of Banco Santander's total shareholder
return (TSR) compared to our peer group. Its weight is increased
from 40% to 50% of the total.
• Return on tangible equity (RoTE), as an indication of long-term
value creation. Its weight will be 30% of the total.
• Four sustainability metrics linked to the progress we make on
our targets to implement the Group's agenda in this sense. Their
weight will be 20% of the total.
And the maximum achievement ratio will also remain at 125% so
executives have the incentive to exceed their targets; however, the
maximum achievement ratio for effectively paid remuneration will
not exceed the thresholds approved at the AGM.
The following table shows the remuneration structure for 2025 of
both executive directors, according to the aforementioned changes:
2025 AWARD
Component
Gross Annual
Salary
Board of
Directors'
by law
stipulated
emoluments
Pension
Contribution
Rest of
components
Variable
remuneration
(Target Bonus
x
Achievement
level of Bonus
pool
+/
Individual
performance)
Fixed
Fixed
Fixed & Variable
Fixed
40%
N+6
13.33%
Cash/
Shares (%)
3.33%
New
60%
10%
Additionally subject to long-term goals
achievement
rTSR
50%
RoTE
30%
Sustain-
ability
20%
New
-
-
40%
10%
10%
13.33%
13.33%
Malus/Clawback clauses
All payments in shares
1 are subject to a one-year retention period and the prohibition of hedging
Cash
Shares
20%
20%
5%
Upfront
Feb N+1
N+2
N+3
Deferred
N+4
N+5
3.33%
10%
10%
3.33%
5%
5%
5%
1.Executive directors also have the obligation to hold them for three years from their award date, unless the director already holds shares for an amount equivalent to 200% of
their net annual salary (calculated on the basis of their gross annual salary). In such case, the regulatory obligation to hold shares is for one year from their grant date.
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Moreover, to strengthen a strategic line that is key to Banco
Santander's future, and with the aim of providing a strong
alignment with PagoNxt's success, the Executive Chair and the
Chief Executive Officer will continue to receive restricted stock
units (RSUs) of PagoNxt, S.L.
The RSUs substitute part of their variable pay instruments in Banco
Santander shares without increasing their total pay and will not
represent more than 10% of their variable pay.
Specifically, as regards 2025, Ana Botín would receive the
equivalent of EUR 500 thousand in RSUs, and Héctor Grisi would
receive the equivalent of EUR 420 thousand in RSUs, in accordance
with PagoNxt, S.L.'s long term incentive plan. Each RSU would
grant the right to a share in PagoNxt, S.L. or the holding entity of its
group (or its equivalent in cash) at the moment when, according to
such plan, a liquidity event, a repurchase or a liquidation of such
instruments takes place.
This plan is subject to the same principles of risk alignment,
variable remuneration caps, deferrals and malus and clawback as
the incentive which applies to executive directors described herein,
but with payment being done in PagoNxt S.L. instruments.
Also, as detailed at the beginning of chapter 6.3, Banco Santander
conducts an annual comparative review of executive directors’ and
top management remuneration. In 2025, the peers that comprise
the review are BBVA, BNP Paribas, Citi, Crédit Agricole, HSBC, ING,
Itaú, Scotiabank and Unicredit, based on their market
capitalization, global scale, brand recognition, geographical
diversification, business model and regulatory framework. The
incorporation of US and Brazilian banks is justified by the strong
presence of Banco Santander in those countries, where Santander
is listed (on the New York Stock Exchange and Brazilian Stock
Exchange of São Paulo).
Our findings show that Banco Santander does not award its
executive directors any remunerative components outside of
common market practice.
Principle of equal pay for equal work and equal employment
conditions for Santander executives and employees
Santander applies the equal pay principle included in the Corporate
remuneration policy of Grupo Santander for executive directors and
employees alike, which forbids any type of differential treatment
that is not exclusively based on an assessment of performance
results and corporate behaviours, and promotes equal pay for men
and women.
Furthermore, our remuneration framework rewards Santander
employees for their contribution based on such common principles
as:
• Meritocracy: Non-discrimination based on sex, age, culture,
religion or ethnicity.
• Consistency: Remuneration consistent with the level of
responsibility, leadership and performance within the Group, to
promote retention of key professionals and attract the best
talent.
• Sustainability: A remuneration framework that is sustainable in
terms of associated costs, cost control, and related objectives (as
described in the policy) that ensure variable remuneration is
commensurate with the Group's performance, disincentivize
short termism and promote long-term sustainability. The
remuneration scheme for the 1,246 Corporate Identified Staff
also includes deferrals of up to 60% of their variable
remuneration, payment of 50% of their variable remuneration in
instruments (subject to one-year retention) and malus and
clawback clauses.
Also, performance objectives for annual variable remuneration
have included since 2020 sustainability components. From 2022,
with the purpose of increasing focus on the Group's sustainability
agenda and highlight this matter as a core long-term strategy,
sustainability metrics are included (described in the next section)
for the last deferred variable remuneration payments.
• Social responsibility: Employees’ pay cannot be lower than the
legal minimum wage or the living wage in the country where
they work. Additionally, in order to give our social responsibility
prominence in remuneration, the Group’s responsible banking
objectives for employee remuneration include the people
financially included metric.
• Performance-based pay: Variable remuneration is subject to the
achievement of (i) annual objectives (set out in section 6.4.B.ii.B),
which reflect customer and profitability strategy, promote proper
risk management and cost-effective capital allocation, and
discourage short-term management focus; and (ii) long-term
objectives (see section 6.4.B.ii.B), which support a sustainable
balance sheet, shareholder return, the Group’s profitability and
sustainability of the Group's activities and the way they are
carried out.
Directors’ remuneration for 2025
A. Directors' remuneration in their capacity as such
In 2025, directors, in their capacity as such, will receive
remuneration for supervisory and collective decision-making duties
for a total of up to EUR 6 million as authorised by the shareholders
at the 2024 AGM (which will again be put to a vote at the 2025
AGM). It consists of:
• annual allocation, and
• attendance fees.
For 2025, the board of directors, on the remuneration committee’s
recommendation, approved a 3% increase (in respect of 2024) to
the annual allotments for the board (chair and members) and its
committees (including the executive committee), as well as to the
amount allocated to the role of Lead Independent Director and
non-executive vice chair and to attendance fees. This increase
(aligned with the average remuneration increase of the Group’s
staff in Spain in 2024 vs 2023) compensates the greater time
commitment of board members, compared to those of other
comparable banking groups, as the last market analysis we
conducted alongside an independent expert concluded.
The specific amounts and the form of payment are determined by
the board of directors in the manner described in the respective 6.2
section of the Annual report, based on the objective circumstances
of each director.
Additionally, as indicated in the description of the director
remuneration system, Banco Santander will pay its directors’ the
corresponding civil liability insurance premium in 2025. The related
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policy is common to all executives and was taken out under usual
market condition, proportionate to Banco Santander's situation.
B. Executive directors' remuneration for the
performance of executive duties
i) Fixed remuneration components
A) Gross annual salary
As part of the annual review of the target compensation of our
executive directors, and on the remuneration committee's
recommendation, the board has decided not to increase their gross
annual salaries, which they believe are competitive based on
market data for our peer group and appropriate given their roles
and capabilities as well as the Group's performance.
Likewise, their gross annual salary amounts may increase owing to
adjustments made to the fixed remuneration mix based on the
criteria approved by the remuneration committee, provided this
does not entail any cost increase for Banco Santander.
B) Other fixed remuneration components
• Benefit systems: defined contribution schemes as set out in
section 'Benefit schemes'
6.
• Supplement to fixed salary: Ana Botín will receive EUR 525
thousand as a supplement to her fixed pay in 2025. This was
approved in 2018 when the supplementary death and disability
pension schemes were eliminated. Héctor Grisi will not receive
any supplement of this kind.
• Social welfare benefits: executive directors will also receive
social welfare benefits such as life insurance premiums, travel
grants, medical insurance and the allocation of remuneration to
employee loans, in accordance with Banco Santander’s general
policy for senior management, and in the same terms as the rest
of employees.
• Likewise, Banco Santander makes available to directors the
human and material means required or considered appropriate
for carrying out their duties (including any travel required for the
exercise of their role). Any eventual private use of these means
by the executive directors is duly paid by them under the similar
terms and conditions that would be applied to third independent
party under the supervision of the audit committee. This
information can also be found under the 'Benefit plans' section.
ii) Variable remuneration components
The board approved the policy on executive directors' variable
remuneration for 2025 on the remuneration committee's
recommendation, based on the remuneration policy principles
described at the beginning of this section 6.4.
Executive directors’ variable remuneration consists of a single
incentive scheme, linked to the achievement of short-and long
term objectives. It is structured as follows:
• The final amount of variable remuneration will be set at the start
of the following year (2026) based on the target bonus amount
and subject to compliance with the annual objectives described
under section B) below.
• 40% of the incentive will be paid immediately once the final
amount has been set, and 60% will be deferred in equal parts
paid out over five years and subject to long-term metrics:
• The amount deferred over the first two years (20% of the total)
will be paid in 2027 and 2028 on the condition that no malus
clauses described under section 6.3 B v) are triggered.
• The amount deferred over the next three years (40% of the
total) will be paid in 2029, 2030 and 2031, on the condition
that no malus clauses are triggered and long-term targets –
described in section D) Deferred incentive subject to long-term
performance objectives– are met.
The Group can clawback incentives already paid in the cases and
during the term set out in its malus and clawback policy, described
under section 6.3. B) v).
Exceptionally, when a new executive director joins Banco
Santander, his/her variable pay may include a sign-on bonus and/
or buyouts.
Variable components in executive directors’ total remuneration for
2025 cannot exceed the limit of 200% of fixed components
submitted for approval to the 2025 AGM. However, under EU
regulations on remuneration, certain variable components can be
excluded.
The proportion of fixed and variable remuneration elements of
Banco Santander executive directors is due to the European
regulation set out in the CRD V directive. In this sense, the setting
of higher fixed amounts than other executive directors of non-EU
banks within our peer group is due precisely to the non
requirement of this limit 2:1 of variable/fixed components for non-
EU banks.
A. Target bonus
Variable remuneration for executive directors in 2025 will be set
based on bonus pool results versus items detailed in the scorecard
herein, their individual target bonus and the achievement of their
individual objectives, which for 2025 among others include, both
for the Executive Chair and the CEO, the ones to continue
consolidating the management of the Group through our five
global businesses.
As part of the annual review of the target compensation of our
executive directors, and on the remuneration committee's
recommendation, the board has decided not to increase their
target bonuses for the same reasons that their gross annual
salaries were not increased.
B. Setting of final variable remuneration based on yearly results
The executive director' 2025 variable remuneration will be based
on the results for the following items within an updated scorecard:
1. Three categories of quantitative metrics (business
transformation, capital and sustainable profitability) to increase
alignment with shareholder value creation and capital
generation. The main changes adopted in 2025 are:
i.
the removal of the total customers metric, leaving active
customers, to prioritize profitability further;
6 As indicated in the next section, executive directors contribution to the benefit systems includes both fixed and variable components
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Category
Metrics
A
Weighting
Active customers
(growth)
10%
Transformation:
Cost per active
15%
Weight: 45%
customer
Fees over costs
(recurrence ratio)
20%
Capital
Weight: 25%
Capital generation
25%
Sustainable
profitability
Weight: 30%
RoRWA (Return on risk-
weighted assets) SVA
30%
`
?
Quantitative
metrics
Qualitative
Exceptional
+/-
+/-
assessment
adjustment
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ii. the inclusion of cost per active customer (instead of total costs)
to keep the focus on appropriate costs management to succeed
in transformation, while connecting it with our profitable
customers;
iii. the replacement of revenue per active customer with fees over
costs to incentivize growing in a business with lower capital
consumption and reducing costs (so when rates come down,
earnings are not depressed); and
iv. the inclusion of RoRWA SVA (shareholder value added) in the
quantitative assessment, removing RoTE from the scope, to
increase alignment with shareholders.
2. A qualitative assessment with the same four components of
previous year, which address regulatory requirements and the
needs and concerns of our shareholders: risk and compliance,
network collaboration, sustainability matters and a relative
performance assessment against the market in the main
financial metrics. As stated in section 6.3.b, the metrics in the
qualitative assessment are measurable, objective, audited and
important to executing the long-term strategy of the company.
The range of adjustment related to the risk and compliance and
network collaboration categories has been modified (from
+/-5% in the 2024 variable remuneration framework to +/-10%
in 2025) to further reinforce risk adjustments within the bonus
scheme and collaboration within the Group due to its relevance
for the current strategy.
3. An exceptional adjustment that must be duly supported and
may involve changes owing to control and/or risk deficiencies,
negative assessments from supervisors or unexpected material
events.
Accordingly, the proposed quantitative metrics and weightings
are:
A. For this purpose, these metrics may be adjusted upwards or downwards by the
board, following a proposal from the remuneration committee, when inorganic
transactions, material changes to the Group’s composition or size or other
extraordinary circumstances (such as impairments, extraordinary impacts of
macroeconomic environment, regulatory changes or restructuring processes)
have occurred which affect the suitability of the metric and achievement scale
established in each case and resulting in an impact not related to the
performance of the executive directors and executives being evaluated.
And finally, to the result obtained above, we add or subtract the
qualitative assessment according to this table:
Qualitative assessment
Weight
Performance vs. Market
+/-10%
Compliance and Risk
'+/-10%
Network collaboration
'+/-10%
Sustainability targets
+/-5%
Lastly, as additional conditions for determining the incentive, the
following circumstances must be confirmed to set variable pay:
• If the Group’s ONP for 2025 were 50% less than in 2024, variable
pay would in no case exceed 50% of the benchmark incentive for
2025.
• If the Group’s ONP were negative, the incentive would be zero.
When setting individual bonuses, the board will also consider
restrictions to the dividend policy imposed by supervisors.
C) Forms of payment of the incentive
Variable remuneration of executive directors will be paid 60% in
instruments, split as:
• the amount of PagoNxt RSUs set for each year (which cannot
exceed 10% of their variable pay); and
• the rest, all in shares of Banco Santander.
One portion will be paid in 2026 and the other will be deferred for
five years and contingent on long-term metrics:
a) 40% of variable remuneration is paid in 2026 net of tax, with
50% in cash and 50% in instruments.
b) 60% paid, if applicable, in five parts in 2027, 2028, 2029, 2030
and 2031 (net of tax), with 33% in cash, 67% in instruments,
under the conditions stipulated in section E). This is explained in
more detail in the table "2025 award" at the beginning of this
6.4 section.
The final three payments, which weight has been increased from
36% of variable remuneration to 40%, will also be subject to long
term objectives described in section D) below.
Shares shall be subject to a three-years retention period, unless
the executive directors already hold shares for an amount
equivalent to 200% of their fix annual remuneration -in which case
the regulatory one year retention period will apply.
Under the remuneration policy, the maximum number of shares
will be calculated based on the daily volume-weighted average of
the weighted average Santander share price in the 50 trading
sessions before the last Friday (not included) before the board
meeting at which executive directors’ bonus is agreed.
D) Deferred variable pay subject to long-term objectives
As indicated above, the amounts deferred in 2029, 2030 and 2031
will be paid on the condition that the group achieves its long-term
targets for 2025-2027, in addition to the terms described in
section E).
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As advanced in section B) on the principles of the remuneration
policy, the long-term targets are:
A. Relative performance of Banco Santander's total shareholder
return (TSR) in 2025-2027 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.
Ranking of Santander TSR
'TSR Ratio'
The 100
th percentile
1.5
Between the 75
th and 100
th percentiles 1 – 1.5
A
(not inclusive)
Between the 50
th and 75
th percentiles (not 0.5 - 1
A
inclusive)
Less than the 50
th percentile
0
A. Proportional increase in TSR coefficient within this bracket of the scale according
to the number of positions moved up in the ranking.
TSR
7 measures the return on shareholders’ investment. It is the
sum of the change in share price plus dividends and other similar
items shareholders can receive during the period.
The peer group comprises BBVA, BNP Paribas, Citi, Credit Agricole,
HSBC, ING, Itaú, Scotiabank and Unicredit.
B. Banco Santander’s consolidated Return on tangible equity
(RoTE) target in 2027. The RoTE ratio for this target is obtained
as follows:
RoTE in 2027 (%)
‘RoTE Ratio'
≥ 18.5%
1.5
≥ 17% but <18.5%
0 – 1.5
A
< 17%
0
A. Straight-line increase in RoTE coefficient within this bracket of the scale based on
the specific percentage of RoTE in 2027.
C. Sustainability metrics.
In the global markets we serve, our engagement to a inclusive
culture is a critical driver of our business success. We have a large,
diverse customer base, and it's essential that our workforce
reflects and understands the varied perspectives of our clients. Our
approach to hiring, training, promoting, and retaining an
appropriately aligned workforce directly impacts our ability to
innovate, relate to our customers and, ultimately, deliver superior
results. By fostering an inclusive environment that values different
backgrounds, experiences, and viewpoints, we enhance our
problem-solving capabilities, improve decision-making, and boost
creativity.
Our focus on the composition of our workforce is about doing
what's smart for our business because it means we are better
positioned to maximize our financial performance and deliver
enhanced value to our shareholders. Our success is intrinsically
linked to the effectiveness of our team, making it a cornerstone of
our strategy for sustained growth and profitability.
More specifically, for the 2025 incentive, the sustainability portion
of the long-term incentive that is granted is determined based on
performance in the following metrics and targets, which together
determine the final payout of 20% of the portion of variable
compensation tied to multi-year goals.
Achievement will depend on the progress made on the Group's
sustainability actions lines and associated targets (described
below)
8:
1. Women in executive positions by 2027:
In those geographies where regulation or governmental policy
does not support establishing specific inclusivity objectives, there
will not be specific goals tied to incentive compensation and will
not be included in the methodology or formula that determines an
element of the total executive payout. In those instances, and to
the extent permissible, they will be assessed with other Group’s
initiatives, factors or projects as aspirational goals that can be a
factor considered in making compensation decisions.
Women in executive positions
B (%)
Coefficient
≥ 39.5%
1.25
≥ 39.2% but < 39.5%
1 – 1.25
A
≥ 38.4% but < 39.2%
0 – 1
A
< 38.4%
0
A. Increase of the coefficient is proportional to its position on this line of the scale.
B. Executive positions make up 14% of the total workforce.
The scope of this metric has been reviewed to enhance the
attraction and retention of female talent and drive meaningful
change. It is essential to focus on lower levels of the organization
pyramid, enabling a stronger and more robust female pipeline that
supports organic and sustainable progress towards our senior
roles.
2. Average annual total number of people that received financial
inclusion support in the period 2025 and 2027:
Financial inclusion
B (millions of people)
Coefficient
≥ 6
1.25
≥ 4.5 but < 6
1 – 1.25
A
≥ 3.5 but < 4.5
0 – 1
A
< 3.5
0
A. Increase of the coefficient is proportional to its position on this line of the scale.
B. Number of people unbanked, underbanked, in financial distress or with difficulty
to access credit to whom we provide tailored access and finance solutions, aiming
to meet local financial inclusion needs in a recurrent, comprehensive, affordable
and effective way.
Financial Inclusion thresholds have shifted from accumulative to annual average
because it reflects better the performance of these programs.
7TSR refers to the difference (%) between the final and initial values of capital invested in ordinary shares of Banco Santander. The final value is calculated based on the
dividends or other similar concepts (such as the Santander Scrip Dividend programme) shareholders receive for this investment during the corresponding period -as if they
had invested in more shares of the same type at the first date on which the dividend or similar concept was payable to shareholders- and the weighted average share price at
that date. To calculate TSR, the weighted average daily volumes of the weighted average listing prices for the fifteen trading sessions prior to 1 January2025 (exclusive) is
considered (to calculate the initial value) and the fifteen trading sessions prior to 1 January 2028 (exclusive) (to calculate the final value).
8 There are thresholds that go beyond current targets, which should not be considered a revision of them, but a way to further motivate our management team, in order to
progress beyond targets on sustainability main strategic lines.
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3. Socially responsible investment in 2027 as a percentage of total
assets under management.
Socially responsible investment
B (%)
Coefficient
≥ 21%
1.25
≥ 19% but < 21%
1 – 1.25
A
≥ 15% but < 19%
0 – 1
A
< 15%
0
A. Increase of the coefficient is proportional to its position on this line of the scale.
B. Assets under management that meet the criteria of Santander’s Sustainable
Finance and Investment Classification System (SFICS), over total assets under
management.
4. Supporting transition. This goal includes how we support our
customers' transition through sustainable finance, and the
progress on transition plan:
Finance raised and facilitated
B
between 2025 and
2027 (EUR bn)
Coefficient
≥ 220
1.25
≥ 165 but < 220
1 – 1,25
A
≥ 120 but < 165
0 – 1
A
< 120
0
A. Increase of the coefficient is proportional to its position on this line of the scale.
B. Grupo Santander's contribution to our customers’ transition: CIB green finance
raised and facilitated and Retail & Commercial banking green finance and Digital
Consumer Bank green finance.
To achieve beyond 100% of this goal, it is necessary to progress on
Banco Santander transition plan, in order to further support our
customers in their transition, including: improving climate data,
progress on actions to align our portfolios, enhance sustainable
product offering to address market needs, further embed climate
and environmental risk, and aim to support policy action and
market developments.
Each sustainability goal has a different weighting:
1. Women in executive positions: 20%
2. Financial inclusion: 20%
3. Socially responsible Investment: 10%
4. Supporting transition: 50%
C = (20% Goal 1 +20% Goal 2 +10% Goal 3 +50% Goal 4)
Finally, the following formula will be used to set the annual
amount of performance-based deferred variable remuneration in
2029, 2030 and 2031 ('final annuity'), without prejudice to any
adjustment deriving from the application of the malus policy (see
section 6.3 B v):
Final annuity = Amt. x (5/10 x A + 3/10 x B + 2/10 x C)
where:
• 'Amt.' is one third of variable remuneration deferred conditional
on performance (i.e. Amt. will be 13.33% of the total incentive
set in early 2026).
• 'A' is the TSR ratio calculated as the scale in the table above,
according to the relative performance of Banco Santander’s TSR
within its peer group in 2025-2027.
• ‘B' is the RoTE coefficient according to the scale in the table
above, based on RoTE at year-end 2027.
• ‘C’ is the coefficient resulting from the sum of weighted
coefficients for each of the four sustainability targets for 2027
(see section (c) above).
• In any event, if the result of (5/10 x A + 3/10 x B +2/10 x C) is
greater than 1.25, the multiplier will be 1.25.
The estimated maximum amount to be delivered in instruments to
executive directors is EUR 11.5 million.
Lastly, to verify compliance with these long-term objectives, the
board, following a proposal from the remuneration committee,
may adjust them to remove the effects of any regulatory change to
its calculation rules or any extraordinary circumstances (such as
impairments, corporate transactions, share buybacks or
restructuring procedures) that have occurred which affect the
suitability of the metrics and achievement scales established in
each case and resulting in an impact not related to the
performance of the executive directors and executives being
evaluated.
E) Other terms of the incentive
Payment of the deferred amounts (including those linked to long
term targets) will occur only if they remain in the Group and none
of the circumstances triggering malus clauses arise (as per the
malus and clawback section in the Group’s remuneration policy)
under terms similar to those indicated for 2024 (detailed in section
6.3 B v)), policy expanded in 2023 to adapt it to the new regulation
of US Securities Exchange Commission. Furthermore, the Group
can claw back paid incentives under the scenarios, period and
terms and conditions set out in the remuneration policy.
Hedging the value of Santander shares received during the
retention and deferral periods is expressly prohibited.
The effect of inflation on the deferred amounts in cash may be
offset.
Selling shares is also prohibited for at least one year since the
delivery.
The remuneration committee may propose to the board
adjustments in variable remuneration under exceptional
circumstances owing to internal or external factors, such as
requirements, orders or recommendations issued by regulatory or
supervisory bodies. Such adjustments will be described in detail in
the report on the remuneration committee and the annual report
on directors’ remuneration put to a non-binding vote at the AGM.
iii. Shareholdings
As described in section 6.3.E, in addition to the regulatory
obligation not to sell shares they receive as remuneration for a
year since from their award date, in order to comply with
recommendation 62 of the Spanish Corporate Governance Code,
the policy on shareholdings includes the obligation for executive
directors not to sell the shares they receive as variable
remuneration for a period of three years from their award date,
unless the executive director already holds Banco Santander shares
for an amount equivalent to twice his/her annual salary.
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Directors’ remuneration for 2026 and 2027
A. Directors’ remuneration in their capacity as such
For 2026 and 2027, no changes to directors’ remuneration are
planned in respect of what is foreseen herein for 2025. However,
shareholders at the 2026 or 2027 AGMs may approve an amount
higher than the six million euros currently in force, or the board
may approve an alternative allocation of that amount to directors
in accordance with the criteria in article 58.2 of Banco Santander’s
Bylaws (i.e. duties and responsibilities; positions held on the board;
membership and attendance at committee meetings; and other
objective circumstances).
B. Directors' remuneration for the performance of
executive duties
Executive directors’ remuneration will conform to principles similar
to those applied in 2025, with the following changes.
i) Fixed components of remuneration
A) Gross annual salary
Executive directors’ annual gross fixed pay may be adjusted each
year based on the criteria approved by the remuneration
committee at any given time.
Otherwise, it must be disclosed in the report on the remuneration
committee and the annual report on director's remuneration put to
a non-binding vote at AGM.
B) Other fixed remuneration components
No changes planned in respect of the terms for 2025.
ii) Variable remuneration components
The policy on executive directors’ variable remuneration for 2026
and 2027 will be based on the same principles as in 2025,
following the same single-incentive scheme described above, and
subject to the same rules of operation and limitations.
A) Setting variable remuneration
Executive directors’ variable remuneration for 2026 and 2027 will
be set based on the corporate bonus pool and a benchmark
approved for each year which takes into account:
• a set of short-term quantitative metrics measured against annual
objectives and aligned with the Group’s strategic plan. These
metrics will also cover, at least, capital and customers. They can
be measured at Group level and, where applicable, at division
level, for a specific business division headed by an executive
director. The results of each metric can be contrasted with the
budget for the financial year, as well as with growth from the
previous year.
• a qualitative assessment that cannot raise or lower the result of
the quantitative metrics by more than 35%. It will be conducted
for the same categories as the quantitative metrics, including
relative performance against market, risk management,
compliance, network collaboration and sustainability targets.
• an exceptional adjustment that must be duly substantiated and
may involve changes owing to control and/or risk shortfalls,
negative assessments from supervisors or unexpected material
events.
The quantitative metrics, the qualitative assessment and potential
extraordinary adjustments will allow main objectives are
considered from the perspective of the various stakeholders and
that the importance of risk and capital management is factored in.
Once the corporate bonus pool is fixed according to the criteria
above, the board of directors, further to a proposal from the
remunerations committee, decides on the individual bonus, taking
into consideration the level of achievement of their individual
objectives, which in general terms coincide with the bonus pool
metrics, their compliance with corporate values and risk culture.
Lastly, the following circumstances must be confirmed to set
variable remuneration:
• If ONP does not reach a certain compliance threshold, the
incentive cannot exceed 50% of the year’s individual target
bonus.
• If the group’s ONP were negative, the incentive would be zero.
• When setting individual variable pay, the board will also consider
restrictions to the dividend policy imposed by supervisors.
B) Forms of payment of the incentive
The variable remuneration of executive directors for 2026 and
2027, will be paid as follows:
• 40% in cash;
• and 60% in instruments, split as follows:
• the amount of PagoNxt, S.L. RSUs set for each year (as
described below); and
• the rest, all in shares of Banco Santander.
It is also envisaged that for 2026 and 2027 Ana Botín would receive
the equivalent of EUR 500 thousand in RSUs, and Héctor Grisi
would receive the equivalent of EUR 420 thousand in RSUs, in
accordance with PagoNxt, S.L.'s long term incentive plan. Each RSU
would grant the right to a share in PagoNxt, S.L. or the holding
entity of its group (or its equivalent in cash) at the moment when,
according to such plan, a liquidity event, a repurchase or a
liquidation of such instruments takes place.
The RSUs will substitute part of their Santander variable pay
instruments without increasing their total pay and will not
represent more than 10% of their variable pay in any event.
C) Deferred variable remuneration subject to long-term
objectives
The last three annual payments of each deferred variable
remuneration amount will be made in accordance with the terms
described under section E) above and if the Group fulfils long-term
objectives for at least 3 years. This may confirm, reduce or increase
payment amounts and the number of deferred instruments.
Long-term metrics will reflect value creation and shareholder
returns as well as capital and sustainability over a minimum period
of 3 years. They will be aligned with the Group’s strategic plan and
main priorities towards its stakeholders. They can be measured for
the entire Group or by country or business, when appropriate, and
subsequently compared to a group of peers.
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The portion paid in shares cannot be sold until one year has
elapsed since delivery.
D) Other terms of the incentive
No changes to the continuity, malus and clawback clauses of the
remuneration policy for 2025 described in section 6.4.B.E) are
expected. Furthermore, no changes are planned in respect of the
clauses on hedging instruments or the deferred amounts in cash
adjusted for inflation.
iii) Shareholdings
The policy on shareholdings approved in 2016, with the
amendment introduced in 2020 relating to not selling the shares
they receive as variable remuneration for a period of three years
detailed in section 6.3.E) above will apply in 2026 and 2027, unless
the remuneration committee proposes it be amended to the board
in light of exceptional circumstances (regulations, orders or
recommendations from regulators or supervisors). Such
amendments would be described in detail in the report on the
remuneration committee and the annual report on director’s
remuneration put to a non-binding vote at the annual general
meeting.
iv) Principle of equal pay
The same principle of equal pay that applies for executive directors
and any other Santander employee described in respect of 2025
apply for 2026 and 2027.
Terms and conditions of executive director
contracts and other provisions applicable to all
directors
Executive directors’ terms of service are governed by board
approved contracts they sign with Banco Santander. The basic
terms and conditions, besides those relating to the remuneration
mentioned above, are the ones described here below.
A. Exclusivity and non-competition
Executive directors may not contract with other companies or
entities to perform services, unless expressly authorised by the
board of directors. In all cases, they are bound by a duty of non
competition in relation to companies and activities similar in nature
to Banco Santander and its consolidated group.
In addition, executive director contracts impose prohibitions on
competing and attracting customers, employees and suppliers,
which can be enforced for two years after their termination in their
executive duties for reasons other than a breach by Banco
Santander. In regard to Ana Botín and Héctor Grisi, the
compensation to be paid by Banco Santander for this duty of non
competition is twice the amount of the fixed remuneration.
Finally, all directors must comply with the Board Rules and
regulations provisions that prevent them from carrying out
competing activities and oblige them to communicate any other
professional activities, that must be assessed by the nominations
committee in order to check whether there is any conflict of
interest or impair director´s capacity to discharge his duties as such.
B. Code of Conduct
Directors are obliged to adhere strictly to the group’s General Code
and the Code of Conduct in Securities Markets, especially in terms
of confidentiality, professional ethics and conflicts of interest.
C. Termination
The length of executive directors' contract is indefinite. Contracts
do not provide for any severance payment upon termination apart
from what the law provides.
If Ana Botín’s contract is terminated by Banco Santander, she must
remain available to the group for four months in order to ensure
proper transition. During this period, she would continue to receive
her gross annual salary.
D. Benefit plans
Executive directors participate in the defined contribution pension
scheme created in 2012. It covers retirement, disability and death.
Banco Santander makes annual contributions to executive
directors’ benefit plans schemes. Annual contributions are
calculated in proportion to executive directors’ pensionable bases,
and the Group will continue to make them until the executive
directors’ leave the Group or until their retirement within the
Group, their death or disability. The pensionable base of executive
directors’ annual contributions is their fixed remuneration plus
30% of the average of their last three variable remuneration
amounts.
Contributions will be 22% of pensionable bases.
The pension amount that corresponds to contributions linked to
variable remuneration will be invested in Santander shares for five
years from the earlier of the date of retirement or cessation. It will
be paid in cash after the five years have elapsed or on the
retirement date (if later). Moreover, the malus and clawback
clauses for variable remuneration contributions will apply for the
same period as the related bonus or incentive.
This benefit plan is outsourced to Santander Seguros y Reaseguros,
Compañía Aseguradora, S.A. Executive directors’ economic rights
under the scheme belong to them even if they are not active in the
group at the time of their retirement, death or disability. Their
contracts do not provide for any severance pay upon termination
apart from what the law provides.
E. Insurance and other remuneration and benefits
in kind
Ana Botín will receive the supplement to their fixed remuneration
approved when the supplementary life and health benefits were
eliminated in 2018. It will be paid in 2025, 2026 and 2027 in the
same amount and continue to be paid until they reach retirement
age (even if they are still active).
The Group has life and health insurance policies taken out for
executive directors. Insurance premiums for 2025 include standard
life insurance and the life insurance cover with the supplement to
their fixed remuneration mentioned above. In 2026 and 2027,
premiums could vary if directors’ fixed pay or actuarial
circumstances change.
Furthermore, directors are covered by Banco Santander’s civil
liability insurance policy and may receive other benefits in kind
(such as employee loans) pursuant to the group’s general policy
and subject to the corresponding tax treatment.
Likewise, the Bank makes available to directors the human and
material means required or considered appropriate for carrying out
their duties (including any travel required for the exercise of their
role). Any eventual private use of these means by the directors is
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duly paid by them under the similar terms and conditions that
would be applied to third independent party under the supervision
of the audit committee.
F. Confidentiality and return of documents
Directors are bound to a strict duty of confidentiality during their
relationship and subsequent to termination. Directors are required
to return any documents and items relating to their activities and in
their possession to Banco Santander.
Agreements with non-executive members of
the board
José Antonio Álvarez has a contract since 1 January 2023 to
represent the bank before supervisors, international bodies, sector
organizations and other entities and authorities in institutional and
public policy matters as necessary, for which he receives a fixed
remuneration of EUR 1,750 thousand. This is an annual contract
which has been renewed for the year 2025.
Luis Isasi has a contract since 4 April 2020 to act as non-executive
Chair of the Santander España business unit (for which he receives
EUR 925 thousand a year) and to serve as a member of the board of
Santander España business unit (for which he receives EUR 75
thousand a year). His contract is for an indefinite term and does not
entitle him to any compensation if terminated.
Appointment of new executive directors
The components of remuneration and basic structure of the
agreements described in this remunerations policy will apply to
any new director that is given executive functions at Banco
Santander, notwithstanding the possibility of amending specific
terms of agreements so that, overall, they contain conditions
similar to those previously described.
Directors’ total remuneration for executive duties cannot exceed
the highest remuneration received by the group’s current executive
directors under the remuneration policy approved by shareholders.
The same rules apply if a director assumes new duties or becomes
an executive director.
If a director takes up executive functions in a specific division or
local unit, the board of directors, on the remuneration committee's
recommendation, can adapt the metrics for setting and paying
incentives to take that division or local unit into account in addition
to the Group.
Remuneration paid to directors in that capacity will be included
within the maximum amount set by shareholders to be distributed
by the board of directors in the terms described above.
A new director coming from an entity outside Grupo Santander
could be paid a buyout to offset any variable remuneration
foregone for having accepted a contract with the group; and/or a
sign-on bonus for leaving to join Banco Santander.
This compensation could be paid fully or partly in shares,
depending on the delivery limits approved at the AGM.
Authorization is expected to be sought at the next general
shareholders’ meeting in order to deliver a maximum number of
shares to any new executive directors or employees to whom
buyout regulations apply.
Furthermore, sign-on bonuses can only be paid once to new
executive directors, in cash or in shares, and in each case they will
not exceed the sum of the maximum variable remuneration
awarded for all executive directors.
Mr Grisi’s appointment as CEO (with effect from 1 January 2023)
did not entail a buyout or sign-on bonus since he was already part
of Grupo Santander.
Temporary exceptions to the remuneration
policy
According to section 6 of Article 529 novedecies of the Spanish
Companies Act, specific exceptions may apply to components in
the remuneration policy, based on particular business needs or
macroeconomic context in the Group's geographies, provided that
they are required to serve the long-term interests and
sustainability of the entity; ensure its viability; and require to be
adopted urgently.
Such exceptions include:
• Complex macroeconomic scenarios where the ordinary course of
the business is severely impacted.
• The appointment of a new Executive Chair or chief executive
officer, or the need to retain an executive director to avoid a
vacancy at the head of the Group (vacatio regis) during especially
complex times for the business.
• The need to adapt to regulatory change.
To apply, exceptions must be supported by:
• a reasoned remuneration committee proposal; and
• board of directors analysis and approval.
Any applied exception will be explained in the Annual report on
directors' remuneration.
6.5 Preparatory work and decision
making for the remuneration policy;
remuneration committee involvement
Section 4.7 'Remuneration committee activities for 2023', (the
report on the remuneration committee) states:
• Pursuant to Banco Santander’s Bylaws and the Rules and
regulations of the board of directors, the duties relating to the
remuneration of directors performed by the remuneration
committee.
• The composition of the remuneration committee at the date the
report is approved.
• The number of meetings held in 2024, including a joint session
with the risk supervision, regulation and compliance supervision
committee.
• The date of the meeting in which the report was approved.
The 2023 annual report on directors’ remuneration was approved
by the board of directors and put to consultative vote at the 2024
AGM, with 90.18% of the votes in favour. The tally of the votes
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333
99.95 %
was:
Number
% of total
A
Votes
10,547,165,767
90.18 %
9.82 %
0.05 %
1.31%
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Votes for
B
Votes against
B
Blank
C
Abstentions
C
Number
9,381,395,305
1,021,578,768
5,497,367
138,694,327
%
A. Percentage on total valid votes and abstentions.
B. Percentage of votes for and against.
C. Percentage of Banco Santander's share capital on the date of the AGM.
Decision process for the development, review
and application of the policy
Pursuant to Article 529 novodecies of the Spanish Companies Act,
the remuneration committee issues the report on the proposed
remuneration policy for 2025, 2026 and 2027 herein. The board of
directors then submits it to the 2025 AGM as a separate item on
the agenda and an integral part of this text. See 6.4 ' Directors'
remuneration policy for 2025, 2026 and 2027'.
Banco Santander’s Compensation function prepares the
remuneration policy with the suggestions, requests and comments
received during the year from the human resources committee,
remuneration committee and the board of directors. A first draft of
the policy is submitted to the remuneration committee for review
every January. The review considers the suggestions, requests and
comments the Chair and Lead Independent Director receive
through shareholder and stakeholder engagement during the year
on our corporate governance and our remuneration structures.
Regulators’ recommendations and legal requirements that may
have come to light since the last time the director remuneration
policy was submitted for approval by the AGM are also considered.
The committee also makes sure the policy is consistent with the
Group's culture and our Simple, Personal and Fair values.
After the preliminary presentation, incorporating the changes and
suggestions of these first revisions, the Compensation function
then prepares the final draft for the remuneration committee to
submit to the board of directors for approval in February.
Based on the analysis carried out in the context of the 2024 annual
remuneration report elaboration and its continued supervision of
the remuneration policy, the remuneration committee believes the
director remuneration policy for 2025, 2026 and 2027 which is
included in section 6.4 above is consistent with the principles of
Banco Santander’s remuneration policy and its remuneration
scheme set out in the Bylaws.
The policy aims, among other aspects, (i) to maintain a simple
executive remuneration scheme, with three categories of
quantitative metrics (business transformation, sustainable
profitability and capital) to further align with value creation and
capital generation; (ii) outperform peers in value creation aspects;
and, (iii) regarding metrics linked to multiyear objectives, to
prioritize long-term profitability for shareholders and Santander
and a sustainable balance sheet (total shareholder return, RoTE
and sustainability-related metrics related to our responsible
banking targets) in order to follow best market practice and meet
our stakeholders’ needs.
In 2024, no deviations from, or temporary exceptions to, the
application of the remuneration policy occurred.
6.6 Remuneration of non-director
members of senior management
2024 variable remuneration was approved by the board of
directors on 4 February 2025 in view of the recommendation from
the 27 January 2025 remuneration committee. It was set according
to Banco Santander’s general remuneration policy as well as
specific details pertaining to senior management.
In general, senior management variable remuneration packages
were calculated with the quantitative metrics and qualitative
assessment used for executive directors (see section 6.3.B) ii).
Some contracts of members of senior management were amended
in 2018 in the same manner described under 6.3.D) in respect of
Ana Botín, with a pension scheme of 22% of their pensionable
bases, the elimination of supplementary benefits, an increase of
the insured sum of life insurance and a supplement to fixed
remuneration in cash which is included under "Other
remuneration".
The following table shows the amounts of short term
remuneration (immediately payable) and deferred remuneration
(not linked to multi year targets) for senior management as of 31
December 2024 and 2023, excluding those of executive directors.
This amount has been reduced by 39% compared to that reported
in 2014 (EUR 80,792 thousand):
EUR thousand
Short-term and deferred salary remuneration
Year
Number of
people
Fixed
Immediately receivable
variable remuneration
(50% in instruments)
A
Deferred variable
remuneration
(50% in instruments)
B
Pension
contributions
Other
remuneration
C
Total
2024
14
16,466
14,753
6,639
4,520
7,153
49,531
2023
14
17,109
14,711
6,439
4,775
7,135
50,169
A. The amount immediately payable in 2024 was 1,612 thousand Santander shares (1,568 thousand Santander shares and 1,386 thousand Santander share options in 2023).
B. The deferred amount for 2024 will be 725 thousand Santander shares a (700 thousand Santander shares and 555 thousand Santander share options in 2023).
C. Includes life insurance premiums, health insurance and relocation packages, other remuneration items and RSUs of PagoNxt S.L., as members of board of directors of this
entity.
The share price for 2024 variable remuneration is EUR 4.576.
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This table breaks down remuneration linked to multi-year targets
for senior management (excluding executive directors) at 31
December 2024 and 2023, which they will only receive if they
meet the terms of continued service; non-applicability of malus
clauses; and long-term goals are met during deferral periods.
Thousands of euros
Deferred variable remuneration
Year
Number of
people
subject to long-term
metrics
A (50% in instruments)
B
2024
14
6,971
2023
14
6,761
A. In 2024, this corresponds to the fair value of maximum annual payments for
2028, 2029 and 2030 in the ninth cycle of the plan for deferred variable
remuneration linked to multi-year targets. In 2023, this corresponds to the
estimated fair value of maximum annual payments for 2027, 2028 and 2029 in
the eighth cycle of the plan for deferred variable pay linked to multi-year targets.
Fair value in the plan was determined on the authorization date based on the
valuation report of independent expert Willis Towers Watson. Based on the plan
for 2024 and success levels of similar plans at peer entities, the fair value was
considered to be 70% of the value linked to long-term metrics.
B. The number of shares in Santander as deferred variable pay subject to long-term
metrics shown in the table above was 762 thousand shares in 2024 (735
thousand shares in Santander and 582 Santander share options in 2023).
The long-term goals are the same as those for executive directors.
They are described in section 6.3.B) iv).
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 2023). 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).
In 2024, the ratio of variable to fixed pay components was 116% of
the total for senior managers group, well within the maximum
limit of 200% set by shareholders at the AGM.
See note 5 of the Group’s 2024 consolidated financial statements
for further details.
6.7 Prudentially significant disclosures
document
On the remuneration committee’s recommendation, the board
approves the key remuneration elements of managers or
employees who, while not belonging to senior management, take
on risks, carry out control functions (i.e. internal audit, risk
management and compliance) or who receive global remuneration
that places them in the same remuneration bracket as senior
management and employees who take on risk. These are typically
those whose professional activities may have an important impact
on the Group's risk profile (all of these, together with the senior
management and Banco Santander's board of directors form the so
called 'Corporate Identified Staff' or 'Corporate Material Risk
Takers')
Every year, the remuneration committee reviews and, where
applicable, updates Corporate Identified Staff in order to include
individuals within the organization who qualify as such. The
Remuneration Policies chapter in the 2024 Pillar III disclosures
report
9 of Banco Santander explains the criteria and regulations
followed to identify such staff.
At the end of 2024, 1,246 Group executives (including executive
directors and non-director senior managers) were considered
corporate identified staff of Grupo Santander (1,152 in 2023),
which accounts for 0.60% of the total final workforce (0.54% in
2023).
Corporate Identified Staff have the same remuneration framework
as executive directors (see sections 6.1 and 6.3), except for:
• Category-based deferral percentages and terms.
• The possibility in 2024 of certain less senior manager categories
of only having deferred variable pay subject to malus and
clawback clauses.
• The portion of variable remuneration paid or deferred as shares
for Group executives in Brazil, Chile and Poland that can be
delivered in shares or similar instruments of their own listed
entities.
In 2025, the board will maintain its flexibility to determine full or
partial payment in shares or similar instruments of Banco
Santander and its relevant subsidiaries in the proportion it deems
appropriate (according to the maximum number of Banco
Santander shares allocated at the general meeting and to any
regulatory restrictions in each jurisdiction).
The aggregate amount of variable remuneration for Corporate
Identified Staff in 2024, the amounts deferred in cash and
instruments, and the ratio of the variable to fixed remuneration
components are explained in the remuneration policies chapter of
Banco Santander’s Pillar III disclosures report for 2024.
9 The 2024 Pillar III disclosures report can be found on our corporate website.
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7. GROUP STRUCTURE AND
INTERNAL GOVERNANCE
The Group is structured into legally independent subsidiaries
whose parent company is Banco Santander, S.A. Its registered
office is in Santander (Cantabria, Spain), while its corporate centre
is located in Boadilla del Monte (Madrid, Spain). It has a Group
subsidiary governance model (GSGM) and good governance
practices in place for its core subsidiaries. Any references to
subsidiaries in this section are to the Group’s most prominent
entities.
The key features of the GSGM are:
• The subsidiaries’ governing bodies must ensure their rigorous
and prudent management and economic solvency while pursuing
the interests of their shareholders and other stakeholders.
• The subsidiaries are managed locally by teams that possess
extensive knowledge on, and experience with, their customers
and markets, while benefiting from the synergies and
advantages of belonging to the Group.
• The subsidiaries are subject to local authority regulation and
supervision, although the ECB supervises the Group on a
consolidated basis.
• Customer funds are secured by the deposit guarantee schemes in
the subsidiaries’ countries and are subject to local laws.
The subsidiaries manage their capital and liquidity autonomously
while the Group’s capital and liquidity are coordinated by corporate
committees. Intra-group risk transactions are limited, transparent
and carried out under market conditions. In addition, the Group
retains a controlling interest in subsidiaries listed in certain
countries.
Each subsidiary runs independently and has its own recovery plan,
limiting the contagion of risk between them and reducing systemic
risk.
The GSGM also applies to the global businesses, namely: Corporate
& Investment Banking (CIB), Retail & Commercial Banking (Retail),
Wealth Management & Insurance (Wealth), Digital Consumer Bank
(Consumer) and Payments (Payments). Local CEOs / Country Heads
remain ultimately responsible for achieving the budget, execution
of the customer and commercial strategy, and financial delivery
while global businesses heads lead common businesses and are
responsible for the implementation of the global operating model
and common tech stack, thereby improving local performance;
these result in a truly global-local organization.
7.1 Corporate Centre
The GSGM is supported by a corporate centre, which brings control
and support units together with such functions as strategy, risk,
compliance, audit, finance, accounting, technology and operations,
people and culture, legal services, internal governance,
communications and marketing. It adds value to the Group by:
• enhancing governance under robust corporate frameworks,
models, policies and procedures to implement strategies and
ensure an effective Group oversight;
• making the Group’s units more efficient through cost
management synergies, economies of scale and a common
brand;
• sharing best commercial practices, with a key focus on global
connectivity, launching commercial initiatives globally and
bolstering digitalization and transformation; and
• ensuring the suitability of our main executives through the
procedure for appointing key positions and assessing suitability
that applies to the entire Group.
7.2 Internal governance
Group-subsidiary relationship
The GSGM outlines a set of principles that regulate three types of
relationships between the Group and its subsidiaries:
• The subsidiaries’ governing bodies are subject to the Group’s
rules and procedures for structuring, forming and running boards
of directors and their committees (audit, nomination,
remuneration and risk committees), according to international
standards. Guidelines regarding subsidiary board composition
are aligned with best international practices and ensure an
appropriate Group presence on subsidiary boards with at least
two Group nominated directors on each board. The subsidiaries
are also subject to local regulations and supervisory standards.
• The relationship between local CEOs / Country Heads and the
Group CEO. Until January 2025 these relationships were
facilitated through three Regional Heads (Europe, North America
and South America). Whilst the regional organizational structure
has played a key role in ensuring that the Group delivers on its
long-term strategic vision and against targets announced as part
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of previous investor days, the board agreed to remove this
management layer in line with its ongoing focus on streamlining
our structure to achieve greater agility, increasing our
profitability through accelerating the roll out of our global
business platforms and products. See section 1.5 'Achievement
of our 2024 goals'.
• The relationship between local and global heads of key positions,
following a three lines of defence model: Chief Risk Officer
(CRO), Chief Compliance Officer (CCO), Chief Audit Executive
(CAE), Chief Financial Officer (CFO) and Chief Accounting Officer
(CAO), as well as other key support and business functions
(Technology and Operations (T&O), People and Culture, General
Secretariat, Marketing, Communications, Strategy), as well as
the five global businesses (CIB, Retail, Wealth, Consumer and
Payments).
Internal regulation
The Group has corporate frameworks for matters considered to
have a material impact on its risk profile, such as risk, capital,
liquidity, compliance, financial crime, technology, auditing,
accounting, finance, strategy, people and culture, outsourcing,
cybersecurity, special situations management communications and
brand and responsible banking. These frameworks, which are
mandatory, also specify:
• how the Group should supervise and exert control over its
subsidiaries; and
• the Group’s involvement in subsidiaries’ decision-making (and
vice versa).
The Banco Santander board approves the GSGM and corporate
frameworks for subsidiary governing bodies to formally adhere to
them. They consider subsidiaries' local requirements and are
revised every year as required by the Group board to adapt to new
legislation and international best practices.
The functions draw on corporate frameworks to prepare internal
regulatory documents that are given to subsidiaries as a reference
for implementing those frameworks effectively, cohesively and in
compliance with applicable local laws and supervisory
requirements. This approach ensures consistency throughout the
Group. Every year, the functions conduct an assessment to ensure
that the Group's internal regulations are embedded locally and
carry out an annual certification process to ensure the internal
regulation under their scope is fit for purpose.
The Group’s Internal Governance office and subsidiary general
counsels are responsible for embedding the GSGM and corporate
frameworks. Every year, their performance is assessed in reports
sent to the relevant governing bodies.
Since 2019, a policy on the governance of non-GSGM subsidiaries
has enhanced the governance and control system that has been
applied to those companies.
Global businesses each have specific governance arrangements
which ensures a robust Group-wide oversight of such businesses
as set out in the GSGM. Each global business is responsible for
defining the common business and operating model, setting the
global ambition and identifying and managing the global tech
platforms and product factories.
Recent developments
As we continue to progress our transformation agenda, the board
agreed to remove the regional layer of management in January
2025 to drive simplification and ensure that our global businesses
operate directly across all countries, enabling faster decision
making, clear accountability and enhanced agility. As a result, local
CEO / Country Heads now report directly to the Group CEO. They
must undertake their defined key responsibilities in compliance
with European Union and country-specific laws and regulations. In
turn, global businesses and corporate functions own the
implementation of the global operating model across our footprint;
and are responsible for of the relevant platform and products
budgets. This ensures alignment with our global priorities and
further ensures resource optimization.
In addition, the T&O governance model was updated in 2024 with
the aim of helping the global businesses and entities in their digital
transformation. This governance model details a set of guiding
principles defined to implement T&O’s operating model global
strategy, whilst ensuring an adequate control and oversight on a
Group-wide basis.
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The following charts show the three levels of the GSGM, as well as the main actions to ensure an effective relationship and solid internal
governance system for the Group.
Group
Subsidiaries
Board of directors
The GSGM enhances control and
oversight through:
Board of directors
Group presence on the subsidiaries'
boards of directors, establishing
guidelines for board and committee
Group Executive Chair
A
structure, dynamics and effectiveness.
Reporting of the CEO / Country Heads
to the Group CEO and Group executive
committee.
Reporting to Group and interaction
between them.
Group CEO
B
CEO / Country Head
Control management and business
functions, as well as Group global
businesses
C
Control management and business
functions, as well as local global
businesses
A. First executive.
B. Second executive, who reports directly to the board of directors.
C. Audit, Risk, Compliance, Finance, Financial Accounting & Control, T&O, People and Culture, General Secretariat, Marketing, Communications, Strategy as well as the five
global businesses (CIB, Retail, Wealth, Consumer and Payments).
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Best practices and talent sharing
Multiple point of entry structure that
Continuous collaboration and daily
across the whole Group and between
has proved to be a key resilience
interaction between local and
subsidiaries is key to our success.
instrument and is a result of our
corporate teams.
diversification strategy.
A common set of corporate
Synergies and economies of scale
Planning and implementation of new
frameworks and policies across the
across the Group.
Group-wide and local initiatives to
Group adapted to local market
keep developing our management and
conditions.
control model.
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8. INTERNAL CONTROL OVER
FINANCIAL REPORTING (ICFR)
This section describes the key features of Grupo Santander's ICFR.
8.1 Control environment
Governance and control bodies
These bodies are responsible for implementing and overseeing our
ICFR, which builds on the Group’s internal control system (ICS):
• Board of directors. It approves the financial reports Banco
Santander must disclose as a listed company. The board also
oversees and guarantees the integrity of the Group’s internal
information, control, accounting and reporting systems.
• Audit committee. It assists the board of directors in overseeing
the ICS and in preparing and presenting financial information.
The audit committee also works with the external auditor to
address matters that have been considered in audits to have a
significant impact on our ICFR. It also makes sure the external
auditor issues a report on the Group’s ICFR.
For more details, see section 4.5 'Audit committee activities in
2024'.
• Risk control committee. It assists the audit committee in
reviewing and overseeing the annual ICS assessment.
• Corporate accounting, financial and management, and
sustainability information committee. It is responsible for
governing and supervising accounting, financial management
and control matters.
• Internal control steering meeting. It is chaired by the CRO and
CAO and its role is to continuously monitors the Group’s control
environment, as well as the ICS strategy and performance.
Lead functions
The structure of the Group enables us to manage risk effectively
and ensure that internal control functions (risk, compliance and
internal audit) are independent of business functions and can
perform their duties efficiently. The key functions that prepare
financial information are:
• Costs function. It draws up and documents the corporate model
for managing structures and templates, which is used as a
reference across the Group.
• Business and support functions. They are responsible for
identifying and documenting (under their remit) the risks, tasks
and controls that make up our ICFR, based on knowledge of their
operations and procedures.
• Financial accounting and control function. It is responsible for:
(i) drawing up the Group's accounting policies and adapting them
to local needs; (ii) ensuring that appropriate organizational
structures are in place to carry out assigned tasks, as well as a
suitable hierarchical-functional structure; (iii) using Group tools
and methodologies to implement and run an ICS on the cut-off,
consolidation and publication of financial information and to
ensure that the financial information we report remains reliable;
and (iv) implementing the corporate accounting and management
information systems and adapting them to the specific needs of
local units.
• Risk and compliance functions. These functions comprise the
second line of defence and are in charge of independently
overseeing and challenging the risk management that the first
line conducts.
Within the Risk division, the internal control function sets the
standards and methodology for, and oversees the
implementation, monitoring and reporting of the Group’s ICS.
• Internal audit function. It is the third line of defence in
overseeing and reporting on our ICFR. It recommends corrective
action and areas of improvement for the first and second lines to
consider and implement. Internal audit is an independent
function from the board of directors and senior management that
oversees the quality and effectiveness of internal control, risk
management (current or emerging) and governance processes
and systems, thus helping the protect the organization's value,
solvency and reputation.
General Code of Conduct, Canal Abierto
and training
General Code of Conduct (GCC)
The Group’s GCC sets out board approved guidelines on employees’
conduct. Moreover, it dictates guidelines in relation to accounting
standards and financial reporting.
All of the Group’s employees, including directors, sign up to the
GCC when they join Santander. Some are also subjected to the
Code of Conduct in Securities Markets and other codes of conduct
specific to their area or business.
All Santander employees have access to courses on the GCC. The
compliance function also answers employees’ queries on ethics
and rules in the GCC.
If anyone violates the code, the people and culture function adopts
disciplinary measures and recommends corrective action (including
work sanctions), irrespective of any related civil or criminal
sanctions.
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For more details on the GCC’s core implementation mechanisms,
see 'Conduct standards' in section 4.2 'Ethical conduct' in the
'Sustainability statement' chapter.
Canal Abierto
Canal Abierto is Banco Santander's internal information system
where any person related to Banco Santander can confidentially
and, if desired, anonymously, report unethical conduct that could
be considered illegal acts in the workplace or contrary to the law;
irregularities or violations of the GCC and acts that go against the
Group’s corporate behaviours; and improper accounting or auditing
practices and internal control or influence on external auditors
according to the SOx Act. It also provides a means to report
suspicions of infringements of anti-money laundering and
terrorism financing, corruption and bribery, and securities market
laws.
The board of directors is responsible for implementing Canal
Abierto, while the audit committee and the risk supervision,
regulation and compliance committee jointly supervise the
channel.
For more details on functioning of the channel and the number and
type of reports received, see section 4.3 'Ethical channels' in the
'Sustainability statement' chapter.
Training
Group employees who help prepare or analyse financial
information take part in training programmes and regular refresher
courses specifically designed to teach them the concepts and skills
they require to discharge their duties properly.
The functions that prepare our ICFR promote, design and oversee
these programmes and courses, with support from the people and
culture function.
Training takes the form of both e-learning and on-site sessions
that the people and culture function monitors and oversees to
guarantee that employees duly complete them and understand
their contents.
Training programmes and refresher courses on financial reporting
in 2024 focused on: (i) risk analysis and management; (ii)
accounting and financial statement analysis; (iii) the business,
banking and the financial environment; (iv) financial management,
costs and budgeting; (v) mathematical skills; and (vi) calculations
and statistics.
Over 81,133 employees from several units and markets where
Grupo Santander operates undertook the mentioned training
programmes, with some 490,000 hours spent on them. Moreover,
each subsidiary has its own training plan, based on Banco
Santander’s.
8.2 Risk assessment in financial
reporting
Grupo Santander has a specific process to identify the companies
that must be included in its scope of consolidation, which the
Financial Accounting and Control division and the General
Secretariat division oversee.
This process enables us to identify the entities that Grupo
Santander controls through voting rights that grant direct or
indirect ownership of their capital and through mutual funds,
securitization funds, shareholders agreements, structured entities
and other means. The aim is to determine whether the Group has
control over an entity, whether it has rights to the variable returns
of the entity or is exposed to them, and whether it can influence
the amount of such variable returns. If the Group is considered to
have control, the entity is included in the scope of consolidation
under the global integration method. Otherwise, we analyse
whether there is significant influence or joint control. If so, the
entity is also included in the scope of consolidation and is
measured using the equity method.
Entities with the greatest impact on the preparation of the
consolidated financial information, must use a common ICS
methodology to make sure that relevant controls are included and
all significant risks to financial reporting are covered.
Risk identification considers all the Group's activities, not just the
risks directly related to the preparation of the Group's financial
information. For more details on the specific ICS controls on non
financial information and sustainability, see 'Risk management and
internal controls over sustainability information' in note SN 2.
'Sustainability governance' in the 'Sustainability statement'
chapter.
Identifying potential risks that must be covered by the ICS is based
on top management's knowledge and understanding of the
business and its operations in relative to the importance and
qualitative criteria associated with the type, complexity or
structure of the business.
Banco Santander ensures that controls are in place to cover the
potential risks we identify. This includes risks of errors and fraud in
financial reporting and those that cover (i) the existence of assets,
liabilities and transactions at the relevant date; (ii) timely and
correct recording and proper valuation of assets, liabilities and
transactions; and (iii) the correct application of accounting
principles and rules, as well as appropriate breakdowns.
For more details on the identification, documentation and
assessment of the ICS risks and controls, see section 1.5 'Internal
control system' in the 'Risk management and compliance' chapter.
8.3 Control activities
Revision and approval of financial information
The board of directors and the audit committee oversee the
preparation, submission and integrity of the financial information
required of Banco Santander and the Group. They also review
compliance with regulatory requirements, the scope of
consolidation and the correct application of accounting standards,
ensuring that financial information remains permanently updated
on our corporate website.
The audit committee is responsible for reporting to the board of
directors on the financial information that the Group must publish,
ensuring that it is prepared in accordance with the same principles
and practices as the financial statements and is as equally reliable.
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The most significant aspects we consider when closing accounts
and reviewing relevant judgements, estimates, measurements and
projections are:
• impairment losses on certain assets;
• the assumptions used in the actuarial calculation for
employment benefit liabilities and other obligations;
• the useful life of tangible and intangible fixed assets;
• the valuation of consolidation goodwill;
• the calculation of provisions and contingent liabilities;
• the fair value of certain unquoted assets and liabilities;
• the recoverability of tax assets; and
• the fair value of acquired identifiable assets and the liabilities
assumed in business combinations.
For more details on ICS reporting and governance, see section 1.5
'Internal control system' in the 'Risk management and compliance'
chapter.
Internal control policies and procedures for
financial IT systems
The Technology and Operations division draws up the Group’s
corporate policies on IT systems that are used directly or indirectly
to prepare financial statements. These systems follow special
internal controls to prepare and publish financial information
correctly.
The internal control policies on the following aspects are of
particular importance:
• Updated and divulged internal policies and procedures for
system security and access to applications and computer
systems according to the duties assigned to a role, to make sure
access to information is appropriate and to protect the
confidentiality, availability and integrity of financial information
from cyber attacks.
• The methodology we use when creating, modifying and
maintaining apps follows a cycle of definition, development and
testing that ensures we process financial information correctly.
We have special development and security controls and data
access, testing, vulnerability management, and other
mechanisms. For more details on cybersecurity, see section 5.
'Research, development and innovation (R&D&I)' in the
'Economic and Financial Review' chapter.
• Comprehensive testing of applications developed based on the
requirements set by a specialized development laboratory.
• We run the complete software testing cycle in a pre-production
computerized environment which simulates real situations
before they are rolled out. Testing includes technical and
functional tests, performance tests, user-acceptance tests and
pilot and prototype tests, which the entities draw up before the
apps become available to end users.
• Business continuity and technological contingency plans based
on corporate methodology for key functions in disasters or other
events that could suspend or disrupt operations, as well as highly
automated back-up systems that support critical systems and
require little manual intervention owing to redundant systems
and communication lines, high availability systems and data
back-up.
Internal control policies and procedures for
outsourced activities and valuation services
from independent experts
Grupo Santander has a corporate outsourcing and third party
agreement framework and third party approval policies and
procedures to cover outsourcing risks properly.
The Group must adhere to this framework (and the models and
policies that build on it), which meets the EBA's requirements for
outsourcing and risk management with third parties and complies
with DORA Regulation.
Key processes include:
• tasks to initiate, record, process, settle, report and account for
transactions and asset valuations;
• IT support in terms of software development, infrastructure
maintenance, incident management, security and processing;
and
• other material support services that are not directly related to
financial reporting, such as vendor management, property
management, HR management and others.
Key control procedures to ensure adequate coverage of risks in
these processes are:
• documenting relations between Group companies with
comprehensive service agreements;
• documenting and validating by the Group’s service providers of
processes and controls for the services that the Group´s vendors
perform; and
• external suppliers undergoing an approval process to ensure that
the relevant risks associated with the services they provide
remain within acceptable levels (according to the Group's risk
appetite) and to encourage them to prove the effectiveness of
their internal controls through external certifications.
Grupo Santander reviews its estimates internally according to its
control model guidelines. It will hire the services of a third party to
help with specific matters upon confirming their expertise and
independence and approving their methods and rationale of
assumptions though relevant procedures.
In particular, we have controls in place to ensure the integrity and
quality of information on external suppliers of key services that
could affect the financial statements. These controls are
comprehensively detailed in the service level agreements that
form part of the respective contracts with third parties.
For more details, see 'Supplier risk management' in the section
5.2. 'Operational risk management' in the 'Risk management and
compliance' chapter.
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8.4 Information and communication
Group accounting policies
Accounting policies should be understood as a complement to local
financial and accounting rules. Their overarching aims are (i) for
statements and financial information to be made available to
management bodies, supervisors and the market to provide
accurate and reliable information for decision-making in relation to
the Group; and (ii) for all Group entities (due to their accounting
ties to Banco Santander) to meet their legal requirements in a
timely manner.
The Accounting Regulation area of the Financial Accounting and
Control division is responsible for:
• setting the general framework for the treatment of the
transactions that constitute Banco Santander's activity, in
accordance with their economic nature and the regulations
governing the financial system;
• drafting up and keeping up to date the Group’s accounting
policies and resolving any queries or conflicts arising from their
interpretation; and
• enhancing and standardizing the Group’s accounting practices.
The accounting, financial management and sustainability
information corporate framework sets out the principles and
guidelines to prepare accounting, financial and management
information that must apply to all Grupo Santander entities as a
key element of their good governance.
The Group's structure makes it necessary for these principles and
standard guidelines to be common for their application across our
footprint, and for each of the Group entities to have effective
consolidation methods and employ homogeneous accounting
policies. The framework's principles are adequately reflected in the
Group’s accounting policies.
Accounting policies are revised at least once a year and on the back
of key regulatory amendments. Moreover, every month, the
Accounting Regulation area publishes an internal bulletin on new
accounting regulation and their most significant interpretations.
The Group entities, through their operations or accounting heads,
maintain open communication with the Accounting Regulation area
and the rest of the Financial Accounting and Control division, as
well as other divisions when appropriate.
Mechanisms for the preparation of financial
information
Regarding financial statement consolidation, to minimize
operational risk and maximize the quality of information, the
Group developed IT tools to channel the flow of information
between the units and the Financial Accounting and Control
division and carries out consolidation based on the information
provided.
This process is automated end to end, with controls that enable us
to detect incidents during consolidation. Moreover, the Financial
Accounting and Control division exercises further supervisory and
analytical control, which is set out in formal documents and carried
out and reviewed under set time frames.
8.5 Monitoring of system functioning
2024 ICFR monitoring activities and results
The board of directors approved an internal audit framework that
details the function and how it should conduct its work.
Internal audit function reports to the audit committee and, at least
twice a year, to the board of directors. As an independent unit, it
also has direct access to the board when required.
Internal audit assesses:
• the efficiency and effectiveness of the ICFR;
• compliance with applicable regulations and supervisory
requirements;
• the reliability and integrity of financial and operational
information; and
• asset integrity.
Its scope of action includes:
• all entities over which the Group exercises effective control;
• separated assets (for example, mutual funds) managed by the
entities mentioned in the previous section; and
• any entity (or separated assets) not included in the above points
with which the Group has entered into an agreement to provide
internal audit function.
This subjective scope includes, our activities, businesses and
processes (performed internally or through outsourcing), the
organization and, where applicable, branch networks. Internal
audit function may also conduct audits for other investees that are
not included in the preceding points when the Group has reserved
this right as a shareholder, as well as on outsourced activities in
accordance with the established agreements.
The audit committee supervises the Group's Internal Audit
function. For more details, see section 4.5 'Audit committee
activities in 2024'.
As at 2024 year-end, Internal Audit division had 1,230 employees,
all exclusively dedicated to this service. Of these, 281 were based
at the Corporate Centre and 949 in the local units located in the
Group´s core markets, all with exclusive dedication.
Every year, the internal audit function prepares an audit plan based
on a risk self-assessment and is solely responsible for executing
the plan. Reviews may lead to recommendations, which are
prioritized in accordance with their relative importance and are
continuously monitored until full implementation.
In its meeting on 13 February 2024, the audit committee gave the
green light to the internal audit plan for 2024, which the board of
directors subsequently approved at its meeting on 26 February
2024.
The internal audit function report on the ICFR review aimed to:
• verify compliance with the provisions contained in sections 302,
404, 406, 407 and 806 of the SOx Act;
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• check corporate governance with regard to information relating
to the ICFR, including risk culture;
• review the functions performed by the internal control
departments and by other departments, areas and divisions that
work to ensure compliance with the SOx Act;
• make sure the supporting documentation relating to the SOx Act
is up to date;
• confirm the effectiveness of a sample of controls based on an
internal audit risk assessment methodology;
• assess the accuracy of the unit's certifications, especially their
consistency with respect to the observations and
recommendations made by Internal Audit, the external auditors
of the annual accounts and supervisors; and
• ratify the implementation of recommendations made in the audit
plan.
In 2024, the audit committee and the board of directors were
regularly informed of the internal audit function's work in
accordance with its annual plan, as well as of other related
matters. For more details, see section 4.5 'Audit committee
activities in 2024'.
Detection and management of deficiencies
As part of its to supervise financial reporting and internal control
systems, the audit committee is responsible for maintaining
continuous dialogue with the external auditor regarding any
significant weaknesses detected in the audit.
The audit committee also assesses the results of the work of the
internal audit function and may take the necessary measures to
correct any deficiencies identified in the financial information, that
may impact on the reliability and accuracy of the financial
statements. It may ask other areas of the Group involved in the
process for vital information and clarification. The committee also
assesses the potential impact of any errors detected in the financial
information.
In 2024, the audit committee was informed of the ICS assessment
and certification for the 2023 financial year. For more details, see
section 4.5 'Audit committee activities in 2024'.
8.6 External auditor report
The external auditor issued an independent reasonable assurance
report on the design and effectiveness of our ICFR.
The report is included on the following pages.
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9. OTHER CORPORATE
GOVERNANCE INFORMATION
Since 12 June 2018, CNMV allows the annual corporate
governance and directors’ remuneration reports Spanish listed
companies must submit to be drafted in a free format, which is
what we selected for our corporate governance and directors’
remuneration reports since 2018.
The CNMV requires any issuer opting for a free format to provide
certain information in a format it dictates so that it can be
aggregated for statistical purposes. This information is included (i)
for corporate governance matters, under section 9.2 'Statistical
information on corporate governance required by the CNMV',
which also covers the section 'Degree of compliance with corporate
governance recommendations', and (ii) for remuneration matters,
under section 9.5 'Statistical information on remuneration required
by the CNMV'.
Some shareholders or other stakeholders may be used to the
formats of the corporate governance and directors' remuneration
reports set the by the CNMV. Therefore, each section under this
format in sections 9.1 'Reconciliation with the CNMV’s corporate
governance report model' and 9.4 'Reconciliation to the CNMV’s
remuneration report model' include a cross reference indicating
where this information may be found in the 2024 annual corporate
governance report (drafted in a free format) and elsewhere in this
annual report.
We have normally completed the 'comply or explain' section for all
recommendations in the Spanish Corporate Governance Code to
clearly show the ones we complied with, and explain the ones we
partially complied or failed to comply with. In section 9.3
'References on compliance with recommendations of Spanish
Corporate Governance Code', we have included a chart with cross
references showing where information supporting each response
can be found in this corporate governance chapter and elsewhere
in this annual report.
9.1 Reconciliation with the CNMV’s corporate governance report model
Section in the CNMV
Included in
model
statistical report
Comments
A. OWNERSHIP STRUCTURE
A.1
Yes
See sections 2.1 'Share capital', 3.2 'Shareholder rights' and 9.2 'Statistical information on corporate
governance required by the CNMV'.
A.2
Yes
See section 2.3 'Significant shareholders' and 9.2 'Statistical information on corporate governance
required by the CNMV'.
A.3
Yes
See 'Tenure and equity ownership' in section 4.2 and section 9.2 'Statistical information on corporate
governance required by the CNMV'.
A.4
No
See section 2.3 'Significant shareholders' where we explain there are no significant shareholders on
their own account so this section does not apply.
A.5
No
See section 2.3 'Significant shareholders' where we explain there are no significant shareholders on
their own account so this section does not apply.
A.6
No
See section 2.3 'Significant shareholders' where we explain there are no significant shareholders on
their own account so this section does not apply.
A.7
Yes
See sections 2.4 'Shareholders' agreements' and 9.2 'Statistical information on corporate governance
required by the CNMV'.
A.8
Yes
Not applicable. See section 9.2 'Statistical information on corporate governance required by the CNMV'.
A.9
Yes
See section 2.5 'Treasury shares' and 9.2 'Statistical information on corporate governance required by
the CNMV'.
A.10
No
See sections 2.2 'Authority to increase capital' and 2.5 'Treasury shares'.
A.11
Yes
See section 9.2 'Statistical information on corporate governance as required by the CNMV'.
A.12
No
See section 'Voting rights and unrestricted share transfers' in section 3.2.
A.13
No
See section 3.2 'Shareholder rights'.
A.14
Yes
See sections 2.6 'Stock market information' and 9.2 'Statistical information on corporate governance as
required by the CNMV'.
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Section in the CNMV
Included in
model
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Comments
B. GENERAL SHAREHOLDERS’ MEETING
B.1
No
See 'Quorum and majorities for passing resolutions at general meeting' in section 3.2.
B.2
No
See 'Quorum and majorities for passing resolutions at general meeting' in section 3.2.
B.3
No
See 'Rules for amending our Bylaws' in section 3.2.
B.4
Yes
See 'Quorum and attendance' in section 3.4, in relation to financial year 2024, and section 9.2 'Statistical
information on corporate governance required by the CNMV', in relation to the financial 2022, 2023 and
2024 year.
B.5
Yes
See 'Approved resolutions and voting results' in section 3.4.
B.6
Yes
See 'Participation at general meetings' in section 3.2 and section 9.2 'Statistical information on
corporate governance required by the CNMV'.
B.7
No
See 'Quorum and majorities for passing resolutions at general meeting' in section 3.2.
B.8
No
See 'Corporate website' in section 3.1.
C. MANAGEMENT STRUCTURE
C.1 Board of directors
C.1.1
Yes
See 'Size' in section 4.2 and section 3.4 '2024 AGM'.
C.1.2
Yes
See sections 1.1 'Board skills and diversity', 4.1 'Our directors, 'Tenure and equity ownership' in section
4.2, and section 9.2 'Statistical information on corporate governance required by the CNMV'.
C.1.3
Yes
See sections 2.4 'Shareholders' agreements', 4.1 'Our directors', 'Composition by director type' in section
4.2, 'Duties and activities in 2024' in section 4.6 and section 9.2 'Statistical information on corporate
governance required by the CNMV'.
C.1.4
Yes
See 'Board skills and diversity matrix' in section 4.2, in relation to financial year 2024, and section 9.2
'Statistical information on corporate governance required by the CNMV', in relation to the remaining
financial years.
C.1.5
No
See 'Diversity' and 'Board skills and diversity matrix' in section 4.2 and 'Duties and activities in 2024' in
section 4.6.
C.1.6
No
See section 1.5 'Achievement of our 2024 goals', 'Diversity' in section 4.2 and 'Duties and activities in
2024' in section 4.6 and also section 3.1.3 'Inclusive culture' in 'Sustainability statement' chapter.
C.1.7
No
See section 4.6 'Nomination committee activities in 2024'.
C.1.8
No
Not applicable, since there are no proprietary directors. See 'Composition by type of director' in section
4.2.
C.1.9
No
See 'Functions' in section 4.4.
C.1.10
No
See section 4.1 'Our directors'.
C.1.11
Yes
See sections 4.1 'Our directors' and 9.2 'Statistical information on corporate governance required by the
CNMV'.
C.1.12
Yes
See 'Board and committee preparation and attendance' in section 4.3.
C.1.13
Yes
See sections 6. 'Remuneration' and 9.2 'Statistical information on corporate governance required by the
CNMV'. Additionally, see Note 5) in the 'Notes to the consolidated financial statements'.
C.1.14
Yes
See sections 5. 'Senior management team', 6.6 '.Remuneration of non-director members of senior
management' and 9.2 'Statistical information on corporate governance required by the CNMV'.
Additionally, see note 5) in the 'Notes to the consolidated financial statements'.
C.1.15
Yes
See 'Board regulation' in section 4.3.
C.1.16
No
See 'Election, appointment, re-election and succession of directors' in section 4.2.
C.1.17
No
See 'Board effectiveness review and actions to continuously improve' in section 1.2 and 'Board
effectiveness review in 2024' in section 4.3.
C.1.18
No
Not applicable as it was not carried out with the help of an independent external advisor. See 'Board
effectiveness review and actions to continuously improve' in section 1.2 and 'Board effectiveness review
in 2024' in section 4.3.
C.1.19
No
See 'Election, appointment, re-election and succession of directors' in section 4.2.
C.1.20
No
See 'Board operation' in section 4.3.
C.1.21
Yes
Not applicable since there are no specific requirements, other than those applying to directors generally,
to be appointed chair. See section 9.2 'Statistical information on corporate governance required by the
CNMV'.
C.1.22
No
See 'Diversity' in section 4.2.
C.1.23
Yes
See 'Election, appointment, re-election and succession of directors' in section 4.2 and section 9.2
'Statistical information on corporate governance required by the CNMV'.
C.1.24
No
See 'Board operation' in section 4.3.
C.1.25
Yes
See 'Lead Independent Director' and 'Board and committee preparation and attendance' in section 4.3,
'Duties and activities in 2024' in sections 4.4, 4.5, 4.6, 4.7, 4.8, 4.9 and 4.10 and section 9.2 'Statistical
information on corporate governance required by the CNMV'.
C.1.26
Yes
See 'Board and committee preparation and attendance' in section 4.3, section 4.6 'Nomination
committee activities in 2024' and section 9.2 'Statistical information on corporate governance required
by the CNMV'.
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financial review
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Section in the CNMV
Included in
model
statistical report
Comments
C.1.27
Yes
See section 9.2 'Statistical information on corporate governance required by the CNMV'.
C.1.28
No
See 'Duties and activities in 2024' in section 4.5 and section 8.4 'Information and communication'.
C.1.29
Yes
See section 4.1 'Our directors', 'Secretary of the board' in section 4.3 and section 9.2 'Statistical
information on corporate governance as required by the CNMV'.
C.1.30
No
See section 3.1 'Shareholder communication and engagement' and 'External auditor independence' in
section 4.5.
C.1.31
Yes
See 'Re-election' in section 4.5.
C.1.32
Yes
In accordance with the CNMV’s instructions, see 'External auditor independence' in section 4.5 and sub
section C.1.32 of section 9.2 'Statistical information on corporate governance required by the CNMV'.
Per the CNMV’s instructions on preparing annual reports on corporate governance, sub-section C.1.32
provides the fee ratios of non-audit services to total audit services, with these differences in the ratio set
out in Regulation (EU) No 537/2014 that is included in section 4.5 'Audit committee activities in 2024':
(a) the ratios in sub-section C.1.32 have two perimeters to the one established by Regulation (EU) No
537/2014: fees for the approved services to be performed by PricewaterhouseCoopers Auditores, S.L.
(PwC) for Banco Santander and fees for the approved services to be performed by PwC and other firms
in its network for all other Grupo Santander entities, in and outside Spain; and (b) the ratios'
denominator is the fees amount for audit services in 2024 and not the average fee value from the past
three consecutive years that Regulation (EU) No 537/2014 dictates.
C.1.33
Yes
See section 9.2 'Statistical information on corporate governance required by the CNMV'.
C.1.34
Yes
See section 9.2 'Statistical information on corporate governance required by the CNMV'.
C.1.35
Yes
See 'Board operation' and 'Committee operation' in section 4.3.
C.1.36
No
See 'Election, appointment, re-election and succession of directors' in section 4.2.
C.1.37
No
See 'Duties and activities in 2024' in section 4.6.
C.1.38
No
Not applicable.
C.1.39
Yes
See sections 6.4 'Directors' remuneration policy for 2025, 2026 and 2027', 6.7 'Prudentially significant
disclosures document' and 9.2 'Statistical information on corporate governance required by the CNMV'.
C.2 Board committees
C.2.1
Yes
See 'Structure of board committees' and 'Committee operation' in section 4.3, sections 4.4, 4.5, 4.6, 4.7,
4.8, 4.9, 4.10 and 9.2 'Statistical information on corporate governance required by the CNMV'.
C.2.2
Yes
See section 9.2 'Statistical information on corporate governance required by the CNMV'.
C.2.3
No
See 'Board regulation' and 'Structure of board committees', 'Committee operation' in section 4.3 and
'Duties and activities in 2024' in sections 4.4, 4.5, 4.6, 4.7, 4.8, 4.9 and 4.10.
D. RELATED PARTY AND INTRAGROUP TRANSACTIONS
D.1
No
See 'Related-party transactions' in section 4.12.
D.2
Yes
Not applicable. See 'Related-party transactions' in section 4.12.
D.3
Yes
Not applicable. See 'Related-party transactions' in section 4.12.
D.4
Yes
See section 9.2 'Statistical information on corporate governance required by the CNMV'.
D.5
Yes
Not applicable. See 'Related-party transactions' in section 4.12.
D.6
No
See 'Other conflicts of interest' in section 4.12.
D.7
Yes
Not applicable. See section 2.3 'Significant shareholders' and 'Other conflicts of interest' in section 4.12.
E. CONTROL AND RISK MANAGEMENT SYSTEMS
E.1
No
See chapter 'Risk management and compliance', in particular section 1. 'Risk management and control
model' and sections 1.3 'Materiality assessment', 2.3 'Embedding ESG in risk management' and 4.2.2.
'Responsible taxation' in 'Sustainability statement' chapter.
E.2
No
See note 54 to the 'Notes to the consolidated financial statements', section 1.3 'Risk and compliance
governance' in the 'Risk management and compliance' chapter. See also sections 1.3 'Materiality
assessment', 1.4 'Sustainability governance' and 4.2.2. 'Responsible taxation' in 'Sustainability
statement' chapter.
E.3
No
See sections 1.2 'Key risk types', 2. 'Credit risk', 3. 'Market, structural and liquidity risk', 4. 'Capital risk',
5. 'Operational risk', 6. 'Compliance risk', 7. 'Model risk' and 8. 'Strategic risk' in 'Risk management and
compliance' chapter. See also section 2.3 'Embedding ESG in risk management' in 'Sustainability
statement' chapter and, for our capital needs, see section 3.5 'Capital management and adequacy.
Solvency ratios' of 'Economic and financial review' chapter.
E.4
No
See section 1.4. 'Management processes and tools' in the 'Risk management and compliance' chapter
and sections 1.3 'Materiality assessment', 2.3 'Embedding ESG in risk management' and 4.2.2.
'Responsible taxation' in 'Sustainability statement' chapter.
E.5
No
See 2. 'Credit risk', 3. 'Market, structural and liquidity risk', 4. 'Capital risk', 5. 'Operational risk', 6
'Compliance risk', 7 .'Model risk' and 8. 'Strategic risk' in the 'Risk management' chapter. Additionally,
see note 25e) in the 'Notes to the consolidated financial statements'.
E.6
No
See sections 1. 'Risk management and control model', 2. 'Credit risk', 3. 'Market, structural and liquidity
risk', 4. 'Capital risk', 5. 'Operational risk', 6. 'Compliance risk', 7. 'Model risk' and 8. 'Strategic risk' in
'Risk management' and compliance chapter. See also 1.4 'Sustainability governance' and 2.3
'Embedding ESG in risk management' in 'Sustainability statement' chapter.
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statement
governance
financial review
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Section in the CNMV
Included in
model
statistical report
Comments
F. ICFRS
F.1
No
See section 8.1 'Control environment'.
F.2
No
See section 8.2 'Risk assessment in financial reporting'.
F.3
No
See section 8.3 'Control activities'.
F.4
No
See section 8.4 'Information and communication'.
F.5
No
See section 8.5 'Monitoring of system functioning'.
F.6
No
Not applicable.
F7
No
See section 8.6 'External auditor report'.
G. DEGREE OF COMPLIANCE WITH CORPORATE GOVERNANCE RECOMMENDATIONS
G
Yes
See 'Degree of compliance with the corporate governance recommendations' in section 9.2 and section
9.3 'References on compliance with recommendations of Spanish Corporate Governance Code'.
H. OTHER INFORMATION OF INTEREST
H
No
• See 'Board regulation' in section 4.3, as well as section 1.4 'Sustainability governance' in the
'Sustainability statement' chapter.
• Banco Santander also complies with the Polish Code of Best Practices, except in areas where
regulation is different in Spain and Poland.
• In addition, see sections 1.4 'Sustainability governance' and 4. 'Business conduct (Governance
information)' in the 'Sustainability statement' chapter.
• Banco Santander has voluntarily signed up to the Code of Best Tax Practices in Spain, see section
4.2.2. 'Responsible taxation' in the 'Sustainability statement' chapter and note 27g) of the 'Notes to
the consolidated financial statements'. Banco Santander also voluntarily signed up to the Code of
Good Practices for the viable restructuring of debts secured by mortgages on primary residences and
the Code of Good Practices for mortgage debtors at risk of vulnerability, see note 54 to the 'Notes to
the consolidated financial statements'.
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9.2 Statistical information on corporate governance required by the CNMV
Unless otherwise indicated all data as of 31 December 2024.
A. OWNERSHIP STRUCTURE
A.1 Complete the following table on share capital and the attributed voting rights, including those corresponding to shares with a
loyalty vote as of the closing date of the year, where appropriate:
Indicate whether company Bylaws contain the provision of double loyalty voting:
Yes • No •
Date of last
Share capital
Number of
modification
(euros)
shares
Number of voting rights
20/12/2024
7,576,246,161
15,152,492,322
15,152,492,322
Indicate whether different types of shares exist with different associated rights:
Yes • No •
A.2 List the direct and indirect holders of significant ownership interests at year-end, including directors with a significant
shareholding:
% of voting rights
attributed to shares
% of voting rights through
financial instruments
Name or corporate name of shareholder
Direct
Indirect
Direct
Indirect
Total % of voting rights
BlackRock Inc.
0.00
6.79
0.00
0.09
6.88
Details of the indirect shares:
Name or corporate name of
the indirect shareholder
BlackRock Inc.
Name or corporate name of
the direct shareholder
Subsidiaries of BlackRock Inc.
% of voting rights
attributed to shares
6.79
% of voting rights through
financial instruments
0.09
Total % of voting rights
6.88
A.3 Give details of the participation at the close of the fiscal year of the members of the board of directors who are holders of voting
rights attributed to shares of the company or through financial instruments, whatever the percentage, excluding the directors who
have been identified in Section A.2 above:
From the total % of voting
rights attributed to the
shares, indicate, where
Name or corporate name of director
% of voting rights
attributed to shares
(including loyalty
votes)
Direct
Indirect
% of voting rights
through financial
instruments
Direct
Indirect
Total %
of voting
rights
appropriate, the % of the
additional votes attributed
corresponding to the
shares with a loyalty vote
Direct
Indirect
Ana Botín-Sanz de Sautuola y O’Shea
0.01
0.21
0.00
0.00
0.22
0.00
0.00
Héctor Grisi Checa
0.01
0.00
0.00
0.00
0.01
0.00
0.00
Glenn Hogan Hutchins
0.01
0.00
0.00
0.00
0.01
0.00
0.00
José Antonio Álvarez Álvarez
0.02
0.00
0.00
0.00
0.02
0.00
0.00
Homaira Akbari
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Juan Carlos Barrabés Cónsul
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Javier Botín-Sanz de Sautuola y O’Shea
0.04
0.17
0.00
0.00
0.21
0.00
0.00
Sol Daurella Comadrán
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Henrique de Castro
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Germán de la Fuente Escamilla
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Gina Díez Barroso Azcárraga
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Luis Isasi Fernández de Bobadilla
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Belén Romana García
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Pamela Walkden
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Antonio Francesco Weiss
0.00
0.00
0.00
0.00
0.00
0.00
0.00
% total voting rights held by the board of directors
0.47
% total voting rights represented on the board of directors
0.82
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Details of the indirect holding:
Name or
corporate name
of director
Name or
corporate name
of direct owner
% of voting rights
attributed to shares
% of voting rights through
financial instruments
Total % of
voting rights
From the total % of voting rights
attributed to the shares, indicate,
where appropriate, the % of the
additional votes attributed
corresponding to the shares
with a loyalty vote
_
_
_
_
_
_
A.7 Indicate whether the company has been notified of any shareholders’ agreements that may affect it, in accordance with the
provisions of Articles 530 and 531 of the Spanish Companies Act (LSC). If so, provide a brief description and list the shareholders
bound by the agreement, as applicable:
Yes • No •
% of share
Expiry date, if
Parties to the shareholders’ agreement
capital affected
Brief description of agreement
applicable
Javier Botín-Sanz de Sautuola y O’Shea
(directly and indirectly through
Agropecuaria El Castaño, S.L.U.)
Emilio Botín-Sanz de Sautuola y O’Shea,
Puente San Miguel, S.L.U.
Ana Botín-Sanz de Sautuola y O’Shea,
0.72
CRONJE, S.L.U.
Nueva Azil, S.L.
Carmen Botín-Sanz de Sautuola y O’Shea
Paloma Botín-Sanz de Sautuola y O’Shea
Bright Sky 2012, S.L.
Transfer restrictions and syndication of voting rights as described
under section 2.4 'Shareholders’ agreements' of the 'Corporate
governance' chapter in the annual report. The communications to
CNMV relating to this shareholders' agreement can be found in
material facts with entry numbers 64179, 171949, 177432,
194069, 211556, 218392, 223703, 226968 and 285567 filed in
CNMV on 17 February 2006, 3 August 2012, 19 November 2012,
17 October, 2013, 3 October 2014, 6 February 2015, 29 May
2015, 29 July 2015 and 31 December 2019, respectively.
01/01/2056
Indicate whether the company is aware of the existence of any concerted actions among its shareholders. If so, give a brief
description as applicable:
Yes • No •
% of share
Expiry date, if
Participants in the concerted action
capital affected
Brief description of concerted action
applicable
Javier Botín-Sanz de Sautuola y O’Shea
(directly and indirectly through
Agropecuaria El Castaño, S.L.U.)
Emilio Botín-Sanz de Sautuola y O’Shea,
Puente San Miguel, S.L.U.
Ana Botín-Sanz de Sautuola y O’Shea,
0.72
CRONJE, S.L.U.
Nueva Azil, S.L.
Carmen Botín-Sanz de Sautuola y O’Shea
Paloma Botín-Sanz de Sautuola y O’Shea
Bright Sky 2012, S.L.
Transfer restrictions and syndication of voting rights as described
under section 2.4 'Shareholders’ agreements' of the 'Corporate
governance' chapter in the annual report. The communications to
CNMV relating to this shareholders' agreement can be found in
material facts with entry numbers 64179, 171949, 177432,
194069, 211556, 218392, 223703, 226968 and 285567 filed in
CNMV on 17 February 2006, 3 August 2012, 19 November 2012,
17 October, 2013, 3 October 2014, 6 February 2015, 29 May
2015, 29 July 2015 and 31 December 2019, respectively.
01/01/2056
A.8 Indicate whether any individual or entity currently exercises control or could exercise control over the company in accordance
with article 5 of the Spanish Securities Market Act. If so, identify them:
Yes • No •
A.9 Complete the following tables on the company’s treasury shares:
At year end:
Number of shares held directly
Number of shares held indirectly (*)
% of total share capital
0
15,529,459
0.10%
(*) Through:
Name or corporate name of the direct shareholder
Pereda Gestión, S.A.
Banco Santander Argentina, S.A.
Banco Santander México, S.A.
Total:
Number of shares held directly
14,000,000
558,421
971,038
15,529,459
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A.11 Estimated free float:
%
Estimated free float
91.73
A.14 Indicate whether the company has issued securities not traded in a regulated market of the European Union.
Yes • No •
B. GENERAL SHAREHOLDERS' MEETING
B.4 Indicate the attendance figures for the general shareholders’ meetings held during the financial year to which this report relates
and in the two preceding financial years:
Attendance data
% remote voting
Date of General Meeting
% attending in
person
% by proxy
Electronic means
Other
Total
01/04/2022
0.71
65.41
2.08
0.57
68.77
Of which free float:
0.09
64.98
2.08
0.57
67.72
Attendance data
% remote voting
Date of General Meeting
% attending in
person
% by proxy
Electronic means
Other
Total
31/03/2023
0.72
64.20
2.22
0.42
67.56
Of which free float:
0.06
63.73
2.22
0.42
66.43
Attendance data
% remote voting
Date of General Meeting
% attending in
person
% by proxy
Electronic means
Other
Total
22/03/2024
0.82
62.48
2.83
0.52
66.65
Of which free float:
0.08
61.99
2.83
0.52
65.42
B.5 Indicate whether in the general shareholders’ meetings held during the financial year to which this report relates there has been
any matter submitted to them which has not been approved by the shareholders:
Yes • No •
B.6 Indicate whether the Bylaws require a minimum holding of shares to attend to or to vote remotely in the general shareholders’
meeting:
Yes • No •
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C. MANAGEMENT STRUCTURE
C.1 Board of directors
C.1.1 Maximum and minimum number of directors provided for in the Bylaws:
Maximum number of directors
17
Minimum number of directors
12
Number of directors set by the General Meeting
15
Name or corporate
name of director
Category of
director
Position in
the board
Date of first
appointment
Date of last
appointment
C.1.2 Complete the following table with the directors’ details:
Representative
Election procedure
Ana Botín-Sanz de Sautuola y O’Shea
N/A
Executive
Chair
04/02/1989
31/03/2023
Vote in general
shareholders’
meeting
Héctor Grisi Checa
N/A
Executive
Chief Executive
Officer
01/01/2023
31/03/2023
Vote in general
shareholders’
meeting
Glenn Hogan Hutchins
N/A
Independent
Lead Independent
Director
20/12/2022
31/03/2023
Vote in general
shareholders’
meeting
José Antonio Álvarez Álvarez
N/A
Other external
Vice Chair
13/01/2015
22/03/2024
Vote in general
shareholders’
meeting
Homaira Akbari
N/A
Independent
Director
27/09/2016
31/03/2023
Vote in general
shareholders’
meeting
Juan Carlos Barrabés Cónsul
N/A
Independent
Director
27/06/2024
27/06/2024
Vote in general
shareholders’
meeting
Javier Botín-Sanz de Sautuola y
O’Shea
N/A
Other external
Director
25/07/2004
22/03/2024
Vote in general
shareholders’
meeting
Sol Daurella Comadrán
N/A
Independent
Director
18/02/2015
31/03/2023
Vote in general
shareholders’
meeting
Henrique de Castro
N/A
Independent
Director
17/07/2019
22/03/2024
Vote in general
shareholders’
meeting
Germán de la Fuente Escamilla
N/A
Independent
Director
21/04/2022
22/03/2024
Vote in general
shareholders’
meeting
Gina Díez Barroso Azcárraga
N/A
Independent
Director
22/12/2020
31/03/2023
Vote in general
shareholders’
meeting
Luis Isasi Fernández de Bobadilla
N/A
Other external
Director
19/05/2020
01/04/2022
Vote in general
shareholders'
meeting
Belén Romana García
N/A
Independent
Director
22/12/2015
22/03/2024
Vote in general
shareholders’
meeting
Pamela Walkden
N/A
Independent
Director
29/10/2019
31/03/2023
Vote in general
shareholders’
meeting
Antonio Francesco Weiss
N/A
Independent
Director
27/06/2024
27/06/2024
Vote in general
shareholders'
meeting
Total number of directors
15
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Indicate any directors who have left during the financial year to which this report relates, regardless of the reason (whether for
resignation or by agreement of the general meeting or any other):
Category of director
Indicate whether he or she
Name or corporate
at the time he/her
Date of last
Board committees he or she
has left before the expiry
name of director
left
appointment
Date of leave
was a member of
of his or her term
Bruce Carnegie-
Independent
26/03/2021
22/03/2024
Nomination and remuneration
No
Brown
committees
Ramiro Mato García-
Independent
26/03/2021
27/06/2024
Executive; audit; risks
No
Ansorena
supervision, regulation and
compliance; and responsible
banking, sustainability and
culture committees
C.1.3 Complete the following tables for the directors in each relevant category:
Executive directors
Name or corporate name of director
Position held in the company
Profile
Ana Botín-Sanz de Sautuola y O’Shea
Executive Chair
See section 4.1 'Our directors' in the 'Corporate governance'
chapter in the annual report.
Héctor Grisi Checa
CEO
See section 4.1 'Our directors' in the 'Corporate governance'
chapter in the annual report.
Total number of executive directors
% of the Board
13.33
Proprietary non-executive directors
Name or corporate name of significant shareholder represented or having
Name or corporate name of director
proposed his or her appointment
Profile
N/A
N/A
N/A
Total number of proprietary non-executive directors
% of the Board
Independent directors
Name or corporate name of director
Profile
Glenn Hogan Hutchins
See section 4.1 'Our directors' in the 'Corporate governance' chapter in the annual report.
Homaira Akbari
See section 4.1 'Our directors' in the 'Corporate governance' chapter in the annual report.
Juan Carlos Barrabés Cónsul
See section 4.1 'Our directors' in the 'Corporate governance' chapter in the annual report.
Sol Daurella Comadrán
See section 4.1 'Our directors' in the 'Corporate governance' chapter in the annual report.
Henrique de Castro
See section 4.1 'Our directors' in the 'Corporate governance' chapter in the annual report.
Germán de la Fuente Escamilla
See section 4.1 'Our directors' in the 'Corporate governance' chapter in the annual report.
Gina Díez Barroso Azcárraga
See section 4.1 'Our directors' in the 'Corporate governance' chapter in the annual report.
Belén Romana Garcia
See section 4.1 'Our directors' in the 'Corporate governance' chapter in the annual report.
Pamela Walkden
See section 4.1 'Our directors' in the 'Corporate governance' chapter in the annual report.
Antonio Francesco Weiss
See section 4.1 'Our directors' in the 'Corporate governance' chapter in the annual report.
Total number of independent directors
10
% of the Board
66.67
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Identify any independent director who receives from the company or its group any amount or perk other than his or her director
remuneration, as a director, or who maintain or have maintained during the financial year covered in this report a business
relationship with the company or any group company, whether in his or her own name or as a principal shareholder, director or
senior manager of an entity which maintains or has maintained such a relationship.
In such a case, a reasoned statement from the Board on why the relevant director(s) is able to carry on their duties as independent
director(s) will be included.
Name or
corporate name Description of the rela
of director
tionship
Reasoned statement
Sol Daurella
Comadrán
Business/Financing
When conducting the annual verification of the independence of directors classified as independent, the
nomination committee analysed the business relationships between Grupo Santander and the companies
in which they are or have previously been principal shareholders, directors or senior managers.
The committee concluded that the business relationships maintained and the funding Grupo Santander
granted to companies in which Sol Daurella was a principal shareholder or director in 2024 were not
significant because, among other reasons: (i) they did not generate economic dependence on the
companies involved in view of the substitutability of this funding by other sources, whether banks or
others; (ii) they were consistent with Grupo Santander's share in the corresponding market; and (iii) they
did not reach certain comparable materiality thresholds used in other jurisdictions (e.g. NYSE, Nasdaq and
the Canadian Bank Act).
Henrique de
Castro
Business
When conducting the annual verification of the independence of directors classified as independent, the
nomination committee analysed the business relationships between Grupo Santander and the companies
in which they are or have previously been principal shareholders, directors or senior managers.
The committee concluded that the business relationships maintained between Grupo Santander and the
company in which Henrique de Castro was a director in 2024 were not significant because, among other
reasons they did not reach certain comparable materiality thresholds used in other jurisdictions (e.g. NYSE
and Nasdaq).
Gina Díez
Barroso
Azcárraga
Business/Financing
When conducting the annual verification of the independence of directors classified as independent, the
nomination committee analysed the business relationships between Grupo Santander and the companies
in which they are or have previously been principal shareholders, directors or senior managers.
The committee concluded that the business relationships maintained and the funding Grupo Santander
granted to companies in which Gina Díez Barroso was a principal shareholder and director in 2024 were
not significant because, among other reasons: (i) they did not generate a situation of economic
dependence on the company involved in view of the substitutability of this funding by other sources,
whether banks or others; (ii) they were consistent with Grupo Santander's share in the corresponding
market; and (iii) they did not reach certain comparable materiality thresholds used in other jurisdictions
(e.g. NYSE, Nasdaq and the Canadian Bank Act).
Glenn Hogan
Hutchins
Business/Financing
When conducting the annual verification of the independence of directors classified as independent, the
nomination committee analysed the business relationships between Grupo Santander and the companies
in which they are or have previously been principal shareholders, directors or senior managers.
The committee concluded that the business relationships maintained and the funding Grupo Santander
granted to the company in which Glenn Hutchins was a director in 2024 were not significant because,
among other reasons: (i) they did not generate economic dependence on the companies involved in view
of the substitutability of this funding by other sources, whether banks or others; (ii) they were consistent
with Grupo Santander's share in the corresponding market; and (iii) they did not reach certain comparable
materiality thresholds used in other jurisdictions (e.g. NYSE, Nasdaq and the Canadian Bank Act).
Belén Romana
García
Business/Financing
When conducting the annual verification of the independence of directors classified as independent, the
nomination committee analysed the business relationships between Grupo Santander and the companies
in which they are or have previously been principal shareholders, directors or senior managers.
The committee concluded that the business relationships maintained and the funding Grupo Santander
granted to companies in which Belén Romana was a director in 2024 were not significant because, among
other reasons: (i) they did not generate economic dependence on the companies involved in view of the
substitutability of this funding by other sources, whether banks or others; (ii) they were consistent with
Grupo Santander's share in the corresponding market; and (iii) they did not reach certain comparable
materiality thresholds used in other jurisdictions (e.g. NYSE, Nasdaq and the Canadian Bank Act).
Juan Carlos
Financing
Barrabés Cónsul
When conducting the annual verification of the independence of directors classified as independent, the
nomination committee analysed the business relationships between Grupo Santander and the companies
in which they are or have previously been principal shareholders, directors or senior managers.
The committee concluded that the funding Grupo Santander granted to Juan Carlos Barrabés and the
companies in which he was a principal shareholder or director in 2024 were not significant because,
among other reasons: (i) it did not generate economic dependence in view of the substitutability of this
funding by other sources, whether banks or others; (ii) it was consistent with Grupo Santander's share in
the corresponding market; and (iii) it did not reach certain comparable materiality thresholds used in other
jurisdictions (e.g. NYSE, Nasdaq and the Canadian Bank Act).
Antonio Weiss
Business
When conducting the annual verification of the independence of directors classified as independent, the
nomination committee analysed the business relationships between Grupo Santander and the companies
in which they are or have previously been principal shareholders, directors or senior managers.
The committee concluded that the business relationships maintained between Grupo Santander and the
company in which Antonio Weiss was a principal shareholder in 2024 were not significant because,
among other reasons they did not reach certain comparable materiality thresholds used in other
jurisdictions (e.g. NYSE and Nasdaq).
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Other external directors
Identify all other external directors and explain why these cannot be considered proprietary or independent directors and detail their
relationships with the company, its executives or shareholders:
Company, manager or
shareholder to which or
Name or corporate name of
to whom the director is
director
Reasons
related
Profile
José Antonio Álvarez Álvarez
Given that Mr Álvarez was the former CEO of Banco
Banco Santander, S.A.
See section 4.1 'Our
Santander until 31 December 2022, pursuant to sub
section 4.a) of article 529 duodecies of the Spanish
Companies Act.
directors' in the Corporate
governance chapter in the
annual report.
Javier Botín-Sanz de Sautuola y
O’Shea
Given that Mr Botín has been director for over 12
years, pursuant to sub-section 4. i) of article 529
duodecies of the Spanish Companies Act.
Banco Santander, S.A.
See section 4.1 'Our
directors' in the Corporate
governance chapter in the
annual report.
Luis Isasi Fernández de Bobadilla
Under prudent criteria given his remuneration as non
executive Chair of Santander España’s body as
supervisor, unit without its own corporate identity
separate to Banco Santander, pursuant to sub
sections 2 to 4 of article 529 duodecies of the Spanish
Companies Act.
Banco Santander, S.A.
See section 4.1 'Our
directors' in the Corporate
governance chapter in the
annual report.
Total number of other external directors
3
% of the Board
20.00
List any changes in the category of a director which have occurred during the period covered in this report.
Name or corporate name of director
Date of change
Previous category
Current category
—
—
—
—
C.1.4 Complete the following table on the number of female directors at the end of each the past four years and their category:
Number of female directors
% of total directors of each category
FY 2024
FY 2023
FY 2022
FY 2021
FY 2024
Executive
1
1
1
1
50.00
Proprietary
—
—
—
—
0.00
Independent
5
5
5
5
50.00
Other external
—
—
—
—
0.00
Total:
6
6
6
6
40.00
FY 2023
FY 2022
FY 2021
50.00
50.00
50.00
0.00
0.00
50.00
50.00
50.00
0.00
0.00
40.00
40.00
40.00
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0.00
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C.1.11 List the positions of director, administrator or representative thereof, held by directors or representatives of directors who are
members of the company's board of directors in other entities, whether or not they are listed companies:
Identity of the director or
representative
Company name of the listed or non-listed entity Position
Remunerated YES/NO
Ana Botín-Sanz de Sautuola y
O’Shea
The Coca-Cola Company
Director
YES
Héctor Grisi Checa
Cogrimex, S.A. de C.V.
Chair
NO
Glenn Hogan Hutchins
AT&T Inc.
Director
YES
North Island, LL
Chair
NO
North Island Ventures, LLC
Chair
NO
José Antonio Álvarez Álvarez
Aon PLC
Director
YES
Homaira Akbari
Landstar System, Inc.
Director
YES
AKnowledge Partners, LLC
Chief Executive Officer
YES
Juan Carlos Barrabés Cónsul
Grupo Barrabés Cónsul, S.L.
Chair-Chief Executive Officer
NO
Barrabés Internet, S.L.U.
Chief Executive Officer
NO
Barrabés Ski Montaña, S.L.U.
Director
NO
Action & Lifestyle, S.L.U.
Director
NO
Tuca del Mont, S.L.
Chief Executive Officer
NO
Ediciones Montañas y Hombres, S.L.U.
Director
NO
Llitarrada Innova, S.L.
Representative of sole
administrator
NO
Innova Next, S.L.U.
Representative of joint and several
administrator
NO
Step One Ventures, S.L.
Representative of joint and several
administrator
NO
Formiguero Barrabés, S.L.
Joint and several administrator
NO
Agencia Certificadora Autónoma, S.L.U.
Representative of joint and several
administrator
NO
Primschain, S.L.U.
Representative of sole
administrator
NO
Javier Botín-Sanz de Sautuola y
O’Shea
JB Capital Markets, S. V., S.A.U.
Inversiones Zulú, S.L.
Chair
Chair-Chief Executive Officer
YES
NO
Agropecuaria El Castaño, S.L.
Joint administrator
NO
Inversiones Peña Cabarga, S.L.
Joint and several administrator
NO
Sol Daurella Comadrán
Coca-Cola Europacific Partners PLC
Chair
YES
Cobega, S.A.
Representative of director
NO
Equatorial Coca Cola Bottling Company, S.L.
Director
YES
Cobega Invest S.L.
Joint administrator
NO
Olive Partners, S.A.
Representative of director
NO
Indau, S.A.R.L.
Sole administrator
YES
Henrique de Castro
Fiserv Inc.
Director
YES
Stakecorp Capital, s.a.r.l.
Director
NO
Gina Díez Barroso Azcárraga
Grupo Diarq, S.A. de C.V.
Chair
NO
Dalia Women, S.A.P.I. de C.V.
Director
NO
Centro de Diseño y Comunicación, S.C.
Chair
NO
Bolsa Mexicana de Valores, S.A.B. de C.V.
Director
YES
Luis Isasi Fernández de Bobadilla
Logista Integral, S.A.
Chair
YES
Balcón del Parque, S.L.
Sole administrator
NO
Santa Clara de C. Activos, S.L.
Joint and several administrator
NO
Belén Romana García
Werfen, S.A.
Director
YES
SIX Group AG
Director
YES
SIX Digital Exchange AG
Chair
YES
SDX Trading AG
Chair
YES
Bolsas y Mercados Españoles, Sociedad Holding
de Mercados y Sistemas Financieros, S.A.
Director
YES
Industria de Diseño Textil, S.A. (Inditex)
Director
YES
Antonio Weiss
Societe Familiale d'Investissements S.A.
Director
YES
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Indicate, where appropriate, the other remunerated activities of the directors or directors' representatives, whatever their nature,
other than those indicated in the previous table.
Identity of the director or representative
Other paid activities
Glenn Hogan Hutchins
Member of the international advisory board Government of Singapore Investment
Corporation
Member of the executive committee of Boston Celtics
Homaira Akbari
Member of the Security Advisory Board of Telefónica Soluciones de Criptografía, S.A.U.
Belén Romana García
Senior advisor of Artá Capital, S.G.E.I.C., S.A.
Academic director of the IE Leadership & Foresight Hub Programme
Pamela Walkden
Member of the advisory board of JD Haspel Limited
Antonio Weiss
Partner of SSW Partners LP
Associate of AFWCo LP
Senior Advisor of JAB Holdings
C.1.12 Indicate and, if applicable explain, if the company has established rules on the maximum number of directorships its directors
may hold and, if so, where they are regulated:
Yes • No •
The maximum number of directorships is established, as provided for in article 30 of the Rules and regulations of the board, in article 26 of
Spanish Law 10/2014 on the ordering, supervision and solvency of credit institutions. This rule is further developed by articles 29 and
subsequent of Royal Decree 84/2015 and by Rules 30 and subsequent of Bank of Spain Circular 2/2016.
C.1.13 Identify the following items of the total remuneration of the board of directors:
Board remuneration accrued in the fiscal year (EUR thousand)
30,214
Funds accumulated by current directors for long-term savings systems with consolidated economic rights (EUR thousand)
76,356
Funds accumulated by current directors for long-term savings systems with unconsolidated economic rights (EUR thousand)
0
Pension rights accumulated by former directors (EUR thousand)
46,390
C.1.14 Identify the members of the company’s senior management who are non executive directors and indicate total remuneration
they have accrued during the financial year:
Name or corporate name
Position (s)
Mahesh Chatta Aditya
Group Chief Risk Officer
Daniel Barriuso Rojo
Global Head of Retail & Commercial Banking and Group Chief Transformation Officer
Julia Bayón Pedraza
Group Chief Audit Executive
Juan Manuel Cendoya Méndez de Vigo
Group Head of Communications, Corporate Marketing and Research
José Francisco Doncel Razola
Group Chief Accounting Officer
José Antonio García Cantera
Group Chief Financial Officer
Francisco Javier García-Carranza
Global Head of Wealth Management & Insurance
David Arthur Hazell
Group Chief Compliance Officer
José María Linares Perou
Global Head of Corporate & Investment Banking
Mónica Lopez-Monís Gallego
Group Head of Supervisory and Regulatory Relations
Dirk Ludwig Marzluf
Group Chief Operating & Technology Officer
José Luis de Mora Gil-Gallardo
Group Head of Digital Consumer Bank and Group Head of Corporate Development and Financial
Planning
Jaime Pérez Renovales
Group General Counsel
Javier Roglá Puig
Group Head of People & Culture
Number of women in senior management
Percentage of total senior management
14.29%
Total remuneration accrued by the senior
49,531
management (EUR thousand)
C.1.15 Indicate whether any changes have been made to the board's regulations during the financial year:
Yes • No •
C.1.21 Indicate whether there are any specific requirements, other than those applying to directors generally, to be appointed Chair:
Yes • No •
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C.1.23 Indicate whether the Bylaws or the board's regulations set a limited term of office (or other requirements which are stricter
than those provided for in the law) for independent directors different than the one provided for in the law.
Yes • No •
C.1.25 Indicate the number of board meetings held during the financial year and how many times the board has met without the
Chair’s attendance. Attendance also includes proxies appointed with specific instructions:
Number of board meetings
Number of board meetings held without the Chair’s attendance
Indicate the number of meetings held by the Lead Independent Director with the rest of directors without the attendance or
representation of any executive director.
Number of meetings
Indicate the number of meetings of the various board committees held during the financial year.
Number of meetings of the audit committee
15
Number of meetings of the responsible banking, sustainability and culture committee
4
Number of meetings of the innovation and technology committee
5
Number of meetings of the nomination committee
13
Number of meetings of the remuneration committee
14
Number of meetings of the risk supervision, regulation and compliance committee
18
Number of meetings of the executive committee
24
C.1.26 Indicate the number of board meetings held during the financial year and data about the attendance of the directors:
Number of meetings with at least 80% of directors being present
18
% of votes cast by members present over total votes in the financial year
98
Number of board meetings with all directors being present (or represented having given specific instructions)
16
% of votes cast by members present at the meeting or represented with specific instructions over total votes in the
financial year
98.87
C.1.27 Indicate whether the company´s consolidated and individual financial statements are certified before they are submitted to
the board for their formulation.
Yes • No •
Identify, where applicable, the person(s) who certified the company’s individual and consolidated financial statements prior to their
formulation by the board:
Name
Position
José Francisco Doncel Razola
Group Chief Accounting Officer
C.1.29 Is the secretary of the board also a director?
Yes • No •
If the secretary of the board is not a director fill in the following table:
Name or corporate name of the secretary
Representative
Jaime Pérez Renovales
N/A
C.1.31 Indicate whether the company has changed its external audit firm during the financial year. If so, identify the incoming audit
firm and the outgoing audit firm:
Yes • No •
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C.1.32 Indicate whether the audit firm performs non-audit work for the company and/or its group. If so, state the amount of fees
paid for such work and express this amount as a percentage they represent of all fees invoiced to the company and/or its group.
Yes • No •
Group
Company
companies
Total
Amount of non-audit work (EUR thousand)
9,301
12,339
21,640
Amount of non-audit work as a % of amount of audit work
34.43
15.47
20.26
C.1.33 Indicate whether the audit report on the previous year’s financial statements contains a qualified opinion or reservations.
Indicate the reasons given by the Chair of the audit committee to the shareholders in the general shareholders meeting to explain
the content and scope of those qualified opinion or reservations.
Yes • No •
C.1.34 Indicate the number of consecutive years during which the current audit firm has been auditing the financial statements of
the company and/or its group. Likewise, indicate for how many years the current firm has been auditing the financial statements as a
percentage of the total number of years over which the financial statements have been audited:
Individual financial
statements
Consolidated
financial statements
Number of consecutive years
9
9
Company
Group
Number of years audited by current audit firm/Number of years the company’s or its Group
financial statements have been audited (%)
20.93
21.43
C.1.35 Indicate and if applicable explain whether there are procedures for directors to receive the information they need in sufficient
time to prepare for meetings of the governing bodies:
Yes • No •
Procedures
Our Rules and regulations of the board foresees that members of the board and committees are provided with the relevant documentation for each
meeting sufficiently in advance of the meeting date.
C.1.39 Identify, individually in the case of directors, and in the aggregate in all other cases, and provide detailed information on,
agreements between the company and its directors, executives and employees that provide indemnification, guarantee or golden
parachute clause in the event of resignation, unfair dismissal or termination as a result of a takeover bid or other type of transaction.
Number of beneficiaries
25
Type of beneficiary
Description of the agreement:
Employees
The Bank has no commitments to provide severance pay to directors.
A number of employees have a right to compensation equivalent to one to two years of their basic salary in the event
of their contracts being terminated by the Bank in the first two years of their contract in the event of dismissal on
grounds other than their own will, retirement, disability or serious dereliction of duties.
In addition, for the purposes of legal compensation, in the event of redundancy a number of employees are entitled
to recognition of length of service including services provided prior to being contracted by the Bank; this would entitle
them to higher compensation than they would be due based on their actual length of service with the Bank itself.
Indicate whether these agreements must be reported to and/or authorised by the governing bodies of the company or its group
beyond the procedures provided for in applicable law. If applicable, specify the process applied, the situations in which they apply,
and the bodies responsible for approving or communicating those agreements:
General Shareholders’
Board of directors
Meeting
Body authorising clauses
√
YES
NO
Is the general shareholders’ meeting informed of such clauses?
√
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C.2 Board committees
C.2.1 Give details of all the board committees, their members and the proportion of executive, independent and other external
directors.
Executive committee
Name
Position
Type
Ana Botín-Sanz de Sautuola y O’Shea
Héctor Grisi Checa
José Antonio Álvarez Álvarez
Luis Isasi Fernández de Bobadilla
Belén Romana García
Chair
Member
Member
Member
Member
Executive director
Executive director
Other external director
Other external director
Independent director
% of executive directors
40.00
% of proprietary directors
0.00
% of independent directors
20.00
% of other external directors
40.00
Audit committee
Name
Germán de la Fuente Escamilla
Homaira Akbari
Henrique de Castro
Belén Romana García
Pamela Walkden
Position
Chair
Member
Member
Member
Member
Type
Independent director
Independent director
Independent director
Independent director
Independent director
% of executive directors
0
% of proprietary directors
0
% of independent directors
100
% of other external directors
0
Identify those directors in the audit committee who have been appointed on the basis of their knowledge and experience in
accounting, audit or both and indicate the date of appointment of the committee chair.
Name of directors with accounting or audit experience
Germán de la Fuente
Homaira Akbari
Henrique de Castro
Belén Romana García
Pamela Walkden
Date of appointment of the committee chair for that position
23 March 2024
Nomination committee
Name
Position
Belén Romana García
Chair
Juan Carlos Barrabés Cónsul
Member
Sol Daurella Comadrán
Member
Gina Díez Barroso
Member
Glenn Hutchins
Member
Type
Independent director
Independent director
Independent director
Independent director
Independent
director
% of executive directors
0
% of proprietary directors
0
% of independent directors
100
% of other external directors
0
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Remuneration committee
Name
Glenn Hogan Hutchins
Sol Daurella Comadrán
Henrique de Castro
Luis Isasi Fernández de Bobadilla
Position
Chair
Member
Member
Member
Type
Independent director
Independent director
Independent director
Other external director
% of executive directors
% of proprietary directors
% of independent directors
% of other external directors
0
0
75.00
25.00
Risk supervision, regulation and compliance committee
Name
Position
Pamela Walkden
Chair
Germán de la Fuente Escamilla
Member
Luis Isasi Fernández de Bobadilla
Member
Belén Romana García
Member
Type
Independent director
Independent director
Other external director
Independent director
% of executive directors
% of proprietary directors
% of independent directors
% of other external directors
0
0
75.00
25.00
Responsible banking, sustainability and culture committee
Name
Position
Sol Daurella Comadrán
Chair
Homaira Akbari
Member
Juan Carlos Barrabés Cónsul
Member
Gina Díez Barroso Azcárraga
Member
Belén Romana García
Member
Type
Independent director
Independent director
Independent director
Independent director
Independent director
% of executive directors
% of proprietary directors
% of independent directors
% of other external directors
0
0
100
0
Innovation and technology committee
Name
Glenn Hogan Hutchins
Ana Botín-Sanz de Sautuola y O'Shea
Homaira Akbari
José Antonio Álvarez Álvarez
Juan Carlos Barrabés Cónsul
Henrique de Castro
Héctor Grisi Checa
Belén Romana García
Position
Chair
Member
Member
Member
Member
Member
Member
Member
Type
Independent director
Executive director
Independent director
Other external director
Independent director
Independent director
Executive director
Independent director
% of executive directors
% of proprietary directors
% of independent directors
% of other external directors
25.00
0.00
62.50
12.50
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C.2.2 Complete the following table on the number of female directors on the various board committees over the past four years.
Number of female directors
FY 2024
FY 2023
FY 2022
FY 2021
Number
%
Number
%
Number
%
Number
%
Audit committee
3
50.00
3
50.00
3
50.00
3
60.00
Responsible banking, sustainability and culture
committee
4
80.00
4
80.00
3
75.00
3
60.00
Innovation and technology committee
3
37.50
3
42.86
3
42.86
3
42.86
Nomination committee
3
60.00
2
50.00
2
50.00
2
50.00
Remuneration committee
1
25.00
1
20.00
1
20.00
1
20.00
Risk supervision, regulation and compliance
committee
2
50.00
2
40.00
2
50.00
2
40.00
Executive committee
2
40.00
2
33.33
2
33.33
2
33.33
D. RELATED-PARTY AND INTRAGROUP TRANSACTIONS
D.2 Give individual details of operations that are significant due to their amount or of importance due to their subject matter carried
out between the company or its subsidiaries and shareholders holding 10% or more of the voting rights or who are represented on
the board of directors of the company, indicating which has been the competent body for its approval and if any affected shareholder
or director has abstained. In the event that the board of directors has responsibility, indicate if the proposed resolution has been
approved by the board without a vote against the majority of the independents:
Not applicable.
D.3 Give individual details of the operations that are significant due to their amount or relevant due to their subject matter carried
out by the company or its subsidiaries with the administrators or managers of the company, including those operations carried out
with entities that the administrator or manager controls or controls jointly, indicating the competent body for its approval and if any
affected shareholder or director has abstained. In the event that the board of directors has responsibility, indicate if the proposed
resolution has been approved by the board without a vote against the majority of the independents:
Not applicable.
D.4 Report individually on intra-group transactions that are significant due to their amount or relevant due to their subject matter
that have been undertaken by the company with its parent company or with other entities belonging to the parent's group, including
subsidiaries of the listed company, except where no other related party of the listed company has interests in these subsidiaries or
that they are fully owned, directly or indirectly, by the listed company.
In any case, report any intragroup transactions carried out with entities in countries or territories considered to be tax havens.
Corporate name of
Amount (EUR
the group company
Brief description of the transaction and any other information necessary for its evaluation
thousand)
The information included in this chart shows the transactions and the results obtained by Banco Santander in Spain and its foreign branches as of 31
December 2024 with Group entities resident in countries or territories that were considered non-cooperative jurisdictions pursuant to Spanish
legislation, at such date (Law 11/2021 on measures to prevent and fight against tax fraud).
These results, and the balances indicated below, were eliminated in the consolidation process. See note 3 to the 2024 'consolidated financial
statements' for more information on offshore entities.
Banco Santander
(Brasil) S.A.
(Cayman Islands
Branch)
The amount shown on the right corresponds to net positive results (including results due to exchange
differences) relating to contracting of derivatives.
The referred derivatives had a net positive market value of EUR 143 million and covered the following
transactions:
- 181 Non-Delivery Forwards.
- 213 Swaps.
- 67 Cross Currency Swaps.
- 52 Options.
- 116 Forex.
232,795
The amount shown on the right corresponds to negative results relating to demand and term deposits
(liability). These deposits had a nominal value of EUR 2,564 million as of 31 December 2024.
49,681
The amount shown on the right corresponds to positive results relating to term deposits (asset). These
deposits had a nominal value of EUR 11 million as of 31 December 2024.
The amount shown on the right corresponds to positive results relating to fixed income securities/
subordinated instruments (asset). This relates to the investment in Tier I subordinated perpetual notes,
with original date of issue November 2018, that were fully amortized on 8 November 2024.
87,327
The amount shown on the right corresponds to negative results relating to interests and commissions
concerning correspondent accounts (liability). This relates to correspondent accounts with a credit
balance of EUR 15 million as of 31 December 2024.
The amount shown on the right corresponds to positive results relating to commissions received.
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D.5 Give individual details of the operations that are significant due to their amount or relevant due to their subject matter carried
out by the company or its subsidiaries with other related parties pursuant to the international accounting standards adopted by the
EU, which have not been reported in previous sections.
Not applicable.
G. DEGREE OF COMPLIANCE WITH THE
CORPORATE GOVERNANCE
RECOMMENDATIONS
Indicate the degree of the company’s compliance with the
recommendations of the good governance code for listed
companies.
Should the company not comply with any of the
recommendations or comply only in part, include a detailed
explanation of the reasons so that shareholders, investors and
the market in general have enough information to assess the
company’s behaviour. General explanations are not acceptable.
1. The bylaws of listed companies should not place an upper
limit on the votes that can be cast by a single shareholder, or
impose other obstacles to the takeover of the company by
means of share purchases on the market.
Complies • Explain •
2. When the listed company is controlled, pursuant to the
meaning established in Article 42 of the Commercial Code, by
another listed or non-listed entity, and has, directly or through
its subsidiaries, business relationships with that entity or any of
its subsidiaries (other than those of the listed company) or
carries out activities related to the activities of any of them, this
is reported publicly, with specific information about:
a) The respective areas of activity and possible business
relationships between, on the one hand, the listed company or
its subsidiaries and, on the other, the parent company or its
subsidiaries.
b) The mechanisms established to resolve any conflicts of
interest that may arise.
Complies • Partially complies • Explain • Not applicable •
3. During the AGM the chair of the board should verbally inform
shareholders in sufficient detail of the most relevant aspects of
the company’s corporate governance, supplementing the
written information circulated in the annual corporate
governance report. In particular:
a) Changes taking place since the previous annual general
meeting.
b) The specific reasons for the company not following a given
Good Governance Code recommendation, and any alternative
procedures followed in its stead.
Complies • Partially complies • Explain •
4. The company should define and promote a policy for
communication and contact with shareholders and institutional
investors within the framework of their involvement in the
company, as well as with proxy advisors, that complies in full
with the rules on market abuse and gives equal treatment to
shareholders who are in the same position. The company should
make said policy public through its website, including
information regarding the way in which it has been
implemented and the parties involved or those responsible its
implementation.
Further, without prejudice to the legal obligations of disclosure
of inside information and other regulated information, the
company should also have a general policy for the
communication of economic-financial, non-financial and
corporate information through the channels it considers
appropriate (media, social media or other channels) that helps
maximise the dissemination and quality of the information
available to the market, investors and other stakeholders.
Complies • Partially complies • Explain •
5. The board of directors should not make a proposal to the
general meeting for the delegation of powers to issue shares or
convertible securities without pre-emptive subscription rights
for an amount exceeding 20% of capital at the time of such
delegation.
And that whenever the board of directors approves an issuance
of shares or convertible securities without pre-emptive rights
the company immediately publishes reports on its web page
regarding said exclusions as referenced in applicable mercantile
law.
Complies • Partially complies • Explain •
6. Listed companies drawing up the following reports on a
voluntary or compulsory basis should publish them on their
website well in advance of the AGM, even if their distribution is
not obligatory:
a) Report on auditor independence.
b) Reviews of the operation of the audit committee and the
nomination and remuneration committees.
c) Audit committee report on third-party transactions.
Complies • Partially complies • Explain •
7. The company should broadcast its general meetings live on
the corporate website.
The company should have mechanisms that allow the
delegation and exercise of votes by electronic means and even,
in the case of large-cap companies and, to the extent that it is
proportionate, attendance and active participation in the general
shareholders’ meeting.
Complies • Explain •
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8. The audit committee should strive to ensure that the financial
statements that the board of directors presents to the general
shareholders’ meeting are drawn up in accordance to accounting
legislation. And in those cases where the auditors includes any
qualification in its report, the chair of the audit committee
should give a clear explanation at the general meeting of their
opinion regarding the scope and content, making a summary of
that opinion available to the shareholders at the time of the
publication of the notice of the meeting, along with the rest of
proposals and reports of the board.
Complies • Partially complies • Explain •
9. The company should disclose its conditions and procedures
for admitting share ownership, the right to attend general
meetings and the exercise or delegation of voting rights, and
display them permanently on its website.
Such conditions and procedures should encourage shareholders
to attend and exercise their rights and be applied in a non
discriminatory manner.
Complies • Partially complies • Explain •
10. When a shareholder so entitled exercises the right to
supplement the agenda or submit new proposals prior to the
general meeting, the company should:
a) Immediately circulate the supplementary items and new
proposals.
b) Disclose the standard attendance card or proxy appointment
or remote voting form, duly modified so that new agenda items
and alternative proposals can be voted on in the same terms as
those submitted by the board of directors.
c) Put all these items or alternative proposals to the vote
applying the same voting rules as for those submitted by the
board of directors, with particular regard to presumptions or
deductions about the direction of votes.
d) After the general meeting, disclose the breakdown of votes
on such supplementary items or alternative proposals.
Complies • Partially complies • Explain • Not applicable •
11. In the event that a company plans to pay for attendance at
the general meeting, it should first establish a general, long
term policy in this respect.
Complies • Partially complies • Explain • Not applicable •
12. The board of directors should perform its duties with unity of
purpose and independent judgement, according the same
treatment to all shareholders in the same position. It should be
guided at all times by the company’s best interest, understood
as the creation of a profitable business that promotes its
sustainable success over time, while maximising its economic
value.
In pursuing the corporate interest, it should not only abide by
laws and regulations and conduct itself according to principles
of good faith, ethics and respect for commonly accepted
customs and good practices, but also strive to reconcile its own
interests with the legitimate interests of its employees,
suppliers, clients and other stakeholders, as well as with the
impact of its activities on the broader community and the
natural environment.
Complies • Partially complies • Explain •
13. The board of directors should have an optimal size to
promote its efficient functioning and maximise participation.
The recommended range is accordingly between five and fifteen
members.
Complies • Explain •
14. The board of directors should approve a policy aimed at
promoting an appropriate composition of the board that:
a) is concrete and verifiable;
b) ensures that appointment or re-election proposals are based
on a prior analysis of the competences required by the board;
and
c) favours diversity of knowledge, experience, age and gender.
Therefore, measures that encourage the company to have a
significant number of female senior managers are considered to
favour gender diversity.
The results of the prior analysis of competences required by the
board should be written up in the nomination committee’s
explanatory report, to be published when the general
shareholders’ meeting is convened that will ratify the
appointment and re-election of each director.
The nomination committee should run an annual check on
compliance with this policy and set out its findings in the annual
corporate governance report.
Complies • Partially complies • Explain •
15. Proprietary and independent directors should constitute an
ample majority on the board of directors, while the number of
executive directors should be the minimum practical bearing in
mind the complexity of the corporate group and the ownership
interests they control.
Further, the number of female directors should account for at
least 40% of the members of the board of directors before the
end of 2022 and thereafter, and not less than 30% previous to
that.
Complies • Partially complies • Explain •
16. The percentage of proprietary directors out of all non
executive directors should be no greater than the proportion
between the ownership stake of the shareholders they
represent and the remainder of the company’s capital.
This criterion can be relaxed:
a) In large cap companies where few or no equity stakes attain
the legal threshold for significant shareholdings.
b) In companies with a plurality of shareholders represented on
the board but not otherwise related.
Complies • Explain •
17. Independent directors should be at least half of all board
members.
However, when the company does not have a large market
capitalisation, or when a large cap company has shareholders
individually or concertedly controlling over 30 percent of capital,
independent directors should occupy, at least, a third of board
places.
Complies • Explain •
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18. Companies should disclose the following director particulars
on their websites and keep them regularly updated:
a) Background and professional experience.
b) Directorships held in other companies, listed or otherwise,
and other paid activities they engage in, of whatever nature.
c) Statement of the director class to which they belong, in the
case of proprietary directors indicating the shareholder they
represent or have links with.
d) Dates of their first appointment as a board member and
subsequent re-elections.
e) Shares held in the company, and any options on the same.
Complies • Partially complies • Explain •
19. Following verification by the nomination committee, the
annual corporate governance report should disclose the reasons
for the appointment of proprietary directors at the urging of
shareholders controlling less than 3 percent of capital; and
explain any rejection of a formal request for a board place from
shareholders whose equity stake is equal to or greater than that
of others applying successfully for a proprietary directorship.
Complies • Partially complies • Explain • Not applicable •
20. Proprietary directors should resign when the shareholders
they represent dispose of their ownership interest in its entirety.
If such shareholders reduce their stakes, thereby losing some of
their entitlement to proprietary directors, the number of the
latter should be reduced accordingly.
Complies • Partially complies • Explain • Not applicable •
21. The board of directors should not propose the removal of
independent directors before the expiry of their tenure as
mandated by the bylaws, except where they find just cause,
based on a proposal from the nomination committee. In
particular, just cause will be presumed when directors take up
new posts or responsibilities that prevent them allocating
sufficient time to the work of a board member, or are in breach
of their fiduciary duties or come under one of the disqualifying
grounds for classification as independent enumerated in the
applicable legislation.
The removal of independent directors may also be proposed
when a takeover bid, merger or similar corporate transaction
alters the company’s capital structure, provided the changes in
board membership ensue from the proportionality criterion set
out in recommendation 16.
Complies • Explain •
22. Companies should establish rules obliging directors to
disclose any circumstance that might harm the organisation’s
name or reputation, related or not to their actions within the
company, and tendering their resignation as the case may be,
and, in particular, to inform the board of any criminal charges
brought against them and the progress of any subsequent trial.
When the board is informed or becomes aware of any of the
situations mentioned in the previous paragraph, the board of
directors should examine the case as soon as possible and,
attending to the particular circumstances, decide, based on a
report from the nomination and remuneration committee,
whether or not to adopt any measures such as opening of an
internal investigation, calling on the director to resign or
proposing his or her dismissal. The board should give a reasoned
account of all such determinations in the annual corporate
governance report, unless there are special circumstances that
justify otherwise, which must be recorded in the minutes. This is
without prejudice to the information that the company must
disclose, if appropriate, at the time it adopts the corresponding
measures.
Complies • Partially complies • Explain •
23. Directors should express their clear opposition when they
feel a proposal submitted for the board’s approval might
damage the corporate interest. In particular, independents and
other directors not subject to potential conflicts of interest
should strenuously challenge any decision that could harm the
interests of shareholders lacking board representation.
When the board makes material or reiterated decisions about
which a director has expressed serious reservations, then he or
she must draw the pertinent conclusions. Directors resigning for
such causes should set out their reasons in the letter referred to
in the next recommendation.
The terms of this recommendation also apply to the secretary of
the board, even if he or she is not a director.
Complies • Partially complies • Explain • Not applicable •
24. Directors who give up their position before their tenure
expires, through resignation or resolution of the general
meeting, should state the reasons for this decision, or in the
case of non-executive directors, their opinion of the reasons for
the general meeting resolution, in a letter to be sent to all
members of the board.
This should all be reported in the annual corporate governance
report, and if it is relevant for investors, the company should
publish an announcement of the departure as rapidly as
possible, with sufficient reference to the reasons or
circumstances provided by the director.
Complies • Partially complies • Explain • Not applicable •
25. The nomination committee should ensure that non
executive directors have sufficient time available to discharge
their responsibilities effectively.
The board rules and regulations should lay down the maximum
number of company boards on which directors can serve.
Complies • Partially complies • Explain •
26. The board should meet with the necessary frequency to
properly perform its functions, eight times a year at least, in
accordance with a calendar and agendas set at the start of the
year, to which each director may propose the addition of initially
unscheduled items.
Complies • Partially complies • Explain •
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27. Director absences should be kept to a strict minimum and
quantified in the annual corporate governance report. In the
event of absence, directors should delegate their powers of
representation with the appropriate instructions.
Complies • Partially complies • Explain •
28. When directors or the secretary express concerns about
some proposal or, in the case of directors, about the company’s
performance, and such concerns are not resolved at the
meeting, they should be recorded in the minutes book if the
person expressing them so requests.
Complies • Partially complies • Explain • Not applicable •
29. The company should provide suitable channels for directors
to obtain the advice they need to carry out their duties,
extending if necessary to external assistance at the company’s
expense.
Complies • Partially complies • Explain •
30. Regardless of the knowledge directors must possess to carry
out their duties, they should also be offered refresher
programmes when circumstances so advise.
Complies • Explain • Not applicable •
31. The agendas of board meetings should clearly indicate on
which points directors must arrive at a decision, so they can
study the matter beforehand or obtain the information they
consider appropriate.
For reasons of urgency, the chair may wish to present decisions
or resolutions for board approval that were not on the meeting
agenda. In such exceptional circumstances, their inclusion will
require the express prior consent, duly minuted, of the majority
of directors present.
Complies • Partially complies • Explain •
32. Directors should be regularly informed of movements in
share ownership and of the views of major shareholders,
investors and rating agencies on the company and its group.
Complies • Partially complies • Explain •
33. The chair, as the person responsible for the efficient
functioning of the board of directors, in addition to the functions
assigned by law and the company’s bylaws, should prepare and
submit to the board a schedule of meeting dates and agendas;
organise and coordinate regular evaluations of the board and,
where appropriate, of the company’s chief executive officer;
exercise leadership of the board and be accountable for its
proper functioning; ensure that sufficient time is given to the
discussion of strategic issues, and approve and review refresher
courses for each director, when circumstances so advise.
Complies • Partially complies • Explain •
34. When a lead independent director has been appointed, the
bylaws or the Rules and regulations of the board of directors
should grant him or her the following powers over and above
those conferred by law: to chair the board of directors in the
absence of the chair or vice chair; to give voice to the concerns of
non-executive directors; to maintain contact with investors and
shareholders to hear their views and develop a balanced
understanding of their concerns, especially those to do with the
company’s corporate governance; and to coordinate the chair’s
succession plan.
Complies • Partially complies • Explain • Not applicable •
35. The board secretary should strive to ensure that the board’s
actions and decisions are informed by the governance
recommendations of the Good Governance Code of relevance to
the company.
Complies • Explain •
36. The board in full should conduct an annual evaluation,
adopting, where necessary, an action plan to correct weakness
detected in:
a) The quality and efficiency of the board’s operation.
b) The performance and membership of its committees.
c) The diversity of board membership and competencies.
d) The performance of the chair of the board of directors and the
company’s chief executive.
e) The performance and contribution of individual directors, with
particular attention to the chair of board committees.
The evaluation of board committees should start from the
reports they send to the board of directors, while that of the
board itself should start from the report of the nomination
committee.
Every three years, the board of directors should engage an
external facilitator to aid in the evaluation process. This
facilitator’s independence should be verified by the nomination
committee.
Any business dealings that the facilitator or members of its
corporate group maintain with the company or members of its
corporate group should be detailed in the annual corporate
governance report.
The process followed and areas evaluated should be detailed in
the annual corporate governance report.
Complies • Partially complies • Explain •
37. When there is an executive committee, there should be at
least two non-executive members, at least one of whom should
be independent; and its secretary should be the secretary of the
board of directors.
Complies • Partially complies • Explain • Not applicable •
38. The board should be kept fully informed of the matters
discussed and decisions made by the executive committee. To
this end, all board members should receive a copy of the
committee’s minutes.
Complies • Partially complies • Explain • Not applicable •
39. All members of the audit committee, particularly its chair,
should be appointed with regard to their knowledge and
experience in accounting, auditing and risk management
matters, both financial and non-financial.
Complies • Partially complies • Explain •
40. Listed companies should have a unit in charge of the internal
audit function, under the supervision of the audit committee, to
monitor the effectiveness of reporting and control systems. This
unit should report functionally to the board’s non-executive
chair or the chair of the audit committee.
Complies • Partially complies • Explain •
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41. The head of the unit handling the internal audit function
should present an annual work programme to the audit
committee, for approval by this committee or the board, inform
it directly of any incidents or scope limitations arising during its
implementation, the results and monitoring of its
recommendations, and submit an activities report at the end of
each year.
Complies • Partially complies • Explain • Not applicable •
42. The audit committee should have the following functions
over and above those legally assigned:
1. With respect to internal control and reporting systems:
a) Monitor and evaluate the preparation process and the
integrity of the financial and non-financial information, as well
as the control and management systems for financial and non
financial risks related to the company and, where appropriate,
to the group – including operating, technological, legal, social,
environmental, political and reputational risks or those related
to corruption – reviewing compliance with regulatory
requirements, the accurate demarcation of the consolidation
perimeter, and the correct application of accounting principles.
b) Monitor the independence of the unit handling the internal
audit function; propose the selection, appointment and removal
of the head of the internal audit service; propose the service’s
budget; approve or make a proposal for approval to the board of
the priorities and annual work programme of the internal audit
unit, ensuring that it focuses primarily on the main risks the
company is exposed to (including reputational risk); receive
regular report-backs on its activities; and verify that senior
management are acting on the findings and recommendations
of its reports.
c) Establish and supervise a mechanism that allows employees
and other persons related to the company, such as directors,
shareholders, suppliers, contractors or subcontractors, to
report irregularities of potential significance, including financial
and accounting irregularities, or those of any other nature,
related to the company, that they notice within the company or
its group. This mechanism must guarantee confidentiality and
enable communications to be made anonymously, respecting
the rights of both the complainant and the accused party.
d) In general, ensure that the internal control policies and
systems established are applied effectively in practice.
2. With regard to the external auditor:
a) Investigate the issues giving rise to the resignation of the
external auditor, should this come about.
b) Ensure that the remuneration of the external auditor, does
not compromise its quality or independence.
c) Ensure that the company notifies any change of external
auditor through the CNMV, accompanied by a statement of any
disagreements arising with the outgoing auditor and the
reasons for the same.
d) Ensure that the external auditor has a yearly meeting with the
board in full to inform it of the work undertaken and
developments in the company’s risk and accounting positions.
e) Ensure that the company and the external auditor adhere to
current regulations on the provisions of non-audit services,
limits on the concentration of the auditor’s business and other
requirements concerning auditor independence.
Complies • Partially complies • Explain •
43. The audit committee should be empowered to meet with
any company employee or manager, even ordering their
appearance without the presence of another manager.
Complies • Partially complies • Explain •
44. The audit committee should be informed of any structural
changes or corporate transactions the company is planning, so
the committee can analyse the operation and report to the board
beforehand on its economic conditions and accounting impact
and, when applicable, the exchange ratio proposed.
Complies • Partially complies • Explain • Not applicable •
45. Risk control and management policy should identify or
establish at least:
a) The different types of financial and non-financial risk the
company is exposed to (including operational, technological,
financial, legal, social, environmental, political and reputational
risks, and risks relating to corruption), with the inclusion under
financial or economic risks of contingent liabilities and other
off-balance-sheet risks.
b) A risk control and management model based on different
levels, of which a specialised risk committee will form part
when sector regulations provide or the company deems it
appropriate.
c) The level of risk that the company considers acceptable.
d) The measures in place to mitigate the impact of identified risk
events should they occur.
e) The internal control and reporting systems to be used to
control and manage the above risks, including contingent
liabilities and off-balance-sheet risks.
Complies • Partially complies • Explain •
46. Companies should establish a risk control and management
function in the charge of one of the company’s internal
department or units and under the direct supervision of the audit
committee or some other specialised board committee. This
internal department or unit should be expressly charged with
the following responsibilities:
a) Ensure that risk control and management systems are
functioning correctly and, specifically, that major risks the
company is exposed to are correctly identified, managed and
quantified.
b) Participate actively in the preparation of risk strategies and in
key decisions about their management.
c) Ensure that risk control and management systems are
mitigating risks effectively in the frame of the policy drawn up
by the board of directors.
Complies • Partially complies • Explain •
47. Members of the nomination and remuneration committee-or
of the nomination committee and remuneration committee, if
separately constituted - should be chosen procuring they have
the right balance of knowledge, skills and experience for the
functions they are called on to discharge. The majority of their
members should be independent directors.
Complies • Partially complies • Explain •
48. Large cap companies should have formed separate
nomination and remuneration committees.
Complies • Explain • Not applicable •
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49. The nomination committee should consult with the
company’s chair and chief executive, especially on matters
relating to executive directors.
When there are vacancies on the board, any director may
approach the nomination committee to propose candidates that
it might consider suitable.
Complies • Partially complies • Explain •
50. The remuneration committee should operate independently
and have the following functions in addition to those assigned
by law:
a) Propose to the board the standard conditions for senior officer
contracts.
b) Monitor compliance with the remuneration policy set by the
company.
c) Periodically review the remuneration policy for directors and
senior officers, including share-based remuneration systems
and their application, and ensure that their individual
compensation is proportionate to the amounts paid to other
directors and senior officers in the company.
d) Ensure that conflicts of interest do not undermine the
independence of any external advice the committee engages.
e) Verify the information on director and senior officers’ pay
contained in corporate documents, including the annual
directors’ remuneration statement.
Complies • Partially complies • Explain •
51. The remuneration committee should consult with the
company’s chair and chief executive, especially on matters
relating to executive directors and senior officers.
Complies • Partially complies • Explain •
52. The rules regarding composition and functioning of
supervision and control committees should be set out in the
regulations of the board of directors and aligned with those
governing legally mandatory board committees as specified in
the preceding sets of recommendations. They should include at
least the following terms:
a) Committees should be formed exclusively by non-executive
directors, with a majority of independents.
b) They should be chaired by independent directors.
c) The board should appoint the members of such committees
with regard to the knowledge, skills and experience of its
directors and each committee’s terms of reference; discuss their
proposals and reports; and provide report-backs on their
activities and work at the first board plenary following each
committee meeting.
d) They may engage external advice, when they feel it necessary
for the discharge of their functions.
e) Meeting proceedings should be minuted and a copy made
available to all board members.
Complies • Partially complies • Explain • Not applicable •
53. The task of supervising compliance with the policies and
rules of the company in the environmental, social and corporate
governance areas, and internal rules of conduct, should be
assigned to one board committee or split between several,
which could be the audit committee, the nomination committee,
a committee specialised in sustainability or corporate social
responsibility, or a dedicated committee established by the
board under its powers of self-organisation. Such a committee
should be made up solely of non-executive directors, the
majority being independent and specifically assigned the
following minimum functions.
Complies • Partially complies • Explain •
54. The minimum functions referred to in the previous
recommendation are as follows:
a) Monitor compliance with the company’s internal codes of
conduct and corporate governance rules, and ensure that the
corporate culture is aligned with its purpose and values.
b) Monitor the implementation of the general policy regarding
the disclosure of economic-financial, non-financial and
corporate information, as well as communication with
shareholders and investors, proxy advisors and other
stakeholders. Similarly, the way in which the entity
communicates and relates with small and medium-sized
shareholders should be monitored.
c) Periodically evaluate the effectiveness of the company’s
corporate governance system and environmental and social
policy, to confirm that it is fulfilling its mission to promote the
corporate interest and catering, as appropriate, to the legitimate
interests of remaining stakeholders.
d) Ensure the company’s environmental and social practices are
in accordance with the established strategy and policy.
e) Monitor and evaluate the company’s interaction with its
stakeholder groups.
Complies • Partially complies • Explain •
55. Environmental and social sustainability policies should
identify and include at least:
a) The principles, commitments, objectives and strategy
regarding shareholders, employees, clients, suppliers, social
welfare issues, the environment, diversity, fiscal responsibility,
respect for human rights and the prevention of corruption and
other illegal conducts.
b) The methods or systems for monitoring compliance with
policies, associated risks and their management.
c) The mechanisms for supervising non-financial risk, including
that related to ethical aspects and business conduct.
d) Channels for stakeholder communication, participation and
dialogue.
e) Responsible communication practices that prevent the
manipulation of information and protect the company’s honour
and integrity.
Complies • Partially complies • Explain •
56. Director remuneration should be sufficient to attract and
retain directors with the desired profile and compensate the
commitment, abilities and responsibility that the post demands,
but not so high as to compromise the independent judgement of
non-executive directors.
Complies • Explain •
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57. Variable remuneration linked to the company and the
director’s performance, the award of shares, options or any
other right to acquire shares or to be remunerated on the basis
of share price movements, and membership of long-term
savings schemes such as pension plans, retirement accounts or
any other retirement plan should be confined to executive
directors.
The company may consider the share-based remuneration of
non-executive directors provided they retain such shares until
the end of their mandate. The above condition will not apply to
any shares that the director must dispose of to defray costs
related to their acquisition.
Complies • Partially complies • Explain •
58. In the case of variable awards, remuneration policies should
include limits and technical safeguards to ensure they reflect the
professional performance of the beneficiaries and not simply the
general progress of the markets or the company’s sector, or
circumstances of that kind.
In particular, variable remuneration items should meet the
following conditions:
a) Be subject to predetermined and measurable performance
criteria that factor the risk assumed to obtain a given outcome.
b) Promote the long-term sustainability of the company and
include non-financial criteria that are relevant for the company’s
long-term value, such as compliance with its internal rules and
procedures and its risk control and management policies.
c) Be focused on achieving a balance between the achievement
of short, medium and long-term targets, such that performance
related pay rewards ongoing achievement, maintained over
sufficient time to appreciate its contribution to long-term value
creation. This will ensure that performance measurement is not
based solely on one off, occasional or extraordinary events.
Complies • Partially complies • Explain • Not applicable •
59. The payment of the variable components of remuneration is
subject to sufficient verification that previously established
performance, or other, conditions have been effectively met.
Entities should include in their annual directors’ remuneration
report the criteria relating to the time required and methods for
such verification, depending on the nature and characteristics of
each variable component.
Additionally, entities should consider establishing a reduction
clause (‘malus’) based on deferral for a sufficient period of the
payment of part of the variable components that implies total or
partial loss of this remuneration in the event that prior to the
time of payment an event occurs that makes this advisable.
Complies • Partially complies • Explain • Not applicable •
60. Remuneration linked to company earnings should bear in
mind any qualifications stated in the external auditor’s report
that reduce their amount.
Complies • Partially complies • Explain • Not applicable •
61. A major part of executive directors’ variable remuneration
should be linked to the award of shares or financial instruments
whose value is linked to the share price.
Complies • Partially complies • Explain • Not applicable •
62. Following the award of shares, options or financial
instruments corresponding to the remuneration schemes,
executive directors should not be able to transfer their
ownership or exercise them until a period of at least three years
has elapsed.
Except for the case in which the director maintains, at the time
of the transfer or exercise, a net economic exposure to the
variation in the price of the shares for a market value equivalent
to an amount of at least twice his or her fixed annual
remuneration through the ownership of shares, options or other
financial instruments.
The foregoing shall not apply to the shares that the director
needs to dispose of to meet the costs related to their acquisition
or, upon favourable assessment of the nomination and
remuneration committee to address an extraordinary situation.
Complies • Partially complies • Explain • Not applicable •
63. Contractual arrangements should include provisions that
permit the company to reclaim variable components of
remuneration when payment was out of step with the director’s
actual performance or based on data subsequently found to be
misstated.
Complies • Partially complies • Explain • Not applicable •
64. Termination payments should not exceed a fixed amount
equivalent to two years of the director’s total annual
remuneration and should not be paid until the company
confirms that he or she has met the predetermined performance
criteria.
For the purposes of this recommendation, payments for
contractual termination include any payments whose accrual or
payment obligation arises as a consequence of or on the
occasion of the termination of the contractual relationship that
linked the director with the company, including previously
unconsolidated amounts for long-term savings schemes and the
amounts paid under post-contractual non-compete agreements.
Complies • Partially complies • Explain • Not applicable •
List whether any directors voted against or abstained from
voting on the approval of this Report.
Yes • No •
I declare that the information included in this statistical annex are
the same and are consistent with the descriptions and information
included in the annual corporate governance report published by
the company.
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9.3 References on compliance with
recommendations of Spanish Corporate
Governance Code
Recommendation
Comply / Explain
Information
1
Comply
See section 3.2 'Shareholder rights'.
2
Not applicable
See 'Other conflicts of interest' in section 4.12 and section 2.3 'Significant shareholders'.
3
Comply
See section 3.1 'Shareholder communication and engagement'.
4
Comply
See section 3.1 'Shareholder communication and engagement'.
5
Comply
See section 2.2 'Authority to increase capital'.
6
Comply
See sections 4.5 'Audit committee activities in 2024', 4.6 'Nomination committee activities in 2024', 4.7
'Remuneration committee activities in 2024', 4.8 'Risk supervision, regulation and compliance committee
activities in 2024', 4.9 'Responsible banking, sustainability and culture committee activities in 2024', 4.10
'Innovation and technology committee activities in 2024' and 4.12 'Related-party transactions and conflicts
of interest'.
7
Comply
See 'Engagement with shareholders in 2024' in section 3.1, 'Participation at general meetings' in section
3.2 and section 3.5 'Our next AGM in 2025'.
8
Comply
See 'Board regulation' in section 4.3 and sections 4.5 'Audit committee activities in 2024' and 8.5
'Monitoring of system functioning'.
9
Comply
See 'Participation at general meetings' in section 3.2.
10
Comply
See 'Supplement to the notice and proposals resolutions' in section 3.2.
11
Not applicable
See section 3.5 'Our next AGM in 2025'.
12
Comply
See section 4.3 'Board functioning and effectiveness'.
13
Comply
See 'Size' in section 4.2.
14
Comply
See 'Diversity' and 'Election, appointment, re-election and succession of directors' in section 4.2, 'Board
regulation' in section 4.3, 'Duties and activities in 2024' in section 4.6 and 'Sustainability statement'
chapter.
15
Comply
See section 4.2 'Board composition'.
16
Comply
See 'Composition by type of director' in section 4.2.
17
Comply
See 'Composition by type of director' and 'Election, appointment, re-election and succession of directors' in
section 4.2.
18
Comply
See 'Corporate website' in section 3.1, section 4.1 'Our directors' and 'Tenure and equity ownership' in
section 4.2.
19
Not applicable
See 'Composition by type of director' in section 4.2.
20
Comply
See 'Election, appointment, re-election and succession of directors' in section 4.2.
21
Comply
See 'Election, appointment, re-election and succession of directors' in section 4.2.
22
Comply
See 'Election, appointment, re-election and succession of directors' in section 4.2, 'Board regulation' in
section 4.3 and 'Duties and activities in 2024' in section 4.6.
23
Comply
See 'Election, appointment, re-election and succession of directors' in section 4.2.
24
Comply
See 'Election, appointment, re-election and succession of directors' in section 4.2 and 'Board's regulation' in
section 4.3.
25
Comply
See 'Board and committee preparation and attendance' in section 4.3 and 'Duties and activities in 2024' in
section 4.6.
26
Comply
See 'Board operation' and 'Board and committee preparation and attendance' in section 4.3.
27
Comply
See 'Board operation', 'Committee operation' and 'Board and committee preparation and attendance' in
section 4.3.
28
Comply
See 'Board regulation' and 'Board operation' in section 4.3.
29
Comply
See 'Board operation' and 'Committee operation' in section 4.3.
30
Comply
See 'Director training and induction programmes' in section 4.3.
31
Comply
See 'Board operation' in section 4.3.
32
Comply
See section 3.1 'Shareholder communication and engagement' and 'Duties and activities in 2024' in section
4.6.
33
Comply
See section 4.3 'Board functioning and effectiveness'.
34
Comply
See 'Lead Independent Director' in section 4.3.
35
Comply
See 'Secretary of the board' in section 4.3.
36
Comply
See 'Board effectiveness review in 2024' in section 4.3.
37
Comply
See 'Board regulation' in section 4.3 and 'Composition' in section 4.4.
38
Comply
See 'Committee operation' in section 4.3 and section 4.4 'Executive committee activities in 2024'.
39
Comply
See 'Board regulation' in section 4.3 and 'Composition' in section 4.5.
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40
45
50
55
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Recommendation
Comply / Explain
Information
Comply
See 'Duties and activities in 2024' in section 4.5 and sections 8.1 'Control environment' and 8.5 'Monitoring
of system functioning'.
41
Comply
See 'Board regulation' in section 4.3, 'Duties and activities in 2024' in section 4.5 and section 8.5
'Monitoring of system functioning'.
42
Comply
See 'Board regulation' in section 4.3 and 'Duties and activities in 2024' in section 4.5.
43
Comply
See 'Committee operation' in section 4.3.
44
Comply
See 'Duties and activities in 2024' in section 4.5.
Comply
See 'Board regulation' in section 4.3, 'Duties and activities in 2024' in section 4.5, 'Duties and activities in
2024' in section 4.8 and the 'Risk management and compliance' chapter.
46
Comply
See 'Duties and activities in 2024' in section 4.5,'Duties and activities in 2024' in section 4.8 and the 'Risk
management and compliance' chapter.
47
Comply
See 'Composition' in section 4.6 and 'Composition' in section 4.7.
48
Comply
See 'Structure of board committees' in section 4.3.
49
Comply
See 'Duties and activities in 2024' in section 4.6.
Comply
See 'Duties and activities in 2024' in section 4.7 and 'Duties and activities in 2024' in section 4.6.
51
Comply
See 'Duties and activities in 2024' in section 4.7.
52
Comply
See 'Board regulation' and 'Committee operation' in section 4.3 and sections 4.8 'Risk supervision,
regulation and compliance committee activities in 2024' and 4.9 'Responsible banking, sustainability and
culture committee activities in 2024'.
53
Comply
See 'Board regulation' in section 4.3, 'Duties and activities in 2024' in section 4.6, 'Duties and activities in
2024' in section 4.8 and 'Duties and activities in 2024' in section 4.9.
54
Comply
See 'Board regulation' in section 4.3, 'Duties and activities in 2024' in section 4.6, 'Duties and activities in
2024' in section 4.8 and 'Duties and activities in 2024' in section 4.9.
Comply
See 'Duties and activities in 2024' in section 4.9 and 'Sustainability statement' chapter.
56
Comply
See sections 6.2 'Remuneration of directors for supervisory and collective decision-making duties: policy
applied in 2024', 6.3 'Remuneration of directors for executive duties' and 6.4 'Directors' remuneration
policy for 2025, 2026 and 2027'.
57
Comply
See sections 6.2 'Remuneration of directors for supervisory and collective decision-making duties: policy
applied in 2024', 6.3 'Remuneration of directors for executive duties' and 6.4 'Directors' remuneration
policy for 2025, 2026 and 2027'.
58
Comply
See section 6.3 'Remuneration of directors for executive duties' and 6.4 'Directors' remuneration policy for
2025, 2026 and 2027'.
59
Comply
See section 6.3 'Remuneration of directors for executive duties'.
Comply
See section 6.3 'Remuneration of directors for executive duties'.
61
Comply
See section 6.3 'Remuneration of directors for executive duties' and 6.4 'Directors' remuneration policy for
2025, 2026 and 2027'.
62
Comply
See 'Duties and activities in 2024' in section 4.7, section 6.3 'Remuneration of directors for executive duties'
and 6.4 'Directors' remuneration policy for 2025, 2026 and 2027'.
63
Comply
See section 6.3 'Remuneration of directors for executive duties' and 6.4 'Directors' remuneration policy for
2025, 2026 and 2027'.
64
Comply
See sections 6.1 'Principles of the remuneration policy' and 6.3 'Remuneration of directors for executive
duties' and 6.4 'Directors' remuneration policy for 2025, 2026 and 2027'.
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9.4 Reconciliation to the CNMV’s remuneration report model
Section in
Included in
the CNMV
statistical
model
report
Further information elsewhere and comments
A. Remuneration policy for the present fiscal year
A.1
No
• See section 6.4: A.1.1, A.1.2, A.1.3, A.1.4, A.1.5, A.1.6, A.1.7, A.1.8, A.1.9, A.1.10, A.1.11 (note 5), A.1.12.
• See also sections 4.7 and 6.5 for A.1.1 y A.1.6.
• See 'L. Summary of link between risk, performance and remuneration' in section 6.3.
A.2
No
See section 6.4.
A.3
No
See section 6.4. See introduction.
A.4
No
See section 6.5.
B. Overall summary of application of the remuneration policy over the last fiscal year
B.1
No
For B.1.1, see sections 6.1, 6.2. and 6.3.
For B.1.2 y B.1.3 (not applicable) see section 6.5.
B.2
No
See 'L. Summary of link between risk, performance and remuneration' in section 6.3.
B.3
No
See sections 6.1, 6.2 and 6.3.
B.4
No
See section 6.5.
B.5
No
See section 6.2 and 6.3.
B.6
No
See 'A. Gross annual salary' in section 6.3.
B.7
No
See 'B. Variable remuneration' in section 6.1, as well as sections 6.2 and 6.3.
B.8
No
Not applicable.
B.9
No
See 'C. Main features of the benefit plans' in section 6.3.
B.10
No
See 'D. Other remuneration' in section 6.3.
B.11
No
See 'Terms and conditions of executive director contracts and other provisions applicable to all directors' in section
6.4.
B.12
No
See ' F. Remuneration of board members as representatives of the Bank' in section 6.3.
B.13
No
See note 5 to the consolidated financial statements.
B.14
No
See 'E. Insurance and other remuneration and benefits in kind' in section 6.4.
B.15
No
See 'F. Remuneration of board members as representatives of the Bank' in section 6.3.
B.16
No
No remuneration for this component.
C. Breakdown of the individual remuneration of directors
C
Yes
See section 9.5 'Statistical information on remuneration required by the CNMV'.
C.1 a) i)
Yes
See section 9.5 'Statistical information on remuneration required by the CNMV'.
C.1 a) ii)
Yes
See section 9.5 'Statistical information on remuneration required by the CNMV'.
C.1 a) iii)
Yes
See section 9.5 'Statistical information on remuneration required by the CNMV'.
C.1 a) iii)
Yes
See section 9.5 'Statistical information on remuneration required by the CNMV'.
C.1 b) i)
Yes
See section 9.5 'Statistical information on remuneration required by the CNMV'.
C.1 b) ii)
No
No remuneration for this component.
C.1 b) iii)
No
No remuneration for this component.
C.1 b) iv)
No
No remuneration for this component.
C.1 c)
Yes
See section 9.5 'Statistical information on remuneration required by the CNMV'.
C.2
Yes
See section 9.5 'Statistical information on remuneration required by the CNMV'.
D. Other information of interest
D
No
See section 4.7 'Remuneration committee activities in 2024'
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9.5 Statistical information on remuneration required by the CNMV
B. OVERALL SUMMARY OF HOW REMUNERATION POLICY WAS APPLIED DURING THE YEAR ENDED
B.4 Report on the result of the consultative vote at the general shareholders’ meeting on remuneration in the previous year,
indicating the number of votes in favour, votes against, abstentions and blank ballots:
Number
% of total
Votes cast
10,547,165,767
100.00 %
Number
% of votes cast
Votes in favour
9,381,395,305
88.95 %
Votes against
1,021,578,768
9.69 %
Blank
5,497,367
0.05 %
Abstentions
138,694,327
1.31 %
C. ITEMISED INDIVIDUAL REMUNERATION ACCRUED BY EACH DIRECTOR
Directors
Type
Period of accrual in year 2024
Ana Botín-Sanz de Sautuola y O’Shea
Executive Chair
From 01/01/2024 to 31/12/2024
Héctor Grisi Checa
CEO
From 01/01/2024 to 31/12/2024
José Antonio Álvarez Álvarez
Vice-Chair
From 01/01/2024 to 31/12/2024
Glenn Hutchins
Lead independent director
From 01/01/2024 to 31/12/2024
Homaira Akbari
Independent
From 01/01/2024 to 31/12/2024
Javier Botín-Sanz de Sautuola y O’Shea
Other external
From 01/01/2024 to 31/12/2024
Sol Daurella Comadrán
Independent
From 01/01/2024 to 31/12/2024
Henrique de Castro
Independent
From 01/01/2024 to 31/12/2024
Gina Díez Barroso
Independent
From 01/01/2024 to 31/12/2024
Luis Isasi Fernández de Bobadilla
Other External
From 01/01/2024 to 31/12/2024
Ramiro Mato García-Ansorena
Independent
From 01/01/2024 to 27/06/2024
Belén Romana García
Independent
From 01/01/2024 to 31/12/2024
Pamela Walkden
Independent
From 01/01/2024 to 31/12/2024
Germán de la Fuente
Independent
From 01/01/2024 to 31/12/2024
Bruce Carnegie-Brown
Independent
From 01/01/2024 to 22/03/2024
Juan Carlos Barrabés Cónsul
Independent
From 27/06/2024 to 31/12/2024
Antonio Francesco Weiss
Independent
From 27/06/2024 to 31/12/2024
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C.1 Complete the following tables on individual remuneration of each director (including the remuneration for exercising executive
functions) accrued during the year.
a) Remuneration from the reporting company:
i) Remuneration in cash (thousand euros)
Remuneration
for
Name
Fixed
remuneration
Per diem
allowances
membership
of Board's
committees
Short-term
variable
Salary remuneration
Long-term
variable
remuneration
Severance
pay
Other
grounds
Total
year
2024
Total
year
2023
Ana Botín-Sanz de
Sautuola y O’Shea
98
56
214
3,435
2,891
719
—
525 7,938 7,406
Héctor Grisi Checa
98
56
198
3,150
1,645
—
—
— 5,147 4,560
José Antonio
Álvarez Álvarez
128
56
198
—
342
473
—
2,460 3,657 3,776
Glenn Hutchins
415
97
188
—
—
—
—
—
700
372
Bruce Carnegie-
Brown
22
31
24
—
—
—
—
—
78
576
Homaira Akbari
98
88
99
—
—
—
—
—
285
265
Javier Botín-Sanz
de Sautuola y
O’Shea
98
46
—
—
—
—
—
—
144
137
Sol Daurella
Comadrán
98
88
106
—
—
—
—
—
292
249
Henrique de Castro
98
103
99
—
—
—
—
—
300
284
Gina Díez Barroso
98
71
56
—
—
—
—
—
225
211
Luis Isasi
Fernández de
Bobadilla
98
101
241
—
—
—
—
1,000 1,440 1,417
Ramiro Mato
García-Ansorena
48
60
163
—
—
—
—
—
271
518
Belén Romana
García
98
128
373
—
—
—
—
—
599
572
Pamela Walkden
98
105
178
—
—
—
—
—
381
341
Germán de la
Fuente
98
100
140
—
—
—
—
—
338
271
Juan Carlos
Barrabés Cónsul
50
31
47
—
—
—
—
—
128
—
Antonio Francesco
Weiss
50
22
—
—
—
—
—
—
72
—
Comments (Not included in the electronic submission to the CNMV)
The remuneration of Luis Isasi includes EUR 1,000 thousand for his role as non-executive Chair of the Santander España business unit and for
attending its board and committee meetings.
The variable remuneration only includes amounts related to the position of executive director of Banco Santander S.A.
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ii) Table of changes in share-based remuneration schemes and gross profit from consolidated shares or financial instruments
Name
Ana
Botín-
Sanz de
Sautuola
y O’Shea
Name
Héctor Grisi
Checa
Name of Plan
4th cycle of deferred variable remuneration
plan linked to multi-year targets (2019)
5th cycle of deferred variable remuneration
plan linked to multi-year targets (2020)
6th cycle of deferred variable remuneration
plan linked to multi-year targets (2021)
7th cycle of deferred variable remuneration
plan linked to multi-year targets (2022) in shares
7th cycle (Bis) of deferred variable remuneration
plan linked to multi-year targets (2022) in shares
options.
8th cycle of deferred variable remuneration
plan linked to multi-year targets (2023) in shares
9th cycle of deferred variable remuneration
plan linked to multi-year targets (2024)
Name of Plan
8th cycle of deferred variable remuneration
plan linked to multi-year targets (2023) in
shares
9th cycle of deferred variable remuneration
plan linked to multi-year targets (2024)
Financial instruments at start
of year 2024
No. of
No. of
equivalent
instruments
shares
106,464
106,464
74,547
74,547
533,023
533,023
249,335
249,335
671,339
249,335
572,107
572,107
—
—
Financial instruments at start
of year 2024
No. of
No. of
equivalent
instruments
shares
371,737
371,737
—
—
—
—
Financial instruments
granted during 2024 year
No. of
No. of
equivalent
instruments
shares
—
—
—
—
—
—
—
—
—
—
—
—
901,853
901,853
Financial instruments
granted during 2024 year
No. of
No. of
equivalent
instruments
shares
—
—
606,917
606,917
—
—
Gross profit
from shares
handed over or
No. of
consolidated
equivalent
Price of the
financial
No. of
shares /
consolidated
instruments
instruments
handed over
shares
(EUR thousand)
—
35,452
35,452
4.576
162
—
31,049
31,049
4.576
142
—
162,750
162,750
4.576
745
—
62,334
62,334
4.576
285
—
167,835
62,334
4.576
250
—
114,421
114,421
4.576
524
—
404,447
404,447
4.576
1,851
Financial instruments consolidated during 2024
Gross profit
from shares
handed over or
No. of
consolidated
equivalent
Price of the
financial
No. of
shares /
consolidated
instruments
instruments handed over
shares
(EUR thousand)
74,347
74,347
4.576
340
279,480
279,480
4.576
1,279
—
—
—
—
—
—
—
—
—
Instruments
matured but
not exercised
No. of
instruments
71,012
6,225
14,925
—
—
—
—
Instruments
matured but
not exercised
No. of
instruments
—
—
—
—
—
—
—
—
—
—
—
No. of
No. of
equivalent
instruments
shares
—
—
37,273
37,273
355,348
355,348
187,001
187,001
503,504
187,001
457,686
457,686
497,405
497,405
Financial instruments at end
of year 2024
No. of
No. of
equivalent
instruments
shares
297,390
297,390
327,437
327,437
Annual report 2024
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Financial instruments consolidated during 2024
Financial instruments at end
of year 2024
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Instruments
Financial instruments at start
Financial instruments
matured but
Financial instruments at end
of year 2024
granted during 2024 year
Financial instruments consolidated during 2024
not exercised
of year 2024
Gross profit
from shares
No. of
handed over or
equivalent
consolidated
No. of
No. of
shares /
Price of the
financial
No. of
No. of
equivalent
No. of
equivalent
No. of
handed
consolidated
instruments
No. of
No. of
equivalent
Name
Name of Plan
instruments
shares
instruments
shares
instruments
over
shares
(EUR thousand)
instruments
instruments
shares
4th cycle of deferred variable remuneration
plan linked to multi-year targets (2019)
71,149
71,149
—
—
—
—
23,693
23,693
4.576
108
—
47,456
—
—
—
José
Antonio
Álvarez
5th cycle of deferred variable remuneration
plan linked to multi-year targets (2020)
6th cycle of deferred variable remuneration
plan linked to multi-year targets (2021)
40,491
359,733
40,491
359,733
—
—
—
—
—
—
—
—
16,865
109,838
16,865
109,838
4.576
4.576
77
503
—
—
3,381
10,073
—
—
20,245
239,822
20,245
239,822
Álvarez
7th cycle of deferred variable remuneration
plan linked to multi-year targets (2022) in shares
168,316
168,316
—
—
—
—
42,079
42,079
4.576
193
—
—
—
126,237
126,237
7th cycle (Bis) of deferred variable remuneration
plan linked to multi-year targets (2022) in shares
options.
453,194
168,316
—
—
—
—
113,298
42,079
4.576
169
—
—
—
339,896
126,237
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Comments (Not included in the electronic submission to the CNMV)
• The variable remuneration only includes the amounts related to the position of executive director of Banco Santander S.A. For the construction of "short-term variable remuneration" and "long-term variable
remuneration" information has been used the consolidation criteria of CNMV. In 2024 there was no application of malus clauses.
• The variable remuneration consolidated as of the date of this report corresponds to the following plans:
1) Short-term variable remuneration:
a. 40% immediate payment of variable remuneration of the ninth cycle of the deferred multi-year objectives variable remuneration plan (2024).
b. First fifth deferred (12%) of variable remuneration of the eight cycle of the deferred multi-year objectives variable remuneration plan (2023).
c. Second fifth deferred (12%) of variable remuneration of the seventh cycle of the deferred multi-year objectives variable remuneration plan (2022).
2) Long-term variable remuneration:
a. Third deferred (first fifth subject to multi-year metrics) of variable remuneration of the sixth cycle of the deferred multi-year objectives variable remuneration plan (2021).
b. Fourth deferred (second fifth subject to multiyear metrics) of variable remuneration of the fifth cycle of the deferred multi-year objectives variable remuneration plan (2020).
c. Fifth deferred (third fifth subject to multiyear metrics) of variable remuneration of the fourth cycle of the deferred multi-year objectives variable remuneration plan (2019).
For the purpose of calculating the hypothetical current cash value of Gross profit from shares handed over or consolidated financial instruments, the same share price used for VR 2024 has been taken, calculated with the
weighted average daily volume of weighted average listing prices of Santander shares in the 50 trading sessions prior to the Friday (not inclusive) before 4 February 2025 (the date on which the board approved the 2024
bonus for executive directors), which was EUR 4.576 per share.
In the case of the 2022 VR share options, the gross profit of the hypothetical consolidated instruments has been calculated as the difference between the EUR 4.576 and the exercise price of the option in that remuneration
plan (EUR 3.088).
• And below are 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 33-66 percentile). Weight of 33.3%.
2) Fifth cycle of the deferred multi-year objectives variable remuneration plan (2020): 83.3% 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) Fourth 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%.
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iii) Long-term saving systems (thousand EUR)
Remuneration from
consolidation of rights
Name
to savings system
Ana Botín-Sanz de Sautuola y O’Shea
1,339
Héctor Grisi Checa
1,105
Contribution over the year from the company (EUR
thousand)
Savings systems with
Savings systems with
consolidated
unconsolidated
economic rights
economic rights
Amount of accumulated funds (EUR thousand)
2024
2023
Systems
Systems
with
Systems with
with
Systems with
consolidated
unconsolidate
consolidated
unconsolidate
economic
d economic
economic
d economic
Name
2024
2023
2024
2023
rights
rights
rights
rights
Ana Botín-Sanz de
1,339
1,144
—
—
54,731
—
49,257
—
Sautuola y O’Shea
Héctor Grisi Checa
1,105
966
1,299
—
585
—
José Antonio Álvarez
—
— —
—
— —
20,326
— —
19,495
—
iv) Details of other items (thousands of EUR)
Amount
remunerated
Name
Item
in 2024
Ana Botín-Sanz
Life insurance and complement
507
de Sautuola y
O’Shea
Other remuneration
30
Amount
remunerated
Name
Item
in 2024
Héctor Grisi
Life insurance and complement
389
Checa
Other remuneration
48
Amount
remunerated
Name
Item
in 2024
José Antonio
Life insurance and complement
849
Álvarez Álvarez
Other remuneration
7
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b) Remuneration of the company directors for seats on the boards of other group companies:
i) Remuneration in cash (thousands of EUR)
Name
Homaira Akbari
Fixed
remuneration
296
Per diem
allowances
—
Remuneration for
membership of
Board's
committees
—
Salary
—
Short-term
variable
remuneration
—
Long-term variable
remuneration
—
Severance pay
—
Other grounds
—
Total year 2024
296
Total year 2023
311
D. Henrique Manuel
Drummond Borges Cirne de
Castro
200
—
—
—
—
—
—
—
200
200
Pamela Walkden
129
—
—
—
—
—
—
—
129
152
D. José Antonio Álvarez
383
—
—
—
—
—
—
—
383
341
Comments (Not included in the electronic submission to the CNMV)
• The variable remuneration only includes the amounts related to the position of executive director of Banco Santander S.A.
ii) Table of changes in share/based remunerations schemes and gross profit from consolidated shares of financial instruments
Not applicable
iii) Long term saving systems (thousand EUR)
Not applicable
iv) Detail of other items (thousands of EUR)
Not applicable
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c) Summary of remuneration (thousands of EUR)
The summary should include the amounts corresponding to all the items of remuneration included in this report that have been accrued by
the director, in thousand euros.
Remuneration accrued in the company
Remuneration accrued in group companies
Name
Total cash
remuneration
Gross profit
on
consolidated
shares or
financial
instruments
Contribution
s to the
long-term
savings plan
Remuneratio
n for other
items
Total
2024
Total cash
remuneration
Gross profit
on
consolidated
shares or
financial
instruments
Contribution
s to the
long-term
savings plan
Remuneratio
n for other
items
Total
2024
Total 2024
Company +
group
companies
Ana Botín-Sanz de Sautuola
y O’Shea
7,938
3,959
1,339
537
13,773
—
—
—
—
—
13,773
Héctor Grisi Checa
5,147
1,619
1,105
437
8,308
—
—
—
—
—
8,308
José Antonio Álvarez
Álvarez
3,657
1,050
—
856
5,563
383
—
—
—
383
5,946
Glenn Hutchins
700
—
—
—
700
—
—
—
—
—
700
Bruce Carnegie-Brown
78
—
—
—
78
—
—
—
—
—
78
Homaira Akbari
285
—
—
—
285
296
—
—
—
296
581
Javier Botín-Sanz de
Sautuola y O’Shea
144
—
—
—
144
—
—
—
—
—
144
Sol Daurella Comadrán
292
—
—
—
292
—
—
—
—
—
292
Henrique de Castro
300
—
—
—
300
200
—
—
—
200
500
Gina Díez Barroso
225
—
—
—
225
—
—
—
—
—
225
Luis Isasi Fernández de
Bobadilla
1,440
—
—
—
1,440
—
—
—
—
—
1,440
Ramiro Mato García-
Ansorena
271
—
—
—
271
—
—
—
—
—
271
Belén Romana García
599
—
—
—
599
—
—
—
—
—
599
Pamela Walkden
381
—
—
—
381
129
—
—
—
129
510
Germán de la Fuente
338
—
—
—
338
—
—
—
—
—
338
Juan Carlos Barrabés
Cónsul
128
—
—
—
128
—
—
—
—
—
128
Antonio Francesco Weiss
72
—
—
—
72
—
—
—
—
—
72
Total
21,995
6,627
2,444
1,830
32,896
1,008
—
—
—
1,008
33,905
Comments (Not included in the electronic submission to the CNMV)
The remuneration of Luis Isasi includes EUR 1,000 thousand for his role as non-executive Chair of the Santander España business unit and for
attending its board and committee meetings.
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C.2 Indicate the evolution in the last five years of the amount and percentage variation of the remuneration accrued by each of the
directors of the listed company who have held this position during the year, the consolidated results the company and the average
remuneration on an equivalent basis with regard to full-time employees of the company and its subsidiaries that are not directors of
the listed company.
% var.
24/23
% var.
23/22
% var.
22/21
% var.
21/20
Directors' remuneration (EUR thousand)
2024
2023
2022
2021
2020
• Executive Directors
Ana Botín-Sanz de Sautuola y O’Shea
13,773
13%
12,239
4%
11,735
(5)%
12,288
52%
8,090
Héctor Grisi Checa
8,308
22%
6,793
—
—
—
—
—
—
• External Directors
1
José Antonio Álvarez Álvarez
5,946
3%
5,775
(40)%
9,575
(2)%
9,728
41%
6,877
Glenn Hutchins
700
88%
372
—
10
—
—
—
—
Bruce Carnegie-Brown
78
(86)%
576
(18)%
700
—
700
18%
595
Homaira Akbari
581
1%
576
(5)%
605
31%
461
19%
386
Javier Botín-Sanz de Sautuola y O’Shea
144
5%
137
6%
129
—%
129
6%
122
Sol Daurella Comadrán
292
17%
249
8%
230
(4)%
239
12%
214
Henrique de Castro
500
3%
484
5%
461
45%
319
36%
234
Gina Díez Barroso
225
7%
211
23%
172
32%
130
622%
18
Luis Isasi Fernández de Bobadilla
2
1,440
2%
1,417
—
1,412
—
1,406
49%
943
Ramiro Mato García Ansorena
271
(48)%
518
4%
500
—
499
16%
430
Belén Romana García
599
5%
572
4%
549
3%
533
28%
417
Pamela Walkden
510
3%
493
5%
470
38%
339
59%
214
Germán de la Fuente
338
25%
271
—
137
—
—
—
—
Juan Carlos Barrabés Cónsul
128
—
—
—
—
—
—
—
—
Antonio Francesco Weiss
72
—
—
—
—
—
—
—
—
Company’s performance
Underlying profit attributable to the Group (EUR mn)
12,574
14%
11,076
15%
9,605
11%
8,654
70%
5,081
Consolidated results of the Group
3 (EUR mn)
19,027
16%
16,459
8%
15,250
5%
14,547
—
(2,076)
Ordinary RoTE
16.27%
8%
15.06%
13%
13.37%
5%
12.73%
71%
7.44%
Employees' average remuneration
4 (EUR thousand)
61
5%
58
3%
56
1%
56
18%
47
Employees' average remuneration in Spain
5 (EUR
thousand)
75
3%
73
6%
68
10%
62
(2%)
63
1.Non-executive directors' remuneration fluctuations are caused by joining or leaving the Board of Directors and the difference in the amount of meetings they assist during the
year. Hence there is no correlation between their remuneration and the company performance.
2.The remuneration of Luis Isasi includes EUR 1,000 thousand for his role as non-executive Chair of the Santander España business unit and for attending its board and
committee meetings.
3. Group operating profit/(loss) before tax.
4. Employee average remuneration includes all concepts. Full-time equivalent data. Variable remuneration data accrued in the current year.
5. Total employees in Spain geography. Fixed remuneration + effective bonus received in the year. Not included rest of concepts. Not impacted by exchange rates.
Comments (Not included in the electronic submission to the CNMV)
• The variable remuneration only includes the amounts related to the position of executive director of Banco Santander S.A. For the construction of "short
term variable remuneration" and "long-term variable remuneration" information has been used the consolidation criteria of CNMV. In 2024 there was no
application of malus clauses.
• Total remuneration of executive directors is impacted by the excellent evolution of Santander share price. In 2024, the revaluation of the share price
used to set the 2024 variable remuneration (EUR 4.576) was +21%, so the Gross profit from shares handed over or consolidated financial instruments (Price x
Volume) increased due to such revaluation. If it had remained stable in EUR 3.793 (share price of VR 2023), the increase in the total remuneration of the
Executive Chair would have been +9% compared to the figure released in 2023 report (EUR 12,239 thousand). This variation is also highly impacted by the
consolidation in 2024 of previous deferrals with better levels of achievement (e.g. 2021 plan had a 91.6% of total achievement).
• And regarding the average remuneration of employees (EUR 61 thousand), to highlight the following ideas:
a. Normally the increases or decreases in remuneration are greater for the executive directors, depending on the results of the entity, because the
percentage of variable remuneration over fixed remuneration is lower in the average employee than in the executive directors.
b. Our local presence and global scale, based on three regions and ten core markets, and our vast branch network (c.8,000), have a direct impact on this
figure: more than a half of our employees are based in Mexico and South America (mainly in Brazil). The salaries of these employees are adapted to the
local cost of living. Therefore, the comparison with the remuneration of executive directors (which remuneration was set for living in a mature country)
is also impacted by the difference between both costs of living. Developing countries have a lower cost of living than the country where both directors
carried out their functions.
c. The different annual exchange rates have also an impact on this calculation where all local wages and salaries are translated into euros at the average
year-end exchange rate.
d. Finally, the average remuneration figure of Banco Santander is impacted by the different departures (retirements and early retirements) and annual new
hires, with the average cost of the former (a more senior profile) being higher than the latter (a more junior profile).
This annual report on remuneration has been approved by the board of directors of the company, at its meeting on 25 February 2025.
State if any directors have voted against or abstained from approving this report.
Yes • No •
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ECONOMIC AND
FINANCIAL REVIEW
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2024 Highlights
We delivered record profit for the third consecutive year, creating value
for shareholders...
→ Record profit on the back of 8mn new customers YoY and
strong revenue growth
FY’24 Attributable Profit
FY’24 Revenue
€12.6bn
€62bn
+14%
+8%
→ A groundbreaking year in our transformation driving
strong operating performance and profitable growth
Efficiency ratio
RoTE
41.8%
16.3%
–226bps
+121bps
→ Solid balance sheet with sound credit quality and capital
ratio reflecting all-time high organic generation
CoR
FL CET1
1.15%
12.8%
-3bps
+51bps
→ Delivering double-digit value creation and higher
shareholder remuneration
TNAVps + DPS
Cash DPS
+14%
+39%
… and achieved all our 2024 financial targets
2024 targets
2024 achievements
Revenue
A
High-single digit growth
+10%
ü
Efficiency ratio
c.42%
41.8%
ü
CoR
c.1.2%
1.15%
ü
FL CET1
>12.0%
after FL
B Basel III implementation
12.8%
ü
RoTE
>16%
16.3%
ü
A. YoY change in constant euros, except Argentina in current euros.
B. Fully-loaded definition as of 1 January 2025.
Note: YoY changes. P&L accounts presented on an underlying basis. FY'24 attributable profit in constant euros +15% vs. FY’23. FY'24 revenue in constant euros +10% vs. FY’23.
For more information on figures presented in constant euros and the alternative performance measures presented above, see section 8. 'Alternative performance measures'.
TNAVps + Cash dividend per share (DPS) includes the €9.50 cent cash dividend per share paid in May 2024 and the €10.00 cent interim cash dividend per share paid in
November 2024. Growth in Cash DPS corresponds to the total cash dividend per share paid during 2024 compared to the cash dividends per share paid during 2023. For more
details, see section 3.3 ‘Dividends and shareholder remuneration’ in the ‘Corporate governance’ chapter.
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1. ECONOMY, REGULATION AND COMPETITION
387
2. GROUP SELECTED DATA
392
3. GROUP FINANCIAL PERFORMANCE
394
3.1 Overview of Santander
394
3.2 Results
397
3.3 Balance sheet
411
3.4 Liquidity and funding management
415
3.5 Capital management and adequacy. Solvency ratios
423
3.6 Special situations and resolution
434
4. FINANCIAL INFORMATION BY SEGMENT
437
4.1 Description of segments during 2024
437
4.2 Summary of the Group's main business areas' income statements
439
4.3 Primary segments
441
4.4 Secondary segments
453
4.5 Appendix
462
5. RESEARCH, DEVELOPMENT AND INNOVATION (R&D&I)
478
6. SIGNIFICANT EVENTS SINCE YEAR END
481
7. TREND INFORMATION 2025
482
8. ALTERNATIVE PERFORMANCE MEASURES (APMs)
492
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1. ECONOMY, REGULATION
AND COMPETITION
Economy
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 in 2024:
• Eurozone (GDP in 2024: +0.7%). 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 remained resilient, with the
unemployment rate at record lows (6.3% at year end). Inflation
fell to around 2%, allowing the European Central Bank (ECB) to
start a cycle of interest rate cuts, ending the year at 3%.
• Spain (GDP in 2024: +3.2%). 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.
• United Kingdom (GDP in 2024: +0.9%). The economy recovered
in 2024 after stagnating in 2023, backed by consumption and
investment. The labour market remained tight at full
employment (4.3% at year end), although it began to show signs
of cooling. This added pressure on wages (which grew 5% on
average), which fuelled inflation through services. Inflation stood
above the Bank of England's 2% target, despite its downward
trend during the year, which allowed the central bank to initiate
interest rate cuts in August. By year-end, the Bank of England
reference rate stood at 4.75%.
• Portugal (GDP in 2024: +1.9%). The economy experienced a
slowdown in growth, due to the loss of momentum in
investment and exports, the latter due to the weak external
demand from the European Union (EU). The labour market
remained strong at full employment rates (6.6% in November
2024). Inflation was stable backed by little change in the more
volatile components. Both headline and core inflation ended the
year above the ECB's target, at 3% and 2.8%, respectively. Of
note was the reduction in the economy's debt ratios, especially
public debt, which, as a result of contained public deficit,
remained below 100% in 2024.
• Poland (GDP in 2024: +2.8%). The economy recovered sharply in
2024 after weak growth in 2023 (+0.1%). Domestic demand
offset the weak tone of foreign demand. The labour market
remained stressed due to labour shortages, yet maintained a full
employment rate which kept wage growth at double digits.
Inflation moderated in H1 2024 but rebounded in H2 2024,
ending the year at 4.7%, which led the central bank to hold the
official interest rate at 5.75%.
• US (GDP in 2024: +2.8%). GDP growth was more robust than
expected, backed by dynamic productivity increases. The
unemployment rate remained around 4%, favoured by the
increase in immigration. Inflation continued to moderate,
although it remained high, and drove the Federal Reserve (Fed)
to reduce the degree of monetary tightening by cutting interest
rates by 100 basis points in the second part of the year to 4.50%.
• Mexico (GDP in 2024: +1.5% estimated). The economy slowed in
2024, driven by lower construction growth (following the
completion of infrastructure projects the previous year), while
the manufacturing and services sectors remained resilient.
Inflation moderated at year-end, especially core inflation, which
fell below 4%. The central bank began its cycle of official rate
cuts, with gradual reductions from 11.25% at the end of 2023 to
10% at the end of 2024, and indicated there would be further
cuts.
• Brazil (GDP in 2024: +3.5% estimated). The economy maintained
robust growth, supported by the strength of private consumption
and investment. Inflation rebounded towards the end of the year,
to 4.8% (4.6% in 2023). The central bank concluded its cycle of
interest rate cuts in May 2024 at 10.5% and restarted interest
rate hikes in September, with interest rates ending the year at
12.25% (11.75% in December 2023).
• Chile (GDP in 2024: +2.3% estimated). The economy recovered in
2024, driven by consumption and exports. Inflation rebounded to
4.5% in 2024 compared to 3.9% in 2023, due to the rise of
electricity prices and its effects on other goods and services.
Medium-term inflation expectations remain anchored at the 3%
target. This allowed the central bank to continue its cycle of
interest rate cuts to reach 5% by the end of the year (compared
to 8.25% in 2023).
• Argentina (GDP in 2024: -2.5% estimated). The economy
completed its adjustment process, correcting its fiscal and
external imbalances, leading to surpluses. This enabled the
economy to begin recovering in the second half of the year after
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an intense recession in the first half. Inflation accelerated at the
beginning of the year (affected by the devaluation of the
Argentine peso in December 2023), but moderated significantly
by year-end, to monthly rates below 3%.
Financial markets' performance in 2024 was marked by the
landing expectations of the global economy, which was softer than
anticipated, supported by the beginning of the cycle of easing
monetary policy in the US and the eurozone, and the presidential
elections in the US, with some occasional bouts of volatility and an
increase in geopolitical risk in conflict areas.
Equity markets showed a positive trend. Gains were especially
positive in the US, due to the strength of the business cycle
together with expectations of tax cuts and deregulation. The
technology sector stood out above all, mainly driven by the rise of
artificial intelligence. In European stock markets, gains were more
moderate, weighed down by weaknesses in the German growth
model and the prospects of a more uncertain external environment
(due to the impact of US and Chinese policies).
In the sovereign debt market, despite the fact that the Fed began
the cycle of interest rate cuts, there was a rebound in long-term
debt yields in the US, reflecting expectations of a pick-up in
inflation. In Europe, strong interest in government bonds has
reduced spreads over the German bond yields. France was an
exception, weighed down by weakening macroeconomic
fundamentals and political uncertainty.
The US dollar strengthened against the euro towards the end of
the year, underpinned by the cyclical gap between the US and
eurozone economies, by geopolitical uncertainty (which benefits
the dollar as a safe-haven asset) and by the political agenda of the
new administration in the US (which reduces the Fed's room for
additional interest rate cuts).
In commodities, gold led gains, driven by geopolitical uncertainty
and declining official interest rates. Industrial metals benefited
from a revival of global manufacturing activity. In contrast, oil
prices fell amid concerns regarding oversupply and slow demand
growth.
Latin American markets had a volatile year, especially in the second
half of 2024, due to the combination of a more uncertain
international context and idiosyncratic factors in several countries.
Central banks continued the monetary policy easing cycles they
began in 2023, albeit gradually and still maintaining restrictive
positions, while paying attention to their differentials against the
Fed and the performance of their currencies against the US dollar.
Latin American currencies ended the year with sharp depreciations.
Volatility was most pronounced in the Brazilian market, where
Brazil’s central bank decided to restart the cycle of interest rate
hikes in the final months of the year, to curb pressures on the
Brazilian real and contain its possible upward impacts on inflation.
The banking sector benefitted from a favourable macroeconomic
environment and resilient labour markets which supported
continued solid revenue performance and contained portfolio
quality deterioration.
As a result, the market valuation of banks improved significantly
throughout the year, although significant differences in the ratio of
market capitalization to book value remained. While European
banks increased their market capitalization to an average of 0.8
times their book value, US banks were at levels of 1.6 times their
book value at year end.
The process of easing monetary policies is expected to have an
impact on net interest income which is expected to be offset by an
increase in credit volumes in an environment where a significant
increase in non-performing loans is not expected.
Banks maintained high solvency levels, as observed in the stress
tests conducted by supervisors and multilateral organizations, and
they absorbed the impact of the gradual liquidity withdrawal being
carried out by the major central banks.
The sector's outlook for 2025 is positive, with returns expected to
be slightly lower than those recorded in 2024 but well above those
observed in the last decade. In the short term, the main risks facing
the sector are essentially exogenous, mainly those related to
geopolitical risks.
The potential volatility in market valuations could be amplified by
the positions of non-bank financial institutions. The volatility
observed in the banking sector in August, although short lived, can
be seen as a wake-up call.
The medium-term challenges for banks remain unchanged. The
digital transition continues to force entities to make significant
investments in order to offer the best customer experience to be
able to face the competition from new competitors, while
improving efficiency through automatization and simplification of
processes, and maintaining safeguards against cyberattacks.
Additionally, the banking sector must continue to address potential
risks related to sustainability.
Regulatory and competitive environment
In 2024, the regulatory agenda was similar to that of 2023, with
prudential, sustainability, digitalization and retail banking issues
taking the spotlight. In Europe, European Parliament elections held
in June 2024 and the composition of the new European
Commission slowed down the approval of ongoing proposals and
the presentation of new ones. Competitiveness was consolidated
as a fundamental pillar of action, both for the new European
Commission - which agreed to introduce a competitiveness test in
new legislative proposals - and for the UK, which introduced it as a
regulatory objective.
The main regulatory topics in 2024 were:
1. Prudential and resolution: the European Banking Authority
(EBA) began work on the secondary regulation needed to allow
the Basel III reform in Europe (the new CRR3) to enter into force
on 1 January 2025. However, the implementation of the
Fundamental Review of the Trading Book (FRTB) was postponed
until January 2026 to settle differences in criteria between
jurisdictions and considering the different impacts, given the
delayed implementation in the UK and the uncertainty around
its implementation in the US. Additionally, the Basel Committee
continued to work on the new prudential framework for
cryptoasset exposures.
In Europe, discussions also centred on the capital buffer
framework (potential revision is being considered), and on
securitizations, which are expected to increase in a more
competitive environment. No significant progress was made on
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the crisis management framework review, as negotiations were
postponed until early 2025.
The Basel Committee and the Financial Stability Board (FSB)
continued to analyse the lessons learned from the Silicon Valley
Bank and Credit Suisse collapses, and also analysed a potential
framework for non-bank financial intermediaries (NBFIs).
2. Sustainability: In June 2024, the European Union adopted the
Corporate Sustainability Due Diligence Directive (CSDDD), which
establishes obligations for large companies to identify and
mitigate adverse effects on human rights and environmental
impacts derived from their operations and supply chains.
Regarding improvements in European competitiveness, the
European Commission reiterated its objective of reducing
reporting burdens, announcing that it will work to simplify the
requirements on taxonomy, reporting (Corporate Sustainability
Reporting Directive or CSRD) and due diligence regulation.
The European supervisory authorities (the EBA, the European
Insurance and Occupational Pensions Authority or EIOPA and
the European Securities and Markets Authority or ESMA)
published a common definition of greenwashing for the
financial sector, and the EBA worked on the integration of
climate and environmental risks into the Pillar 1 prudential
framework. In addition, guidelines have been developed for
bank transition plans in Europe and in other jurisdictions such as
the UK.
The Basel Committee aims to complement Pillar 3 transparency
requirements with information on environmental risk
management.
Other jurisdictions, such as Brazil, Mexico and Chile continued
to make progress in building a sustainability framework, with
initiatives related to taxonomies and risk management.
Finally, the International Sustainability Standards Board (ISSB)
continued to make progress in the design of reporting
requirements, consolidating its position as the international
standard.
3. Digitalization: The European Artificial Intelligence Regulation
(Regulation (EU) 2024/1689 or AI Act), which establishes a
harmonized legal framework for the development, marketing
and use of artificial intelligence (AI) systems in the European
Union, entered into force in August 2024. The regulation
classifies AI systems according to their level of risk, establishing
new requirements for high-risk systems and prohibiting those
that pose unacceptable risks. With this regulation, the EU
positions itself as one of the first jurisdictions to generally
regulate artificial intelligence. Internationally, forums such as
Group of Seven (G7) have established general principles, while
the best framework for the use of AI is still under debate.
The debate on Central Bank Digital Currencies (CBDCs)
continues. The EU continued to make progress on the digital
euro project. The vast majority of central banks in the EU are
exploring opportunities to issue a CBDC, although the focus is
shifting to wholesale CBDCs, where opportunities seem to be
clearer. The appetite to launch a digital currency decreased both
in the US and in the UK.
Some jurisdictions have begun to implement the
recommendations for the regulation of cryptoassets and
stablecoins issued by the FSB. Europe led the way with the
Markets in Crypto-Assets Regulation (MiCA) while other
countries such as Brazil and Argentina are exploring similar
frameworks.
In addition, Europe continued to work on a framework for data
sharing between financial institutions (Financial Data Access or
FiDA) whose objective is to give customers control and power
over their data, with the aim of generating a data economy.
Similar debates on data took place in Chile and the US.
Finally, payment regulation in many countries, both in terms of
fraud regulation in an increasingly digital world, and the
regulation of interchange fees were discussed.
4. Retail banking: The debate focused on the European
Commission's Retail Investment Strategy (RIS), a proposal
which aims to empower and protect retail investors in the EU by
amending several directives on capital markets, on which
negotiations are still ongoing. The debate also centred on the
Savings and Investments Union (formerly the Capital Markets
Union), which intends to create a single market for capital and
increase the number of retail investors participating in capital
markets. There was also an important focus on different
regulations on pricing and customer access to products in the
UK, Brazil and Argentina.
For more details, see note 1.e to the consolidated financial
statements.
Santander and public policy
We have a strong commitment to our customers to conduct our
business in a simple, personal and fair way. We are also committed
to constructively engaging with regulators and supervisors, both
regarding the regulation and frameworks that affect our business,
as well as the interests of our customers.
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Public policy priorities
Promote regulation that allows banks to finance the economy and be profitable and investable
• Banks must continue to play their fundamental role of financing the economy and promoting growth in a competitive
way, with profitability as their first line of defence.
1
• It is important that, when designing regulation and supervision, policymakers and regulators consider the need for a
balance between preserving financial stability and supporting economic growth.
• Lack of growth is the biggest threat to financial stability. As such, it is crucial to promote growth in order to finance the
current challenges: decarbonization, the demographic challenge and the digital transformation, among others.
• Predictability and transparency in capital, regulatory and supervisory requirements are key to preserve the ability of
banks to finance the economy and its transformation, as well as their ability to invest.
• For European banks to be competitive and do more for their customers, businesses and society as a whole, it is
necessary to guarantee consistent regulation and a single market. To do so, the EU needs a new Savings and
Investments Union as well as a Banking Union. Additionally, it is essential for the European regulation to recognize non-
EU countries, so that global European companies can continue to invest in other jurisdictions, improving their
competitiveness and contributing to growth in other regions.
Provide support so that sustainability can boost the competitiveness and growth of companies
2
• It is advisable to conduct regular impact assessments on the sustainability legislation currently in force, to evaluate its
contribution to a stable and fair transition.
• It is crucial for the regulatory framework to recognize specific needs given the heterogeneity in the starting points of
countries and sectors in terms of their transitions, to enable banks to finance both sustainable companies and especially
those undergoing a transition to become more sustainable.
• It is important that the regulatory framework does not add capital requirements associated with ESG risk management.
Leverage the benefits of a digital economy
• In a more digital world, banks must leverage technology to improve their value proposition to customers.
3
• It is positive for central banks to analyse the possibilities technology offers to increase innovation. Regarding payments,
a prudent approach to CBDCs is needed, to ensure they generate opportunities while mitigating associated risks. Retail
CBDCs could have significant impacts on financial stability and should not displace private payment solutions. In
contrast, wholesale CBDCs could act as enablers for a new tokenized economy.
• It is vital that all payment systems are subject to a common regulatory framework, to safeguard customer protection
and financial stability and promote interoperability between payment systems.
• Both education and public authorities' involvement are necessary to raise awareness of the increased risk of fraud in a
digital world. Moreover, it is crucial to facilitate a framework that addresses the entire fraud chain and adequately
allocates responsibilities to all parties involved, to avoid perverse incentives.
• Tokenization has the potential to transform financial markets by introducing new financial assets.
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Promote a data economy
• Data has gained importance as an asset in an increasingly digitalized economy and society. Leveraging the benefits of a
4
data-driven economy requires a change in the way in which companies are regulated, public institutions are managed
and citizens are served.
• Data exchange should be regulated following a cross-sector perspective, to promote synergies that could arise from
sharing information between sectors and thus maximize opportunities for innovation and preserve a competitive
environment. One of the clearest examples is the combination of public and private data.
• It is essential that regulation encourages innovation and the adoption of AI as a transformative technology, while also
curbing threats to people’s safety and fundamental rights. The major challenges linked to this technology are global and
must be tackled in a coordinated way across regions. Regulators and the industry must work together to establish
adequate guidelines and ensure their proper implementation.
Achieve the proper balance between customer protection and needs
• Regulation must promote both customer protection and service as well as product, service and channel innovation,
based on a market approach. The implementation of regulatory instruments such as caps on prices or bans on incentives
5
to sell products should be carefully assessed, as they can introduce complexity and rigidity into value propositions and
may even lead to the creation of an unregulated parallel market.
• Significant short- and medium-term investments are needed to finance the growing digitalisation of the economy and
the green transition. It is critical to ensure that retail investors have access to capital markets, on the base of transparent
and specific information on value-adding products. Additionally, incentives are key to provide advice and value-added
services to these investors in open distribution models.
• To ensure financial inclusion and prevent excessive leverage, is it important for consumers to access credit according to
their needs and solvency and that interest rates on consumer credit are set following market competition.
• Promoting financial education and empowering consumers with clear and targeted information is crucial to enable
consumers to make informed financial decisions. In this sense, the use of data and AI will be key to better fulfil our
customers' needs in a changing environment.
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2. GROUP SELECTED DATA
BALANCE SHEET (EUR million)
Dec-24
Dec-23
% Dec-24 vs. Dec-23
Dec-22
Total assets
1,837,081
1,797,062
2.2
1,734,659
Loans and advances to customers
1,054,069
1,036,349
1.7
1,036,004
Customer deposits
1,055,936
1,047,169
0.8
1,009,722
Total funds
A
1,348,422
1,306,942
3.2
1,239,981
Total equity
107,327
104,241
3.0
97,585
INCOME STATEMENT (EUR million)
2024
2023
% 2024 vs. 2023
2022
Net interest income
46,668
43,261
7.9
38,619
Total income
61,876
57,423
7.8
52,117
Net operating income
35,842
31,998
12.0
28,214
Profit before tax
19,027
16,459
15.6
15,250
Profit attributable to the parent
12,574
11,076
13.5
9,605
EPS, PROFITABILITY AND EFFICIENCY (%)
2024
2023
% 2024 vs. 2023
2022
Earnings per share (euro)
0.77
0.65
17.9
0.54
RoE
B
13.0
11.9
10.7
RoTE
B
16.3
15.1
13.4
RoA
B
0.76
0.69
0.63
RoRWA
B
2.18
1.96
1.77
Efficiency ratio
B
41.8
44.1
45.8
UNDERLYING INCOME STATEMENT
B (EUR million)
2024
2023
% 2024 vs. 2023
2022
Net interest income
46,668
43,261
7.9
38,619
Total income
62,211
57,647
7.9
52,154
Net operating income
36,177
32,222
12.3
28,251
Profit before tax
19,027
16,698
13.9
15,250
Profit attributable to the parent
12,574
11,076
13.5
9,605
% changes in constant euros (2024 vs. 2023):
NII: +9.5%; Total income: +9.9%; Net operating income: +14.6%; Profit before tax: +15.6%; Attributable profit: +15.3%.
Note: for Argentina and any grouping which includes it, the variations in constant euros have been calculated considering the
Argentine peso exchange rate on the last working day for each of the periods presented. Additionally, in 2024, for the Argentine
peso, we apply an alternative exchange rate that better reflects the evolution of inflation (we continue to apply the official ARS
exchange rate to all prior years). For further information, see section 8. 'Alternative performance measures' of this chapter.
Certain figures contained in this chapter, have been subject to rounding to enhance their presentation. Accordingly, in certain
instances, the sum of the numbers in a column or a row in tables contained in this report may not conform exactly to the total
figure given for that column or row.
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SOLVENCY (%)
Dec-24
Dec-23
Dec-22
Fully-loaded CET1 capital ratio
12.8
12.3
12.0
Fully-loaded total capital ratio
17.2
16.3
15.8
CREDIT QUALITY (%)
B
Dec-24
Dec-23
Dec-22
Cost of risk
C
1.15
1.18
0.99
NPL ratio
3.05
3.14
3.08
NPL coverage ratio
65
66
68
THE SHARE AND MARKET CAPITALIZATION
Dec-24
Dec-23
% Dec-24 vs. Dec-23
Dec-22
Number of shareholders
3,485,134
3,662,377
(4.8)
3,915,388
Number of shares (millions)
15,152
16,184
(6.4)
16,794
Share price (euro)
4.465
3.780
18.1
2.803
Market capitalization (EUR million)
67,648
61,168
10.6
47,066
Tangible book value per share (euro)
5.24
4.76
4.26
Price / Tangible book value per share (X)
0.85
0.79
0.66
CUSTOMERS (thousands)
Dec-24
Dec-23
% Dec-24 vs. Dec-23
Dec-22
Total customers
172,537
164,542
4.9
159,844
Active customers
D
103,262
99,503
3.8
99,190
Digital customers
E
59,317
54,161
9.5
51,471
OPERATING DATA
Dec-24
Dec-23
% Dec-24 vs. Dec-23
Dec-22
Number of employees
206,753
212,764
(2.8)
206,462
Number of branches
8,011
8,518
(6.0)
9,019
A. Includes customer deposits, mutual funds, pension funds and managed portfolios.
B. In addition to IFRS measures, we present non-IFRS measures including some which we refer to as underlying measures. These non-IFRS measures exclude items outside
the ordinary course of business and reclassify certain items under some headings of the underlying income statement as described at the end of section3.2 'Results' and in
section 8. 'Alternative Performance Measures' of this chapter. In our view, this provides a better year-on-year comparison.
C. Allowances for loan-loss provisions over the last 12 months / Average loans and advances to customers over the last 12 months.
D. Those customers who comply with the minimum balance and/or transactionality requirements as defined according to the business area.
E. Every physical or legal person, that, being part of a commercial bank, has logged in to its personal area of internet banking or mobile phone or both in the last 30 days.
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3. GROUP FINANCIAL
PERFORMANCE
Santander follows IFRS to report its results (see note 1.b to the
consolidated financial statements), which generally inform
reporting of our financial situation in this consolidated directors’
report. However, we also use non-IFRS measures and Alternative
Performance Measures (APMs) to assess our performance (see
section 8. 'Alternative Performance Measures' of this chapter).
Thus, the main adjustments to our IFRS results consist of:
• Underlying results measures: we present what we call
underlying results measures which exclude items outside the
ordinary course of business and reclassify certain items under
some headings of the underlying income statement as described
at the end of section 3.2 ‘Results’ in this chapter and in note 52.c
of the consolidated financial statements. In our view, this
provides a better year-on-year comparison.
In section 4. 'Financial information by segment', we present
results by primary and secondary segments only in underlying
terms in accordance with IFRS 8. We reconcile them in aggregate
terms with our IFRS consolidated results in note 52.c to the
consolidated financial statements.
• Local currency measures: we use certain non-IFRS financial
indicators in local currency to assess our ongoing operating
performance. They include the results from our subsidiary banks
outside the eurozone excluding the exchange rate impact (i.e., in
constant euros) except for Argentina and any grouping which
includes it. For further information, see section 8. 'Alternative
Performance Measures' of this chapter, which explains how we
exclude the exchange rate impact from financial measures in
local currency. Because changes in exchange rates have a non
operating impact on results, we believe assessing performance in
local currency provides management and investors a more
meaningful assessment of performance.
We have rounded certain figures in this consolidated directors'
report to present them more clearly. Thus, the amounts given in
the totals columns and rows of tables in certain instances may not
match the sum of that column or row.
3.1 Overview of 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, shareholders and
communities. 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 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.
Your Voice, 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 customers. By listening to our
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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 customer experience and strengthen our 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 through our
financial education programme, Finanzas para Mortales. Our
commitment 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 more information, see the 'Sustainability
statement' chapter.
• For our shareholders, we delivered solid financial results in 2024
and met all our 2024 targets which we upgraded in July 2024.
Once again, we achieved an all-time high attributable profit,
reaching EUR 12,574 million in 2024. This was supported by
revenue growth (+10% year-on-year in constant euros), better
efficiency (41.8% in 2024) and profitability improvement (RoTE
of 16.3% in 2024). At the same time, we maintained a solid
balance sheet with sound credit quality (cost of risk was 1.15% in
2024) and capital ratios (fully-loaded CET1 ratio at 12.8% at year
end).
Finally, we delivered higher shareholder remuneration with
double-digit value creation in 2024. Our TNAV per share plus
cash dividend per share grew 14% year-on-year and the cash
dividend per share paid during 2024 was 39% greater than cash
dividends per share paid during 2023.
Annual report 2024
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statement
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Looking ahead
We are in a phase of value creation which is underpinned by the
following three tenets:
• Think Value: delivering double-digit value creation, on average
through-the-cycle.
• Think Customer: building a digital bank with branches with well
targeted products and services to grow our customer base.
• Think Global: leveraging global and in-market scale, network
and tech to deliver world class-services and accelerate profitable
growth.
Our business model and transformation are already providing
sustained earnings and a stronger balance sheet, while enabling us
to accelerate profitable growth and value creation.
We manage the Group as ONE Santander through five global
businesses. As one of the largest retail and consumer banks in the
world, we have the scale to build our own technology platforms,
making it possible to offer customers the best products and
services while constantly reducing the cost-to-serve. This is a key
competitive advantage and is reflected in our results through
continuous improvement in operational leverage.
Our business model and our five global businesses boost value
creation by leveraging our global and in-market scale. This,
coupled with our network effects, drives revenue growth with
structurally lower costs thereby supporting our ambition of
becoming the most profitable bank in every market where we
operate.
The strategic priorities of our five global businesses for 2025 are
the following:
• Retail & Commercial Banking: i) continue our transformation
journey towards our vision of becoming a digital bank with
branches underpinned by a common operating model and a
global tech platform; ii) adapt our business model towards value
creation through stronger customer relationships and network
effects; and iii) strengthen structural efficiency on the back of our
transformed operating and business models to drive cost-to
serve efficiencies.
• Digital Consumer Bank: i) converge towards global platforms; ii)
grow and consolidate partnerships; iii) promote the network
effect through a complete product offering to our customers
leveraging the Group's capabilities; iv) continue gathering
customer deposits; and v) enhance and automate our originate
to-share model.
• Corporate & Investment Banking: i) deepen our client
relationships with a particular focus on the US; ii) fully leverage
our enhanced centres of expertise, increase connectivity around
the client agenda and further digitalize our business; iii) keep
evolving our active capital management and global operating
models; and iv) attract, develop and retain top talent.
• Wealth Management & Insurance: i) improve our customer
experience providing enhanced value-added products and
services and expanding our presence to new countries and
businesses; ii) boost operational leverage by globalizing service
and product factories/hubs and enhancing local distribution; and
iii) develop common global platforms to transform our
operations and distribution model leveraging the Group's
technology, data and AI.
• Payments: in PagoNxt, i) continue to scale up our global platform
of innovative payments and integrated value-added solutions; ii)
roll out our global payment platform to all our regions and the
open market. In Cards, expand our cards business while
improving customer experience.
Additionally, we are accelerating our global approach to
technology which drives innovation and excellence in a dynamic
and fast-changing environment. This is differentiating us from our
peers and giving us a competitive advantage. We have already built
a strong set of platforms, which provide services to customers
across our footprint and, at the same time, to the open market.
To conclude, we believe Grupo Santander is well positioned to
achieve our aim to be the best open financial services platform,
leveraging our unique business model and our network effects.
Annual report 2024
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statement
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3.2 Results
Statutory income statement
Condensed income statement
EUR million
Change
2024
2023 Absolute
%
2022
Net interest income
46,668
43,261
3,407
7.9
38,619
Net fee income (commission income minus commission expense)
13,010
12,057
953
7.9
11,790
Gains or losses on financial assets and liabilities and exchange differences (net)
2,273
2,633
(360)
(13.7)
1,653
Dividend income
714
571
143
25.0
488
Income from companies accounted for using the equity method
711
613
98
16.0
702
Other operating income/expenses
(1,500)
(1,712)
212
(12.4)
(1,135)
Total income
61,876
57,423
4,453
7.8
52,117
Operating expenses
(26,034)
(25,425)
(609)
2.4
(23,903)
Administrative expenses
(22,740)
(22,241)
(499)
2.2
(20,918)
Staff costs
(14,328)
(13,726)
(602)
4.4
(12,547)
Other general administrative expenses
(8,412)
(8,515)
103
(1.2)
(8,371)
Depreciation and amortization
(3,294)
(3,184)
(110)
3.5
(2,985)
Provisions or reversal of provisions
(3,883)
(2,678)
(1,205)
45.0
(1,881)
Impairment or reversal of impairment of financial assets not measured at fair value through
profit or loss (net)
(12,644)
(12,956)
312
(2.4)
(10,863)
Impairment of other assets (net)
(628)
(237)
(391)
165.0
(239)
Gains or losses on non-financial assets and investments (net)
367
313
54
17.3
12
Negative goodwill recognized in results
—
39
(39)
(100.0)
—
Gains or losses on non-current assets held for sale not classified as discontinued operations
(27)
(20)
(7)
35.0
7
Profit or loss before tax from continuing operations
19,027
16,459
2,568
15.6
15,250
Tax expense or income from continuing operations
(5,283)
(4,276)
(1,007)
23.6
(4,486)
Profit from the period from continuing operations
13,744
12,183
1,561
12.8
10,764
Profit or loss after tax from discontinued operations
—
—
—
—
—
Profit for the period
13,744
12,183
1,561
12.8
10,764
Profit attributable to non-controlling interests
(1,170)
(1,107)
(63)
5.7
(1,159)
Profit attributable to the parent
12,574
11,076
1,498
13.5
9,605
Annual report 2024
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Main income statement items
In 2024, the profit attributable to the parent reached a new record
of EUR 12,574 million, representing a year-on-year increase of
14%, compared to the EUR 11,076 million recorded in 2023. This
increase was backed by the good performance in total income,
which grew at a much higher pace than operating expenses.
This year-on-year comparison is impacted by a higher charge
relating to the temporary levy on revenue earned in Spain (EUR 335
million in 2024), charges in Q2 2024 related to the discontinuation
of our merchant platform in Germany and Superdigital in Latin
America (EUR 243 million, net of tax and minority interests) and the
provision in Q4 2024 for potential complaints related to motor
finance dealer commissions in the UK (EUR 260 million, net of tax
and minority interests). Additionally, there was a lower
contribution to the Deposit Guarantee Fund in Spain in 2024 and
there was no contribution to the Single Resolution Fund as
contributions ended in 2023.
Total income
Total income amounted to EUR 61,876 million, a new annual
record and an 8% increase year-on-year. Net interest income and
net fee income accounted for 96% of total income. By line item:
Net interest income
Net interest income amounted to EUR 46,668 million, 8% higher
than 2023.
The tables below show the average balances of each year
calculated as the monthly average over the period, which we
believe should not differ materially from using daily balances, and
the interest generated.
The tables also include average balances and interest rates in 2024
and 2023, based on the domicile of the entities at which the
relevant assets or liabilities are recorded. Domestic balances relate
to our entities domiciled in Spain. International balances relate to
entities domiciled outside of Spain (reflecting our foreign activity),
and are divided into mature markets (the US and Europe, except
Spain and Poland) and developing markets (South America, Mexico
and Poland).
The average balance of interest-earning assets in 2024 was 2%
higher than in 2023. The activity of our entities in both the
domestic market and in the international mature markets grew by
3% year-on-year, while it was stable in the international
developing markets.
The average balance of interest-bearing liabilities in 2024 was 2%
higher year-on-year, with growth in domestic (+6% year-on-year)
and international developing markets (+1% year-on-year), while it
decreased by 1% year-on-year in international mature markets.
The average return on interest-earning assets increased 32 bps
from 6.70% in 2023 to 7.02% in 2024, following a strong increase
in 2023. By market, it grew 49 bps year-on-year in the domestic
market, 54 bps year-on-year in our international mature markets,
and fell 14 bps year-on-year in our international developing
markets.
The average cost of interest-bearing liabilities rose 19 bps in 2024
to 4.33%. By market, it performed in line with the average yield on
assets, increasing in our domestic (+48 bps year-on-year) and
international mature (+67 bps year-on-year) markets, and it fell
1.1 pp year-on-year in our international developing markets.
We calculated the change in interest income/(expense) shown in
the tables below by:
• Applying the interest rate of the previous period to the difference
between the average balances from the current and previous
periods to obtain the change in volumes.
• Applying the difference between the rates from the current and
previous periods to the average balance from the previous year
to obtain the change in interest rate.
Both interest income and expense increased in 2024, mainly due to
higher average interest rates and, to a lesser extent, greater
volumes.
As a result, net interest income increased 8% year-on-year, with
generalized growth across all businesses and regions.
Especially of note was the performance in Retail, mainly in South
America due to the higher volumes and lower cost of deposits, and
in Spain, Poland and Portugal due to good margin management.
There was also strong growth in Consumer, especially in Europe
due to volumes growth and asset repricing, and in Brazil, favoured
by higher volumes and lower average interest rates.
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Average balance sheet - assets and interest income
EUR million
2024
2023
Assets
Average
balance
Interest
Average
rate
Average
balance
Interest
Average
rate
Cash balances at central banks and other deposits on demand, and loans
and advances to central banks and credit institutions
290,409
16,399
5.65%
310,887
16,467
5.30%
Domestic
108,705
4,701
4.32%
117,332
4,694
4.00%
International - Mature markets
114,350
5,700
4.98%
124,570
5,611
4.50%
International - Developing markets
67,354
5,998
8.91%
68,985
6,162
8.93%
of which:
Reverse repurchase agreements
65,939
5,644
8.56%
55,570
4,745
8.54%
Domestic
32,739
1,901
5.81%
24,292
1,336
5.50%
International - Mature markets
8,085
492
6.09%
4,845
278
5.74%
International - Developing markets
25,115
3,251
12.94%
26,433
3,131
11.85%
Loans and advances to customers
1,053,394
77,781
7.38%
1,036,547
70,619
6.81%
Domestic
265,043
12,272
4.63%
265,322
10,581
3.99%
International - Mature markets
562,488
33,884
6.02%
546,641
28,771
5.26%
International - Developing markets
225,863
31,625
14.00%
224,584
31,267
13.92%
of which:
Reverse repurchase agreements
61,793
5,922
9.58%
46,382
4,202
9.06%
Domestic
12,410
468
3.77%
8,725
261
2.99%
International - Mature markets
48,161
5,310
11.03%
36,546
3,809
10.42%
International - Developing markets
1,222
144
11.78%
1,111
132
11.88%
Debt securities
262,338
16,120
6.14%
224,304
14,501
6.46%
Domestic
94,607
3,478
3.68%
71,507
2,503
3.50%
International - Mature markets
64,140
2,174
3.39%
51,327
1,444
2.81%
International - Developing markets
103,591
10,468
10.11%
101,470
10,554
10.40%
Income from hedging operations
2,456
3,561
Domestic
152
(45)
International - Mature markets
2,001
2,955
International - Developing markets
303
651
Other interest
(21)
104
Domestic
(71)
(47)
International - Mature markets
42
63
International - Developing markets
8
88
Total interest-earning assets
1,606,141
112,735
7.02%
1,571,738
105,252
6.70%
Domestic
468,355
20,532
4.38%
454,161
17,686
3.89%
International - Mature markets
740,978
43,801
5.91%
722,538
38,844
5.38%
International - Developing markets
396,808
48,402
12.20%
395,039
48,722
12.33%
Other non-interest earning assets
197,131
201,365
Assets from discontinued operations
—
—
Average total assets
1,803,272
112,735
1,773,103
105,252
Annual report 2024
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Contents
Average balance sheet - liabilities and interest expense
EUR million
2024
2023
Liabilities and stockholders’ equity
Average
balance
Interest
Average
rate
Average
balance
Interest
Average
rate
Deposits from central banks and credit institutions
152,706
9,383
6.14%
175,164
9,350
5.34%
Domestic
60,256
2,960
4.91%
62,366
2,723
4.37%
International - Mature markets
44,633
2,447
5.48%
63,456
2,989
4.71%
International - Developing markets
47,817
3,976
8.32%
49,342
3,638
7.37%
of which:
Repurchase agreements
63,601
4,570
7.19%
55,619
3,737
6.72%
Domestic
37,663
1,973
5.24%
34,123
1,686
4.94%
International - Mature markets
8,773
579
6.60%
6,542
388
5.93%
International - Developing markets
17,165
2,018
11.76%
14,954
1,663
11.12%
Customer deposits
1,041,242
36,465
3.50%
1,011,471
33,238
3.29%
Domestic
321,519
4,944
1.54%
302,379
3,269
1.08%
International - Mature markets
472,750
16,283
3.44%
468,602
12,386
2.64%
International - Developing markets
246,973
15,238
6.17%
240,490
17,583
7.31%
of which:
Repurchase agreements
85,665
8,240
9.62%
73,193
7,084
9.68%
Domestic
14,124
586
4.15%
4,602
263
5.71%
International - Mature markets
48,115
5,278
10.97%
46,992
4,125
8.78%
International - Developing markets
23,426
2,376
10.14%
21,599
2,696
12.48%
Marketable debt securities
A
310,226
14,774
4.76%
288,345
12,751
4.42%
Domestic
147,606
5,330
3.61%
134,045
4,184
3.12%
International - Mature markets
117,291
5,323
4.54%
108,912
4,219
3.87%
International - Developing markets
45,329
4,121
9.09%
45,388
4,348
9.58%
of which:
Commercial paper
25,809
1,244
4.82%
29,195
1,329
4.55%
Domestic
17,046
727
4.26%
21,509
888
4.13%
International - Mature markets
7,143
339
4.75%
5,641
243
4.31%
International - Developing markets
1,620
178
10.99%
2,045
198
9.68%
Other interest-bearing liabilities
22,887
677
2.96%
23,139
638
2.76%
Domestic
17,151
490
2.86%
16,109
469
2.91%
International - Mature markets
3,707
17
0.46%
4,830
1
0.02%
International - Developing markets
2,029
170
8.38%
2,200
168
7.64%
Expenses from hedging operations
2,986
4,436
Domestic
1,159
1,045
International - Mature markets
1,325
1,756
International - Developing markets
502
1,635
Other interest
1,782
1,578
Domestic
741
567
International - Mature markets
282
304
International - Developing markets
759
707
Total interest-bearing liabilities
1,527,061
66,067
4.33%
1,498,119
61,991
4.14%
Domestic
546,532
15,624
2.86%
514,899
12,257
2.38%
International - Mature markets
638,381
25,677
4.02%
645,800
21,655
3.35%
International - Developing markets
342,148
24,766
7.24%
337,420
28,079
8.32%
Other non-interest bearing liabilities
171,069
173,299
Non-controlling interests
8,398
8,650
Total stockholders´ equity
96,744
93,035
Liabilities from discontinued operations
—
—
Average total liabilities and stockholders´ equity
1,803,272
66,067
1,773,103
61,991
A. Does not include contingently convertible preference shares and perpetual subordinated notes because they do not accrue interests. We include them under 'Other non
interest-bearing liabilities'.
Annual report 2024
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Business model
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Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Volume and profitability analysis
EUR million
2024 vs. 2023
Increase (decrease) due to
changes in
Interest income
Volume
Rate
Total change
Cash and deposits on demand and loans and advances to central banks and credit institutions
(985)
917
(68)
Domestic
(358)
365
7
International - Mature markets
(482)
571
89
International - Developing markets
(145)
(19)
(164)
of which:
Reverse repurchase agreements
522
377
899
Domestic
487
78
565
International - Mature markets
196
18
214
International - Developing markets
(161)
281
120
Loans and advances to customers
1,022
6,140
7,162
Domestic
(11)
1,702
1,691
International - Mature markets
854
4,259
5,113
International - Developing markets
179
179
358
of which:
Reverse repurchase agreements
1,411
309
1,720
Domestic
128
79
207
International - Mature markets
1,270
231
1,501
International - Developing markets
13
(1)
12
Debt securities
1,463
156
1,619
Domestic
844
131
975
International - Mature markets
401
329
730
International - Developing markets
218
(304)
(86)
Income from hedging income
(1,105)
—
(1,105)
Domestic
197
—
197
International - Mature markets
(954)
—
(954)
International - Developing markets
(348)
—
(348)
Other interest
(125)
—
(125)
Domestic
(24)
—
(24)
International - Mature markets
(21)
—
(21)
International - Developing markets
(80)
—
(80)
Total interest-earning assets
270
7,213
7,483
Domestic
648
2,198
2,846
International - Mature markets
(202)
5,159
4,957
International - Developing markets
(176)
(144)
(320)
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Contents
Volume and cost analysis
EUR million
Interest expense
Deposits from central banks and credit institutions
Domestic
International - Mature markets
International - Developing markets
Volume
Rate
(1,190)
1,223
(95)
332
(980)
438
(115)
453
Total change
33
237
(542)
338
of which:
Repurchase agreements
Domestic
582
182
251
105
833
287
International - Mature markets
144
47
191
International - Developing markets
256
99
355
Customer deposits
Domestic
International - Mature markets
International - Developing markets
792
218
111
463
2,435
1,457
3,786
(2,808)
3,227
1,675
3,897
(2,345)
of which:
Repurchase agreements
Domestic
International - Mature markets
International - Developing markets
729
413
101
215
427
(90)
1,052
(535)
1,156
323
1,153
(320)
Marketable debt securities
Domestic
International - Mature markets
International - Developing markets
785
449
342
(6)
1,238
697
762
(221)
2,023
1,146
1,104
(227)
of which:
Commercial paper
Domestic
International - Mature markets
(166)
(190)
69
81
29
27
(85)
(161)
96
International - Developing markets
(45)
25
(20)
Other interest-bearing liabilities
Domestic
International - Mature markets
16
30
0
23
(9)
16
39
21
16
International - Developing markets
(14)
16
2
Expenses from hedging expenses
Domestic
(1,450)
114
—
—
(1,450)
114
International - Mature markets
International - Developing markets
(431)
(1,133)
—
—
(431)
(1,133)
Other interest
204
—
204
Domestic
174
—
174
International - Mature markets
International - Developing markets
(22)
52
—
—
(22)
52
Total interest-bearing liabilities
Domestic
International - Mature markets
International - Developing markets
(843)
890
(980)
(753)
4,919
2,477
5,002
(2,560)
4,076
3,367
4,022
(3,313)
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Increase (decrease) due to
changes in
2024 vs. 2023
Domestic
International - Mature markets
International - Developing markets
Domestic
International - Mature markets
International - Developing markets
Domestic
International - Mature markets
International - Developing markets
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Net interest income. Volume, profitability and cost analysis summary
EUR million
2024 vs. 2023
Increase (decrease) due to
changes in
Volume
Rate
Total change
Interest income
270
7,213
7,483
648
(202)
(176)
2,198
5,159
(144)
2,846
4,957
(320)
Interest expense
(843)
890
(980)
(753)
4,919
2,477
5,002
(2,560)
4,076
3,367
4,022
(3,313)
Net interest income
1,113
(242)
778
577
2,294
(279)
157
2,416
3,407
(521)
935
2,993
Net interest income
EUR million
Net fee income
EUR million
38,619
43,261
46,668
2022
2023
2024
+8%
2024 vs. 2023
11,790
12,057
13,010
2022
2023
2024
+8%
2024 vs. 2023
Net fee income
EUR million
Change
2024
2023
Absolute
%
2022
Asset management business, funds and insurance
4,374
3,967
407
10.3
4,032
Credit and debit cards
2,352
2,386
(34)
(1.4)
2,139
Securities and custody services
1,289
1,086
203
18.7
986
Account management and availability fees
2,046
2,005
41
2.0
2,032
Cheques and payment orders
842
826
16
1.9
797
Foreign exchange
834
797
37
4.7
788
Charges for past-due/unpaid balances and guarantees
305
297
8
2.6
277
Bill discounting
190
208
(18)
(8.7)
227
Other
778
484
294
60.7
512
Net fee income
13,010
12,057
953
7.9
11,790
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Net fee income
Net fee income totalled 13,010 in 2024 and grew 8% compared to
2023, with good performance in all businesses except Payments,
whose year-on-year comparison was impacted by a one-time
positive fee from commercial agreements in Brazil in Q1 2023.
Gains or losses on financial assets and liabilities and
exchange differences (net)
Gains on financial transactions and liabilities and exchange
differences (net) stood at EUR 2,273 million in 2024 (EUR 2,633
million in 2023), affected by lower market activity in South
America, especially in Brazil, lower results in DCB Europe (DCBE)
and lower results in the Corporate Centre from foreign currency
hedges and risk transfer initiatives.
Gains and losses on financial assets and liabilities stem from mark
to-market valuations of the trading portfolio and derivative
instruments, which include spot market foreign exchange
transactions, sales of investment securities and liquidation of our
hedging and other derivative positions.
For more details, see note 43 to the consolidated financial
statements.
Exchange rate differences primarily show gains and losses from
foreign exchange and the differences that arise from converting
monetary items in foreign currencies to the functional currency,
and from selling non-monetary assets denominated in foreign
currency at the time of their disposal. Given Santander manages
currency exposures with derivative instruments, the changes in this
line should be analysed together with Gains/(losses) on financial
assets and liabilities.
For more details, see note 44 to the consolidated financial
statements.
Dividend income
Dividend income was EUR 714 million in 2024 (EUR 571 million in
2023).
Income from companies accounted for by the equity
method
The income from companies accounted for by the equity method
reached EUR 711 million in 2024 compared to EUR 613 million in
2023.
Other operating income/expenses
Other operating income recorded a loss of EUR 1,500 million in
2024 (compared to a EUR 1,712 million loss in 2023). These results
include the hyperinflation adjustment in Argentina and charge
relating to the temporary levy on revenue earned in Spain, which
was 50% higher than in 2023 (EUR 335 million in 2024 versus EUR
224 million in 2023). As mentioned, there was no contribution to
the SRF in 2024 and there was a lower contribution to the DGF in
Spain (EUR 11 million, net of tax and minority interests in 2024).
For more details, see note 45 to the consolidated financial
statement.
Operating expenses
Operating expenses amounted to EUR 26,034 million in 2024, 2%
higher than 2023, growing at a much lower pace than total
income.
Our cost management continued to focus on improving our
efficiency and, as a result, we remained among the most efficient
global banks in the world.
Our business transformation plan, ONE Transformation, continued
to progress across our footprint, reflected in an enhanced
operating performance and better business dynamics.
Operating expenses
EUR million
Change
2024
2023
Absolute
%
2022
Staff costs
14,328
13,726
602
4.4
12,547
Other administrative expenses
8,412
8,515
(103)
(1.2)
8,371
Information technology
2,622
2,471
151
6.1
2,473
Communications
404
414
(10)
(2.4)
410
Advertising
540
603
(63)
(10.4)
559
Buildings and premises
757
721
36
5.0
708
Printed and office material
89
97
(8)
(8.2)
96
Taxes (other than tax on profits)
556
570
(14)
(2.5)
559
Other expenses
3,444
3,639
(195)
(5.4)
3,566
Administrative expenses
22,740
22,241
499
2.2
20,918
Depreciation and amortization
3,294
3,184
110
3.5
2,985
Operating expenses
26,034
25,425
609
2.4
23,903
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Provisions or reversal of provisions
Provisions (net of provisions reversals) amounted to EUR 3,883
million in 2024 (EUR 2,678 million in 2023) and included the
charges after discontinuing our Superdigital platform in Latin
America in Q2 2024, and the provision in Q4 2024 for potential
complaints related to motor finance dealer commissions in the UK.
For more details, see note 25 to the consolidated financial
statements.
Impairment or reversal of impairment of financial
assets not measured at fair value through profit or
loss (net)
Impairment or reversal of impairment on financial assets not
measured at fair value through profit or loss (net) was EUR 12,644
million in 2024 (EUR 12,956 million in 2023).
Credit quality indicators remained robust, supported by good risk
management and the good performance of the economy in general
and labour markets in the countries where the Group operates.
Impairment of other assets (net)
The impairment on other assets (net) was EUR 628 million in 2024
and included the charge registered in Q2 2024 after discontinuing
our merchant platform in Germany, compared to an impairment of
EUR 237 million in 2023.
Gains or losses on non-financial assets and
investments (net)
Net gains on non-financial assets and investments (net) were EUR
367 million in 2024, which included the gain recorded in Q2 2024
from an agreement with Sodexo in Brazil compared to a gain of
EUR 313 million in 2023.
For more details, see note 48 to the consolidated financial
statements.
Negative goodwill recognized in results
No negative goodwill was recorded in 2024. Negative goodwill of
EUR 39 million was recorded in 2023.
Gains or losses on non-current assets held for sale not
classified as discontinued operations
This item, which mainly includes impairment of foreclosed assets
recorded and the sale of properties acquired upon foreclosure,
recorded a EUR 27 million loss in 2024 (EUR 20 million loss in
2023).
For more details, see note 49 to the consolidated financial
statements.
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Impairment or reversal of impairment of financial assets not measured at fair value through profit or loss (net)
EUR million
2024
2023
2022
Financial assets at fair value through other comprehensive income
—
44
7
Financial assets at amortized cost
12,644
12,912
10,856
Impairment or reversal of impairment of financial assets not measured at fair value through
profit or loss and net gains and losses from changes
12,644
12,956
10,863
Impairment on other assets (net)
EUR million
2024
2023
2022
Impairment of investments in subsidiaries, joint ventures and associates, net
—
—
—
Impairment on non-financial assets, net
628
237
239
Tangible assets
386
136
140
Intangible assets
231
73
75
Others
11
28
24
Impairment on other assets (net)
628
237
239
Profit or loss before tax from continuing operations
Profit before tax was EUR 19,027 million in 2024, +16% year-on
year, supported by the good performance of net interest income,
net fee income and cost discipline.
Tax expense or income from continuing operations
Total income tax was EUR 5,283 million in 2024 (EUR 4,276 million
in 2023).
Profit attributable to the parent
EUR million
Profit attributable to non-controlling interests
Profit attributable to non-controlling interests increased slightly to
EUR 1,170 million in 2024 (EUR 1,107 million in 2023), in part due
to the accelerated placement of ordinary shares of Santander Bank
Polska S.A. in the year.
For more details, see note 28 to the consolidated financial
statements.
Profit attributable to the parent
Profit attributable to the parent amounted to EUR 12,574 million in
2024, 14% higher than the EUR 11,076 million in 2023. These
results do not fully reflect profit performance due to the
aforementioned impacts.
Earnings per share
EUR
9,605
11,076
12,574
2022
2023
2024
+14%
2024 vs. 2023
0.539
0.654
0.771
2022
2023
2024
+18%
2024 vs. 2023
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Underlying income statement
→Third consecutive year of record revenue, which boosted profit to an all-time high in 2024.
→Efficiency improvement and profitable growth, supported by the operational leverage resulting from the execution of
ONE Transformation.
→Risk indicators were robust, underpinned by good risk management, the economic environment and low
unemployment.
Attributable profit
RoTE
RoRWA
EUR 12,574 million
+14% in euros
+15% in constant euros
16.3%
+1.2 pp
2.18%
+0.2 pp
Note: changes vs. 2023.
Below is the condensed income statement adjusted for items
beyond the ordinary course of business and reclassification of
certain items under some headings of the underlying income
statement, as described in note 52.c of the consolidated financial
statements, where our segments' aggregate underlying
consolidated results are reconciled to the statutory consolidated
results.
The Group presents, both at the total Group level and for each of
the business units, the changes in euros registered in the income
statement, as well as variations excluding the exchange rate effect
(i.e., in constant euros) except for Argentina and any grouping
which includes it. For further information, see section 8.
'Alternative Performance Measures' of this chapter.
At the Group level, exchange rates had an unfavourable impact of
2.0 pp on total income and a favourable impact of 1.6 pp on costs
in the year.
To better understand the business trends, we reclassified certain
items under some headings of the underlying income statement.
These items explain the differences between the statutory and
underlying income statements and were:
Condensed underlying income statement
EUR million
2024
2023
Absolute
%
% excl. FX
2022
Net interest income
46,668
43,261
3,407
7.9
9.5
38,619
Net fee income
13,010
12,057
953
7.9
10.7
11,790
• In 2024:
• The impact of the temporary levy on revenue earned in Spain
totalling EUR 335 million in Q1 2024, which was reclassified
from total income to other gains (losses) and provisions.
• Provisions which strengthen the balance sheet in Brazil of EUR
352 million in Q2 2024 (EUR 174 million net of tax and
minority interests).
• In 2023:
• The impact of the temporary levy on revenue earned in Spain
totalling EUR 224 million in Q1 2023, which was reclassified
from total income to other gains (losses) and provisions.
• Provisions which strengthen the balance sheet in Brazil of EUR
235 million (net of tax and minority interests) in Q1 2023.
Change
Gains (losses) on financial transactions and exchange differences
2,273
2,633
(360)
(13.7)
(11.3)
1,653
Other operating income
260
(304)
564
—
—
92
Total income
62,211
57,647
4,564
7.9
9.9
52,154
Administrative expenses and amortizations
(26,034)
(25,425)
(609)
2.4
4.0
(23,902)
Net operating income
36,177
32,222
3,955
12.3
14.6
28,251
Net loan-loss provisions
(12,333)
(12,458)
125
(1.0)
2.0
(10,509)
Other gains (losses) and provisions
(4,817)
(3,066)
(1,751)
57.1
58.9
(2,492)
Profit before tax
19,027
16,698
2,329
13.9
15.6
15,250
Tax on profit
(5,283)
(4,489)
(794)
17.7
19.0
(4,486)
Profit from continuing operations
13,744
12,209
1,535
12.6
14.4
10,764
Net profit from discontinued operations
—
—
—
—
—
—
Consolidated profit
13,744
12,209
1,535
12.6
14.4
10,764
Non-controlling interests
(1,170)
(1,133)
(37)
3.3
5.3
(1,159)
Net capital gains and provisions
—
—
—
—
—
—
Profit attributable to the parent
12,574
11,076
1,498
13.5
15.3
9,605
Underlying profit attributable to the parent
A
12,574
11,076
1,498
13.5
15.3
9,605
A. Excluding net capital gains and provisions.
For more details, see note 52.c to the consolidated financial statements.
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In both 2024 and 2023, profit attributable to the parent and
underlying profit were the same (EUR 12,574 million in 2024 and
EUR 11,076 million in 2023), as profit was not affected by results
that fell outside the ordinary course of our business. As a result,
both attributable profit and underlying profit increased 14% in
euros and 15% in constant euros compared to 2023.
This year-on-year comparison is impacted by a higher charge
relating to the temporary levy on revenue earned in Spain, charges
in Q2 2024 related to the discontinuation of our merchant platform
in Germany and Superdigital in Latin America (EUR 243 million, net
of tax and minority interests) and by the provision in Q4 2024 for
potential complaints related to motor finance dealer commissions
in the UK (EUR 260 million, net of tax and minority interests).
Additionally, in 2024, there was a lower contribution to the Deposit
Guarantee Fund in Spain and there was no contribution to the
Single Resolution Fund as contributions ended in 2023.
Total income amounted to EUR 62,211 million in 2024, a new
record, up 8% year-on-year. In constant euros, total income rose
10% year-on-year, as follows:
• Net interest income (NII) totalled EUR 46,668 million, a new
record, and 10% higher year-on-year, with growth across all
businesses and regions:
• NII grew strongly in Retail (+11%), which represents 60% of
the Group's NII. It rose in all three regions, especially in South
America, which benefitted from higher volumes and lower cost
of deposits, and in Europe, driven by good margin
management.
• In Consumer (23% of Group NII), it rose 6%, on the back of
active loan repricing and volumes growth in Europe, and higher
volumes and lower interest rates in Brazil.
• In CIB, NII increased strongly (+15%), boosted by our three
main businesses.
• In Wealth, NII rose 8%, driven by good margin management in
a favourable macroeconomic environment and strong
commercial activity in Private Banking.
• In Payments, NII increased 13%, with growth in both Cards and
PagoNxt, due to higher activity.
• Net fee income reached EUR 13,010 million, also a new record,
up 11% year-on-year, with growth across all businesses if we
exclude from Payments the one-time positive fee from
commercial agreements in Cards in Brazil in Q1 2023. We
recorded this excellent net fee income performance as a result of
executing our strategy to capture network effects across the
Group. By business:
• In Retail, net fee income increased 7%, supported by higher
commercial activity and a larger customer base. By country, the
good performances in Brazil, the US, Mexico and Poland stood
out.
• In Consumer, net fee income rose 24%, driven mainly by
growth in Europe due to increased insurance penetration,
volumes growth in Brazil and auto fee income in the US.
• In CIB, net fee income increased 21%, with all businesses
growing but particularly Global Banking on the back of the US
Banking Build-Out (US BBO) initiative.
• In Wealth, net fee income rose 19%, with growth across all
three businesses, mainly due to good commercial activity in
Private Banking and Asset Management.
• In Payments, net fee income declined 1%, affected by the
impact from the aforementioned one-time positive fee in Q1
2023 in Cards (+1% excluding it), while net fee income rose 5%
in PagoNxt.
• Gains on financial transactions and exchange differences
declined 11%, due to lower results in CIB, mainly in Brazil
affected by weaker market activity (although it showed some
recovery in the second half of the year), lower results in DCBE
and lower results in the Corporate Centre due to impacts from
foreign currency hedges and risk transfer initiatives.
• Other operating income registered a positive result in 2024
compared to a negative result in 2023. These results include the
negative impact of the hyperinflation adjustment in Argentina
and there was a lower contribution to the DGF in Spain (EUR 11
million, net of tax and minority interests in 2024). As already
mentioned, there was no contribution to the SRF in 2024 as
contributions ended in 2023.
This positive total income performance, with double-digit growth,
enabled us to exceed our growth target for 2024, which we
upgraded in Q2.
Total income
EUR million
52,154
57,647
62,211
2022
2023
2024
A. In constant euros: +10%.
+8%
A
2024 vs. 2023
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Administrative expenses and amortizations in 2024 totalled EUR
26,034 million, up 2% year-on-year. In real terms, excluding the
impact of average inflation and in constant euros, they grew 1%
year-on-year (for further information, see section 8. 'Alternative
performance measures' of this chapter).
We continued to progress with our business transformation plan,
ONE Transformation, reflected in greater operational leverage and
better business dynamics. By business and in constant euros:
• In Retail, administrative expenses and amortizations grew 3%. In
real terms they fell 1%, driven by the transformation efforts
through organizational and process simplification and the
implementation of our global platform. The efficiency ratio
improved 3.4 pp year-on-year to 39.7%.
• In Consumer, administrative expenses and amortizations fell 1%
year-on-year. In real terms, they fell 4%, even as we continued
to invest in operational leasing and check-out lending platforms
and in business growth. This good performance was due to our
focus on efficiency and transformation and resulted in a 2.7 pp
improvement in the efficiency ratio year-on-year to 40.1%.
• In CIB, administrative expenses and amortizations increased
14%, due to our investments in new products, capabilities and
technology. The efficiency ratio stood at 45.6%, maintaining a
leading position among peers.
• In Wealth, administrative expenses and amortizations rose 9%,
due to investments in key initiatives, such as reinforcing teams in
Private Banking. The efficiency ratio improved 2.0 pp year-on
year to 35.9%.
• In Payments, administrative expenses and amortizations rose
8%, rising 5% in real terms due to investments in global
platforms in both PagoNxt and Cards. The efficiency ratio stood
at 45.0%.
Our cost management continued to focus on structurally improving
our efficiency. As a result, we remained one of the most efficient
banks in the world with an efficiency ratio of 41.8%. This is a 2.3 pp
improvement year-on-year and is in line with our target of around
42%, which we upgraded in Q2.
Efficiency ratio (cost to income)
%
All in all, net operating income reached EUR 36,177 million, up
12% year-on-year (+15% in constant euros). This strong
performance was driven by both the good performance of revenue
and the efficiency improvement.
Net loan-loss provisions in 2024 amounted to EUR 12,333 million,
down 1% year-on-year. In constant euros, they increased just 2%,
with our credit portfolio growing 1%.
The good performance in Retail (which accounts for around 50% of
the Group's total net loan-loss provisions), due to lower provisions
in Europe, partially offset the expected increases in Consumer, as a
result of the normalization in Europe, higher volumes, increased
Swiss franc mortgage portfolio coverage, lower portfolio sales
than last year and some regulatory charges.
The cost of risk stood at 1.15%, better than the Group’s 2024
target to maintain the cost of risk around 1.2%.
For more details, see section 2. 'Credit risk' in the 'Risk
management and compliance' chapter.
Net loan-loss provisions
EUR million
45.8
44.1
41.8
2022
2023
2024
-2.3 pp
2024 vs. 2023
10,509
12,458
12,333
2022
2023
2024
A. In constant euros: +2%.
-1%
A
2024 vs. 2023
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Other gains (losses) and provisions recorded a loss of EUR 4,817
million in 2024, versus a EUR 3,066 million loss 2023, mainly
affected by the aforementioned charges in 2024 (the
discontinuation our merchant platforms in Germany and
Superdigital in Latin America and the provision for potential
complaints related to motor finance dealer commissions in the UK),
and the higher impact of the temporary levy on revenue earned in
Spain.
Profit attributable to the parent in 2024 was EUR 12,574 million,
a new record, and 14% more than in 2023 (+15% in constant
euros), supported by solid total income growth, which greatly
outstripped cost growth, which grew practically in line with
inflation, and controlled cost of risk (improving 3 bps year-on
year).
Underlying profit attributable to the parent
EUR million
RoTE stood at 16.3% (15.1% in 2023) in line with our full-year
target to exceed 16%, which we upgraded in Q2.
RoRWA stood at 2.18% (1.96% in 2023) and earnings per share
stood at EUR 0.77 (EUR 0.65 in 2023).
RoTE
%
9,605
11,076
12,574
2022
2023
2024
A. In constant euros: +15%.
+14%
A
2024 vs. 2023
13.4
15.1
16.3
2022
2023
2024
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3.3 Balance sheet
Balance sheet
EUR million
Assets
Dec-24
Dec-23
Absolute
%
Dec-22
Cash, cash balances at central banks and other deposits on demand
192,208
220,342
(28,134)
(12.8)
223,073
Financial assets held for trading
230,253
176,921
53,332
30.1
156,118
Non-trading financial assets mandatorily at fair value through profit or loss
6,130
5,910
220
3.7
5,713
Financial assets designated at fair value through profit or loss
7,915
9,773
(1,858)
(19.0)
8,989
Financial assets at fair value through other comprehensive income
89,898
83,308
6,590
7.9
85,239
Financial assets at amortized cost
1,203,707
1,191,403
12,304
1.0
1,147,044
Hedging derivatives
5,672
5,297
375
7.1
8,069
Changes in the fair value of hedged items in portfolio hedges of interest risk
(704)
(788)
84
(10.7)
(3,749)
Investments
7,277
7,646
(369)
(4.8)
7,615
Assets under reinsurance contracts
222
237
(15)
(6.3)
308
Tangible assets
32,087
33,882
(1,795)
(5.3)
34,073
Intangible assets
19,259
19,871
(612)
(3.1)
18,645
Tax assets
30,596
31,390
(794)
(2.5)
29,987
Other assets
8,559
8,856
(297)
(3.4)
10,082
Non-current assets held for sale
4,002
3,014
988
32.8
3,453
Total assets
1,837,081
1,797,062
40,019
2.2
1,734,659
Liabilities and equity
Financial liabilities held for trading
152,151
122,270
29,881
24.4
115,185
Financial liabilities designated at fair value through profit or loss
36,360
40,367
(4,007)
(9.9)
40,268
Financial liabilities at amortized cost
1,484,322
1,468,703
15,619
1.1
1,423,858
Hedging derivatives
4,752
7,656
(2,904)
(37.9)
9,228
Changes in the fair value of hedged items in portfolio hedges of interest rate risk
(9)
55
(64)
(116.4)
(117)
Liabilities under insurance contracts
17,829
17,799
30
0.2
16,426
Provisions
8,407
8,441
(34)
(0.4)
8,149
Tax liabilities
9,598
9,932
(334)
(3.4)
9,468
Other liabilities
16,344
17,598
(1,254)
(7.1)
14,609
Liabilities associated with non-current assets held for sale
—
—
—
—
—
Total liabilities
1,729,754
1,692,821
36,933
2.2
1,637,074
Shareholders' equity
135,196
130,443
4,753
3.6
124,732
Other comprehensive income
(36,595)
(35,020)
(1,575)
4.5
(35,628)
Non-controlling interest
8,726
8,818
(92)
(1.0)
8,481
Total equity
107,327
104,241
3,086
3.0
97,585
Total liabilities and equity
1,837,081
1,797,062
40,019
2.2
1,734,659
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Change
Executive summary
A
Loans and advances to customers (excluding reverse repos)
Positive activity in the year supported slight credit growth, still
affected by prepayments.
EUR 1,017 billion
+1%
è By segment:
Loan growth in Consumer, Payments and Wealth, offset the
slight decrease in Retail in Europe and the US.
Retail
Consumer
CIB
-1%
+4%
0%
Customer funds (deposits excluding repos + mutual funds)
Customer funds increased 4% year-on-year, above loan
growth, reflecting the interest rate environment.
EUR 1,211 billion
+4%
è By product:
Growth in all products, rising double digits in mutual funds and
with a pickup in demand deposits at the end of the year, mainly
in Europe, following interest rate cuts.
Demand
Time
Mutual funds
+2%
+1%
+18%
A. 2024 vs. 2023 changes in constant euros. For more information on figures presented in constant euros and the exclusion of repurchase agreements and
reverse repurchase agreements, see section 8 'Alternative performance measures'.
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Loans and advances to customers
Loans and advances to customers totalled EUR 1,054,069 million
in December 2024, a 2% increase year-on-year.
For the purpose of analysing traditional commercial banking loans,
the Group uses gross loans and advances to customers excluding
reverse repurchase agreements (repos) which amounted to EUR
1,016,546 million in December 2024, a 2% increase year-on-year.
To facilitate the analysis of Santander's management, the
comments below do not consider the exchange rate impact (i.e., in
constant euros), except for Argentina and any grouping which
includes it. For further information, see section 8. 'Alternative
performance measures' of this chapter.
Gross loans and advances to customers, excluding reverse repos
and in constant euros, grew 1% year-on-year, as follows:
• In Retail, which represents 60% of the Group's loans, gross loans
and advances fell 1%, as growth in corporate and personal loans
Loans and advances to customers
EUR million
partially offset falls in mortgages and SMEs, affected by
prepayments. By region, increases in North and South America
partially offset declines in Europe.
• In Consumer, which represents 21% of the Group's loans, gross
loans and advances grew 4% driven by good performance in the
auto markets in Europe and Latin America.
• In CIB, which represents 14% of the Group's loans, lending
volumes were stable, as growth in North and South America
compensated the lower volumes in Europe.
• In Wealth and Payments gross loans and advances increased 8%
and 15%, respectively.
Change
Dec-24
Dec-23
Absolute
%
Dec-22
Commercial bills
53,209
55,628
(2,419)
(4.3)
56,688
Secured loans
557,463
554,375
3,088
0.6
565,609
Other term loans
296,339
295,485
854
0.3
290,031
Finance leases
40,120
38,723
1,397
3.6
39,833
Receivable on demand
10,756
12,277
(1,521)
(12.4)
11,435
Credit cards receivable
24,928
24,371
557
2.3
22,704
Impaired assets
33,731
34,094
(363)
(1.1)
32,888
Gross loans and advances to customers (excluding reverse repos)
1,016,546
1,014,953
1,593
0.2
1,019,188
Reverse repos
59,648
44,184
15,464
35.0
39,500
Gross loans and advances to customers
1,076,194
1,059,137
17,057
1.6
1,058,688
Loan-loss allowances
22,125
22,788
(663)
(2.9)
22,684
Net loans and advances to customers
1,054,069
1,036,349
17,720
1.7
1,036,004
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Gross loans and advances to customers
Gross loans and advances to customers
(excluding reverse repos)
(excluding reverse repos)
EUR billion
% of operating areas. December 2024
1,019
1,015
1,017
Dec-22
Dec-23
Dec-24
0%
A
Dec 24 vs.
Dec 23
A. In constant euros: +1%.
At the end of 2024, 65% of loans and advances to customers
maturing in more than one year had a fixed interest rate, while the
other 35% had a floating interest rate:
• In Spain, 51% of loans and advances to customers were fixed
rate and 49% were floating rate.
• Outside of Spain, 68% of loans and advances to customers were
fixed rate and 32% were floating rate.
As of December 2024, gross loans and advances to customers
excluding reverse repos maintained a diversified structure between
the markets in which the Group operates: Europe (55%), DCB
Europe (14%), North America (16%) and South America (15%).
Retail: 60%
Consumer: 21%
CIB: 14%
Wealth: 3%
Payments: 2%
For more details on the distribution of loans and advances to
customers by business line, see note 10.b to the consolidated
financial statements.
Tangible assets amounted to EUR 32,087 million in December
2024, down EUR 1,795 million compared to December 2023.
Intangible assets stood at EUR 19,259 million, of which EUR 13,438
million corresponds to goodwill (which decreased EUR 579 million)
and EUR 5,821 million to other intangible assets, mostly IT
developments (down EUR 33 million year-on-year).
Loans and advances to customers with maturities exceeding one year as at 31 December 2024
EUR million
Domestic
International
TOTAL
Amount
Weight as %
of the total
Amount
Weight as %
of the total
Amount
Weight as %
of the total
Fixed
70,166
51%
371,080
68%
441,246
65%
Floating
67,461
49%
172,313
32%
239,774
35%
TOTAL
137,627
100%
543,393
100%
681,020
100%
Annual report 2024
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946
968
978
184
209
234
1,130
1,177
1,211
Dec-22
Dec-23
Dec-24
+3%
A
+12%
+1%
• Total
• Mutual
funds
B
• Deposits
excluding
repos
Dec-24 vs.
Dec-23
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Contents
Total customer funds
EUR million
Change
Dec-24
Dec-23
Absolute
%
Dec-22
Demand deposits
677,818
661,262
16,556
2.5
710,232
Time deposits
299,801
307,085
(7,284)
(2.4)
236,099
Mutual funds
A
233,722
208,528
25,194
12.1
184,054
Customer funds
1,211,341
1,176,875
34,466
2.9
1,130,385
Pension funds
A
15,646
14,831
815
5.5
14,021
Managed portfolios
A
43,118
36,414
6,704
18.4
32,184
Repos
78,317
78,822
(505)
(0.6)
63,391
Total funds
1,348,422
1,306,942
41,480
3.2
1,239,981
A. Including managed and marketed funds.
Customer deposits grew 1% year-on-year to EUR 1,055,936
million at 31 of December 2024.
Santander uses customer funds (customer deposits, excluding
repos, plus mutual funds) to analyse traditional retail banking
funds, which stood at EUR 1,211,341 million and grew 3% year
on-year.
To facilitate the analysis of Santander's management, the
comments below do not consider the exchange rate impact (i.e., in
constant euros), except for Argentina and any grouping which
includes it. For further information, see section 8. 'Alternative
performance measures' of this chapter.
Compared to December 2023, customer funds rose 4% in constant
euros, as follows:
• By product, customer deposits excluding repos rose 2%, with an
increase in both demand (+2%) and time deposits (+1%). Mutual
funds rose 18%, with widespread increases across all businesses
and regions.
Customer funds (excluding repos)
EUR billion
A. In constant euros: +4%.
B. Including managed and marketed funds.
• By business, customer funds increased 4% in Retail, driven by
time deposits in Europe and South America. In Consumer,
customer funds rose 11%, in line with our retail deposit
gathering strategy. In CIB, customer funds fell 7%, as a result of
our strategy to reduce excess corporate deposits while in Wealth
they were up 12%, driven mainly by mutual funds.
• By secondary segment, customer funds increased practically in
all countries. Of note, was South America where they grew 13%.
In Europe, they increased 2% and in North America they were
stable, as double-digit growth in Mexico offset the decrease in
the US.
Customer funds maintained a diversified structure across the
markets in which the Group operates: Europe (62%), DCB Europe
(7%), North America (14%) and South America (17%). The weight
of demand deposits was 56% of total customer funds, while time
deposits accounted for 25% and mutual funds 19%.
In addition to capturing customer deposits, for strategic reasons
the Group has a selective policy on issuing securities in
international fixed income markets and strives to adapt the
frequency and volume of its market operations to the structural
liquidity needs of each unit, as well as to the receptiveness of each
market.
For more details on debt issuances and maturities, see section 3.4
'Liquidity and funding management' in this chapter.
Customer funds (excluding repos)
% of operating areas. December 2024
Retail: 62%
Consumer: 11%
CIB: 13%
Wealth: 14%
Annual report 2024
414
Executive
Regulatory ratios
The LCR and NSFR ratios amply exceed regulatory
requirements (both 100%)
LCR
A
NSFR
168%
126%
vs. 100% regulatory
vs. 100% regulatory
requirement
requirement
A. Group LCR.
Summary
Debt issuances in 2024
We issued close to EUR 80 bn in debt in 2024, diversified by
product, currency, country and maturity
EUR 52.6 bn
Medium- and long-term debt
EUR 26.6 bn
Securitizations
Comfortable and stable funding structure
High contribution from customer deposits
100%
Loan-to-deposit ratio
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3.4 Liquidity and funding management
Liquidity management
Our structural liquidity management aims to optimize maturities
and costs, and to avoid undesired liquidity risks in funding
Santander’s operations, and is based on these principles:
• Decentralized liquidity model.
• Medium- and long-term (M/LT) funding needs must be covered
by medium- and long-term instruments.
• High contribution from customer deposits due to the retail
nature of the balance sheet.
• Wholesale funding sources diversified by instrument, investor,
market, currency and maturity.
• Limited use of short-term funding.
• Sufficient liquidity reserves (including standing facilities/discount
windows at central banks) to be used in adverse situations.
• Group and subsidiary-level compliance with regulatory liquidity
requirements.
To apply these principles effectively across the Group, we
developed a unique, three-pronged management framework:
• Organization and governance. Strict organization and
governance that involve subsidiaries’ senior managers in
decision-making and our global strategy. Decisions about
structural risks, including liquidity and funding risk, falls on the
local asset and liability committees (ALCOs), which coordinate
with the global ALCO. The global ALCO is empowered by Banco
Santander, S.A.'s board of directors under the corporate Asset
and Liability Management (ALM) framework.
This enhanced governance model is part of our risk appetite
framework, which meets regulatory and market standards for
strong risk management and control systems.
• Balance sheet and liquidity risk. In-depth analysis that supports
decisions and controls to ensure liquidity levels cover short- and
long-term needs with stable funding sources, and optimize
funding costs.
Each subsidiary has a conservative risk appetite framework
(based on their commercial strategy) which sets out the liquidity
risk management framework. Subsidiaries must work within the
framework limits to achieve their strategic objectives.
• Liquidity management adapted to the needs of each business.
We prepare a liquidity plan every year to achieve:
• a solid balance sheet structure, with a diversified footprint in
wholesale markets;
• stable liquidity buffers and limited asset encumbrance; and
• compliance with regulatory and other metrics included in each
entity’s risk appetite statement.
We monitor all these plan's components throughout the year.
Santander continues to carry out the Internal Liquidity Adequacy
Assessment Process (ILAAP) as part of its other risk management
and strategic processes to measure liquidity in ordinary and
stressed scenarios. The quantitative and qualitative items we
consider are also inputs for the Supervisory Review and Evaluation
Process (SREP).
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Once a year, we must submit a board-approved ILAAP assessment
to supervisors that demonstrates our funding and liquidity
structures will remain solid in all scenarios and our internal
processes will ensure sufficient liquidity (based on analyses that
each subsidiary conducts according to local liquidity management
models).
We believe that our governance structure is robust and suited to
identify, manage, monitor and control liquidity risks. It rests on
common frameworks, conservative principles, clearly defined roles
and responsibilities, a consistent committee structure, effective
local lines of defence and well-coordinated corporate supervision.
We produce frequent, detailed liquidity monitoring reports for
management, control and reporting purposes. We also regularly
send the most relevant information to senior managers, the
pertinent ALCOs, the executive committee and the board of
directors.
Over the last few years, Santander and each subsidiary have
developed a comprehensive special situations management
framework that centralizes our governance for such scenarios. It
contains contingency funding plans that form part of our
governance model, including feasible, pre-assessed actions that
follow a defined timeline, are categorized and prioritized, and
provide for sufficient liquidity and execution time to mitigate stress
scenarios. For more details, see the '3.6 Special situations and
resolution' section in this chapter.
Funding strategy and liquidity in 2024
Funding strategy and structure
Our funding strategy is focused on extending our management
model to all subsidiaries.
It is based on a model of autonomous subsidiaries that are
responsible for covering their own liquidity needs. This enables us
to better understand the advantages derived from our solid retail
banking model to maintain sound liquidity positions in the Group
and our core local units, even amid market stress.
We have adapted our funding strategies to business trends, market
conditions and new regulations. In 2024, we improved specific
aspects, without significant changes in liquidity management or
funding policies and practices. We believe this will enable us to
start 2025 from a strong position and with no growth restrictions.
Our subsidiaries continue to apply the same funding and liquidity
management strategies to:
• maintain sufficient and stable medium- and long-term wholesale
funding levels;
• ensure the right volume of assets that can be discounted in
central banks as part of the liquidity buffer; and
• generate liquidity from the retail business.
These developments provide Santander with a very strong funding
structure with the following characteristics:
• Customer deposits are our main funding source. At the end of
December 2024, they represented just over two thirds of net
liabilities (i.e. of the liquidity balance sheet). They are highly
stable because they mainly arise from retail customer activity.
For more details, see the Liquidity in 2024 section.
Group liquidity balance sheet
%. December 2024
• ST funding
• Equity and other
Financial assets
68%
68%
6%
4%
26%
14%
11%
2%
Assets
Liabilities
• M/LT debt issuance
•
Securitizations
Fixed assets & other
and others
Loans and advances
•
Customer
to customers
deposits
Note: Liquidity balance sheet for management purposes is the consolidated balance
sheet, net of trading derivatives and interbank balances. For more information on
the consolidated balance sheet, see the 'Consolidated financial statements' chapter.
• M/LT funding (including M/LT issuances and securitizations)
accounted for nearly 18% of net liabilities at the end of 2024
(similar to 2023).
• The outstanding balance of M/LT debt issued (to third parties) at
the end of 2024 was EUR 222,623 million. Our maturity profile is
comfortable and well balanced by instrument and market with a
weighted average maturity of 4.2 years (slightly above average
maturity of 4.1 years at the end of 2023).
These tables show our funding by instrument over the past three
years and by maturity profile:
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Group. Stock of medium- and long-term debt issuances
A
EUR million
2024
2023
2022
AT1/Preferred shares
Tier 2/Subordinated
Senior debt
Covered bonds
Total
11,254
23,468
137,693
50,207
222,623
9,892
20,708
125,951
49,639
206,190
8,693
17,573
116,350
44,073
186,689
A. Placed in markets. Does not include securitizations, agribusiness notes and real estate credit notes.
Group. Distribution by contractual maturity
EUR million
AT1/Preferred shares
Tier 2/Subordinated
Senior debt
Covered bonds
Total
0-1
month
—
—
5,662
993
6,655
1-3
months
—
1,542
3,791
1,258
6,591
3-6
months
—
—
5,558
1,322
6,880
6-9
months
—
394
4,961
492
5,848
9-12
months
—
1,442
1,322
356
3,119
12-24
months
—
2,573
20,426
11,397
34,397
2-5
years
—
3,400
60,153
22,509
86,062
more than
5 years
11,254
14,117
35,820
11,880
73,071
Total
11,254
23,468
137,693
50,207
222,623
Note: There are no additional guarantees for any of the debt issued by the Group’s subsidiaries.
In addition to M/LT wholesale debt issuances, we have
securitizations placed in the market as well as collateralized and
other specialist funding totalling EUR 66,971 million (including
EUR 12,226 million in debt instruments placed with private
banking clients in Brazil). The average maturity was around 1.9
years.
This chart shows the similarity of the geographic breakdown of our
loans and advances to customers and M/LT wholesale funding
across our footprint. This distribution is very similar to 2023.
Loans and advances to customers and M/LT
wholesale funding
%. December 2024
Europe
North America
South America
DCB Europe
Wholesale funding from short-term issuance programmes is a
residual part of Santander’s funding structure, which is related to
treasury activities and is comfortably covered by liquid assets.
The outstanding short-term wholesale funding balance at the end
of 2024 was EUR 38,450 million, of which 54% was in European
Commercial Paper, US Commercial Paper and domestic
programmes issued by Banco Santander, S.A.; 14% in certificates of
deposit and commercial paper programmes in the UK; 19% in
Santander Consumer Finance commercial paper programmes; and
13% in issuance programmes in other subsidiaries.
Liquidity in 2024
The key liquidity takeaways from 2024 were:
• basic liquidity ratios remained at comfortable levels;
• regulatory liquidity ratios were well above minimum
requirements; and
• our asset encumbrance from funding operations was moderate.
In 2024, the main central banks started to cut interest rates, with
different levels of intensity. However, Brazil's central bank started
to raise its interest rate at the end of 2024, while in Poland,
interest rates remained stable during the year.
In 2024, the repayment of the ECB TLTRO-III funding programme
launched by the European Central Bank was completed, being
replaced by a mix of funding sources that allowed regulatory
liquidity ratios and internal metrics to remain at appropriate levels.
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The liquidity position remained solid, and commercial activity did
not consume significant liquidity during the year, as the growth in
lending was matched by the growth in deposits.
i) Basic liquidity ratios at comfortable levels
At the end of 2024, Santander recorded:
• A credit to net assets ratio (i.e., total assets minus trading
derivatives and inter-bank balances) of 68%, a similar level to
previous years.
• A net loan-to-deposit ratio (LTD) of 100%, a very comfortable
level (well below 120%) although slightly higher than the 99%
at 2023 year-end.
• A customer deposit plus M/LT funding to net loans and advances
ratio of 128%, slightly above the 127% in 2023.
• Limited recourse to short-term wholesale funding (around 2-3%
of total funding), in line with previous years.
• An average structural surplus balance, defined as the excess of
structural funding sources (deposits, M/LT funding and capital)
against structural liquidity needs from fixed assets and loans, of
EUR 340,438 million in the year.
The consolidated structural surplus stood at EUR 363,828 million
at year-end. Fixed-income assets (EUR 230,862 million), equities
(EUR 20,368 million) and net interbank and central bank deposits
(EUR 151,048 million) were partly offset by short-term
wholesale funding (-EUR 38,450 million). This totalled around
24% of our net liabilities (similar to previous years).
This table shows Santander’s basic liquidity monitoring metrics in
recent years:
Group’s liquidity monitoring metrics
%
2024
2023
2022
Loans
A / Net assets
68%
68%
72%
Loan
A -to-deposit ratio (LTD)
100%
99%
103%
Customer deposits and medium- and
long-term funding / Loans
A
128%
127%
121%
Short-term wholesale funding / Net
liabilities
2%
3%
3%
Structural liquidity surplus (% of net
liabilities)
24%
23%
19%
A. Net loans and advances to customers.
The table below shows the principal liquidity ratios of our
secondary segments as at 31 December 2024:
Secondary segments' liquidity metrics
%. December 2024
LTD ratio
Deposits + M/
(loans
A /
LT funding /
deposits)
Loans
A
Spain
76%
142%
United Kingdom
107%
110%
Portugal
100%
112%
Poland
76%
139%
DCB Europe
168%
85%
US
108%
120%
Mexico
90%
121%
Brazil
94%
131%
Chile
134%
97%
Argentina
68%
147%
Group
100%
128%
A. Net loans and advances to customers.
In 2024, the key drivers of Santander's and its subsidiaries' liquidity
were:
• Commercial activity has provided liquidity during the year.
• Issuance activity continued to be intense, to finance issuance
maturities and repayment of central bank funding, even
exceeding the funding plan proposed at the beginning of the
year, taking advantage of favourable market conditions, to pre
fund part of the 2025 maturities.
In 2024, Santander issued EUR 79,127 million in M/LT funding (at
year-average exchange rates).
By instrument (in constant euros, i.e., excluding exchange rate
impact), issuances of M/LT fixed income debt (i.e., covered bonds,
senior debt, subordinated debt and capital hybrid instruments)
increased by around 18% to EUR 52,575 million in the year. Activity
in senior debt issuances (mainly TLAC eligible) increased
significantly compared to 2023. The volume of covered bond
issuances in 2024 was similar to the previous year. Securitizations
and structured finance totalled EUR 26,552 million in 2024, a 33%
increase year-on-year.
Spain issued the most M/LT fixed income debt (excluding
securitizations), followed by the UK. The UK and Spain registered
the highest absolute increases in the year. The main year-on-year
decrease occurred in Santander Consumer Finance.
The US and Santander Consumer Finance were the main issuers of
securitizations.
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The charts below show issuances in the year by instrument and
region:
Distribution by instrument and region
%. December 2024
Senior debt: 47%
Securitizations and
other: 34%
Covered bonds: 11%
AT1/Preferred: 5%
Tier 2/Subordinated: 3%
Europe: 56%
North America: 21%
South America: 7%
DCB Europe: 16%
The issuance of eligible hybrid instruments, such as AT1 or
subordinated debt, depends on risk-weighted asset growth. In
2024, they reduced their weight versus 2023, to the benefit of
senior debt. The weight of covered bonds decreased in 2024, to the
benefit of securitizations.
In 2024, at average exchange rates, the Group issued EUR 20,800
million in subordinated debt instruments, including EUR 13,848
million in senior non-preferred debt from Banco Santander, S.A.
and Poland and senior preferred from the holdings in the UK and
the US; EUR 2,762 million in subordinated debt issued from Banco
Santander, S.A., EUR 2,881 million of AT1 eligible hybrid
instruments were issued from Banco Santander, S.A. and EUR
1,308 million hybrid instruments were issued from Brazil, as AT1
eligible and as subordinated for the Group.
In conclusion, in 2024, we retained comfortable access to all our
markets having issued and securitized debt in 17 currencies,
involving 30 major issuers from 14 countries and an average
maturity of 4.9 years, similar to 2023 (4.8 years).
ii) Compliance with regulatory ratios
Within the liquidity management model, Santander manages
implementation, monitoring and compliance with the liquidity
requirements established under international financial regulations.
Liquidity Coverage Ratio (LCR)
As the regulatory LCR requirement has been at 100% since 2018,
we set a risk appetite of 110% at the consolidated and subsidiary
level.
Our good baseline short-term position liquidity, combined with the
management of the ratio in all units, enabled us to maintain levels
of over 100% in the year, both at the consolidated and individual
level.
The Group LCR ratio as at end of December 2024 was 168%. This
ratio is calculated using an internal methodology that determines
the common minimum percentage of simultaneous coverage in all
Group jurisdictions, taking into account all existing restrictions on
the transfer of liquidity in third countries. This methodology
reflects more accurately the Group’s resilience to liquidity risk.
This internal ratio is very much in line with the level that would be
achieved under the approach followed until mid-2024, which did
not include restrictions on liquidity transfer between subsidiaries.
The Consolidated LCR ratio as at end of December 2024 was 153%,
comfortably exceeding internal and regulatory requirements. This
ratio is calculated, at the request of the ECB, using a consolidation
methodology that does not take into account any excess liquidity in
excess of 100% of the LCR outflows and that is subject to
transferability restrictions (legal or operational) in third countries,
even if such excess liquidity can be used to cover additional
outflows within the country itself, which is not subject to any
restrictions.
However, as the Group manages the liquidity on a decentralized
level, the consolidated metrics are not considered a representative
indicator of the Group's liquidity position.
This table shows that all our subsidiaries substantially exceeded
the required minimum in 2024 and the comparison versus 2023.
Santander UK’s figures only include activities that the Financial
Services and Markets Act 2000 leaves within the Ring-Fenced
Bank.
Liquidity Coverage Ratio (LCR)
%
December 2024
December 2023
Parent bank
162%
159%
United Kingdom
154%
159%
Portugal
142%
150%
Poland
220%
221%
Santander Consumer Finance
263%
357%
US
179%
138%
Mexico
212%
171%
Brazil
168%
154%
Chile
181%
207%
Argentina
226%
226%
Group LCR
168%
—
Consolidated LCR
153%
166%
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NSFR (Net Stable Funding Ratio)
Regulation (EU) 2019/876 of the European Parliament dictated
that entities must have a net stable funding ratio greater than
100% from June 2021.
The NSFR is a structural measure that gives banks an incentive to
ensure long-term stability and proper management of maturity
mismatches by funding long-term assets with long-term liabilities.
It is the quotient of available stable funding (ASF) and required
stable funding (RSF).
ASF comprises sources of funding (i.e., capital and other liabilities)
considered stable over one year. As RSF primarily refers to any
asset deemed illiquid over one year, it needs to be matched with
stable sources of funding.
The risk appetite limit for the NSFR is set at 103% at the
consolidated and subsidiary level.
The high weight of customer deposits (which are more stable);
permanent liquidity needs deriving from commercial activity
funded by medium- and long-term instruments; and limited
recourse to short-term funding help maintain our balanced
liquidity structure as reflected in our consolidated and subsidiary
NSFRs which all exceeded 100% in December 2024.
The following table provides details by entity as well as a
comparison with 2023. Santander UK’s figures only include
activities that the Financial Services and Markets Act 2000 leaves
within the Ring-Fenced Bank. All figures were calculated using
European regulations.
Net Stable Funding Ratio
%
December 2024
December 2023
Parent bank
122%
117%
United Kingdom
137%
138%
Portugal
120%
117%
Poland
156%
157%
Santander Consumer Finance
116%
111%
US
120%
117%
Mexico
128%
129%
Brazil
114%
113%
Chile
112%
115%
Argentina
181%
202%
Group
126%
123%
iii) Asset Encumbrance
Santander’s use of assets as collateral in structural balance sheet
funding sources is moderate.
Per the 2014 European Banking Authority (EBA) guidelines on
disclosure of encumbered and unencumbered assets, the concept
of asset encumbrance includes on-balance-sheet assets pledged as
collateral in operations to obtain liquidity, off-balance-sheet assets
received and reused for a similar purpose, and other assets with
liabilities for reasons other than funding.
The tables below show the asset encumbrance data we must
submit to the EBA as of 2024.
On-balance-sheet encumbered assets amounted to EUR 299.8
billion, of which 56% were loans and advances (e.g., mortgages
and corporate loans). Off-balance-sheet encumbrance stood at
EUR 161.0 billion and mainly related to debt securities received as
collateral in reverse repos and reused ('rehypothecated').
In total, encumbered assets amounted to EUR 460.9 billion, giving
rise to associated liabilities of EUR 363.0 billion.
At the end of 2024, total asset encumbrance in funding operations
was 22.5% of the Group's extended balance sheet under EBA
criteria (total assets plus guarantees received: EUR 2,047.7 billion),
similar to 2023.
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Group. Disclosure on asset encumbrance as at December 2024
EUR billion
Carrying amount of
Fair value of
Carrying amount of
Fair value of
encumbered assets
encumbered assets
unencumbered assets
unencumbered assets
Assets
299.8
—
1,537.2
—
Loans and advances
168.8
—
1,181.0
—
Equity instruments
9.6
9.6
13.9
—
Debt instruments
93.8
94.3
189.7
190.6
Other assets
27.6
—
152.8
—
Group. Collateral received as at December 2024
EUR billion
Fair value of encumbered collateral Fair value of collateral received or own debt
received or own debt securities issued securities issued available for encumbrance
Collateral received
161.0
Loans and advances
1.2
Equity instruments
7.0
Debt instruments
152.8
Other collateral received
—
Own debt securities issued other than own covered
bonds or ABSs
0.1
Group. Encumbered assets/collateral received and associated liabilities as at December 2024
EUR billion
Matching liabilities,
Assets, collateral received and own
contingent liabilities
debt securities issued other than
or securities lent
covered bonds and ABSs encumbered
DBRS
A (High)
R-1 (Middle)
Stable
Fitch Ratings
A-(SeniorA) F2 (Senior F1)
Stable
Moody's
A2
P-1
Positive
Standard & Poor's
A+
A-1
Stable
Scope
AA
S-1+
Stable
JCR Japan
AA
—
Stable
Total sources of encumbrance (carrying amount)
363.0
Rating agencies
Rating agencies influence Santander’s access to wholesale funding
markets and the cost of its issuances.
The agencies listed below regularly review our ratings. Debt
ratings depend on several internal factors (business model,
strategy, capital, income generation capacity, liquidity, ESG related
factors, etc.) but also on external factors related to economic
conditions, the industry and sovereign risk across our footprint.
Sometimes the methodology applied by the rating agencies limits a
bank's rating to the sovereign rating of the country where it is
headquartered. As at end 2024 Banco Santander, S.A. was rated
above the sovereign debt rating of the Kingdom of Spain by
Moody’s, DBRS and S&P and rated at the same level by Fitch, which
demonstrates our financial strength and the benefits from our
diversification.
At the end of 2024, the ratings from the main agencies were:
Rating agencies
Long term
Short term
Outlook
In October 2024, Moody's confirmed the A2 rating for long-term
and P-1 rating for short-term and maintained the positive outlook,
which it had already upgraded in April, following the same
movement in the rating of the Kingdom of Spain and keeping it two
notches above it.
In September 2024, S&P Global Ratings confirmed Santander's
credit rating at A+ for long-term debt issuances and A1 for short
term. In April, S&P rated our AT1 instruments as BBB- (investment
grade), a new rating for this type of instrument. It also maintained
Santander's outlook at stable, above the sovereign rating.
Fitch maintained the senior ratings at A/F1 in September 2024 and
the stable outlook. In February 2025, it upgraded Santander’s long
term rating from A- to A and the short-term rating F2 to F1 and
maintained the outlook at stable, above the sovereign.
DBRS maintained the outlook at stable, above the sovereign.
In January 2025, JCR upgraded Santander's rating by one notch
from A+ to AA- for long-term debt issuances and senior rating from
A to A+, with a stable outlook.
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49.6
0.0
7.5
41.9
0.2
2.3
460.9
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Funding outlook for 2025
Grupo Santander has begun 2025 in a comfortable position and
with a good funding outlook for the year, despite some uncertainty
stemming from the global macroeconomic and geopolitical
situation.
We expect a moderate lending increase across our footprint,
together with a good performance of deposits, which will not put
pressure on liquidity in commercial business.
Maturities in the coming quarters are expected to be manageable,
aided by limited recourse to short-term funding and an active
medium- and long-term issuance dynamic. We will manage each
country and optimize liquidity to maintain a solid balance sheet
structure across our footprint.
Our funding plans consider costs and diversification by instrument,
country and market as well as the construction of liability buffers
with loss-absorbing capacity in resolution (whether capital eligible
or not). We design them to ensure Santander and its subsidiaries
satisfy regulatory requirements and those stemming from our risk
appetite framework.
Santander has been very active at the beginning of 2025. Banco
Santander, S.A. pre-funded approximately EUR 8.0 billion in 2024.
In January 2025, the main issuers in the Group (Banco Santander,
S.A., Santander UK and Santander Holdings USA) had already
issued EUR 6.3 billion, which, together with the pre-funding
amounts to around EUR 15 billion.
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Santander's capital function has the following aims:
Capital allocation
Maximize profitability in the
Shift towards a fee-based,
economic cycle
capital-light model
Capital allocation based on shareholder
Sustain profitability improvements in a
Embrace a fee-based, capital-light model,
value creation by measuring profitability on a
changing macro-economic environment
given intense competition from peers operating
full cost allocation basis
with lighter capital models with more
competitive pricing
Provide economic value to shareholders
Continue building a sound capital base
Improve free capital generation by increasing profitability per unit of
Continuously improve the Group’s capital base,
capital deployed as well as by mitigating impacts that hinder free
while cautiously following the net zero RWA growth mandate
capital generation
Santander’s goal is to generate capital growth and value creation for shareholders
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3.5 Capital management and adequacy. Solvency ratios
Executive summary
Fully-loaded capital ratio
The fully-loaded CET1 ratio increased 0.5 pp in the year to
12.8%, remaining above 12% in every quarter in 2024
%
Capital management and adequacy at Santander aims to guarantee
solvency and maximize profitability, while complying with
regulatory requirements and internal capital targets.
Capital management is a key strategic tool for decision-making at
both the subsidiary and corporate levels.
We have a common framework that covers capital management
actions, criteria, policies, functions, metrics and processes. We
have a team in charge of our capital analysis, adequacy and
management that coordinates with subsidiaries on all matters
related to capital and monitors and measures shareholder returns.
Our most notable capital management activities are:
• Establishing capital adequacy and capital contribution targets
that align with minimum regulatory requirements, internal
policies and the budget, to guarantee robust capital levels
consistent with our risk profile and efficient use of capital.
• Drawing up a capital plan to meet our strategic plan objectives.
Fully-loaded CET1
Strong organic generation driven by higher profit and risk
transfer and balance sheet mobilization initiatives
Organic generation in 2024
+209 bps
TNAV per share
The TNAV per share was EUR 5.24, +14% year-on-year
including cash dividends paid in 2024
• Monitoring the capital ratio in both regulatory and economic
terms and the efficient capital allocation to country units and
global businesses. Assessing capital adequacy to ensure the
capital plan is consistent with our risk profile and risk appetite
framework in baseline and stress scenarios.
• Integrating capital metrics into businesses' management
ensuring alignment with the Group’s objectives. Continuously
monitoring stock and new business profitability as well as new
business pricing at the country unit, global business, segment
and customer levels, in addition to tracking businesses, portfolios
and customers with profitability below the minimum target.
• Coordinating and promoting the bank’s asset mobilization plan
(e.g., securitizations, guarantees, sales).
• Preparing internal capital reports, and reports for the supervisory
authorities and the market (ICAAP, Pillar 3 reports and stress
tests).
• Planning and managing other loss-absorbing instruments other
than regulatory capital instruments (MREL and TLAC).
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The main measures we took in 2024 were:
Issuances of capital hybrid and other loss
absorbing instruments
In 2024, Banco Santander, S.A. issued around EUR 5.7 billion in
hybrid instruments, of which approximately EUR 2.8 billion was
Tier 2 subordinated debt and approximately EUR 2.9 billion was
contingently convertible preferred shares (CoCos). One EUR 1.5
billion CoCo issuance was to replace an AT1 issuance of the same
amount that was called in a tender offer. The other CoCo, a USD
1.5 billion issuance, was to cover regulatory requirements.
Additionally, Banco Santander, S.A. issued around EUR 9.0 billion in
senior non-preferred debt.
Dividends and shareholder remuneration
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). See 'First 2024 Buyback Programme' in the
'Corporate governance' chapter.
• 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 EUR 1,587 million, for which the
appropriate regulatory authorization has been obtained, and
the execution of which began on 6 February 2025. For more
details, see 'Second 2024 Buyback Programme' in the
'Corporate governance' chapter.
• 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). For more details, see
section 3.3 'Dividends and shareholder remuneration' in the
'Corporate governance' chapter.
Strengthening our active capital management
culture
We continue to focus on disciplined capital allocation and
shareholder remuneration after achieving our 2024 fully-loaded
CET1 target of remaining above 12%.
At end 2025, we are targeting to reach a CET1
A ratio of 13%, above
the 12% objective and at the top end of our 12-13% operating
range. Additionally, the board of directors intends to return up to
EUR 10 billion to our shareholders through share buybacks
corresponding to 2025 and 2026 by combining: i) buybacks
resulting from the application of our existing shareholder
remuneration policy consisting of a c.50% pay-out ratio
(distributed approximately equally between cash dividends and
share buybacks); plus ii) additional buybacks to distribute excesses
of our CET1. The implementation of the shareholder remuneration
policy and any share buybacks to distribute CET1 surpluses are
subject to future corporate and regulatory decisions and approvals.
Continuous improvement of our capital ratios reflects our
profitable growth strategy and a culture of active capital
management at all levels.
The Capital and Profitability Management team is in charge of our
capital analysis, adequacy and management, coordination with
subsidiaries on all matters related to capital and monitoring and
measuring returns.
Every country and business unit has drawn up individual capital
plans that focus on maximizing return on equity.
Santander places high value on its long-term sustainability and the
efficient use of capital in the incentives of the Group's main
executives. We considered certain aspects relating to capital
management and returns when setting senior managers' 2024
variable remuneration including return on tangible equity (RoTE)
and other relevant capital metrics (capital generation or CET1).
A. Phased-in CRR3.
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Fully-loaded CET1 ratio
%
12.0
12.3
12.8
Dec-22
Dec-23
Dec-24
Regulatory phased-in CET1 ratio
A
%
12.2
12.3
12.8
Main capital data and solvency ratios
EUR million
Fully loaded
Phased in
A
Common equity (CET1)
Tier 1 (T1)
Eligible capital
Risk-weighted assets
CET1 capital ratio
T1 capital ratio
Total capital ratio
Leverage ratio
4.69%
2024
2023
2024
2023
79,705
76,448
79,800
76,741
90,076
85,450
90,170
85,742
107,106 101,747 108,589 102,240
624,477 623,652 624,503 623,731
12.8%
12.3%
12.8%
12.3%
14.4%
13.7%
14.4%
13.7%
17.2%
16.3%
17.4%
16.4%
4.78%
4.68%
4.78%
A. The phased-in ratios include the transitory treatment of IFRS 9, calculated in accordance with article 473 bis of the Regulation on Capital Requirements (CRR) and
subsequent amendments introduced by Regulation 2020/873 of the European Union. Additionally, the Tier 1 and total phased-in capital ratios include the transitory
treatment according to chapter 2, title 1, part 10 of the aforementioned CRR.
Fully-loaded capital ratios in 2024
The fully-loaded CET1 ratio was 12.8% if we do not apply the
transitory IFRS 9 provisions or the subsequent amendments
introduced by Regulation 2020/873 of the European Union. This
represents a 0.5 pp increase in the year.
We organically generated 209 bps of capital, strongly supported by
results obtained during the year and by a significant uplift from
asset rotation and risk transfer initiatives. The impact from
shareholder remuneration in the year was -100 bps.
Fully-loaded CET1 ratio in 2024
%
We also recorded a negative 59 bp impact in regulatory and
models, mainly relating to a parameter change regarding
maturities in CIB models and changes in capital model associated
with large exposures.
Additionally, there was no net contribution in markets and others,
as positive impacts from the accelerated placement of Santander
Bank Polska S.A. ordinary shares, intangible assets and ALCO
portfolio valuations were offset by various smaller charges
(pensions, tax credits, etc.).
The fully-loaded leverage ratio stood at 4.78% at the end of 2024.
12.3
+2.09
-1.00
-0.59
0.00
12.8
Dec-23
Organic
generation
Shareholder
remunerationᴬ
Regulatory
& models
Markets
& others
Dec-24
A. Deduction for expected shareholder remuneration. Our target payout is approximately 50% of Group reported profit (excluding non-cash, non-capital ratios impact items),
divided approximately equally between cash dividends and share buybacks. The implementation of the shareholder remuneration policy is subject to future corporate and
regulatory decisions and approvals.
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Regulatory capital ratios (phased-in)
The phased-in ratios are calculated by applying the CRR transitory
schedules. The transitory schedule ended on 31 December 2024
(with the exception of some issuances in the UK). From 1 January
2025, a new transitory schedule will apply related to the
implementation of CRR3. For more information, see note 1.e in the
consolidated financial statements.
On a consolidated basis, the minimum levels required by the
European Central Bank in 2024 were 9.6% for the CET1 ratio and
13.9% for the total capital ratio.
Our capital requirements increased in 2024 compared to 2023 due
to:
• a higher D-SIB requirement driving an increase in the D-SIB/G
SIB requirement from 1% to 1.25% due to: i) a methodological
change by the ECB which was later adopted by Banco de España;
and ii) because institutions must hold capital at the consolidated
level for the higher of the G-SIB (currently at 1%) and D-SIB
requirements;
• the ECB's revision of Banco Santander, S.A.'s P2R requirement
from 1.58% to 1.74% (mainly due to a change in the ECB's
methodology);
• higher countercyclical buffer requirements by the competent
authorities in the countries in which we operate (+0.02 pp); and
• and a new systemic risk buffer (0.03 pp).
At year-end, the phased-in CET1 ratio was 12.8%, resulting in a
CET1 management buffer of 313 bps. This shows our ability to
generate capital organically, our solid position to be able to pay
dividends and our strong capital management.
The total phased-in capital ratio was 17.4%. Taking into account
the shortfall in AT1, Santander exceeded the 2024 minimum
regulatory requirements (i.e. distance to the maximum
distributable amount - MDA) by 297 bps.
The phased-in leverage ratio stood at 4.78%.
A. Countercyclical buffer.
B. Systemic risk buffer.
C. Global systemically important banks (G-SIB) buffer.
D. Capital conservation buffer.
Regulatory capital (phased-in). Flow statement
EUR million
2024
Capital Core Tier 1 (CET 1)
Starting amount (31/12/2023)
76,741
Shares issued in the year and share premium
(4,810)
Treasury shares and own shares financed
1,153
Reserves
(419)
Attributable profit net of dividends
9,431
Other retained earnings
(3,579)
Minority interests
1,580
Decrease/(increase) in goodwill and other
intangible assets
1,263
Other
(1,559)
Ending amount (31/12/2024)
79,800
Additional Capital Tier 1 (AT1)
Starting amount (31/12/2023)
9,002
AT1 eligible instruments
1,264
AT1 excesses - subsidiaries
105
Residual value of intangible assets
—
Deductions
—
Ending amount (31/12/2024)
10,371
Capital Tier 2 (T2)
Starting amount (31/12/2023)
16,497
T2 eligible instruments
1,767
Generic funds and surplus loan-loss provisions-IRB
(76)
T2 excesses - subsidiaries
230
Deductions
—
Ending amount (31/12/2024)
18,418
Deductions from total capital
—
Total capital ending amount (31/12/2024)
108,589
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These tables show the total risk-weighted assets (comprising the denominator of capital requirements based on risk) as well as their
distribution by geographic segment.
Risk-weighted assets (phased-in CRR, phased-in IFRS 9)
EUR million
Minimum
capital
requirements
2024
2023
2024
Credit risk (excluding CCR)
A
499,560
515,238
39,965
Of which: standardized approach (SA)
283,612
285,728
22,689
Of which: the foundation IRB (FIRB) approach
59,981
56,913
4,798
Of which: slotting approach
B
13,840
14,123
1,107
Of which: IRB equities under the simple risk-weighted approach
4,724
3,603
378
Of which: the advanced IRB (AIRB) approach
129,919
138,204
10,394
Counterparty credit risk (CCR)
18,768
13,593
1,501
Of which: standardized approach
15,035
10,150
1,203
Of which: internal model method (IMM)
—
—
—
Of which: exposures to a CCP
294
324
24
Of which: credit valuation adjustment (CVA)
679
680
54
Of which: other CCR
2,761
2,439
221
Settlement risk
173
4
14
Securitization exposure in the banking book (after the cap)
15,705
11,419
1,256
Of which: SEC-IRBA approach
7,285
4,275
583
Of which: SEC-ERBA approach
2,484
2,257
199
Of which: SEC-SA approach
B
5,935
4,887
475
Of which: 1,250% deduction
C
—
—
—
Position, foreign exchange and commodities risks (Market risk)
17,946
16,454
1,436
Of which: standardized approach
10,693
9,166
855
Of which: internal model approach (IMA)
7,253
7,288
580
Large exposures
—
—
—
Operational risk
72,351
67,022
5,788
Of which: basic indicator approach
—
—
—
Of which: standardized approach
72,351
67,022
5,788
Of which: advanced measurement approach
—
—
—
Amounts below the thresholds for deduction
22,656
28,732
1,812
Total
B
624,503
623,731
49,960
A. Includes equities under the PD/LGD approach.
B. For more detail see Pillar 3 report.
C. Information prepared following the update of the EBA (24.05.22,'ITS on institutions’ Pillar 3 public disclosures'). Banco Santander, S.A. deducts from capital those
securitizations that meet the deduction requirements, and therefore does not apply a 1,250% weighting to these exposures. This row does not include the EUR 8,367 million
in 2024 and EUR 5,475 million in 2023 that would result from applying this weighting to these exposures.
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RWAs
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RWAs by geographical distribution (phased-in CRR, phased-in IFRS 9)
EUR billion
TOTAL
EUROPE
o/w:
Spain
o/w:
United
Kingdom
NORTH
AMERICA o/w: US
SOUTH
AMERICA
o/w:
Brazil
Credit risk (excluding CRR)
535
330
180
58
85
58
120
84
of which, standardised approach (SA)
284
117
41
18
73
56
94
61
of which, internal rating-based (IRB) approach
203
174
107
37
8
0
21
19
of which, securitizations
A
16
13
9
2
2
2
1
1
of which, rest
33
27
22
1
1
1
4
3
Market risk
18
13
13
0
1
1
4
2
Operational risk
72
34
16
8
17
12
16
9
Total
625
378
208
67
103
72
140
95
Note: Breakdown according to debtor’s residency, except operational risk (management criteria). Counterparty RWAs are included in the IRB/STD approaches. The amounts
shown in the table are presented in EUR billion, therefore, the amounts have been rounded. Consequently, in certain instances, the sum of the numbers in a column or a row in
tables contained in this report may not conform exactly to the total figure given for that column or row.
A. It does not include 1,250% deductions. See footnote C in the previous table.
Note: EUR 5 billion allocated to other countries (1% of total Group RWAs).
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This table presents the main changes to capital requirements by
credit risk:
Credit risk capital movements
A
EUR million
Capital
RWAs
requirements
Starting amount (31/12/2023)
539,247
43,140
Asset size
(17,322)
(1,386)
Asset quality
(2,584)
(207)
Model updates
8,307
665
Methodology and policy
14,308
1,145
Acquisitions and disposals
—
—
Foreign exchange movements
(8,897)
(712)
Other
—
—
Ending amount (31/12/2024)
533,060
42,645
A. Includes capital requirements from equity, securitizations and counterparty risk
(excluding CVA and CCP).
Credit risk RWAs decreased EUR 6,187 million in 2024. If we isolate
the exchange rate effect (due to the depreciation of the Brazilian
real, the Mexican peso and the Chilean peso, partially offset by the
appreciation of the US dollar and the pound sterling), RWAs
increased EUR 2,709 million. This is mainly due to 'Methodology
and policy' from calculating maturity models in CIB (+EUR 11,556
million) and a review of the application of the SME factor on some
operations with self-employed customers (+EUR 2,752 million).
Additionally, 'Model updates' contributed +EUR 8,307 million,
mainly relating to capital model changes associated with large
exposures in some portfolios. This growth was compensated by
the decrease in RWAs related to 'Asset quality' (-EUR 2,584 million)
and 'Asset size' (-EUR 17,322 million), as securitizations during the
year (-EUR 29,499 million) more than offset widespread business
growth.
In short, from a qualitative point of view, Santander's solid capital
ratios are consistent with its business model, balance sheet
structure and risk profile.
Economic capital
Economic capital is the capital required to cover all risks from our
activity with a certain level of solvency. We measure it using an
internal model. To calculate the required capital, we determine our
solvency level based on our long-term rating target of 'A' (in line
with the Kingdom of Spain); this represents a confidence level of
99.95% (above the regulatory level of 99.90%).
Our economic capital model measurements cover all significant
risks incurred in our activity (concentration risk, structural interest
rate risk (ALM), business risk, pensions risk, deferred tax assets
(DTAs), goodwill and others that are beyond the scope of
regulatory Pillar 1). It also considers diversification, which is key to
determining and understanding our risk profile and solvency in
view of our multinational operations and businesses.
Our total risk and related economic capital are less than the sum of
the risk and capital of all individual units combined. Because our
business spans several countries in a structure of separate legal
entities with different customer and product segments and risk
types, our earnings are less vulnerable to adverse situations for
any given market, portfolio, customer type or risk. Despite
increasing economic globalization, economic cycles and their
impact differ by country. Groups with a global presence tend to
have more stable results and are more resistant to market or
portfolio crises, which translates into lower risk.
In contrast to regulatory criteria, we consider such intangible
assets as DTAs and goodwill to retain value (even in a hypothetical
resolution), owing to the geographic structure of our subsidiaries.
Thus, we can value assets and estimate their unexpected loss and
capital impact.
Economic capital is an essential internal management tool that
helps us develop our strategy, assess solvency and manage
portfolio and business risk. As such, it is a key part of the
Supervisory Review and Evaluation Process (SREP).
Regarding Basel Pillar 2, we use our economic model for the
internal capital adequacy assessment process (ICAAP). We plan
business progression and capital needs under a baseline scenario
and alternative stress scenarios to make sure we meet our
solvency objectives, even in adverse scenarios.
Economic capital-derived metrics help us assess risk-return
objectives, price operations based on risk, determine how
economically viable projects are, and value country units and
business lines to fulfil our overriding objective of maximizing
shareholder value.
As a homogeneous risk measure, we can use economic capital to
explain how we distribute risk throughout Santander, bringing
together several activities and risk types under a single metric.
Given its relevance to internal management, Santander includes
several economic capital-derived metrics from both a capital needs
and a risk-return point of view, within a conservative risk appetite
framework established at both Group and subsidiary levels.
Required economic capital in December 2024 amounted to EUR
69,984 million. Compared to the available economic capital base of
EUR 96,342 million, this implies a capital surplus of EUR 26,358
million.
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Reconciliation of economic and regulatory capital
EUR million
2024
2023
Net capital and issuance premiums
45,961
49,618
Reserves and retained profits
85,979
76,841
Valuation adjustments
(38,323)
(34,484)
Minority interests
8,485
6,908
Prudential filters
(912)
(669)
Other
A
(4,847)
(3,986)
Base economic capital available
96,342
94,228
Deductions
(17,379)
(18,867)
Goodwill
(13,664)
(14,161)
Other intangible assets
(2,293)
(3,059)
DTAs
(1,423)
(1,648)
Other
(743)
1,088
Base regulatory (FL CET1) capital
available
79,705
76,448
Base economic capital available
96,342
94,228
Economic capital required
B
69,984
74,721
Capital surplus
26,358
19,507
A. Includes: deficit of provisions over economic expected loss, pension assets and
other adjustments.
B. For a better comparison with regulatory capital, the differences in goodwill due
to FX changes are included in the required economic capital. All figures
according to EC 2024 methodology.
The main difference compared to regulatory CET1 is the treatment
of goodwill, other intangible assets and DTAs; we consider them
additional capital requirements rather than a deduction from
available capital.
Profitability metrics and Economic Value Added
One of the Group's primary priorities is to manage capital by
ensuring that we make a profitable allocation of capital in all our
activities.
Our strategy includes investing capital in markets, country units,
global businesses and portfolios with the highest returns on
capital, ensuring strong and sustainable shareholder value
creation. Metrics such as RoTE, RoRWA and RoRAC are part of
approvals and monitoring policies. These metrics help us compare
the return on operations, customers, portfolios and businesses on a
like-for-like basis. We can identify what is obtaining a risk-adjusted
return higher than its cost of capital and thus align risk and
business management to maximize economic value added (EVA).
We regularly assess the level and progression of EVA across the
Group's country units and global businesses, both from a
regulatory and economic capital point of view. EVA is the profit
generated above the cost of capital employed.
The minimum return on capital a transaction must obtain is
determined by the cost of capital (i.e. the minimum compensation
required by shareholders). We calculate it by adding the premium
shareholders demand to invest in Santander to the risk-free return.
The premium depends essentially on the degree of volatility in our
share price with respect to market performance. Santander's cost
of capital in 2024 was 12.0% (versus 11.2% in 2023).
On top of reviewing the cost of capital every year, we also estimate
a cost of capital for each business unit based on its features (under
the philosophy that subsidiaries manage capital and liquidity
autonomously) to determine whether each business is capable of
creating value on a standalone basis.
This table shows economic value added and RoRAC of the Group’s
geographical segments at the end of December 2024.
Economic Value Added
A and RoRAC
EUR million
2024
2023
RoRAC
EVA
RoRAC
EVA
Europe
28.3%
4,149
24.1%
3,169
DCB Europe
13.0%
72
23.2%
788
North America
22.8%
1,205
18.8%
886
South America
26.3%
872
19.0%
(45)
Total Group
17.5%
4,332
15.3%
3,285
A. The economic value added is calculated with the cost of capital of each unit. The
Group’s total RoRAC includes the operating units and the Corporate Centre,
reflecting the Group's economic capital and its return.
In 2024, we generated EUR 4.3 billion EVA for our shareholders,
with positive contributions from all our geographical segments.
Additionally, we also internally use a Shareholder Value Added
(SVA) view which adjusts components that affect shareholder
value creation but are not reflected in results.
Identifying and managing businesses with low profitability is part
of the Group's capital optimization process. We dynamically target
and actively monitor customers, portfolios, global businesses and
markets with attractive returns on capital.
To ensure improved profitability and maximize capital productivity,
we must focus on capital efficiency from origination. Pricing is an
objective process based on the characteristics of the transaction,
product, borrower, segment and market. Furthermore, it should
ensure that the price exceeds a minimum threshold covering at
least funding, operating, credit and capital costs, as well as an
additional spread that takes into account demand sensitivity to
prices and value generation. Therefore, pricing should aim to
maximize profitability, with positive EVA for every transaction,
customer, portfolio and/or global business, and ensure compliance
with minimum return on capital targets.
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financial review
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Santander has granular approvals tools for the CIB and corporate
segments which it uses to calculate the return on both regulatory
and economic capital (RoRWA and RoRAC) and determine
appropriate pricing. For retail segments, tools are locally
developed by the units, tailoring them to the individual
characteristics of each market. We also employ a granular tool to
track returns on capital on a like-for-like basis between units.
Our approvals tools enable us to identify and justify any new loans
with a pricing below the minimum threshold and our monitoring
tools enable us to identify operations with profitability below the
cost of capital, thereby recurrently destroying value. To try to
ensure that all customer relationships add value, we regularly
monitor and actively manage low performing customers through
specific action plans.
Both approvals and profitability monitoring have a robust approval
and review governance which i) ensures the consideration of
minimum pricing thresholds are properly integrated into capital
processes; ii) establishes a timely scaling/authorizing process; and
iii) that detailed follow-ups are carried out for operations approved
below the minimum threshold.
This chart describes the structure in place:
Capital planning and stress tests
Capital stress test exercises are a key tool in banks' dynamic
assessments of their risks and solvency. These forward-looking
reviews are based on unlikely-but-plausible macroeconomic and
idiosyncratic scenarios. They require robust planning models that
can translate the effects defined in the projected scenarios to
elements that affect solvency.
The ultimate aim of these exercises is to assess risks and solvency
thoroughly to determine capital requirements if a bank fails to
meet its regulatory and internal capital objectives.
Santander has an internal capital stress and planning process to
respond to various regulatory exercises and is a key tool integrated
within management and strategy. They aim to ensure sufficient
current and future capital, even in unlikely-but-plausible economic
scenarios. We estimate results in various business environments
(including severe recessions as well as expected macroeconomic
environments), based on our initial situation (defined using
financial statements, capital base, risk parameters and regulatory
and economic ratios) to determine our solvency ratios, usually for a
three-year period.
Planning offers a comprehensive view of our capital for the
analysed period and in each of the defined scenarios based on
regulatory capital and economic capital metrics.
1
Macroeconomic
scenario
• Central and recession
• Idiosyncratic: based on specific risks the entity faces
• Multi-year horizon
• Reverse stress tests
2
Balance sheet
and income statement forecasts
• Projection of volumes. Business strategy
• Margins and funding costs
• Fees and operating expenses
• Market shocks and operational losses
• Credit losses and provisions. PIT LGD and PD models
• IFRS 9 models and migration among stages
3
Capital requirements
forecasts
• Consistent with projected balance sheet
• Regulatory and economic risk parameters (PD, LGD and EAD)
4
Solvency analysis
• Available capital base. Profits and dividends
• Regulatory and legislative impacts
• Capital and solvency ratios
• Compliance with capital objectives
• Regulatory and economic view
5
Action plan
• In the event of failure to comply with internal objectives or regulatory requirements
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This structure supports the ultimate objective of capital planning,
by making it an important strategic component that:
• ensures current and future solvency, even in adverse economic
scenarios;
• facilitates communication with the market and supervisors;
• ensures comprehensive capital management, analyses specific
effects and integrates them into strategic planning;
• enables a more efficient use of capital; and
• helps formulate our capital management strategy.
Senior managers are fully involved in and closely oversee capital
planning under a framework that ensures proper governance and is
subject to the robust challenge, review and analysis.
In capital planning and stress analysis exercises, calculating the
required provisions under stress scenarios is key, especially to
cover losses on credit portfolios. It is particularly important for
income statement forecasts under adverse scenarios.
To calculate loan-loss provisions of the credit portfolio, we use a
methodology that ensures provisions cover loan losses projected
by internal expected loss models, based on exposure at default
(EAD), probability of default (PD) and loss given default (LGD)
parameters, at all times.
In 2018, we adapted this methodology to incorporate changes
brought in by the new IFRS 9 regulations, with models to calculate
balances by stages (S1, S2, S3) as well as the movements between
them and the loan-loss provisions in accordance with the new
standards.
Our capital planning and stress analysis culminate in an analysis of
solvency under various scenarios over a set period to measure
capital adequacy and ensure we meet all internal capital and
regulatory requirements.
Should we fail to meet our capital objectives, we would draw up an
action plan with the measures needed to attain the minimum
capital desired. We analyse and quantify those measures as part of
internal exercises even if we don't need to use them as we exceed
the minimum capital thresholds.
Santander carries out its internal stress and capital planning
transversally throughout the Group, at the consolidated and local
level. Our subsidiaries use it as an internal management tool,
particularly to respond to local regulatory requirements.
We have undergone nine external stress tests since the beginning
of the economic crisis in 2008. Every test proved our strength and
solvency in the most extreme and severe macroeconomic scenarios
showing that, owing to our business model and geographic
diversification, we would still be capable of generating a profit for
shareholders while satisfying the most demanding regulatory
requirements.
The ECB determines and sets Pillar 2 Guidance (P2G) according to
the results of the adverse scenario in these supervisory stress tests,
including the EU-level stress tests carried out by the EBA. When
determining the P2G, the ECB considers the maximum impact
expected on the CET1 ratio, which, for this purpose, is the
difference between the lowest CET1 ratio in the adverse scenario
over the projection horizon and the real CET1 ratio at the starting
point.
In the most recent ECB-EBA stress test in 2023, Santander
destroyed the least fully-loaded CET1 capital among peers in the
adverse scenario (-170 bps versus a peer average of -418 bps). This
implies that, in absolute terms, the Group would have a fully
loaded CET1 ratio 30 bps better than the peer average at the end of
the stressed horizon. Even in the adverse scenario, Santander was
forecasted to generate a cumulative profit of EUR 6,582 million,
well above its peers and the European banking system as a whole
(where losses of EUR 3,129 million and EUR 1,404 million were
projected, respectively).
We have also conducted internal stress tests every year since 2008
as part of our ICAAP (Basel Pillar 2). Every test has proven our
capacity to confront the most difficult exercises globally and
locally. We carry out these capital planning processes using tools
shared throughout the Group.
We incorporate an analysis of the potential impact of climate risks
(transition risk and physical risk) into internal stress exercises in
addition to expressly considering them in the macroeconomic
scenario definitions, in line with industry best practices and
supervisory expectations.
In 2022, Santander participated in the ECB's first climate risk stress
test comprising three parts: first, the supervisor assessed entities’
internal capacities; second, the entities provided information on
their main customers' emissions and revenue shares by activity
sector to the supervisor; and third, the ECB made projections under
various transition risk, heat wave risk and flood risk scenarios. The
ECB published aggregate results for the industry as a whole.
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Total Loss-Absorbing Capacity (TLAC) and
Minimum Requirement for own funds and
Eligible Liabilities (MREL)
In November 2015, the FSB published the TLAC term sheet based
on the previously published principles for crisis management
frameworks. It aims to ensure global systemically important banks
(G-SIBs) will have the capacity to absorb losses and recapitalize as
required to maintain critical functions during and immediately after
resolution proceedings without compromising public funds or
financial stability.
From 1 January 2022, the TLAC term sheet requires each G-SIB to
have an individually set minimum TLAC level that is the greater of
18% of risk-weighted assets and 6.75% of the Basel III Tier 1
leverage ratio exposure.
Some jurisdictions have already transposed the TLAC term sheet
into law (as is the case in Europe, the US and Mexico as of 1
January 2023); however, other jurisdictions where we operate (e.g.
Brazil) have yet to do so.
In Europe, the final texts of CRR 2 and BRRD 2, which amend the
resolution framework, were published in June 2019. One of the
main objectives of this revision was to implement the TLAC
requirement in Europe.
The CRR 2, which came into force in June 2019, dictates the 18% of
RWAs minimum requirement for G-SIBs as set in the TLAC term
sheet. It must be made up of subordinated liabilities (with the
exception of a percentage of senior debt of maximum of 3.5% or
RWAs, with the resolution authority's authorization).
As of 31 December 2024, the TLAC of the resolution group headed
by Banco Santander, S.A. stood at 31.0% of risk-weighted assets
and 9.8% of the leverage ratio exposure.
The BRRD 2 was transposed into law in Spain in 2021.
G-SIBs also have a Pillar 2 requirement in addition to the minimum
CRR TLAC requirement, owing to the MREL methodology in the
BRRD 2.
2024 TLAC
%
In June 2024, Banco de España formally communicated the
(binding) MREL requirement for the Banco Santander, S.A.
Resolution Group (sub-consolidated):
• Until 31 December 2024, the Group needed to meet the
minimum requirement set at the highest of 29.69% of the
Resolution Group’s RWAs and 11.51% of the Resolution Group’s
leverage ratio exposure. Of the total MREL requirement, a
minimum subordination level was fixed as the highest of 10.27%
of RWAs and 6.13% of the leverage ratio exposure. However, the
Resolution Group headed by Banco Santander, S.A.'s minimum
subordination is determined by TLAC, not by MREL, as the TLAC
subordination requirement is greater. This MREL requirement
was based on December 2021 data.
As of 31 December 2024, Banco Santander, S.A.'s MREL was
42.1% of RWAs and 16.5% of the leverage ratio exposure and
subordinated MREL was 35.2% of RWAs and 13.8% of the
leverage ratio exposure. As a result, Banco Santander, S.A. met
its MREL requirements.
• From 1 January 2025 until 24 June 2025, the Group must meet
the minimum requirement set at the highest of 32.39% of the
Resolution Group’s RWAs and 12.23% of the Resolution Group’s
leverage ratio exposure. Of the total MREL requirement, a
minimum subordination level was fixed as the highest of 11.30%
of RWAs and 6.22% of the leverage ratio exposure. This MREL
requirement is based on December 2022 data.
• From 24 June 2025, until otherwise communicated by Banco de
España, the Group will need to meet a minimum requirement set
at the highest of 33.59% of the Resolution Group’s RWAs and
12.93% of the Resolution Group’s leverage ratio exposure. Of the
total MREL requirement, a minimum subordination level was
fixed as the highest of 11.30% of RWAs and 6.22% of the
leverage ratio exposure. This MREL requirement is based on
December 2022 data.
2024 MREL
%
A. CBR: Combined Buffer Requirement, comprising a capital conservation buffer (2.5%), a G-SII buffer (1.25%), a countercyclical capital buffer (0.37%) and a systemic risk
buffer (0.04%).
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3.6 Special situations and resolution
Corporate special situations and resolution
framework, crisis management, recovery and
resolution planning
This section summarizes the main developments in the year
relating to preparing and strengthening mechanisms for a
potential crisis, recovery plans and preparing and executing
initiatives to improve resolvability plans.
Corporate framework for special situations and
resolution
The framework enables our units to aggregate and clearly interpret
the various mechanisms for monitoring, escalating and managing
both financial and non-financial events as well as governance. It
helps link the action plans (e.g. contingency plans, business
continuity plans, recovery plan) to be executed in each phase.
We base crisis governance on a collective decision-making model
that is organized into and operated under severity levels to
facilitate flexibility and sequential decision-making. For instance, in
the most severe stages of a hypothetical crisis, the Gold
committee, composed of the Group’s top executives supported by
the Silver forum and other specialist Bronze teams, would be the
leading decision-making body.
The framework aims to encourage the sharing of best practices
across the Group and continuous collaboration between
subsidiaries and corporate teams (including coordination in the
recovery and resolution planning phases) to continue to develop
our management and control model in the most effective way.
Two of Santander's key processes are the recovery plan and the
bail-in playbook, which describes the resolution tool's execution.
Crisis management
We managed several important events in 2024 relating to i)
cybersecurity (e.g., unauthorized access to a database hosted by a
third party); ii) geopolitical and/or macroeconomic events (e.g.,
armed conflicts in the Middle East); iii) natural disasters (e.g.,
forest fires in Valparaíso, Chile; floods in Rio Grande do Sul, Brazil,
in Poland and in dozens of Spanish municipalities, earthquake in
the Chinese provinces of Gansu and Qinghai); and iv) operational
events (e.g., related to the operation of digital channels or critical
providers).
We have taken away important lessons from these events,
including:
• The benefits of ex ante preparation. Crisis management
simulation exercises conducted over the past few years have
enabled us to act quickly.
• The importance of maintaining a consistent and global approach
that enables us to act as a Group, regardless of the type of event,
where the incident occurs, the size of the affected unit or which
global business is affected.
• The ability to anticipate potential events is decisive in the final
result, especially in internal and external communication and in
case of events that affect critical services with customers or
require frequent contact with competent authorities.
Despite the very different nature of the events managed, our crisis
management model once again demonstrated its strength. There
are two fundamental and defining aspects of our model:
• Coordination between and with the subsidiaries and the five
global businesses. Cooperation between the different units is not
only a strength of the operating model under normal conditions,
but has also proven to be a strength in times of crisis. There are
several instruments that support this coordination such as i) the
ability to summon global crisis governing bodies (e.g., Bronze
teams and/or global Silver forum); ii) the close relationship
between Crisis Management Directors (CMDs), crisis
management managers and the involved functions; or iii) the
ongoing issuance of corporate guidelines to facilitate decision
making.
• Early incident management. Through Bronze teams, we have
been able to give a quick and proactive response to the most
critical events.
However, in order to further strengthen our crisis management
model, we carried out several initiatives:
• A more granular taxonomy and methodology is available for the
identification and classification of events, both for financial and
non-financial events.
• We integrated new decision-making processes to strengthen
confidentiality and protect the security of our employees and
customers.
• We assigned new roles to align the crisis management function
to the new organizational model based on five global businesses.
• We further developed the process governing the response to
humanitarian crises. By using the corporate guide, units are able
to determine the severity of these events depending on their
scale and urgency, as well as the action and governance
framework for each situation.
In short, despite the challenges faced in 2024, the Group has
shown it has the right tools to respond to crises of very different
nature. However, given the complexity of the current environment
and the potential threats facing the banking industry, the Group
remains committed to strengthening crisis management
mechanisms and instruments.
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Recovery plans
Context. Santander drew up its 15
th corporate recovery plan in
2024. It sets out measures we have at our disposal to survive a
very severe crisis without extraordinary public aid, in accordance
with article 5.3 of the BRRD.
Its primary aims are to test i) the feasibility, effectiveness and
credibility of the recovery measures; and ii) the suitability of the
recovery indicators and their respective thresholds, above which
decision-making would be escalated to cope with stress situations.
It sets out macroeconomic and/or financial crisis scenarios that
could materialize in idiosyncratic, systemic and combined events
that could lead the Group to trigger the plan.
The recovery plan should not be considered an instrument separate
from our structural mechanisms to measure, manage and
supervise risk. It is aligned with the risk appetite framework (RAF),
the risk appetite statement (RAS), the risk profile assessment
(RPA), the business continuity management system (BCMS), the
internal assessments of capital and liquidity (ICAAP and ILAAP) and
other tools. It is also integrated into the Group's strategic plans.
Progress in 2024. In January, the new 'Guidelines on Total
Recovery Capacity in Recovery Plans' came into force, which
require us to incorporate more severe scenarios that reach the
near-default point and calculate the recovery capacity in a dynamic
way and taking the moment the indicator was breached as a
starting point. These requirements were already taken into account
in the 2023 plan.
In May 2024, the ECB sent us a letter with their annual priorities,
recommending that: i) entities should focus their efforts on
improving liquidity recovery capacity and demonstrate that they
have sufficient recovery options that can be implemented within a
short time frame (less than one month); ii) simulations should be
carried out to demonstrate the feasibility of these measures; and
iii) liquidity scenarios should incorporate idiosyncratic and rapidly
evolving events that lead to a point close to default in less than
three months.
As it does every year, the 2024 recovery plan fully covers all the
recommendations and priorities required by the ECB, including:
• A more conservative recalibration of capital indicators with
regulatory requirements. They also expanded information on all
indicators and the justification for their calibration.
• More extreme scenarios, so that all scenarios reach a near
default point according to the guidelines.
• A complete and detailed analysis of the risk profile of the entity
at different times in each of the scenarios.
• A report including the characteristics of the two simulations
carried out, with a critical evaluation of the lessons learned and
possible follow-up actions.
• A new recovery measure.
The key takeaways from our review of the 2024 corporate plan
were:
• there are no material interdependencies between main
subsidiaries;
• we have ample recovery capacity in all scenarios through
available measures. Our geographically diversified model is a
great asset from a recovery standpoint;
• each subsidiary has sufficient capacity to emerge from a recovery
situation on its own, which strengthens the Group's model based
on units that are autonomous with respect to liquidity and
capital;
• we have sufficiently robust governance to manage financial and
non-financial stresses that vary in nature and intensity; and
• amid a serious financial or solvency crisis, no subsidiary is
important enough to trigger the corporate plan by causing the
severest recovery indicator levels to be breached.
These factors prove our business model and geographic
diversification strategy would remain firm in a recovery situation.
Regulation and governance. Santander’s recovery plan complies
with EU regulations and follows the non-binding recommendations
of the Financial Stability Board (FSB) and other international
bodies.
We submitted our latest plan to the Single Supervisory Mechanism
in October 2024; the EBA has six months to make formal
considerations.
Santander's recovery plan comprises the corporate plan (Banco
Santander, S.A.) and local plans for the UK, Brazil, Mexico, the US,
Germany, Argentina, Chile, Portugal, Norway and a recovery plan
summary for Santander Bank Polska S.A. and Santander Consumer
Bank S.A. -Poland-. All subsidiaries (except Santander Chile) must
draw up a local plan in compliance with local regulations and
corporate requirements.
Though the board of Banco Santander, S.A. approves the corporate
plan, relevant content and figures are previously submitted to and
discussed by the Silver forum, Gold committee, risk control
committee and the risk supervision, regulation and compliance
committee. Local plans are approved by local bodies in
coordination with the Group (as they are included in the Group's
corporate plan).
Resolution plans
The relevant authorities prepare the resolution plans
1 and
Santander cooperates with them, providing all requested
information. During 2024, the members of the crisis management
group (CMG) upheld their decision on our multiple point of entry
(MPE) strategy to be used in a hypothetical resolution, formed by
11 different resolution groups where the parent company, Banco
Santander, S.A., forms the main resolution group along with the
rest of its subsidiaries of the Banking Union.
1. With the exception of the US, where individual entities draw up their own resolution plans.
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This strategy is consistent with our legal and business structure, as
the 11 resolution groups can be resolved independently without
involving other parts of the organization, given the low level of
interconnection.
Meetings with the Single Resolution Board (SRB) and its working
priorities letters confirmed in October 2023 that there are no
substantial impediments to Banco Santander, S.A.’s resolvability,
achieving the target set for December 2023 by the SRB. Despite
this, the SRB highlighted the need to continue to work on
resolvability and meet the targets set for the new resolution
planning cycle starting in 2025, which focus on the
operationalization of the resolution tool, i.e., internal
recapitalization (bail-in).
In 2024, we prepared the multi-annual work plan to continue to
meet resolution planning requirements. Banco Santander, S.A.’s
board of directors approved it in February 2025, prior to its
definitive submission to the SRB and in which the following
actions, among others, were defined:
1) Conduct initial tests to measure capability to provide high
quality data for resolution valuations
In 2024, Banco Santander, S.A. carried out a real-time dry run
exercise on governance and obtaining data for valuation in
resolution for each of the relevant subsidiaries of Banco Santander,
S.A. within the resolution group known as the Banking Union. We
shared the generated data with the SRB.
2) Conduct a liquidity exercise based on the joint SRB-ECB
liquidity report prepared in October 2024
During November 2024, we worked on a new liquidity report,
jointly required by the SRB and the ECB. In 2025, we will again
conduct a liquidity exercise aimed at strengthening our liquidity
reporting capabilities during and after resolution, which will take
into account the SRB's comments on the 2024 liquidity exercise.
For the first time, it will be a real-time dry run exercise and the SRB
will observe.
3) Continue the work on the separability of important
subsidiaries in the resolution group headed by Banco Santander,
S.A.
We will continue the work on separability, an area that was
established as a priority for Santander in 2023, and will continue to
be so during 2025, focused on improving our ability to implement
alternative resolution tools to sell a business in the event of
resolution by developing an advanced separability analysis report.
This analysis should identify potential obstacles and mitigating
factors to ensure the subsidiaries' operational and business
continuity if separated from the Group. We will work on
developing specific business transferability manuals in 2025,
detailing how to execute the sale of a business from an operational
point of view.
4) Test the internal recapitalization resolution tool and the
internal loss transfer and recapitalization mechanism, together
with information system capabilities
Given the results of the dry-run exercises for the internal
recapitalization testing exercises in previous years, Banco
Santander is expected to continue to annually test its bail-in
preparation through a test focused on its information systems'
capabilities, accounting and amortization processes, conversion
and issuance of new capital, communication and governance, as
described in the bail-in playbook. Testing should also include the
internal loss transfer and recapitalization mechanism (ILTRM) in
place for most of the important Banco Santander, S.A. subsidiaries.
The SRB has already communicated the new developments of this
simulation exercise for 2025, mainly the inclusion of new
subsidiaries and the stress assumptions.
5) Continue the work on Management Information Systems
During 2024, we completed all the manuals for reporting
information regarding internal recapitalization and valuation data.
We also did dry-run tests on the capabilities of management
information systems, including the preparation and extraction of
resolution valuation information and bail-in instruments. In 2025,
we plan to carry out further testing to ensure information systems
are capable of providing accurate and timely information.
6) Guarantee operational continuity in resolution situations
In 2024, we continued to work on operational continuity in
resolution: i) we developed retention plans for certain units of the
Banking Union Resolution Group; ii) remediation plans continued
with the inclusion of clauses in vendor contracts to ensure
resilience in resolution; and iii) we updated the contingency plan
for access to market infrastructure. In 2025, we plan to test the
operational continuity in bank resolution through simulation
exercises.
Annual report 2024
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Economic and
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statement
governance
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and compliance
4. FINANCIAL INFORMATION
BY SEGMENT
4.1 Description of segments
during 2024
We base segment reporting on financial information presented to
the chief operating decision maker, which excludes certain
statutory results items that distort year-on-year comparisons and
are not considered for management reporting. This financial
information (underlying basis) is computed by adjusting reported
results for the effects of certain gains and losses (capital gains,
write-downs, impairment of goodwill, etc.). These gains and losses
are items that management and investors ordinarily identify and
consider separately to better understand the underlying trends in
the business (see also note 52.c to the Santander financial
statements).
Santander has aligned the information in this chapter with the
underlying information used internally for management reporting
and with that presented in the Group's other public documents.
Santander's executive committee has been selected to be its chief
operating decision maker. The Group's operating segments reflect
its organizational and managerial structures. The executive
committee reviews internal reporting based on these segments to
assess performance and allocate resources.
As we announced at the end of 2023, following the creation of two
new global segments and in order to align the operating and
management model, we adapted our reporting, starting with the
financial information for Q1 2024, with global businesses
becoming the primary segments.
Main changes to the composition of Santander's
segments
The main changes, which apply from 1 January 2024 to the
management information for all periods included in the
consolidated financial statements, are as follows:
• All of the Group's businesses across all markets were
consolidated into five global areas: Retail & Commercial Banking,
Digital Consumer Bank, Corporate & Investment Banking, Wealth
Management & Insurance and Payments. These became the new
primary segments.
• The changes in financial information were:
• The former Retail Banking was split into two new segments:
Retail & Commercial Banking and Digital Consumer Bank. Our
cards business now forms part of the new Payments segment.
• The results of activities mainly related to financial
management located in the countries are fully allocated to
their global businesses based on the segment that generates
the financial position.
• The local corporate centres are fully allocated to the global
businesses.
• The revenue sharing criteria between global businesses were
revised to better reflect the contribution of each business to
the Group.
• The former primary segments (Europe, North America, South
America and Digital Consumer Bank - which is renamed DCB
Europe) became our secondary segments. 2023 published
figures for the countries, regions and the Corporate Centre
remain unchanged.
All the changes described above have no impact on the reported
Group consolidated financial statements.
Primary segments
This primary level of segmentation, which is based on the Group's
management structure from 1 January 2024, comprises six
reportable segments: five operating areas plus the Corporate
Centre.
The operating areas are:
Retail & Commercial Banking (Retail): area that integrates the retail
banking business and commercial banking (individuals, SMEs and
corporates), except for business originated in the consumer finance
and the cards businesses.
Digital Consumer Bank (Consumer): comprises all business
originated in the consumer finance companies, plus Openbank,
Open Digital Services (ODS) and SBNA Consumer.
Corporate & Investment Banking (CIB): this business, which
includes Global Transaction Banking, Global Banking (Global Debt
Financing and Corporate Finance) and Global Markets, offers
products and services on a global scale to corporate and
institutional customers, and collaborates with other global
businesses to better serve our broad customer base.
Wealth Management & Insurance (Wealth): includes the corporate
unit of Private Banking and International Private Banking in Miami
and Switzerland (Santander Private Banking), the asset
management business (Santander Asset Management) and the
insurance business (Santander Insurance).
Annual report 2024
437
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Payments: the Group's digital payments solutions, providing global
technology solutions for our banks and new customers in the open
market. It is structured in two businesses: PagoNxt (Getnet, Ebury
and PagoNxt Payments) and Cards (cards platform and business in
the countries where we operate).
Secondary segments
At this secondary level, Santander is structured into the segments
that made up the primary segments until 31 December 2023,
which are Europe, DCB Europe, North America and South America:
Europe: comprises all business activity carried out in the region,
except that included in DCB Europe. Detailed financial information
is provided on Spain, the UK, Portugal and Poland.
DCB Europe: includes Santander Consumer Finance, which
incorporates the entire consumer finance business in Europe,
Openbank in Spain and ODS.
North America: comprises all the business activities carried out in
Mexico and the US, which includes the holding company (SHUSA)
and the businesses of Santander Bank (SBNA), Santander
Consumer USA (SC USA), the specialized business unit Banco
Santander International, the New York branch and Santander US
Capital Markets (SanCap).
South America: includes all the financial activities carried out by
Santander through its banks and subsidiary banks in the region.
Detailed information is provided on Brazil, Chile and Argentina.
In addition to these operating units, both primary and secondary
segments, the Group maintains the Corporate Centre, which
includes the centralized activities relating to equity stakes in
financial companies, financial management of the structural
exchange rate position, assumed within the sphere of the
Group’s assets and liabilities committee, as well as
management of liquidity and shareholders’ equity via issuances.
As the Group’s holding entity, this area manages all capital and
reserves and allocations of capital and liquidity with the other
businesses. It does not incorporate the costs related to the
Group’s central services (charged to the areas), except for
corporate and institutional expenses related to the Group’s
functioning.
The businesses included in each of the primary segments in this report and the accounting principles under which their results are
presented here may differ from the businesses included and accounting principles applied in the financial information separately
prepared and disclosed by our subsidiaries (some of which are publicly listed) which in name or geographical description may
seem to correspond to the business areas covered in this report. Accordingly, the results of operations and trends shown for our
business areas in this document may differ materially from those of such subsidiaries.
As described in section 3. 'Group financial performance', the results of our business areas presented below are provided on the
basis of underlying results only and generally including the impact of foreign exchange rate fluctuations. However, for a better
understanding of the changes in the performance of our business segments, we also provide and discuss the year-on-year changes
to our results excluding such exchange rate impacts. For Argentina and any grouping which includes it, the variations in constant
euros have been calculated considering the Argentine peso exchange rate on the last working day for each of the periods
presented. Additionally, in 2024, for the Argentine peso, we apply an alternative exchange rate that better reflects the evolution of
inflation (we continue to apply the official ARS exchange rate to all prior years). For further information, see the 8. 'Alternative
performance measures' section.
The statements included in this section regarding Santander's competitiveness and that of its subsidiaries have been produced by
the Group based on public information (corporate websites of competing entities and information published by national banking
institutions).
Certain figures contained in this chapter, have been subject to rounding to enhance their presentation. Accordingly, in certain
instances, the sum of the numbers in a column or a row in tables contained in this report may not conform exactly to the total
figure given for that column or row.
Annual report 2024
438
Retail
Consumer
CIB
Wealth
Payments
Europe
DCBE
North America
South America
Var
Var
B
+28% +29%
-13%
-12%
+12% +16%
+12% +14%
-32%
-26%
+21% +19%
-46%
-47%
+10% +12%
+27% +36%
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statement
governance
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and compliance
4.2 Summary of the Group's main business areas' income statements
2024
Main items of the underlying income statement
EUR million
Profit
Net interest
Net fee
Total
Net operating
Profit before attributable to
Primary segments
income
income
income
income
tax
the parent
Retail & Commercial Banking
27,942
4,681
32,461
19,584
10,874
7,263
Digital Consumer Bank
10,777
1,508
12,916
7,733
2,232
1,663
Corporate & Investment Banking
4,020
2,548
8,343
4,537
4,009
2,740
Wealth Management & Insurance
1,627
1,489
3,661
2,348
2,259
1,650
Payments
2,609
2,793
5,505
3,030
969
413
PagoNxt
132
958
1,240
80
(233)
(299)
Cards
2,478
1,835
4,265
2,950
1,202
712
Corporate Centre
(308)
(11)
(676)
(1,055)
(1,317)
(1,154)
TOTAL GROUP
46,668
13,010
62,211
36,177
19,027
12,574
Secondary segments
Europe
16,720
4,659
23,510
14,102
10,129
6,644
Spain
7,256
2,867
11,974
7,703
5,440
3,762
United Kingdom
4,950
283
5,216
2,299
1,794
1,306
Portugal
1,548
467
2,100
1,553
1,481
1,001
Poland
2,844
674
3,555
2,591
1,650
800
Other
121
367
664
(42)
(236)
(225)
DCB Europe
4,361
902
5,679
3,075
1,131
642
North America
10,330
2,594
13,915
7,214
3,091
2,579
US
5,693
1,152
7,580
3,750
1,053
1,109
Mexico
4,631
1,385
6,278
3,613
2,274
1,671
Other
7
57
57
(149)
(236)
(201)
South America
15,566
4,864
19,783
12,841
5,993
3,863
Brazil
10,121
3,414
13,536
9,184
3,830
2,422
Chile
1,822
551
2,592
1,659
1,111
629
Argentina
2,919
602
2,487
1,465
827
665
Other
703
298
1,168
533
225
146
Corporate Centre
(308)
(11)
(676)
(1,055)
(1,317)
(1,154)
TOTAL GROUP
46,668
13,010
62,211
36,177
19,027
12,574
Profit attributable to the parent distribution
Distribution
A by primary segment. 2024
Retail: 53%
Consumer: 12%
CIB: 20%
Wealth: 12%
Payments: 3%
Profit attributable to the parent. 2024
EUR million. % change YoY
7,263
1,663
2,740
1,650
413
6,644
642
2,579
3,863
A. As a % of operating areas. Excluding the Corporate Centre.
B. Changes in constant euros.
Annual report 2024
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2023
Main items of the underlying income statement
EUR million
Profit
Primary segments
Net interest
income
Net fee
income
Total
income
Net operating
income
Profit before
tax
attributable to
the parent
Retail & Commercial Banking
25,550
4,497
29,754
16,930
7,989
5,659
Digital Consumer Bank
10,221
1,229
12,296
7,033
2,677
1,901
Corporate & Investment Banking
3,594
2,131
7,527
4,140
3,795
2,440
Wealth Management & Insurance
1,513
1,262
3,210
1,994
1,994
1,467
Payments
2,424
2,952
5,298
2,954
1,205
607
PagoNxt
93
954
1,140
49
(17)
(77)
Cards
2,331
1,998
4,158
2,905
1,222
684
Corporate Centre
(41)
(13)
(439)
(829)
(961)
(998)
TOTAL GROUP
43,261
12,057
57,647
32,222
16,698
11,076
Secondary segments
Europe
15,910
4,399
21,439
12,409
8,195
5,482
Spain
6,641
2,699
10,132
5,905
3,399
2,371
United Kingdom
5,152
338
5,525
2,779
2,107
1,545
Portugal
1,465
464
1,982
1,440
1,314
896
Poland
2,543
589
3,182
2,320
1,392
674
Other
109
309
618
(35)
(17)
(3)
DCB Europe
4,193
796
5,502
2,884
2,019
1,199
North America
10,159
2,192
13,174
6,708
2,837
2,354
US
5,742
766
7,209
3,531
863
932
Mexico
4,408
1,374
5,899
3,311
2,119
1,560
Other
8
52
66
(133)
(145)
(138)
South America
13,040
4,684
17,971
11,050
4,608
3,038
Brazil
9,116
3,462
13,104
8,574
2,911
1,921
Chile
1,383
572
2,285
1,265
951
582
Argentina
1,879
396
1,544
769
505
386
Other
662
254
1,038
441
241
150
Corporate Centre
(41)
(13)
(439)
(829)
(961)
(998)
TOTAL GROUP
43,261
12,057
57,647
32,222
16,698
11,076
Annual report 2024
440
Underlying attributable profit
Retail
Retail & Commercial Banking
EUR 7,263 mn
Strategy
To support our vision of becoming a digital bank with branches, during the year, we focused on providing the best
experience for our customers, driving our ONE Transformation programme, implementing a common operating
model and rolling out our global technology platform.
Business
performance
1
Results
1
Loans fell slightly (-1% year-on-year) due to lower loans in Europe and the US, partially offset by the increases in
South America and Mexico. Deposits rose 3% year-on-year, with growth in all three regions.
Attributable profit in 2024 was EUR 7,263 million, a 29% increase year-on-year, driven by a good revenue
performance, efficiency gains from our transformation programme and lower provisions in Europe.
1. In constant euros.
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4.3 Primary segments
Strategy
During the year, we consolidated the Group's individual, SME and
corporate banking activities within a new global business, Retail &
Commercial Banking (Retail), successfully executing our three
strategic priorities with the following advances:
• Common operating model. Our vision is to become a digital bank
with branches, offering our products and services digitally
through our own global platform and using our branch network
to advise our customers. In 2024, all countries worked with a
common operating model and within this vision. We have 147
million customers who can access most of our products and
services digitally. Sales through our digital channels rose double
digits year-on-year. Additionally, we have a network of nearly
8,000 branches, where customers can receive advice and
support.
• Transformation, based on three pillars:
• Customer experience. We reduced the number of products by
39% year-on-year, as part of our commitment to offer a simple
and attractive product portfolio that provides the best
experience for our customers. We also continued to improve
customer journeys, especially digital onboarding (substantially
reducing onboarding times in all countries). Additionally, we
launched a new 100% digital and simplified offer for
individuals in Brazil and SMEs in Spain. As a result of the
improvement in customer experience and digital onboarding,
customers grew more than 8 million in the year.
• Operational leverage. We reduced the number of resources
dedicated to non-commercial activities per million customers
by 13% during the year, supported by digitalization, process
Retail. Customers
automatization and organizational simplification, with
significant progress in all units. Some examples this year were
the digitalization of in-branch processes in Spain and mortgage
servicing in Poland, as well as the simplification of the branch
organization in Brazil and Chile. Additionally, our strategy to
promote a self-service model is producing results, as chatbot
interactions increased during the year and contact centre call
volumes decreased. This has freed up time to be spent on
value-added tasks and has contributed to greater efficiency.
• Global technology platform. The roll out of the global platform
is especially relevant for business transformation. This platform
is based on two proprietary technologies developed in-house: i)
Gravity, with open technologies to reduce back-end costs; and
ii) ODS, deployed in the cloud for the front-end, offering a
superior omni-channel experience to our customers.
During the year, we completed the initial integration of Gravity
and ODS in the US, which enables us to provide a new digital
offering and the best customer experience. We also completed
the migration of our customers in the UK to the new app. In
addition, we are rolling out our global commercial tool to
support branches in Spain and Mexico.
• Profitable growth. Structural efficiency improvements that the
global platform's scale provides and disciplined capital
management, together with increased simplification and process
automatization were significant drivers of profitable growth.
Additionally, enhanced customer experience and a greater
commercial focus drove further customer growth and
profitability improvement.
Thousands and year-on-year change
Retail
Europe
North
America
South
America
Total
147,140
46,576
15,140
22,493
21,275
21,261
79,289
68,882
customers
+6%
+1%
+2%
0%
+4%
+4%
+10%
+11%
Active
79,079
28,806
8,689
13,604
10,859
10,845
39,414
32,552
customers
+5%
+2%
+6%
-2%
+6%
+6%
+8%
+9%
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Business performance
Loans and advances to customers decreased 1% year-on-year. In
gross terms, excluding reverse repos and in constant euros they
also decreased 1%, due to the decline in mortgages and SMEs,
partially offset by the increases in corporate and personal loans. By
region, the decrease in Europe and the US volumes was partially
offset by rises in South America and Mexico.
Mortgage balances fell both in the UK (in line with our profitability
strategy) and in Spain, still impacted by pre-payments despite a
pickup in new business volumes. This was partially offset by
increases in Portugal, Poland, Mexico and Brazil. Personal loans
performed well, especially in Brazil, Spain and Poland.
Corporate loans rose, mainly driven by Poland, Brazil and Mexico.
SME loans decreased mainly due to pre-payments in Europe,
partially offset by higher volumes in Brazil and Poland.
Customer deposits decreased 1% year-on-year. Excluding repos
and in constant euros, they rose 3%, driven by Spain, Poland and
overall growth in South America, notably in Brazil. All products
contributed to the increase, but especially time deposits in Europe
and South America. Mutual funds rose 19% in constant euros,
driven by commercial efforts in the current interest rate
environment. As a result, customer funds increased 4% in constant
euros.
Retail. 2024 business performance
EUR billion and YoY % change in constant euros
-1%
748
+4%
-2%
+2%
+6%
+2%
+9%
+15%
Gross loans and advances to
Customer deposits excl. repos +
customer excl. reverse repos
mutual funds
Results
Attributable profit in 2024 was EUR 7,263 million (53% of the
Group's total operating areas), up 28% compared to 2023. In
constant euros, it rose 29% year-on-year, with the following
detail:
• Total income grew 11% driven by higher net interest income and
net fee income. Net interest income increased 11%, with rises in
most countries, but especially in South America, driven by higher
volumes and lower deposit costs, and in Spain, Poland and
Portugal due to good margin management. The exceptions were
the UK, due to lower mortgage volumes (in line with our
strategy) and higher cost of deposits (competitive market), and
the US, due to lower volumes.
Greater commercial activity and a larger customer base
contributed to net fee income growth (+7%). The most
significant increases were in Brazil, the US, Mexico and Poland.
Retail. Total income
EUR million and YoY % change in constant euros
7,190
4,630
3,728
8,205
8,708
Var
+17%
-9%
+7%
+16%
Other
+17%
Retail
EUR 32,461 mn
+11%
• Administrative expenses and amortizations increased 3%. In real
terms, costs declined 1% reflecting our transformation efforts
through organizational simplification, process automatization
and the deployment of the global platform, particularly evident
in Spain and the US. As a result, net operating income grew 17%
and efficiency improved to 39.7%.
• Net loan-loss provisions improved 7%, due to a positive
performance in Europe, especially in Spain, Poland and the UK
(macro outlook improvement in the country), which more than
offset greater provisions in South America due to higher activity
and the cost of risk normalization in Mexico and Chile.
• The other gains (losses) and provisions line was 21% more
negative than in 2023, mainly due to greater restructuring
charges in some countries and higher charges related to the CHF
mortgage portfolio in Poland.
RoTE in 2024 was 18.9%, a 3.7 pp improvement year-on-year.
Retail. Underlying income statement
EUR million and % change
/ 2023
2024
2023
% % excl. FX
Revenue
32,461
29,754
+9
+11
Expenses
(12,877)
(12,825)
0
+3
Net operating income
19,584
16,930
+16
+17
LLPs
(5,845)
(6,540)
(11)
(7)
PBT
10,874
7,989
+36
+36
Attributable profit
7,263
5,659
+28
+29
Detailed financial information in section 4.5 'Appendix'.
Annual report 2024
442
Underlying attributable profit
Consumer
Digital Consumer Bank
EUR 1,663 mn
Strategy
Our priority is to continue expanding our leadership in consumer finance and to be the most cost competitive
player, with the best customer experience through a more digital global operating model and the best solutions
(check-out lending, digital journeys in auto lending and operational leasing) through common platforms.
Business
performance
1
Loans increased 4% year-on-year, +6% in auto. Deposits rose 10%, in line with our strategy aimed at lowering
funding costs and reducing net interest income volatility across the cycle, to be able to offer our customers better
pricing.
Results
1
Double-digit year-on-year growth in net operating income due to solid performance in net interest income and net fee
income and good cost control. However, this was not reflected in attributable profit (-12%) due to impacts from higher
CHF mortgage provisions and the provision for potential complaints related to motor finance dealer commissions in the
UK.
1. In constant euros.
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Strategy
Digital Consumer Bank (Consumer) is a leading consumer finance
company globally. It operates in 26 countries in Europe and the
Americas and it serves the financing needs at the point of sale
(both physical and digital) of 25 million customers. It combines
three interconnected businesses: auto financing, consumer
lending, supported by Zinia, and Openbank.
Our vision in the Consumer business is to become the preferred
choice of our partners and our end customers, and offer greater
profitability and value creation to our shareholders, while being the
most cost-efficient player in the industry.
To respond to the changes the mobility and consumer finance
ecosystem is undergoing and deliver on our vision, during 2024, we
worked to transform our operating model by:
• Offering global and best-in-class solutions, integrated into our
partners' (OEMs, importers and retailers) processes,
accompanying them as their increasingly digital business models
evolve.
• We continued to foster cross-regional partnerships and
consolidate new partnerships by leveraging existing
agreements, particularly in the US where we incorporated new
strategic agreements in auto throughout the year and in Latin
America where we continued to focus on developing strategic
alliances.
• We further upgraded our value proposition for improved
customer experience.
• Simplifying and automating our processes to increase
scalability. We are working to align our functions with the
Group's operating model. In the US, our focus has been on
recovering pre-pandemic profitability, driving efficiency savings
and improving our service. In Europe, we focused on
transforming our operating model by streamlining the
organization and making it more agile, accelerating process
automatization, improving digital capabilities and converging
towards global platforms.
• Building and developing global platforms. Throughout the year,
we:
• Expanded the functionalities of our auto leasing platform,
operative in three European markets, and we opened the
broker channel in Germany.
• Continued to simplify our auto operating model in Europe,
having moved from one platform per country to three in total,
towards our final goal of having one common platform to
support our aim of being the most cost-efficient player.
• Fostered growth in Zinia, our check-out lending technology in
Germany, through new agreements such as a co-branded card
with Amazon and instalment loans with Apple.
• Launched Openbank in the US in Q4 2024. We also prepared
the launch of an Openbank branch in Germany (opened in
January 2025) and the full launch of Openbank in Mexico (in
February 2025) with a complete value proposition to compete
with other neobanks.
These launches, together with digital deposit gathering
activities in the Netherlands during the year, support our
profitable growth strategy to capture deposits (a lower cost
and more stable source of funding) and actively manage our
balance sheet to make it more capital light.
Consumer. Total customers
Millions
25
25
2023
2024
Annual report 2024
443
215
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Business performance
After a difficult environment in previous years, 2024 showed
further signs of recovery supported by a market with inflation
moderation and lower interest rates in Europe and North America.
In this environment, new lending increased 4% year-on-year, with
solid growth across our main markets, especially in South America,
led by Brazil. The stock of loans and advances to customers rose
4%. In gross terms, excluding reverse repos and in constant euros,
they were also 4% up year-on-year, mainly driven by Brazil.
We have a EUR 17 billion leasing portfolio which decreased 5%
year-on-year in constant euros, as growth in Europe was more
than offset by a decline in the US.
Customer deposits, which accounted for 60% of Consumer's total
funding, increased 12% year-on-year. Excluding repos and in
constant euros, they were up 10%, as a result of our strategy
aimed at lowering funding costs and reducing net interest income
volatility across the cycle. Our access to wholesale funding
markets remained strong and diversified. Mutual funds rose 19%
in constant euros, up from very low levels. As a result, customer
funds rose 11% year-on-year in constant euros.
Consumer. 2024 business performance
EUR billion and YoY % change in constant euros
137
DCB
+4%
+4%
-4%
DCB
Europe
Europe
US
US
+11%
+18%
+3%
Gross loans and advances to
Customer deposits excl. repos +
customer excl. reverse repos
mutual funds
Consumer. Leasing portfolio
EUR billion and YoY % change in constant euros
Total leasing
17
-5%
33%
67%
DCB Europe
US
Results
Attributable profit in 2024 was EUR 1,663 million (12% of the
Group's total operating areas), down 13% year-on-year. In
constant euros, profit fell 12%, as follows:
• Total income rose 6%, with net interest income growing 6% on
the back of active loan repricing actions and volumes growth in
Europe, and higher volumes in Brazil. Net interest income in the
US rose slightly as benefits from higher yields were mostly offset
by lower credit volumes.
Net fee income increased strongly (+24%), largely driven by
increased insurance penetration in Europe, volumes growth in
Brazil and auto fees in the US. Gains on financial transactions
decreased, mainly in Europe. Leasing income fell, due to a
decrease in auto residual values and, in the US due lower leasing
volumes and as we pass on fiscal benefits (recorded in the tax
line) from electric vehicle leases to pricing.
Consumer. Total income
EUR million and YoY % change in constant euros
Var
DCB Europe
+3%
US*
-1%
Other
5,679
5,297
1,940
+45%
* Year-on-year growth in revenue in the US is flat if we include the impact of the EV
incentives in the tax line.
• Administrative expenses and amortizations performed well,
declining slightly year-on-year (-4% in real terms), even as we
invest in leasing and check-out lending platforms and in business
growth. This good performance reflects our efficiency and
transformation efforts in both the US and DCB Europe.
Consequently, net operating income grew 11% and efficiency
improved 2.7 pp to 40.1%.
• Net loan-loss provisions increased 12%, affected by continued
normalization in Europe and the US, higher volumes, increased
CHF mortgage portfolio coverage, lower portfolio sales than last
year and some regulatory charges. Credit quality remained
controlled with the cost of risk at 2.16%, having normalized in
line with expectations, and the NPL ratio stood at 5.07%.
• Other gains (losses) and provisions registered a loss of EUR 939
million in 2024 compared to a EUR 250 million loss in 2023,
mainly driven by higher Swiss franc mortgage provisions in
Poland and the provision for potential complaints related to
motor finance dealer commissions in the UK (for more
information, see note 25.e in the consolidated financial
statements).
RoTE in 2024 was 9.8%, a 1.8 pp decrease year-on-year.
Consumer. Underlying income statement
EUR million and % change
/ 2023
2024
2023
% % excl. FX
Revenue
12,916
12,296
+5
+6
Expenses
(5,183)
(5,263)
(2)
(1)
Net operating income
7,733
7,033
+10
+11
LLPs
(4,562)
(4,106)
+11
+12
PBT
2,232
2,677
(17)
(16)
Attributable profit
1,663
1,901
(13)
(12)
Detailed financial information in section 4.5 'Appendix'.
Annual report 2024
444
Underlying attributable profit
EUR 2,740 mn
CIB
Corporate & Investment Banking
Strategy
We made our centres of expertise more sophisticated and deepened client relationships, on the back of our Global
Markets plan and US Banking Build-Out (US BBO) initiative, and actively managed capital.
Business
performance
1
Strong activity year-on-year across all business lines, particularly driven by our growth initiatives in Global Markets
and Global Banking.
Results
1
Attributable profit rose 16% year-on-year, on the back of revenue growth (+14%) from a record 2023, which more than
offset higher costs related to the investment in new capabilities. We maintained a leading position in efficiency and
profitability with a low cost of risk.
Recent awards
Ranking in League Tables 2024
Risk.net
Risk Solutions House of the Year
Global Banking & Markets
Structured Finance
Bond House and ESG Bond House of
the Year
ECM
M&A
PFI
Americas Bank of the Year
Europe Digital Deal of the Year: GD
Towers (Germany)
Global Finance
Debt Capital Markets
World’s Best Sustainable Supply
Chain and Trade Finance Solutions
ECAs
Note: In DCM, Europe and the UK refers to financial institutions group (FIG).
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
1.
In constant euros.
Strategy
CIB is our global business focused on wholesale customers, with a
strong advisory component and high value-added solutions. We
leverage the Group's technology to digitalize our business and
automate end-to-end processes, enhancing and protecting the
business while increasing operational efficiency.
Our tech partnerships and participations with Allianz Trade, the
fintech Two, SAP and Komgo, among others, enable us to compete
with new digital players and other competitors and benefit from
new opportunities arising in the current environment.
In 2024, we made good progress in the execution of our strategy to
become a focused, world-class CIB business, positioning ourselves
as a trusted advisor to our clients while delivering profitable
growth and maintaining dynamic capital management, with good
progress with respect to the priorities set for the year:
• We made our centres of expertise more sophisticated, further
strengthening our teams in sales, trading and banking, on the
back of our two most important strategic initiatives: US BBO and
Global Markets plan.
In Global Banking (GB), we expanded our sector and product
capabilities in areas adjacent to our traditional strengths to offer
complete investment banking solutions with coverage across
multiple industries, making key hires in our Global Industry
Groups (such as TMT, Healthcare, Industrials and Financials) and
product teams (M&A, Leveraged Finance, Equity Capital Markets
- ECM and Debt Capital Markets - DCM).
In Global Markets (GM), we continued to execute our ambitious
plan centred on increasing activity with our corporate and
institutional clients (strengthening our European Markets
platform with sales teams in Paris, Frankfurt and Milan), further
leveraging technology, increasing cross-border flows and
enhancing our trading and distribution capabilities.
We started to reap the rewards of our investments in 2023 and
2024, as reflected in the solid performance in institutional sales.
• We further deepened our client relationships, with a particular
focus on the US where we are taking our CIB franchise to the next
level through the execution of the US BBO initiative, selectively
expanding our client universe and product capabilities enabling
us to increase our addressable market and the contribution of
fees as a share of total revenue, especially in the US.
As a result, we are already making progress in targeting
untapped wallets, especially in the US and EMEA, where our
recent investments have had a positive effect and synergies are
evident.
Our US BBO initiative is producing results, enabling us to deliver
more sophisticated solutions to our clients and achieve
numerous ‘firsts’ in businesses where we did not have presence
and upgraded roles in transactions. Additionally, this is leading to
follow-on business opportunities in other areas and markets,
such as in our DCM business, which has led the reverse Yankee
bond market.
• We continued to actively manage capital through our originate
to-share model to drive large-scale capital recycling in
coordination with the Group's Global Asset Desk team. This
enabled us to increase origination and maintain good profitability
ratios.
• Attracting, developing and retaining top diverse talent is key to
the execution of our strategy and for business success, and we
implemented several initiatives to enhance our teams’ skills and
provide enriching careers.
Annual report 2024
445
Contents
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Economic and
Risk management
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statement
governance
financial review
and compliance
Business performance
A high proportion of CIB's activity is customer related (84% of total
income) and capital light, supported by our active balance sheet
management, as reflected in a total revenue to risk-weighted
assets ratio of 6.9%, up 1 pp since 2022.
Loans and advances to customers, mainly concentrated in GTB and
GB businesses, increased 9% year-on-year. In gross terms, minus
reverse repos and in constant euros, they were flat. Customer
deposits decreased 1% year-on-year. Excluding repos and in
constant euros, they fell 10% in line with our strategy to reduce
excess corporate deposits.
By business line, we had the following performance:
• In Global Transaction Banking, strong activity in Export Finance
and Trade & Working Capital Solutions more than compensated
weaker activity in Cash Management, impacted by lower interest
rates.
In Export Finance, we maintained a 10% market share on the
back of our coordinator and underwriter roles in some of the
most important transactions. Trade & Working Capital Solutions
continued to increase collaboration with Financial Sponsors,
Leveraged Finance and M&A teams and we outperformed the
market backed by our leading innovative solutions.
• Global Banking performed well on the back of growth in
Corporate Finance (CF) and Global Debt Financing (GDF).
In CF, we gained market share in a complex environment, with
leading advisory and capital raising roles across our focused
industry sectors and higher activity levels in Europe and the US,
as a result of our upgraded capabilities and the expansion of our
US franchise.
GDF had the best-ever year in terms of DCM activity and wallet
share growth. Structured Finance increased significantly at the
end of the year driven by Energy advisory mandates and Fund
Finance. Securitized Products in Europe had the most active year
in over a decade, being the leading bookrunner in primary cash
issuances and as synthetic securitization arranger with fund
investments, with increasing activity in Latin America.
• Global Markets had good activity levels throughout the year in
Europe, Asia and the US, while Latin America recovered in the
second half of the year. Our investments led to increased client
activity, highlighting institutional flows, while the US BBO
initiative continued to gain momentum, with most key products
implemented and volumes ramping up. There was strong activity
in Rates, Securitized Products and Cash Equities.
Results
Record attributable profit in 2024, increasing 12% year-on-year to
EUR 2,740 million (20% of the Group's total operating areas). In
constant euros, profit grew 16%, with the following detail:
• Total income rose 14% year-on-year, backed by double-digit
growth in net interest income and net fee income, both at record
levels. Net interest income grew 15%, boosted by GB and to a
lesser extent by GM. Net fee income increased 21%, driven
particularly by GB on the back of the US BBO initiative. Gains on
financial transactions decreased 7% due to lower market activity
in South America, mainly in Brazil.
By region, good total income performance in North America and
Europe, while total income grew only slightly in South America,
in part due to weaker activity in the Brazilian market .
CIB. Total income by region
EUR million and % change in constant euros
Var
Europe
3,802
1,987
2,555
+14%
North America
+34%
South America
+1%
By business, total income rose 25% in GB (CF in Europe and the
US and GDF across markets) and +18% in GM, on the back of
strong activity in Europe and North America, mainly with
institutional clients. In GTB, total income grew 3% supported by
good performance in Export Finance and Trade & Working
Capital Solutions.
CIB. Total income by business
EUR million and % change in constant euros
2,632
3,100
2,651
2,743
1,878
2,339
7,346
8,343
TOTAL: +14%
Other: -13%
GB: +25%
GTB: +3%
Global Markets: +18%
2023
2024
Note: total income includes revenue from other activities which are less material
(EUR 186 million in 2023 and EUR 161 million in 2024).
• Administrative expenses and amortizations increased 14% due to
our investments in new products, capabilities and technology.
The efficiency ratio stood at 45.6%.
• Due to the nature of the business, net loan-loss provisions have a
limited impact on CIB's results. They were EUR 174 million (EUR
165 million in 2023), with a low cost of risk of 0.10%.
• Other gains (losses) and provisions recorded a EUR 353 million
loss compared to a EUR 181 million loss in 2023.
As a result, RoTE was 18.1% in 2024 (0.5 pp higher than in 2023).
CIB. Underlying income statement
EUR million and % change
/ 2023
2024
2023
% % excl. FX
Revenue
8,343
7,527
+11
+14
Expenses
(3,807)
(3,387)
+12
+14
Net operating income
4,537
4,140
+10
+13
LLPs
(174)
(165)
+6
+7
PBT
4,009
3,795
+6
+9
Attributable profit
2,740
2,440
+12
+16
Detailed financial information in section 4.5 'Appendix'.
Annual report 2024
446
Underlying attributable profit
EUR 1,650 mn
Wealth
Wealth Management & Insurance
Strategy
We continue building the best wealth and insurance manager in Europe and the Americas supported by our leading
global private banking platform and our best-in-class funds and insurance product factories that leverage our scale
and global capabilities to offer the best value proposition to our customers.
Business
performance
1
Total assets under management reached EUR 498 billion, +13% year-on-year, on the back of the excellent
commercial dynamics in both Private Banking and Santander Asset Management. In Insurance, gross written
premiums exceeded EUR 11.5 billion in 2024.
Results
1
Attributable profit grew 14% to EUR 1,650 million with an RoTE of 79%.
1. In constant euros.
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Strategy
Our Wealth Management & Insurance business was established in
2017 with the aim of enhancing its service model and value
proposition as part of a common platform that leverages
Santander's scale and capabilities.
Since then, it has been an important growth driver for the Group
through its three businesses, delivering consistent double-digit
growth and generating around one third of the Group's total fees,
when those ceded to the commercial network are included.
• Santander Private Banking (PB) is our leading global platform
serving our clients across 11 countries. We have a best-in-class
service model and value proposition connecting clients and
countries through a single platform.
• Santander Asset Management (SAM) is our global asset
manager, which manufactures investment solutions for retail
and institutional customers, with presence in 10 countries and
over 50 years of experience. SAM makes the most of its local
client knowledge and global capabilities to provide customers
the best investment opportunities.
• Santander Insurance provides protection solutions following a
model based on strategic alliances with leading insurance
companies that enables us to have a comprehensive value
proposition across 12 countries. We complement this with in
person and digital distribution capabilities to better serve our
clients. Most of this activity is currently under the recently
established Santander Insurance Holding with a solid governance
and risk monitoring processes.
During 2024, we focused on the following strategic initiatives:
• In PB, where we already have a best-in-class global platform
leading investment flows between Latin America, Europe and the
US, we are developing key growth opportunities to expand our
footprint, such as in the Middle East. During the first half of the
year, we established a branch in the Dubai International Financial
Centre.
Private Banking clients
Thousands
+14%
262.7
298.7
2023
2024
We continued expanding our high value-added offering in all
countries, strengthening, for example, our alternatives
investments offering and developing an open architecture for
structured products. We are also increasing our focus on portfolio
advisory services with ongoing initiatives mainly in Spain, Brazil
and Mexico. Additionally, we established a global ultra-high-net
worth (UHNW) team based in Madrid.
We were named the Best International Private Bank in Latin
America and the Best International Private Bank in eight of our
countries by Euromoney and the Best Private Bank in Spain and
Mexico by the Professional Wealth Management Magazine, a
Financial Times publication.
• In SAM, we operate as a global asset manager leveraging our
scale, global investment capabilities and product distribution
hubs. In terms of retail distribution, we progressed in the
implementation of our advisory model across countries and
deployed SAM Conecta in Mexico and Brazil (already operating in
Spain and Portugal), enhancing our distribution capabilities with
real-time information for our customers.
We recently launched Santander Money Market Fund in
partnership with Amundi Asset Management to offer short-term
cash management solutions to institutional and corporate clients.
In our alternatives business, we implemented eFront, our
common operating platform to support our aim of enhancing our
value proposition and consolidating our operations.
During the year, we were the asset manager that received most
awards in the Salmon Awards in Chile and were named the Best
Asset Manager for Money Markets in Brazil by Guia de Fundos de
Investimentos FGV.
• In Insurance, we continued to deploy our strategic plans across
countries to deliver more value to our customers and simplify our
operations. We are focused on completing our value offering,
especially in higher growth verticals such as life savings,
underscoring our long-term vision for growth in the retirement
products and services. Another area of focus is health, where we
have launched new products in Spain, Portugal and Chile.
Additionally, we continue to improve customer growth and
loyalty by deploying fully-digital servicing and claims
capabilities, already implemented in Brazil, Spain, Poland and
Argentina. We are also developing global platforms such as
Autocompara, our motor insurance comparison engine, to
capture additional business in Latin America.
Annual report 2024
447
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Business performance
Total assets under management (AuMs) reached EUR 498 billion,
+13% year-on-year in constant euros, driven by excellent
commercial activity and positive market performance. In Insurance,
gross written premiums exceeded EUR 11.5 billion in 2024. By
business and in constant euros:
• In Private Banking, customer assets and liabilities exceeded EUR
327 billion (+11% year-on-year), with all products growing,
especially funds and investments. Net new money totalled EUR
18.6 billion in 2024. We offer our customers the benefits of our
scale and international presence which is reflected in 14%
growth year-on-year in total clients to 299 thousand.
• In SAM, total AuMs reached EUR 236 billion,+16% year-on-year,
on the back of the record commercial activity across countries.
Net sales in 2024 reached EUR 15.8 billion, exceeding 2023 net
sales.
Spain surpassed the EUR 100 billion in AuMs for the first time
and Mexico delivered record net sales.
• Insurance had good activity levels, with customer growth of 3%
year-on-year and an increase in the protection business. Gross
written premiums recorded in our Wealth business were 9%
lower in 2024, impacted by lower activity in related business.
Wealth. 2024 business performance
EUR billion and % change in constant euros. December 2024
498
294
236
99
135
69
24
12
Total AuMs
Funds and
investment*
SAM
Private Banking
Custody of
customer funds
Customer deposits
Customer loans
GWP
/ 2023
+13%
+16%
+16%
+19%
+10%
+4%
+7%
-9%
Note: total products marketed, advised, under custody and/or managed.
*Excluding overlaps between PB and SAM (PB clients with investment funds
managed by SAM).
Results
Attributable profit was EUR 1,650 million (12% of the Group’s total
operating areas), 12% up compared to 2023. In constant euros, it
was 14% higher, by line item:
• Total income reached EUR 3,661 million, 15% higher year-on-year,
supported by solid growth in both net interest income and net fee
income.
Net interest income increased 8% in a favourable macro
environment driven by solid margin management and strong
commercial activity in Private Banking.
Net fee income rose 19% year-on-year to EUR 1,489 million, with
growth across businesses (mainly in Private Banking and SAM),
boosted especially by higher volumes on the back of positive
commercial activity and favourable market performance.
Including the fees ceded to our commercial network, which are
mainly related to Insurance (c.70% of the total fees ceded), total
revenue reached EUR 6,248 million, up 13%, with a solid
performance across all three businesses.
Wealth. Total income
EUR million and % change in constant euros
Total
Total
income +
income
ceded fees
PB
2,505
689
467
807
1,780
1,496
2,247
+14%
+14%
SAM
+23%
+21%
Insurance
+12%
+7%
Total income
Fees ceded to the commercial network
Note: information at the total Wealth level excludes overlaps between businesses.
• Administrative expenses and amortizations were 9% higher year
on-year, due to investments in key initiatives, such as reinforcing
PB teams to address the increase in commercial activity. As a
result, net operating income increased 19% year-on-year and the
efficiency ratio improved 2.0 pp to 35.9%.
• Net loan-loss provisions increased from net releases of EUR 17
million in 2023 to a EUR 41 million net provision in 2024.
• The other gains (losses) and provisions increased from a loss of
EUR 18 million in 2023 to a EUR 48 million loss in 2024.
The total contribution to Group profit (profit after tax plus fees
ceded to the commercial network) reached EUR 3,399 million, up
9% year-on-year (+12% in constant euros).
RoTE in 2024 was 78.7%, a 6.5 pp improvement year-on-year.
Wealth. Underlying income statement
EUR million and % change
/ 2023
2024
2023
% % excl. FX
Revenue
3,661
3,210
+14
+15
Expenses
(1,313)
(1,216)
+8
+9
Net operating income
2,348
1,994
+18
+19
LLPs
(41)
17
—
—
PBT
2,259
1,994
+13
+15
Attributable profit
1,650
1,467
+12
+14
Detailed financial information in section 4.5 'Appendix'.
Annual report 2024
448
Underlying attributable profit
EUR 413 mn
Payments
Payments
Strategy
PagoNxt and Cards bring a unique position in the payments industry to the Group, covering both sides of the value
chain of card payments (issuing and acquiring businesses) and account-to-account payments.
Business
performance
1
Activity increased in both businesses supported by global platform development, enabling further scale gains. In
PagoNxt, Getnet's Total Payments Volume rose 13% year-on-year and the number of transactions improved 5%. In
Cards, turnover rose 9% year-on-year and transactions rose 8%.
Results
1
Attributable profit was EUR 413 million. Excluding charges after discontinuing our merchant platform in Germany and
Superdigital in Latin America in Q2 2024, profit was EUR 656 million, increasing 18% year-on-year. PagoNxt's EBITDA
margin improved 2.3 pp to 27.5%
1. In constant euros.
Contents
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
PagoNxt and Cards strategy
At the beginning of the year, we consolidated our PagoNxt and
Cards businesses into the unique global business of Payments.
In PagoNxt, we made progress in the following strategic priorities:
• In Getnet, building on our global platform we deployed global
solutions which enable us to gain market share. For example, our
Tap On Phone functionality launched in Spain, Portugal and
Brazil, our Dynamic Currency Conversion service in Brazil, and a
regional e-commerce API for merchants who are pursuing
acquiring and processing services in Brazil, Mexico, Argentina
and Chile through a single integration.
We remain focused on our current value proposition in Spain and
Portugal, and as such, we decided to discontinue our merchant
platform in Germany in June 2024.
• In Ebury, we continued to make progress by focusing on: i)
growing customers by expanding our product offering and online
capabilities; ii) expanding geographically with a focus on
emerging markets; and iii) introducing tailored products to
capture verticals such as mass payments.
• PagoNxt Payments integrated Lynx Tech, a software company
based on AI to detect and prevent financial crime. We continued
to develop Payments Hub, our A2A payment processor which
already processes all types of payments globally for our banks,
and aims to achieve an industry-leading cost per transaction with
value-added services and is starting to offer our services to third
parties.
Also, in 2024, we discontinued our Superdigital platform in Latin
America, in line with our strategy to promote the use of common
platforms across the Group.
In Cards, we focused on the following priorities:
• Expand the business: we made progress implementing Cards
Risk Data Lab in four countries, a global solution with more than
1 million new pre-approved customers. We launched a
differential joint value proposition (card + PoS) in Spain, Chile and
Portugal, reaching more than 50,000 new business cards.
• Improve customer satisfaction: we are working to offer the best
card payment experience in a simple way at any time, through
what we call Invisible Payments. For physical payments, we
launched Apple Pay in Mexico and Argentina, while in e
commerce payments in Brazil we implemented Click to Pay.
• Implement our global card platform (Plard), which manages
more than 15 million debit cards in Brazil and will start issuing
new customer debit cards in Chile in early 2025. In Mexico, the
new authorizer is live with 160 million transactions per month.
Business performance
Loans and advances to customers increased 4% year-on-year. In
gross terms, excluding reverse repos and in constant euros, loans
rose 15%, driven mainly by Cards in Brazil and Mexico.
Payments has a small amount of deposits, concentrated in
PagoNxt, that decreased 27% year-on-year. Excluding repos and in
constant euros they also fell 27%.
Results
Attributable profit was EUR 413 million in 2024 (3% of the Group's
total operating areas), 32% down year-on-year affected by the
aforementioned charges related to the discontinuation of
platforms. Excluding these charges, profit was EUR 656 million,
18% up year-on-year in constant euros, by line item:
• Total income grew 9%, boosted by a good NII performance
driven by higher activity.
• Administrative expenses and amortizations rose 8% due to our
investments in platforms both in Cards and PagoNxt.
• Net loan-loss provisions, mainly related to Cards, increased 8%
driven by South America and Mexico.
The charges related to the discontinuation of platforms were
recorded in the other gains (losses) and provisions line which
recorded a EUR 347 million loss (EUR 84 million loss in 2023).
Payments. Underlying income statement
EUR million and % change
/
2023
2024
2023
%
% excl. FX
Revenue
5,505
5,298
+4
+9
Expenses
(2,475)
(2,344)
+6
+8
Net operating income
3,030
2,954
+3
+9
LLPs
(1,714)
(1,666)
+3
+8
PBT
969
1,205
(20)
(13)
Attributable profit
413
607
(32)
(26)
Detailed financial information in section 4.5 'Appendix'.
Annual report 2024
449
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
PagoNxt
Business performance
In 2024, the total number of transactions in Getnet reached 9.8
billion, 5% higher year-on-year, and the total payments volume
(TPV) was EUR 221.8 billion, 13% more than in 2023 in constant
euros, driven by the good performance in Europe, Mexico and
Chile.
In PagoNxt Payments, the number of transactions processed in
2024 was 1.2 billion compared to 303 million in 2023.
PagoNxt. Activity. TPV (Getnet)
EUR billion and changes in constant euros
+13%
196.3
221.8
2023
2024
Results
Attributable loss of EUR 299 million in 2024 (EUR 56 million loss if
we exclude the charges related to the discontinuation of
platforms), compared to a EUR 77 million loss in 2023. There was
no material impact from exchange rates in the period. Year-on
year and in constant euros:
• Total income rose 14%, driven by the increase in Getnet's
revenue in Europe, Mexico and Chile and a good performance in
Ebury.
• Administrative expenses and amortizations rose 9% year-on
year, reflecting continued investment in global payments
platforms.
• Net loan-loss provisions improved 31%, supported by all regions.
• Other gains (losses) and provisions recorded losses of EUR 296
million, higher losses than a year ago due to the aforementioned
charges related to the discontinuation of our platforms.
EBITDA margin was 27.5%, 2.7 pp higher than in 2023.
PagoNxt. Underlying income statement
EUR million and % change
/ 2023
2024
2023
%
% excl. FX
Revenue
1,240
1,140
+9
+14
Expenses
(1,160)
(1,091)
+6
+9
Net operating income
+80
+49
+63
+210
LLPs
(16)
(24)
(32)
(31)
PBT
(233)
(17)
—
+513
Attributable profit
(299)
(77)
+287
+229
Detailed financial information in section 4.5 'Appendix'.
Cards
Business performance
We recorded good activity levels in the year, resulting in 9% card
turnover growth year-on-year in constant euros, especially credit
cards (+14% in constant euros), with most countries at record
levels.
The number of transactions rose 8% year-on-year, boosted by a
larger card pool and increased card usage across all transaction
sizes.
Loans and advances to customers increased 4% year-on-year. In
gross terms, excluding reverse repos and in constant euros, they
rose 16%, driven mainly by Brazil and Mexico.
Cards. Activity. Turnover
EUR billion and changes in constant euros
+9%
302.5
330.1
2023
2024
Results
In 2024, attributable profit was EUR 712 million, 4% higher
compared to 2023. In constant euros, profit rose 10%, by line item:
• Total income increased 7%. Net interest income improved
(+11%) mainly due to higher volumes in Latin America, which
offset the fall in net fee income (-5%) affected by customer
retention campaigns in Mexico, a regulatory impact in Chile and a
one-time positive fee recorded in Q1 2023 in Brazil.
• Administrative expenses and amortizations rose 7% driven
mainly by our investments in platforms.
• Net loan-loss provisions rose 9%, below portfolio growth.
• Other gains (losses) and provisions recorded a EUR 50 million
loss compared to a EUR 42 million loss in 2023.
In 2024, RoTE in Cards was 32.6% (35.5% in 2023).
Cards. Underlying income statement
EUR million and % change
/ 2023
2024
2023
%
% excl. FX
Revenue
4,265
4,158
+3
+7
Expenses
(1,315)
(1,253)
+5
+7
Net operating income
2,950
2,905
+2
+7
LLPs
(1,698)
(1,642)
+3
+9
PBT
1,202
1,222
(2)
+4
Attributable profit
712
684
+4
+10
Detailed financial information in section 4.5 'Appendix'.
Annual report 2024
450
Underlying attributable profit
Corporate Centre
-EUR 1,154 mn
2024 highlights:
The Corporate Centre continued to support the Group and add value, defining, developing and coordinating the Group's strategy, as
well as aiding the operating units.
It carries out the corporate oversight and control functions, coordinates interactions with the Group's supervisors and regulators and
also carries out functions related to financial and capital management.
Attributable loss of EUR 1,154 million in 2024, compared to a EUR 998 million loss in 2023, due to a weaker performance in net interest
income, affected by greater interest expenses related to higher TLAC/MREL issuances and increased losses on financial transactions
driven by the impact from foreign currency hedges and risk transfer initiatives, which were partially offset by an improvement in the
sum of the rest of the lines (costs, net fee income and tax).
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Strategy and functions
The Corporate Centre contributes value to the Group, through the
This is done via diversified funding sources (issuances and
following functions, among others:
other), maintaining an adequate profile in volumes, maturities
and costs.
• Implementing global control frameworks and supervision.
The price of these transactions with other Group units is the
• Fostering the exchange of best practices in cost management,
market rate that includes all liquidity concepts (which the
which enables us to be one of the most efficient banks.
Group supports by immobilizing funds during the term of the
transaction) and regulatory requirements (TLAC/MREL).
• Collaborating in the definition and execution of the global
strategy, competitive development operations and projects that
• Interest rate risk is also actively managed in order to dampen
ensure we meet the business plan.
the impact of interest rate changes on net interest income,
conducted via high credit quality, very liquid and low capital
• Contributing to the launch of projects that our global businesses
consumption derivatives.
will carry out which aim to leverage our worldwide presence to
generate economies of scale.
• Strategic management of exposure to exchange rates in equity
and dynamic management of the FX hedges related to the
• Ensuring open and constructive communication with
units’ next twelve months results in euros. The net investments
shareholders, analysts, investors, bondholders, rating agencies
in equity currently hedged totalled EUR 12,169 million (mainly
and other market players.
in Mexico, the UK and Poland) through different FX instruments
(spot or forwards).
• Adding value to our businesses, countries and divisions by
encouraging the exchange of best practices, driving and
• Management of capital and reserves: capital analysis, adequacy
managing innovative global initiatives and defining corporate
and management of the Group including coordination with
policies, to improve efficiency in our processes and service
subsidiaries, profitability monitoring to maximize shareholder
quality for our customers.
returns, setting solvency targets and capital contributions,
monitoring the capital ratio (in both regulatory and economic
It also coordinates the relationship with European regulators and
terms), and efficient capital allocation to the units.
supervisors and carries functions related to financial and capital
management, as follows:
• Financial Management functions:
• Structural management of liquidity risk associated with
funding the Group’s recurring activity and stakes of a financial
nature. At the end of 2024, the liquidity buffer was EUR 351
billion.
Annual report 2024
451
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
• Administrative expenses and amortizations showed a positive
Results
trend, decreasing 3% year-on-year, driven by ongoing
The attributable loss of EUR 1,154 million was 16% higher than in
simplification measures.
2023 (loss of EUR 998 million), as follows:
• Net loan-loss provisions recorded a EUR 3 million release in
• Net interest income worsened by EUR 268 million, as increased
2024, after having registered a release of EUR 2 million in 2023.
liquidity buffer remuneration was amply offset by greater
interest expense related to higher volumes of TLAC/MREL
• The net negative impact of other gains (losses) and provisions
issuances.
(which includes provisions, intangible asset impairments, cost of
the state guarantee on deferred tax assets, pensions, litigation,
• Losses on financial transactions increased by EUR 106 million
one-off provisions, etc.) increased from a loss of EUR 134 million
due to the impact from foreign currency hedges and risk transfer
in 2023 to a EUR 265 million loss in 2024.
initiatives.
Corporate Centre. Underlying income statement
Corporate Centre. Balance sheet and operating means
EUR million
EUR million
2024
2023
%
2024
2023
%
Net interest income
(308)
(41)
660.3
Loans and advances to customers
5,778
5,565
3.8
Net fee income
(11)
(13)
(20.6)
Cash, central banks and credit
institutions
104,379 119,279
(12.5)
Gains (losses) on financial
transactions
A
(408)
(302)
35.2
Debt instruments
10,923
7,726
41.4
Other operating income
50
(83)
0.0
Other financial assets
1,444
808
78.7
Total income
(676)
(439)
54.1
Other asset accounts
118,425 121,327
(2.4)
Administrative expenses and
Total assets
240,948 254,705
(5.4)
amortizations
(379)
(391)
(3.1)
Customer deposits
1,430
1,508
(5.2)
Net operating income
(1,055)
(829)
27.1
Central banks and credit institutions
21,730
47,747
(54.5)
Net loan-loss provisions
3
2
25.6
Marketable debt securities
121,122 110,144
10.0
Other gains (losses) and provisions
(265)
(134)
97.7
Other financial liabilities
48
326
(85.3)
Profit before tax
(1,317)
(961)
37.0
Other liabilities accounts
7,256
7,084
2.4
Tax on profit
162
(36)
0.0
Total liabilities
151,585 166,809
(9.1)
Profit from continuing operations
(1,155)
(998)
15.7
Total equity
89,363
87,896
1.7
Net profit from discontinued
operations
—
—
—
Memorandum items:
Consolidated profit
(1,155)
(998)
15.7
Gross loans and advances to
Non-controlling interests
1
—
—
customers
B
5,853
5,640
3.8
Profit attributable to the parent
(1,154)
(998)
15.7
Customer funds
1,299
1,508
(13.8)
Customer deposits
C
1,299
1,508
(13.8)
Mutual funds
—
—
—
Operating means
Number of employees
1,798
1,922
(6.5)
A. Includes exchange differences.
B. Excluding reverse repos.
C. Excluding repos.
Annual report 2024
452
Underlying attributable profit
Europe
EUR 6,644 mn
Strategy
We maintained our objective to accelerate our business transformation to achieve higher growth and a more efficient
common operating model.
Business
performance
1
New business lending volumes improved year-on-year and there was a strong increase in total customers
(+527,000). However, the stock of loans decreased slightly, still impacted by prepayments. Customer deposits
decreased, driven by both demand and time deposits.
Results
1
Attributable profit increased 19% year-on-year to EUR 6,644 million, with strong revenue growth, mainly from net
interest income, and lower provisions.
1. In constant euros.
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
4.4 Secondary segments
Strategy
In 2024, we focused on growing and transforming our business
and implementing of our common operating model.
• In Retail, we continued to drive digitalization through a common
online banking and mobile experience, while reducing running
costs and streamlining products and processes.
• In CIB, we focused on deepening customer relationships and
boosting our distribution capabilities.
• We continued to grow our Wealth business, which is a key driver
of fee generation, while increasing its efficiency by developing
centralized global technology platforms.
• In Payments, we remain focused on our current PagoNxt value
proposition in Spain and Portugal and on expanding our Cards
business.
Business performance
Commercial activity continued its positive trend, supported by an
increase of more than 527,000 customers year-on-year. Loans and
advances to customers rose 2% year-on-year. In gross terms,
excluding reverse repos and in constant euros, they decreased 2%,
mainly in the UK and Spain, partially offset by growth in Poland
and Portugal supported by new loan origination in Retail.
Customer deposits increased 1% year-on-year. Excluding repos
and in constant euros, they decreased 1% year-on-year driven by
both time and demand deposits. Mutual funds rose 19% in
constant euros.
Europe. 2024 business performance
EUR billion and YoY % change in constant euros
E
554 -2%
E
753 +2%
-2%
-4%
+4%
+10%
+3%
-5%
+6%
+13%
Gross loans and advances to
Customer deposits excluding
customers excluding reverse repos
repos + mutual funds
Results
Attributable profit was EUR 6,644 million in 2024 (48% of the
Group's total operating areas), up 21% year-on-year. In constant
euros, profit rose 19% year-on-year, as follows:
• Total income grew 8%, with an increase in net interest income
(+3%), which rose significantly in Spain, Poland and Portugal due
to good margin management, that more than offset the fall in
the UK due to lower volumes (in line with our strategy) and a
higher cost of deposits in a more competitive market. Net fee
income rose 5%, mainly driven by mutual fund fees in Spain.
Gains on financial transactions increased 31% driven by greater
activity in CIB.
• Administrative expenses and amortizations increased 3%, flat in
real terms as higher costs in the UK and Poland, both affected by
competitive labour markets, were offset by declines in Portugal
and Spain. Net operating income rose 12% and the efficiency
ratio improved to 40.0%.
• Net loan-loss provisions decreased 28% mainly driven by credit
quality improvement across countries and by the macro-outlook
improvement in the UK.
• The other gains (losses) and provisions line recorded losses of
EUR 2,111 million, 24% higher, related to the temporary levy on
revenue earned in Spain and greater charges related to the Swiss
franc mortgage portfolio in Poland.
Europe. Underlying income statement
EUR million and % change
/ 2023
2024
2023
% % excl. FX
Revenue
23,510
21,439
+10
+8
Expenses
(9,407)
(9,030)
+4
+3
Net operating income
14,102
12,409
+14
+12
LLPs
(1,862)
(2,533)
(26)
(28)
PBT
10,129
8,195
+24
+22
Attributable profit
6,644
5,482
+21
+19
Detailed financial information in section 4.5 'Appendix'.
Annual report 2024
453
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Underlying attributable profit
Spain
EUR 3,762 mn
Business performance
During the year, we continued to drive our transformation
programme and we maintained the solid trend in customer
growth, achieving 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.
Loans and advances to customers increased 3% year-on-year. In
gross terms and excluding reverse repos, loans decreased 2%,
impacted by SME amortizations, partially offset by growth in CIB
and Wealth growth.
Customer deposits were flat year-on-year. Excluding repos, they
decreased 1%, affected by time deposits, mainly in CIB. Mutual
funds increased 20% year-on-year.
Results
Attributable profit in 2024 reached EUR 3,762 million, 59% higher
than in 2023. By line item:
• Total income was up 18% propelled by net interest income,
mainly in Retail, net fee income mainly from mutual funds, a
lower contribution to the DGF and the end of contribution to the
SRF in 2023.
• Administrative expenses and amortizations increased 1%. In real
terms, they fell 2% driven by efficiencies generated. As a result,
net operating income rose 30% and the efficiency ratio improved
6 pp to 35.7%.
• Net loan-loss provisions decreased 17% supported by proactive
risk management, with an improvement in the cost of risk and
NPL ratio to 0.50% and 2.68%, respectively.
• The other gains (losses) and provisions line recorded 2% higher
losses, due to a higher charge for the temporary levy on revenue
earned in Spain.
Spain. Underlying income statement
EUR million and % change
/ 2023
2024
2023
%
Revenue
11,974
10,132
+18
Expenses
(4,271)
(4,227)
+1
Net operating income
7,703
5,905
+30
LLPs
(1,259)
(1,522)
(17)
PBT
5,440
3,399
+60
Attributable profit
3,762
2,371
+59
Detailed financial information in section 4.5 'Appendix'.
United
Underlying attributable profit
Kingdom
EUR 1,306 mn
Business performance
During the year, we advanced in our transformation programme
through digitalization and automatization, which helped to
simplify the business and improve efficiency. Our focus on
customer service, both in branches and through a new mobile
banking app received very positive scores.
We prioritized profitability, through pricing discipline and planned
balance sheet optimization. As a result, loans and advances to
customers were flat year-on-year. In gross terms, excluding
reverse repos and in constant euros, they decreased 4%.
Customer deposits decreased 1% year-on-year. Excluding repos
and in constant euros, both customer deposits and total customer
funds decreased 5%. Mutual funds were flat year-on-year in
constant euros.
Results
Attributable profit was EUR 1,306 million, 15% down from 2023. In
constant euros, profit decreased 18%. By line item:
• Total income declined 8%, mainly due to a decrease in net
interest income, affected by lower volumes (in line with our
strategy) and a higher cost of deposits in a very competitive
market. Net fee income decreased mainly due to lower
transactionality.
• Administrative expenses and amortizations rose 3% (+1% in real
terms) as costs related to investments, technology and personnel
were partially offset by transformation savings. The efficiency
ratio stood at 55.9%.
• Net loan-loss provisions decreased 75%, driven by macro
outlook improvement in the UK and good risk management. The
cost of risk was 3 bps, an improvement of 7 bps in the year.
• The other gains (losses) and provisions line recorded losses of
EUR 441 million, a 1% greater loss year-on-year.
United Kingdom. Underlying income statement
EUR million and % change
/ 2023
2024
2023
% % excl. FX
Revenue
5,216
5,525
(6)
(8)
Expenses
(2,918)
(2,745)
+6
+3
Net operating income
2,299
2,779
(17)
(19)
LLPs
(64)
(247)
(74)
(75)
PBT
1,794
2,107
(15)
(17)
Attributable profit
1,306
1,545
(15)
(18)
Detailed financial information in section 4.5 'Appendix'.
Annual report 2024
454
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Underlying attributable profit
Portugal
EUR 1,001 mn
Business performance
In 2024, our strategy remained centred on the execution of our
commercial and digital transformation, focusing on excellence in
customer experience and satisfaction, especially in Retail, which
enabled us to grow in both customers and volumes.
During the year, and despite a competitive environment, we were
leaders in new mortgage lending, supported by our mixed-rate
offering. In individuals, there was a good performance in personal
loans and insurance (especially in health). In corporates, we
promoted investment projects and energy transition, both in Retail
and CIB.
As a result, loans and advances to customers grew 4% year-on
year. In gross terms excluding reverse repos, they also increased
4%.
Customer deposits increased 5%, also +5% excluding repos,
supported by a well-targeted strategy. Mutual funds rose 15%
year-on-year, supported by our growth strategy focused on high
value-added segments.
Results
Attributable profit reached EUR 1,001 million in 2024, 12% higher
than in 2023 as follows:
• Total income increased 6%, reflecting higher net interest income
(+6%) supported by higher volumes and good margin
management. Net fee income increased slightly (+1%), in part
due to legal limitations on fees charged on mortgages and other
loans.
• Administrative expenses and amortizations rose 1% (-1% in real
terms). However, the efficiency ratio improved 1 pp to 26.1%.
• Net loan-loss provisions fell 86%, returning to the minimum
levels seen in 2022, with a cost of risk of only 3 bps and an NPL
ratio that improved 0.19 pp to 2.40%.
• The other gains (losses) and provisions line recorded losses of
EUR 61 million, a 25% greater loss year-on-year.
Portugal. Underlying income statement
EUR million and % change
/ 2023
2024
2023
%
Revenue
2,100
1,982
+6
Expenses
(548)
(542)
+1
Net operating income
1,553
1,440
+8
LLPs
(11)
(77)
(86)
PBT
1,481
1,314
+13
Attributable profit
1,001
896
+12
Detailed financial information in section 4.5 'Appendix'.
Underlying attributable profit
Poland
EUR 800 mn
Business performance
In 2024, we launched a new strategy based on three pillars: total
experience (best experience for customers and employees), total
digitalization (digitalizing and automatizing customer journeys
with the best digital channels) and total responsibility (regulatory
compliance and responsible business agenda). We remain in the
top 3 in NPS and we substantially increased active customers,
supported by OneApp in the first year since its implementation.
There were good commercial dynamics, mainly in SMEs and
corporates. Loans and advances to customers were 12% up in the
year. In gross terms, excluding reverse repos and in constant euros,
they rose 10% mainly in Retail and in CIB.
Customer deposits increased 13% year-on-year. Excluding repos
and in constant euros, they rose 11%, driven by both time and
demand deposits. Mutual funds increased 30% in constant euros.
Results
Attributable profit was EUR 800 million in 2024. Year-on-year,
profit rose 19%. In constant euros, it increased 13%, as follows:
• Total income was 6% higher, driven by net interest income (+6%
on the back of higher volumes and strict funding cost control).
Net fee income grew 8%, mainly in FX and funds.
• Administrative expenses and amortizations increased 6%, mainly
affected by a competitive labour market. The efficiency ratio
stood at 27.1% in line with 2023.
• Net loan-loss provisions decreased 28%, with a significant
improvement in the cost of risk.
• The other gains (losses) and provisions line recorded losses of
EUR 429 million, a 61% greater loss year-on-year, impacted by
charges related to the Swiss franc mortgage portfolio.
Poland. Underlying income statement
EUR million and % change
/ 2023
2024
2023
% % excl. FX
Revenue
3,555
3,182
+12
+6
Expenses
(965)
(862)
+12
+6
Net operating income
2,591
2,320
+12
+6
LLPs
(511)
(674)
(24)
(28)
PBT
1,650
1,392
+19
+12
Attributable profit
800
674
+19
+13
Detailed financial information in section 4.5 'Appendix'.
Annual report 2024
455
Underlying attributable profit
Digital Consumer Bank Europe
EUR 642 mn
Our strategy is focused on strengthening our leadership in auto and non-auto through strategic alliances and
better service through new operational leasing and non-auto (Zinia) platforms.
In 2024, new business volumes rose 1% year-on-year (+2% in auto) and the stock of loans grew 4%. Deposits
grew double digits, in line with our objective to increase retail funding through common platforms to reduce
liability costs.
Results
1
Net operating income rose 6% year-on-year due to higher net interest income and net fee income and lower costs.
However, this was not reflected in attributable profit (-47% year-on-year) due to cost of risk normalization, higher
provisions related to the Swiss franc mortgage portfolio in Poland and the provision for potential complaints
related to motor finance dealer commissions in the UK.
1. In constant euros.
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Strategy
Our strategy in Europe is aligned with that of Consumer at the
global level. The vision in our DCB Europe business is to become
the preferred choice of our partners and our end customers and
offer greater profitability and value creation to our shareholders,
while being the most cost competitive player in the industry.
Our main focus is on transforming our operating model:
• Offering global solutions integrated into our partners' (OEMs,
importers and retailers) processes, accompanying them as their
increasingly digital business models evolve.
• Simplifying and automating our processes to improve customer
experience and gain scalability.
• Building and developing global platforms. In 2024, we
strengthened our operational leasing solution and launched an
Amazon co-branded card through Zinia in Germany. We prepared
the launch of an Openbank branch in Germany (opened in
January 2025) and we continued to upgrade our customer value
proposition and experience.
Business performance
The stock of loans and advances to customers rose 3% year-on
year. In gross terms, excluding reverse repos and in constant euros,
it rose 4% year-on-year (primarily due to auto). New business
volumes rose 1% year-on-year in constant euros, mainly new auto.
In line with our strategy to increase retail funding, customer
deposits increased 17% year-on-year. Excluding repos and in
constant euros, they grew 18% to EUR 81 billion. Mutual funds
increased 24% in constant euros albeit from very low levels. Our
access to wholesale funding markets remained strong and
diversified.
DCB Europe. 2024 business performance
EUR billion and % change in constant euros
140
+4%
YoY
+18%
YoY
86
Gross loans and advances to
Customer deposits excluding
customers excluding reverse repos
repos + mutual funds
Results
Attributable profit in 2024 was EUR 642 million (5% of the Group’s
total operating areas), a 46% decline year-on-year. In constant
euros, profit fell 47%, as follows:
• Total income increased 3%, due to higher net interest income
(+4%), supported by active loan repricing and customer deposit
growth, and net fee income (+13%) driven by greater penetration
in direct insurance, especially in Germany and due to higher fees
from our agreements.
• Administrative expenses and amortizations fell slightly, even as
we invest in business growth. Net operating income increased
6% and the efficiency ratio improved 1.7 pp to 45.9%.
• Net loan-loss provisions were 52% higher, impacted by higher
provisions in Swiss franc mortgage portfolio in Poland. They
were also impacted by normalization, in line with expectations,
volumes growth, some regulatory impacts and lower portfolio
sales than last year. Despite all of this, cost of risk remained at
low levels (0.88%), having normalized in line with expectations.
• Other gains (losses) and provisions registered a loss of EUR 735
million in 2024 compared to a EUR 72 million loss in 2023,
mainly driven by Swiss franc mortgage provisions and the
provision for potential complaints related to motor finance
dealer commissions in the UK (for more information, see note
25.e in the consolidated financial statements).
The largest contribution to profit came from Germany (EUR 229
million), followed by the Nordic countries (EUR 202 million) and
France (EUR 113 million).
DCB Europe. Underlying income statement
EUR million and % change
/ 2023
2024
2023
%
% excl. FX
Revenue
5,679
5,502
+3
+3
Expenses
(2,604)
(2,618)
(1)
(1)
Net operating income
3,075
2,884
+7
+6
LLPs
(1,209)
(792)
+53
+52
PBT
1,131
2,019
(44)
(44)
Attributable profit
642
1,199
(46)
(47)
Detailed financial information in section 4.5 'Appendix'.
Annual report 2024
456
Business
performance
1
Strategy
Underlying attributable profit
North America
EUR 2,579 mn
Strategy
We continue to progress in our digital transformation in the region, leveraging the strengths of our global businesses
with the recent launch of Openbank, to deliver a superior customer experience with improved operational leverage.
Business
performance
1
Loans and advances to customers were flat year-on-year, as growth in Mexico was offset by decrease in the US.
Customer deposits declined 5%, in line with our strategy to reduce excess corporate deposits in the US, partially
mitigated by deposit growth in Mexico and Consumer in the US.
Results
1
Attributable profit grew 12% year-on-year, driven by revenue growth in CIB in both countries and the good revenue
performance in all businesses in Mexico, amply offsetting higher costs (inflation and investments).
1. In constant euros.
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Strategy
We continued to pursue business transformation across the US and
Mexico, while leveraging our global and regional scale. In 2024,
we:
• Remained focused on the transformation of our Retail business,
targeting product simplification, digital investments, process and
operations streamlining.
• Achieved an important milestone in Consumer, launching
Openbank in the US to gather retail deposits and we prepared
the full launch in Mexico (in February 2025) to compete with new
players in the country.
• Continued to invest in our CIB Banking Build-Out in the US (US BBO
initiative), with the expansion of our advisory services and product
capabilities, which is already positively impacting revenue.
• Pursued growth in Wealth, with targeted investments to
enhance our capabilities and strengthen business growth levers.
Business performance
Loans and advances to customers were up 3% year-on-year. In
gross terms, excluding reverse repos and in constant euros, they
were flat as growth in Mexico was offset by decrease in the US, in
line with our strategy focused on capital optimization and efficient
allocation, and value creation.
Customer deposits were flat year-on-year. Excluding repos and in
constant euros, they decreased 5%, in line with our strategy to
reduce excess corporate deposits in CIB in the US.
Mutual funds grew 23% year-on-year in constant euros, largely
driven by Retail in Mexico and Wealth in both countries.
North America. 2024 business performance
EUR billion and YoY % change in constant euros
NA
162 0%
NA
170 0%
-2%
+6%
-6%
+12%
Gross loans and advances to
Customer deposits excluding
customers excluding reverse
repos + mutual funds
repos
Results
Attributable profit in 2024 was EUR 2,579 million (19% of the
Group's total operating areas), +10% year-on-year. In constant
euros, profit grew 12%, by line:
• Total income increased 7%, driven by strong performance in CIB
in the US, as we consolidate our US BBO initiative, and by growth
in all businesses in Mexico, supported by higher volumes.
• Administrative expenses and amortizations were 5% higher
impacted by inflation. In real terms, they rose slightly (+1%) as
higher costs related to investments that we are undertaking in
Retail in Mexico and for the development of new capabilities in
CIB in the US were offset by savings from transformation
initiatives.
• Net loan-loss provisions rose 2%, reflecting business growth in
Retail and Payments in Mexico, partially compensated by lower
provisions in auto and Commercial portfolios in the US.
• We recorded a EUR 336 million loss in the other gains (losses)
and provisions line, compared to EUR 138 million loss in 2023
due to charges related to transformation acceleration in the US.
North America. Underlying income statement
EUR million and % change
/ 2023
2024
2023
%
% excl. FX
Revenue
13,915
13,174
+6
+7
Expenses
(6,701)
(6,465)
+4
+5
Net operating income
7,214
6,708
+8
+9
LLPs
(3,786)
(3,733)
+1
+2
PBT
3,091
2,837
+9
+11
Attributable profit
2,579
2,354
+10
+12
Detailed financial information in section 4.5 'Appendix'.
Annual report 2024
457
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Underlying attributable profit
United States
EUR 1,109 mn
Business performance
Loans and advances to customers were 6% higher than in
December 2023. In gross terms, excluding reverse repos and in
constant euros, they were 2% down year-on-year, in line with our
focus on capital optimization and efficient allocation and value
creation.
Customer deposits rose 3% year-on-year. Excluding repos and in
constant euros, they fell 8%, mainly due to our strategy to reduce
excess corporate deposits in CIB. Deposits from individuals,
including those from Openbank since its launch in Q4 2024, grew
2% year-on-year. Mutual funds increased 12% year-on-year in
constant euros, supported by an enhanced value proposition.
Results
Attributable profit in 2024 was EUR 1,109 million, a 19% increase
year-on-year. In constant euros, profit also grew 19%, as follows:
• Total income rose 5%, driven by strong net fee income growth
(+50%) and higher gains on financial transactions supported by
increased activity levels in CIB and the good performance related
to the Multifamily servicing agreement with the FDIC. Net
interest income decreased 1%, due to higher funding costs,
partially offset by higher volumes in auto loans. Leasing income
dropped mainly due to lower leasing volumes.
• Administrative expenses and amortizations increased 4%. In real
terms, they rose just 1%, as investments related to the
Openbank launch and the US BBO initiative were largely offset
by savings captured from our transformation plan.
• Net loan-loss provisions improved 3% due to lower provisions in
the auto and Commercial portfolios, in line with portfolio
performance. Cost of risk improved to 1.82%.
• Other gains (losses) and provisions recorded a EUR 190 million
loss compared to a EUR 74 million loss in 2023, due to charges
related to transformation acceleration.
• Tax on profit had a positive impact both in 2023 and 2024 as a
result of the tax incentives related to electric vehicle leasing.
United States. Underlying income statement
EUR million and % change
/ 2023
2024
2023
%
% excl. FX
Revenue
7,580
7,209
+5
+5
Expenses
(3,830)
(3,679)
+4
+4
Net operating income
3,750
3,531
+6
+6
LLPs
(2,507)
(2,593)
(3)
(3)
PBT
1,053
863
+22
+22
Attributable profit
1,109
932
+19
+19
Detailed financial information in section 4.5 'Appendix'.
Underlying attributable profit
Mexico
EUR 1,671 mn
Business performance
In 2024, we recorded solid activity levels, mainly in individuals,
where we continued to perform well with a market share of 14%
well above our total loan share of 12%.
Loans and advances to customers decreased 6% year-on-year. In
gross terms, excluding reverse repos and in constant euros, loans
rose 6%, with growth in all global businesses except CIB (-6%
year-on-year, in line with our focus on profitability and risk
appetite). There were notable increases in Retail (good
performance in mortgages, personal loans and corporates) and
double-digit growth in Consumer and Wealth.
Customer deposits declined 7% year-on-year. Excluding repos and
in constant euros, they increased 5%, driven by demand deposit
growth (+7%) due to our strategy to manage funding costs and
improve the mix. Mutual funds rose 33% in constant euros.
Results
Attributable profit in 2024 was EUR 1,671 million, 7% higher year
on-year. In constant euros, it increased 10% year-on-year as
follows:
• Total income rose 10%, with increases in net interest income
(+8%, with growth in all businesses), net fee income (+4%,
supported by mutual fund and insurance fees) and gains on
financial transactions (+94%).
• Administrative expenses and amortizations increased 6%. In real
terms however, they rose just 1%, as our investments in
technology and digitalization were offset by savings from
transformation initiatives. As a result, the efficiency ratio
improved by 1.4 pp to 42.5%.
• Net loan-loss provisions were up 16%, due to the normalization
of provisions and solid loan growth. Asset quality performed well
and cost of risk remained at comfortable levels (2.64%).
• Other gains (losses) and provisions recorded a EUR 62 million
loss, compared to a EUR 57 million loss in 2023.
Mexico. Underlying income statement
EUR million and % change
/ 2023
2024
2023
%
% excl. FX
Revenue
6,278
5,899
+6
+10
Expenses
(2,665)
(2,588)
+3
+6
Net operating income
3,613
3,311
+9
+12
LLPs
(1,277)
(1,135)
+12
+16
PBT
2,274
2,119
+7
+11
Attributable profit
1,671
1,560
+7
+10
Detailed financial information in section 4.5 'Appendix'.
Annual report 2024
458
Underlying attributable profit
South America
EUR 3,863 mn
Strategy
In 2024, our franchise continued to grow and create value for the Group, in line with our objective of being the
primary bank for our customers and becoming the most profitable bank in each of the countries where we operate.
Given our focus on service quality, our customer base grew 10% year-on-year, reaching 80 million.
Business
performance
1
Both loans and deposits grew year-on-year (+9% and +12%, respectively), as we supported regional strategic
initiatives including multinationals, consumer, payments and inclusive and sustainable businesses through
differential value propositions.
Results
1
Attributable profit was EUR 3,863 million in 2024, reflecting a 36% increase year-on-year driven by higher activity, lower
cost of deposits, good performance in net fee income as well as improvements in efficiency.
1. In constant euros. In volumes and results, the variations in constant euros have been calculated considering the Argentine peso exchange rate on the last working day
for each of the periods presented. For further information, see section 8. 'Alternative performance measures' of this chapter.
Contents
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Strategy
In 2024, we focused on being the primary bank for our customers,
leveraging the synergies generated by our global businesses:
• In Retail, we continued on our journey to become a digital bank
with branches by streamlining our product and service offering
and improving customer experience.
• In Consumer, we maintained our market leadership in auto by
strengthening strategic alliances and new business acquisitions.
• In CIB, we continued evolving towards a pan-regional offering,
focusing on Markets and Corporate Finance businesses.
• In Wealth, we increased liability gathering to drive loyalty and
continued developing our distribution channels.
• In Payments, we expanded our Getnet business and started
implementing Plard, our Cards platform, in Brazil and Chile.
Business performance
Loans and advances to customers decreased 4% year-on-year. In
gross terms, excluding reverse repos and in constant euros, they
rose 9%, with increases in all global businesses. Retail had a good
performance overall in Brazil and in corporates in Uruguay and
Chile. There were positive trends in loans across our main countries
in Consumer, Payments and Wealth. In CIB, growth in Brazil and
Argentina was partially offset by decreases in Chile and Uruguay.
South America. 2024 business performance
EUR billion and YoY % change in constant euros.
SA
154 +9%
SA
201 +13%
+10%
+1%
+105%
+7%
+16%
+66%
Gross loans and advances to
Customer deposits excluding
customers excluding reverse
repos + mutual funds
repos
Customer deposits fell 7% year-on-year. Excluding repos and in
constant euros, they grew 12%, rising in all our main countries and
driven by double-digit growth in both time and demand deposits.
Mutual funds increased 14%, supported by all our main countries.
Results
Attributable profit was EUR 3,863 million (28% of the Group’s total
operating areas), 27% higher than in 2023. In constant euros, profit
increased 36% as follows:
• Total income rose 18%, supported by 27% net interest income
growth, up in all global businesses (of note, Retail) on the back of
higher activity in the region and, in the case of Brazil and Chile,
also benefiting from negative sensitivity of their balance sheets
in a lower interest rate environment. Solid net fee income growth
amply offset lower gains on financial transactions.
• Administrative expenses and amortizations increased 7% (up 3%
in real terms), mainly driven by Argentina, but with good cost
management in our main countries. The efficiency ratio improved
3.4 pp, reaching 35.1%.
• Net loan-loss provisions rose 9%, due to Brazil and Argentina,
where provisions increased (although both by less than portfolio
growth), normalization from low levels in Chile and portfolio
growth in Consumer in Uruguay. The cost of risk reached 3.50%,
from 3.36% in December 2023.
• Greater loss in other gains (losses) and provisions, mainly driven
by Argentina and Chile.
South America. Underlying income statement
EUR million and % change
/ 2023
2024
2023
% % excl. FX
Revenue
19,783
17,971
+10
+18
Expenses
(6,943)
(6,920)
0
+7
Net operating income
12,841
11,050
+16
+25
LLPs
(5,478)
(5,401)
+1
+9
PBT
5,993
4,608
+30
+40
Attributable profit
3,863
3,038
+27
+36
Detailed financial information in section 4.5 'Appendix'.
Annual report 2024
459
Contents
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Underlying attributable profit
Brazil
EUR 2,422 mn
Business performance
In Brazil, we continued working to become the primary bank for
our customers by launching several initiatives through our global
businesses. In Retail, we focused on providing a personalized
experience for our customers through data analysis and the use of
artificial intelligence. In Consumer, we strengthened our strategic
alliances and maintained our leadership in auto for individuals. In
CIB, we consolidated our leadership in foreign trade financing and
foreign currency. In Wealth, we furthered our fund gathering plan,
leveraging a diversified investment ecosystem. In Payments, we
achieved sustained growth and increased active customers.
Loans and advances to customers fell 8% year-on-year. In gross
terms, excluding reverse repos and in constant euros, they rose
10%, supported by all global businesses, with notable growth in
Retail and Consumer.
Customer deposits decreased 15% year-on-year. Excluding repos
and in constant euros, they grew 8% mainly driven by time
deposits (+9%). Mutual funds rose 6% and total customer funds
increased 7% in constant euros.
Results
Attributable profit in 2024 was EUR 2,422 million, 26% higher
year-on-year. In constant euros, it increased 36%, as follows:
• Total income rose 11%, as the good performance in net interest
income (+20%), which benefitted from higher volumes and the
negative sensitivity of the balance sheet in a lower interest rate
environment, and net fee income (+6%, particularly insurance
and FX fees) amply offset lower gains on financial transactions.
• Administrative expenses and amortizations increased 3%, but
fell 1% in real terms, as a result of good cost management. The
efficiency ratio improved to 32.1%.
• Net loan-loss provisions rose 3%, increasing below loan growth
and having registered charges in 2023 due to single names in
CIB. The cost of risk stood at 4.51% (4.77% in 2023).
• The negative impact of other gains (losses) and provisions
decreased in the period (-3%).
Brazil. Underlying income statement
EUR million and % change
/ 2023
2024
2023
% % excl. FX
Revenue
13,536
13,104
+3
+11
Expenses
(4,352)
(4,529)
(4)
+3
Net operating income
9,184
8,574
+7
+15
LLPs
(4,487)
(4,701)
(5)
+3
PBT
3,830
2,911
+32
+42
Attributable profit
2,422
1,921
+26
+36
Detailed financial information in section 4.5 'Appendix'.
Underlying attributable profit
Chile
EUR 629 mn
Business performance
In 2024, we remained focused on improving customer service,
furthering digitalization and increasing our customer base by
leveraging our digital products. This enabled us to be the most
recommended bank in the country for the fifth consecutive year.
We further expanded Getnet and we are also scaling our platform
to make international transfers to 28 countries, with no cost for our
customers. In Consumer, we strengthened our leadership,
exceeding a market share of 24%.
We lead the market among privately-owned banks in loans and
deposits. Loans and advances to customers decreased 5% year-on
year. Excluding reverse repos and in constant euros, gross loans
and advances to customers rose 1%, increasing in all global
businesses except CIB.
Customer deposits rose 2% year-on-year. Excluding repos and in
constant euros they were 10% higher, mainly underpinned by time
deposits (+13%), while mutual funds grew 32%. Total customer
funds increased 16% in constant euros.
Results
Attributable profit in 2024 was EUR 629 million, up 8% year-on
year. In constant euros it grew 22%, by line item:
• Total income rose 28%, as an increase in net interest income
(+48%), which benefitted from higher activity and the negative
sensitivity of the balance sheet in a lower interest rate
environment, and in net fee income (mainly driven by mutual
funds, cards and advisory) more than offset lower gains on
financial transactions (falling from high levels in 2023).
• Administrative expenses and amortizations were up 3% (-1% in
real terms) and the efficiency ratio improved 8.6 pp to 36.0%.
• Net loan-loss provisions increased 53%, normalizing from very
low levels. The cost of risk rose 39 bps, standing at 1.19%. The
NPL ratio stood at 5.37%.
• Other gains (losses) and provisions reflected a loss of EUR 51
million related to labour charges (gain of EUR 51 million in
2023).
Chile. Underlying income statement
EUR million and % change
/ 2023
2024
2023
%
% excl. FX
Revenue
2,592
2,285
+13
+28
Expenses
(933)
(1,020)
(8)
+3
Net operating income
1,659
1,265
+31
+48
LLPs
(497)
(365)
+36
+53
PBT
1,111
951
+17
+31
Attributable profit
629
582
+8
+22
Detailed financial information in section 4.5 'Appendix'.
Annual report 2024
460
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Contents
Underlying attributable profit
Argentina
EUR 665 mn
Business performance
In Argentina, we pursued our profitable growth and value creation
strategy, focused on customer experience. We further consolidated
our leadership in the transactional business, generating results
with low capital consumption. In Retail, we relaunched mortgage
loans and redefined our operating model, focusing on optimizing
cost to serve. In Consumer, we strengthened our leadership via
strategic alliances. We expanded our perimeter in Wealth and also
developed new digital functionalities in Cards.
In volumes and results, in contrast to the other countries, the
variations in Argentina have been calculated only considering the
Argentine peso exchange rate on the last working day for each of
the periods presented. For further information, see section 8.
'Alternative performance measures' of this chapter.
Loans and advances to customers rose 104% year-on-year. In gross
terms and excluding reverse repos they were up 105%,
underpinned by growth in all businesses (notably in Retail).
Customer deposits increased 74% year-on-year. Excluding repos,
they also grew 74%, supported by both demand (+72%) and time
deposits (+82%). Mutual funds rose 51% in 2024, contributing to a
66% increase in customer funds.
Results
Attributable profit in 2024 was EUR 665 million, 72% higher year
on-year. By line item:
• Total income grew 61%, underpinned by increases in net interest
income (higher credit volumes and income from public securities)
and net fee income, in an environment characterized by
narrowing margins, regulatory changes and disinflation.
• Administrative expenses and amortizations rose 32%, well
below total income growth total income. As a result, the
efficiency ratio improved 9.1 pp year-on-year, reaching 41.1%,
while net operating income was up 90%.
• Net loan-loss provisions increased (+89%) although by less than
loan growth. The cost of risk stood at 4.59%, improving 2.0 pp
year-on-year.
• Other gains (losses) and provisions registered charges relating to
labour charges.
Argentina. Underlying income statement
EUR million and % change
/ 2023
2024
2023
%
Revenue
2,487
1,544
+61
Expenses
(1,022)
(775)
+32
Net operating income
1,465
769
+90
LLPs
(284)
(150)
+89
PBT
827
505
+64
Attributable profit
665
386
+72
Detailed financial information in section 4.5 'Appendix'.
Annual report 2024
461
Contents
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Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
4.5 Appendix
Note: In 2024 for the Argentine peso, we apply an alternative exchange rate that better reflects the evolution of inflation (we continue to
apply the official ARS exchange rate to all prior periods). For further information, see section 8. 'Alternative performance measures' of this
chapter.
Additionally, in line with the changes published in the Q1 2024 quarterly report, balance sheet series include adjustments to some of the
2023 metrics published in the Annual report 2023 in Retail & Commercial Banking, Digital Consumer Bank, CIB and Wealth Management &
Insurance to better reflect our five global businesses’ perimeters according to our new operating model; these adjustments do not affect
business volumes metrics at the Group level.
Primary segments
RETAIL & COMMERCIAL BANKING
EUR million
Underlying income statement
2024
2023
%
% excl. FX
Net interest income
27,942
25,550
9.4
11.0
Net fee income
4,681
4,497
4.1
7.3
Gains (losses) on financial transactions ᴬ
812
854
(4.9)
(4.0)
Other operating income
(974)
(1,146)
(15.1)
(14.3)
Total income
32,461
29,754
9.1
11.0
Administrative expenses and amortizations
(12,877)
(12,825)
0.4
2.5
Net operating income
19,584
16,930
15.7
17.4
Net loan-loss provisions
(5,845)
(6,540)
(10.6)
(7.3)
Other gains (losses) and provisions
(2,865)
(2,401)
19.4
20.7
Profit before tax
10,874
7,989
36.1
35.9
Tax on profit
(3,091)
(1,927)
60.4
57.4
Profit from continuing operations
7,783
6,062
28.4
28.9
Net profit from discontinued operations
—
—
—
—
Consolidated profit
7,783
6,062
28.4
28.9
Non-controlling interests
(520)
(403)
29.0
29.1
Profit attributable to the parent
7,263
5,659
28.3
28.8
Balance sheet and activity metrics
Loans and advances to customers
608,945
618,113
(1.5)
(0.9)
Customer deposits
661,152
666,578
(0.8)
0.3
Memorandum items:
Gross loans and advances to customers ᴮ
609,490
618,773
(1.5)
(0.7)
Customer funds
747,567
725,971
3.0
4.4
Customer deposits
C
649,619
638,169
1.8
2.6
Mutual funds
97,948
87,802
11.6
18.8
Risk-weighted Assets
290,922
293,430
(0.9)
Ratios (%) and customers
RoTE ᴰ
18.9
15.1
3.7
Efficiency ratio
39.7
43.1
(3.4)
NPL ratio
3.18
3.21
(0.03)
NPL coverage ratio
58.4
61.4
(3.0)
Number of total customers (thousands)
147,140
138,821
6.0
Number of active customers (thousands)
79,079
75,130
5.3
A. Includes exchange differences.
B. Excluding reverse repos.
C. Excluding repos.
D. Allocated according to RWA consumption.
Annual report 2024
462
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governance
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Contents
DIGITAL CONSUMER BANK
EUR million
Underlying income statement
2024
2023
%
% excl. FX
Net interest income
10,777
10,221
5.4
6.1
Net fee income
1,508
1,229
22.7
23.8
Gains (losses) on financial transactions ᴬ
(4)
116
—
—
Other operating income
635
730
(13.0)
(13.3)
Total income
12,916
12,296
5.0
5.7
Administrative expenses and amortizations
(5,183)
(5,263)
(1.5)
(1.2)
Net operating income
7,733
7,033
10.0
10.9
Net loan-loss provisions
(4,562)
(4,106)
11.1
12.4
Other gains (losses) and provisions
(939)
(250)
276.0
283.0
Profit before tax
2,232
2,677
(16.6)
(16.4)
Tax on profit
(295)
(426)
(30.9)
(30.8)
Profit from continuing operations
1,938
2,251
(13.9)
(13.6)
Net profit from discontinued operations
—
—
—
—
Consolidated profit
1,938
2,251
(13.9)
(13.6)
Non-controlling interests
(275)
(350)
(21.3)
(21.1)
Profit attributable to the parent
1,663
1,901
(12.5)
(12.3)
Balance sheet and activity metrics
Loans and advances to customers
207,104
199,158
4.0
3.4
Customer deposits
128,975
115,446
11.7
9.2
Memorandum items:
Gross loans and advances to customers ᴮ
215,160
206,649
4.1
3.6
Customer funds
137,122
120,996
13.3
10.8
Customer deposits
C
128,933
114,334
12.8
10.3
Mutual funds
8,189
6,662
22.9
19.4
Risk-weighted Assets
152,399
154,396
(1.3)
Ratios (%) and customers
RoTE ᴰ
9.8
11.5
(1.8)
Efficiency ratio
40.1
42.8
(2.7)
NPL ratio
5.07
4.75
0.33
NPL coverage ratio
73.6
76.5
(2.9)
Number of total customers (thousands)
25,041
25,413
(1.5)
A. Includes exchange differences.
B. Excluding reverse repos.
C. Excluding repos.
D. Allocated according to RWA consumption.
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Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
CORPORATE & INVESTMENT BANKING
EUR million
Underlying income statement
2024
2023
%
% excl. FX
Net interest income
4,020
3,594
11.9
14.8
Net fee income
2,548
2,131
19.6
21.4
Gains (losses) on financial transactions ᴬ
1,619
1,795
(9.9)
(6.7)
Other operating income
156
7
—
—
Total income
8,343
7,527
10.8
13.6
Administrative expenses and amortizations
(3,807)
(3,387)
12.4
13.8
Net operating income
4,537
4,140
9.6
13.4
Net loan-loss provisions
(174)
(165)
5.7
7.3
Other gains (losses) and provisions
(353)
(181)
95.3
100.1
Profit before tax
4,009
3,795
5.7
9.5
Tax on profit
(1,065)
(1,137)
(6.3)
(2.2)
Profit from continuing operations
2,944
2,658
10.8
14.4
Net profit from discontinued operations
—
—
—
—
Consolidated profit
2,944
2,658
10.8
14.4
Non-controlling interests
(204)
(219)
(6.5)
(1.1)
Profit attributable to the parent
2,740
2,440
12.3
15.8
Balance sheet and activity metrics
Loans and advances to customers
184,923
168,960
9.4
9.4
Customer deposits
202,355
203,713
(0.7)
1.0
Memorandum items:
Gross loans and advances to customers ᴮ
136,818
137,578
(0.6)
0.2
Customer funds
152,450
169,839
(10.2)
(7.0)
Customer deposits
C
136,672
155,274
(12.0)
(9.7)
Mutual funds
15,777
14,565
8.3
26.2
Risk-weighted Assets
122,274
114,849
6.5
Ratios (%)
RoTE ᴰ
18.1
17.5
0.5
Efficiency ratio
45.6
45.0
0.6
NPL ratio
0.86
1.36
(0.50)
NPL coverage ratio
39.3
41.2
(2.0)
A. Includes exchange differences.
B. Excluding reverse repos.
C. Excluding repos.
D. Allocated according to RWA consumption.
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WEALTH MANAGEMENT & INSURANCE
EUR million
Underlying income statement
2024
2023
%
% excl. FX
Net interest income
1,627
1,513
7.6
8.2
Net fee income
1,489
1,262
18.0
19.2
Gains (losses) on financial transactions ᴬ
213
170
25.7
27.3
Other operating income
332
266
24.7
32.0
Total income
3,661
3,210
14.0
15.4
Administrative expenses and amortizations
(1,313)
(1,216)
8.0
9.2
Net operating income
2,348
1,994
17.7
19.3
Net loan-loss provisions
(41)
17
—
—
Other gains (losses) and provisions
(48)
(18)
170.8
170.3
Profit before tax
2,259
1,994
13.3
14.8
Tax on profit
(531)
(454)
16.9
18.1
Profit from continuing operations
1,728
1,540
12.2
13.8
Net profit from discontinued operations
—
—
—
—
Consolidated profit
1,728
1,540
12.2
13.8
Non-controlling interests
(79)
(73)
7.9
11.6
Profit attributable to the parent
1,650
1,467
12.5
13.9
Balance sheet and activity metrics
Loans and advances to customers
24,479
22,509
8.8
7.7
Customer deposits
60,986
58,507
4.2
3.9
Memorandum items:
Gross loans and advances to customers ᴮ
24,611
22,603
8.9
7.9
Customer funds
171,866
157,142
9.4
11.6
Customer deposits
C
60,058
57,643
4.2
3.7
Mutual funds
111,807
99,499
12.4
16.4
Risk-weighted Assets
11,559
18,418
(37.2)
Assets under management
498,289
459,544
8.4
12.7
Gross written premiums
11,526
12,598
(11.8)
(8.5)
Ratios (%) and customers
RoTE ᴰ
78.7
72.2
6.5
Efficiency ratio
35.9
37.9
(2.0)
NPL ratio
0.67
1.40
(0.73)
NPL coverage ratio
80.3
29.3
51.0
Number of Private Banking customers (thousands)
299
263
13.7
A. Includes exchange differences.
B. Excluding reverse repos.
C. Excluding repos.
D. Allocated according to RWA consumption.
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Contents
PAYMENTS
EUR million
Underlying income statement
2024
2023
%
% excl. FX
Net interest income
2,609
2,424
7.6
12.9
Net fee income
2,793
2,952
(5.4)
(1.5)
Gains (losses) on financial transactions ᴬ
41
1
—
—
Other operating income
61
(79)
—
—
Total income
5,505
5,298
3.9
8.6
Administrative expenses and amortizations
(2,475)
(2,344)
5.6
8.0
Net operating income
3,030
2,954
2.6
9.0
Net loan-loss provisions
(1,714)
(1,666)
2.9
8.2
Other gains (losses) and provisions
(347)
(84)
314.3
320.1
Profit before tax
969
1,205
(19.6)
(12.9)
Tax on profit
(464)
(509)
(8.8)
(2.2)
Profit from continuing operations
505
696
(27.4)
(20.8)
Net profit from discontinued operations
—
—
—
—
Consolidated profit
505
696
(27.4)
(20.8)
Non-controlling interests
(92)
(89)
3.4
12.0
Profit attributable to the parent
413
607
(31.9)
(25.7)
Balance sheet and activity metrics
Loans and advances to customers
22,840
22,045
3.6
15.0
Customer deposits
1,038
1,418
(26.8)
(26.8)
Memorandum items:
Gross loans and advances to customers ᴮ
24,614
23,709
3.8
15.3
Customer funds
1,038
1,418
(26.8)
(26.8)
Customer deposits
C
1,038
1,418
(26.8)
(26.8)
Mutual funds
—
—
—
—
Risk-weighted Assets
20,346
20,963
(2.9)
Ratios (%)
RoTE ᴰ
15.6
24.9
(9.4)
NPL ratio
5.14
5.02
0.12
NPL coverage ratio
140.1
139.8
0.3
A. Includes exchange differences.
B. Excluding reverse repos.
C. Excluding repos.
D. Allocated according to RWA consumption.
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Contents
PAGONXT
EUR million
Underlying income statement
2024
2023
%
% excl. FX
Net interest income
132
93
41.0
48.3
Net fee income
958
954
0.5
5.2
Gains (losses) on financial transactions ᴬ
0
(10)
(97.5)
(97.4)
Other operating income
150
102
46.5
48.3
Total income
1,240
1,140
8.7
13.6
Administrative expenses and amortizations
(1,160)
(1,091)
6.3
8.8
Net operating income
80
49
62.7
210.4
Net loan-loss provisions
(16)
(24)
(32.5)
(30.9)
Other gains (losses) and provisions
(296)
(42)
611.6
639.1
Profit before tax
(233)
(17)
—
513.0
Tax on profit
(57)
(59)
(4.0)
8.9
Profit from continuing operations
(290)
(76)
281.8
221.4
Net profit from discontinued operations
—
—
—
—
Consolidated profit
(290)
(76)
281.8
221.4
Non-controlling interests
(9)
(1)
571.7
—
Profit attributable to the parent
(299)
(77)
287.1
228.8
Balance sheet and activity metrics
Loans and advances to customers
1,066
1,167
(8.7)
6.1
Customer deposits
1,038
1,418
(26.8)
(26.8)
Memorandum items:
Gross loans and advances to customers ᴮ
1,087
1,196
(9.1)
5.2
Customer funds
1,038
1,418
(26.8)
(26.8)
Customer deposits
C
1,038
1,418
(26.8)
(26.8)
Mutual funds
—
—
—
—
Risk-weighted Assets
4,671
5,428
(13.9)
Total transactions (Getnet, million)
9,837
9,413
4.5
Total payments volume (Getnet)
221,787
196,342
7.9
13.0
Ratios (%)
EBITDA margin
27.5
24.8
2.7
Efficiency ratio
93.6
95.7
(2.1)
A. Includes exchange differences.
B. Excluding reverse repos.
C. Excluding repos.
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Contents
CARDS
EUR million
Underlying income statement
2024
2023
%
% excl. FX
Net interest income
2,478
2,331
6.3
11.4
Net fee income
1,835
1,998
(8.2)
(4.7)
Gains (losses) on financial transactions ᴬ
41
10
309.2
358.5
Other operating income
(89)
(181)
(50.7)
(49.9)
Total income
4,265
4,158
2.6
7.2
Administrative expenses and amortizations
(1,315)
(1,253)
5.0
7.3
Net operating income
2,950
2,905
1.5
7.1
Net loan-loss provisions
(1,698)
(1,642)
3.4
8.8
Other gains (losses) and provisions
(50)
(42)
19.2
18.2
Profit before tax
1,202
1,222
(1.6)
4.5
Tax on profit
(407)
(450)
(9.5)
(3.5)
Profit from continuing operations
795
772
3.0
9.1
Net profit from discontinued operations
—
—
—
—
Consolidated profit
795
772
3.0
9.1
Non-controlling interests
(83)
(88)
(5.7)
1.6
Profit attributable to the parent
712
684
4.1
10.1
Balance sheet and activity metrics
Loans and advances to customers
21,774
20,877
4.3
15.4
Customer deposits
—
—
—
—
Memorandum items:
Gross loans and advances to customers ᴮ
23,526
22,513
4.5
15.8
Customer funds
—
—
—
—
Customer deposits
C
—
—
—
—
Mutual funds
—
—
—
—
Risk-weighted Assets
15,675
15,535
0.9
Number of total cards (millions)
100
97
3,6
Ratios (%)
RoTE ᴰ
32.6
35.5
(2.9)
Efficiency ratio
30.8
30.1
0.7
NPL ratio
5.25
5.11
0.14
NPL coverage ratio
141.9
142.1
(0.3)
A. Includes exchange differences.
B. Excluding reverse repos.
C. Excluding repos.
D. Allocated according to RWA consumption.
Annual report 2024
468
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Secondary segments
EUR million
Europe
Spain
Underlying income statement
2024
2023
% % excl. FX
2024
2023
%
Net interest income
16,720
15,910
5.1
3.3
7,256
6,641
9.3
Net fee income
4,659
4,399
5.9
4.9
2,867
2,699
6.2
Gains (losses) on financial transactions
A
1,357
1,033
31.3
30.7
1,100
688
59.9
Other operating income
774
97
699.8
706.4
751
105
616.5
Total income
23,510
21,439
9.7
8.0
11,974
10,132
18.2
Administrative expenses and amortizations
(9,407)
(9,030)
4.2
2.8
(4,271)
(4,227)
1.0
Net operating income
14,102
12,409
13.6
11.8
7,703
5,905
30.4
Net loan-loss provisions
(1,862)
(2,533)
(26.5)
(27.7)
(1,259)
(1,522)
(17.3)
Other gains (losses) and provisions
(2,111)
(1,681)
25.6
23.7
(1,003)
(984)
2.0
Profit before tax
10,129
8,195
23.6
21.6
5,440
3,399
60.1
Tax on profit
(3,065)
(2,371)
29.3
27.3
(1,678)
(1,029)
63.1
Profit from continuing operations
7,064
5,824
21.3
19.3
3,763
2,371
58.7
Net profit from discontinued operations
—
—
—
—
—
—
—
Consolidated profit
7,064
5,824
21.3
19.3
3,763
2,371
58.7
Non-controlling interests
(420)
(342)
22.8
16.5
0
0
106.8
Profit attributable to the parent
6,644
5,482
21.2
19.5
3,762
2,371
58.7
Balance sheet
Loans and advances to customers
583,754
570,067
2.4
0.2
246,897
239,214
3.2
Cash, central banks and credit institutions
172,609
198,451
(13.0)
(14.4)
99,657
116,317
(14.3)
Debt instruments
150,428
115,428
30.3
29.4
94,519
70,072
34.9
Other financial assets
52,118
44,538
17.0
16.8
48,132
40,926
17.6
Other asset accounts
25,243
26,860
(6.0)
(7.0)
17,521
17,075
2.6
Total assets
984,151
955,344
3.0
1.2
506,725
483,603
4.8
Customer deposits
652,312
644,921
1.1
(0.7)
323,425
324,099
(0.2)
Central banks and credit institutions
110,850
104,164
6.4
4.5
57,218
44,802
27.7
Marketable debt securities
83,036
79,095
5.0
2.3
27,385
28,486
(3.9)
Other financial liabilities
66,358
53,361
24.4
23.8
59,976
46,532
28.9
Other liabilities accounts
28,275
29,633
(4.6)
(4.9)
21,163
22,264
(4.9)
Total liabilities
940,831
911,173
3.3
1.4
489,168
466,184
4.9
Total equity
43,320
44,171
(1.9)
(3.6)
17,557
17,419
0.8
Memorandum items:
Gross loans and advances to customers
B
554,179
551,722
0.4
(1.7)
225,759
229,803
(1.8)
Customer funds
753,172
725,417
3.8
2.1
399,999
386,810
3.4
Customer deposits
C
627,029
620,299
1.1
(0.8)
306,389
308,745
(0.8)
Mutual funds
126,143
105,118
20.0
19.3
93,609
78,065
19.9
Ratios (%), operating means and customers
RoTE
16.9
14.5
2.4
21.7
14.2
7.5
Efficiency ratio
40.0
42.1
(2.1)
35.7
41.7
(6.0)
NPL ratio
2.15
2.32
(0.17)
2.68
3.06
(0.38)
NPL coverage ratio
50.2
49.3
0.9
52.6
49.1
3.6
Number of employees
D
65,746
67,457
(2.5)
23,980
24,713
(3.0)
Number of branches
3,022
3,083
(2.0)
1,827
1,874
(2.5)
Number of total customers (thousands)
46,821
46,293
1.1
15,307
15,023
1.9
Number of active customers (thousands)
29,030
28,538
1.7
8,842
8,367
5.7
A. Includes exchange differences.
B. Excluding reverse repos.
C. Excluding repos.
D. 2023 employee data for Spain published in the Annual report 2023 have been modified slightly to better reflect the allocation of CIB employees.
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Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
EUR million
United Kingdom
Portugal
Underlying income statement
2024
2023
% % excl. FX
2024
2023
%
Net interest income
4,950
5,152
(3.9)
(6.5)
1,548
1,465
5.7
Net fee income
283
338
(16.2)
(18.4)
467
464
0.8
Gains (losses) on financial transactions
A
(18)
29
—
—
45
33
35.3
Other operating income
2
5
(67.2)
(68.1)
40
21
94.3
Total income
5,216
5,525
(5.6)
(8.1)
2,100
1,982
6.0
Administrative expenses and amortizations
(2,918)
(2,745)
6.3
3.4
(548)
(542)
1.0
Net operating income
2,299
2,779
(17.3)
(19.5)
1,553
1,440
7.8
Net loan-loss provisions
(64)
(247)
(74.2)
(74.9)
(11)
(77)
(85.7)
Other gains (losses) and provisions
(441)
(425)
3.9
1.1
(61)
(49)
24.5
Profit before tax
1,794
2,107
(14.9)
(17.1)
1,481
1,314
12.7
Tax on profit
(488)
(563)
(13.3)
(15.6)
(478)
(416)
14.9
Profit from continuing operations
1,306
1,545
(15.4)
(17.7)
1,003
898
11.6
Net profit from discontinued operations
—
—
—
—
—
—
—
Consolidated profit
1,306
1,545
(15.4)
(17.7)
1,003
898
11.6
Non-controlling interests
—
—
—
—
(2)
(2)
4.6
Profit attributable to the parent
1,306
1,545
(15.4)
(17.7)
1,001
896
11.7
Balance sheet
Loans and advances to customers
246,453
245,743
0.3
(4.1)
38,410
36,864
4.2
Cash, central banks and credit institutions
54,787
62,387
(12.2)
(16.1)
3,873
8,084
(52.1)
Debt instruments
15,120
10,234
47.7
41.2
15,010
10,991
36.6
Other financial assets
390
289
35.0
29.1
1,129
1,078
4.7
Other asset accounts
3,382
4,363
(22.5)
(25.9)
1,109
1,279
(13.3)
Total assets
320,132
323,016
(0.9)
(5.3)
59,530
58,297
2.1
Customer deposits
230,408
233,453
(1.3)
(5.7)
38,304
36,366
5.3
Central banks and credit institutions
25,665
28,202
(9.0)
(13.0)
8,813
9,237
(4.6)
Marketable debt securities
47,933
43,850
9.3
4.5
4,973
4,813
3.3
Other financial liabilities
2,500
3,434
(27.2)
(30.4)
339
319
6.3
Other liabilities accounts
1,733
1,704
1.7
(2.8)
3,056
3,725
(18.0)
Total liabilities
308,239
310,642
(0.8)
(5.2)
55,485
54,460
1.9
Total equity
11,893
12,373
(3.9)
(8.1)
4,046
3,837
5.4
Memorandum items:
Gross loans and advances to customers
B
236,496
235,111
0.6
(3.9)
39,143
37,658
3.9
Customer funds
230,479
231,667
(0.5)
(4.9)
43,186
40,618
6.3
Customer deposits
C
222,835
224,396
(0.7)
(5.1)
38,304
36,366
5.3
Mutual funds
7,643
7,272
5.1
0.5
4,882
4,252
14.8
Ratios (%), operating means and customers
RoTE
11.1
13.0
(1.9)
25.4
25.9
(0.6)
Efficiency ratio
55.9
49.7
6.2
26.1
27.3
(1.3)
NPL ratio
1.33
1.42
(0.09)
2.40
2.59
(0.19)
NPL coverage ratio
29.3
30.3
(1.0)
79.4
82.7
(3.3)
Number of employees
20,455
22,280
(8.2)
4,901
4,945
(0.9)
Number of branches
444
444
0.0
374
376
(0.5)
Number of total customers (thousands)
22,541
22,481
0.3
2,989
2,908
2,8
Number of active customers (thousands)
13,646
13,864
(1.6)
1,905
1,838
3,6
A. Includes exchange differences.
B. Excluding reverse repos.
C. Excluding repos.
Annual report 2024
470
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
EUR million
Poland
Other Europe
Underlying income statement
2024
2023
% % excl. FX
2024
2023
% % excl. FX
Net interest income
2,844
2,543
11.8
6.1
121
109
11.1
11.2
Net fee income
674
589
14.4
8.5
367
309
19.0
19.0
Gains (losses) on financial transactions
A
57
67
(14.8)
(19.1)
174
217
(19.9)
(19.9)
Other operating income
(20)
(17)
15.0
9.1
2
(16)
—
—
Total income
3,555
3,182
11.7
6.0
664
618
7.4
7.4
Administrative expenses and amortizations
(965)
(862)
11.9
6.1
(706)
(653)
8.1
8.1
Net operating income
2,591
2,320
11.7
5.9
(42)
(35)
20.8
20.5
Net loan-loss provisions
(511)
(674)
(24.2)
(28.0)
(17)
(12)
42.6
42.6
Other gains (losses) and provisions
(429)
(253)
69.3
60.6
(176)
30
—
—
Profit before tax
1,650
1,392
18.5
12.4
(236)
(17)
—
—
Tax on profit
(431)
(377)
14.4
8.5
10
13
(24.2)
(24.3)
Profit from continuing operations
1,219
1,015
20.1
13.9
(227)
(5)
—
—
Net profit from discontinued operations
—
—
—
—
—
—
—
—
Consolidated profit
1,219
1,015
20.1
13.9
(227)
(5)
—
—
Non-controlling interests
(419)
(342)
22.6
16.3
1
2
(32.3)
(32.3)
Profit attributable to the parent
800
674
18.8
12.7
(225)
(3)
—
—
Balance sheet
Loans and advances to customers
38,042
33,850
12.4
10.6
13,952
14,397
(3.1)
(8.6)
Cash, central banks and credit institutions
10,283
9,289
10.7
9.0
4,009
2,374
68.9
63.0
Debt instruments
17,489
15,070
16.1
14.2
8,289
9,060
(8.5)
(9.3)
Other financial assets
493
733
(32.7)
(33.8)
1,975
1,512
30.6
24.6
Other asset accounts
1,961
1,974
(0.6)
(2.2)
1,270
2,170
(41.5)
(43.0)
Total assets
68,269
60,916
12.1
10.3
29,495
29,512
(0.1)
(3.9)
Customer deposits
50,331
44,500
13.1
11.3
9,843
6,503
51.4
42.3
Central banks and credit institutions
5,020
4,623
8.6
6.9
14,134
17,300
(18.3)
(20.9)
Marketable debt securities
2,744
1,945
41.1
38.9
—
—
—
—
Other financial liabilities
1,656
1,706
(3.0)
(4.5)
1,888
1,369
37.9
31.0
Other liabilities accounts
1,688
1,687
0.0
(1.5)
635
253
151.4
146.2
Total liabilities
61,439
54,462
12.8
11.0
26,500
25,425
4.2
0.1
Total equity
6,830
6,454
5.8
4.2
2,995
4,087
(26.7)
(28.6)
Memorandum items:
Gross loans and advances to customers
B
38,729
34,729
11.5
9.8
14,052
14,420
(2.6)
(8.1)
Customer funds
56,581
49,371
14.6
12.8
22,927
16,951
35.3
30.4
Customer deposits
C
50,086
44,462
12.6
10.9
9,415
6,330
48.7
39.6
Mutual funds
6,495
4,909
32.3
30.2
13,512
10,621
27.2
24.7
Ratios (%), operating means and customers
RoTE
20.2
17.7
2.5
Efficiency ratio
27.1
27.1
0.0
NPL ratio
3.66
3.55
0.11
NPL coverage ratio
61.9
73.3
(11.4)
Number of employees
11,038
10,822
2.0
Number of branches
368
381
(3.4)
Number of total customers (thousands)
5,979
5,877
1.7
Number of active customers (thousands)
4,632
4,465
3.7
A. Includes exchange differences.
B. Excluding reverse repos.
C. Excluding repos.
Annual report 2024
471
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
EUR million
DCB Europe
Underlying income statement
2024
2023
% % excl. FX
Net interest income
4,361
4,193
4.0
3.8
Net fee income
902
796
13.4
13.1
Gains (losses) on financial transactions
A
(24)
117
—
—
Other operating income
440
396
11.0
10.2
Total income
5,679
5,502
3.2
2.9
Administrative expenses and amortizations
(2,604)
(2,618)
(0.5)
(0.7)
Net operating income
3,075
2,884
6.6
6.2
Net loan-loss provisions
(1,209)
(792)
52.6
51.9
Other gains (losses) and provisions
(735)
(72)
914.1
867.3
Profit before tax
1,131
2,019
(44.0)
(44.1)
Tax on profit
(255)
(493)
(48.2)
(48.3)
Profit from continuing operations
876
1,526
(42.6)
(42.7)
Net profit from discontinued operations
—
—
—
—
Consolidated profit
876
1,526
(42.6)
(42.7)
Non-controlling interests
(234)
(327)
(28.7)
(28.8)
Profit attributable to the parent
642
1,199
(46.5)
(46.5)
Balance sheet
Loans and advances to customers
137,038
132,692
3.3
3.4
Cash, central banks and credit institutions
19,185
18,636
2.9
3.1
Debt instruments
6,310
5,387
17.1
17.8
Other financial assets
128
135
(5.3)
(5.4)
Other asset accounts
11,115
9,945
11.8
11.3
Total assets
173,775
166,796
4.2
4.3
Customer deposits
81,376
69,334
17.4
17.9
Central banks and credit institutions
28,120
31,965
(12.0)
(12.9)
Marketable debt securities
43,137
44,605
(3.3)
(3.1)
Other financial liabilities
1,918
2,218
(13.5)
(13.7)
Other liabilities accounts
5,714
5,233
9.2
9.5
Total liabilities
160,264
153,355
4.5
4.6
Total equity
13,512
13,441
0.5
0.8
Memorandum items:
Gross loans and advances to customers
B
139,927
135,202
3.5
3.6
Customer funds
85,876
72,963
17.7
18.2
Customer deposits
C
81,376
69,334
17.4
17.9
Mutual funds
4,500
3,629
24.0
24.0
Ratios (%), operating means and customers
RoTE
6.4
12.3
(5.9)
Efficiency ratio
45.9
47.6
(1.7)
NPL ratio
2.50
2.12
0.37
NPL coverage ratio
82.5
88.0
(5.5)
Number of employees
16,792
16,795
0.0
Number of branches
326
342
(4.7)
Number of total customers (thousands)
19,550
20,193
(3.2)
A. Includes exchange differences.
B. Excluding reverse repos.
C. Excluding repos.
Annual report 2024
472
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Contents
EUR million
North America
United States
Underlying income statement
2024
2023
% % excl. FX
2024
2023
% % excl. FX
Net interest income
10,330
10,159
1.7
3.0
5,693
5,742
(0.9)
(0.8)
Net fee income
2,594
2,192
18.3
20.5
1,152
766
50.3
50.4
Gains (losses) on financial transactions
A
747
505
48.1
49.9
371
294
25.8
25.9
Other operating income
243
318
(23.6)
(24.1)
365
406
(10.1)
(10.1)
Total income
13,915
13,174
5.6
7.0
7,580
7,209
5.1
5.2
Administrative expenses and amortizations
(6,701)
(6,465)
3.6
4.9
(3,830)
(3,679)
4.1
4.2
Net operating income
7,214
6,708
7.5
9.1
3,750
3,531
6.2
6.3
Net loan-loss provisions
(3,786)
(3,733)
1.4
2.4
(2,507)
(2,593)
(3.3)
(3.3)
Other gains (losses) and provisions
(336)
(138)
143.1
146.1
(190)
(74)
154.9
155.0
Profit before tax
3,091
2,837
9.0
11.4
1,053
863
22.0
22.1
Tax on profit
(509)
(468)
8.7
12.5
56
69
(19.1)
(19.1)
Profit from continuing operations
2,582
2,369
9.0
11.2
1,109
932
19.0
19.0
Net profit from discontinued operations
—
—
—
—
—
—
—
—
Consolidated profit
2,582
2,369
9.0
11.2
1,109
932
19.0
19.0
Non-controlling interests
(3)
(15)
(78.6)
(77.8)
—
—
—
—
Profit attributable to the parent
2,579
2,354
9.6
11.7
1,109
932
19.0
19.0
Balance sheet
Loans and advances to customers
179,941
174,780
3.0
1.9
134,856
126,843
6.3
(0.1)
Cash, central banks and credit institutions
39,855
35,969
10.8
12.4
28,200
21,215
32.9
24.9
Debt instruments
57,135
50,311
13.6
18.8
27,042
22,686
19.2
12.0
Other financial assets
8,759
10,937
(19.9)
(15.0)
2,821
4,075
(30.8)
(34.9)
Other asset accounts
22,112
22,829
(3.1)
(4.1)
16,058
16,307
(1.5)
(7.4)
Total assets
307,801
294,827
4.4
4.9
208,978
191,126
9.3
2.8
Customer deposits
175,586
175,958
(0.2)
(0.6)
125,403
121,782
3.0
(3.2)
Central banks and credit institutions
44,332
34,723
27.7
32.1
26,794
17,411
53.9
44.7
Marketable debt securities
41,414
35,133
17.9
15.7
31,783
27,059
17.5
10.4
Other financial liabilities
14,998
18,606
(19.4)
(14.7)
5,223
7,276
(28.2)
(32.5)
Other liabilities accounts
6,869
6,764
1.6
5.9
3,683
3,119
18.1
11.0
Total liabilities
283,200
271,183
4.4
4.9
192,886
176,646
9.2
2.6
Total equity
24,601
23,644
4.0
5.2
16,091
14,480
11.1
4.5
Memorandum items:
Gross loans and advances to customers
B
162,263
161,401
0.5
0.1
117,511
112,671
4.3
(2.0)
Customer funds
169,753
171,310
(0.9)
(0.1)
108,246
108,062
0.2
(5.8)
Customer deposits
C
135,419
141,863
(4.5)
(4.6)
93,545
95,697
(2.2)
(8.1)
Mutual funds
34,334
29,447
16.6
22.8
14,702
12,364
18.9
11.8
Ratios (%), operating means and customers
RoTE
11.2
9.8
1.4
7.5
6.1
1.5
Efficiency ratio
48.2
49.1
(0.9)
50.5
51.0
(0.5)
NPL ratio
4.22
4.09
0.12
4.72
4.57
0.15
NPL coverage ratio
69.7
73.8
(4.2)
63.8
67.7
(3.9)
Number of employees
42,846
45,593
(6.0)
12,484
13,489
(7.5)
Number of branches
1,761
1,784
(1.3)
405
415
(2.4)
Number of total customers (thousands)
25,762
25,027
2.9
4,474
4,510
(0.8)
Number of active customers (thousands)
15,178
14,486
4.8
4,308
4,223
2.0
A. Includes exchange differences.
B. Excluding reverse repos.
C. Excluding repos.
Annual report 2024
473
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
EUR million
Mexico
Other North America
Underlying income statement
2024
2023
% % excl. FX
2024
2023
% % excl. FX
Net interest income
4,631
4,408
5.0
8.1
7
8
(16.7)
(16.7)
Net fee income
1,385
1,374
0.8
3.8
57
52
10.9
10.9
Gains (losses) on financial transactions
A
396
211
88.0
93.5
(20)
(1)
—
—
Other operating income
(133)
(94)
41.7
45.9
12
6
86.5
86.5
Total income
6,278
5,899
6.4
9.6
57
66
(13.9)
(13.9)
Administrative expenses and amortizations
(2,665)
(2,588)
3.0
6.0
(206)
(199)
3.3
3.3
Net operating income
3,613
3,311
9.1
12.3
(149)
(133)
11.7
11.7
Net loan-loss provisions
(1,277)
(1,135)
12.5
15.8
(2)
(5)
(54.0)
(54.0)
Other gains (losses) and provisions
(62)
(57)
8.1
11.3
(85)
(7)
—
—
Profit before tax
2,274
2,119
7.3
10.5
(236)
(145)
62.8
62.8
Tax on profit
(598)
(541)
10.5
13.7
34
5
589.9
588.4
Profit from continuing operations
1,676
1,577
6.3
9.4
(202)
(140)
44.4
44.4
Net profit from discontinued operations
—
—
—
—
—
—
—
—
Consolidated profit
1,676
1,577
6.3
9.4
(202)
(140)
44.4
44.4
Non-controlling interests
(5)
(17)
(73.0)
(72.2)
1
2
(32.3)
(32.3)
Profit attributable to the parent
1,671
1,560
7.2
10.3
(201)
(138)
45.5
45.6
Balance sheet
Loans and advances to customers
45,054
47,905
(6.0)
8.5
30
32
(6.9)
(6.9)
Cash, central banks and credit institutions
10,945
14,088
(22.3)
(10.4)
710
666
6.5
6.5
Debt instruments
30,092
27,624
8.9
25.6
1
2
(28.9)
(28.9)
Other financial assets
5,785
6,723
(14.0)
(0.8)
154
139
10.5
10.5
Other asset accounts
5,745
6,156
(6.7)
7.6
308
366
(15.7)
(15.7)
Total assets
97,621
102,496
(4.8)
9.8
1,203
1,205
(0.2)
(0.2)
Customer deposits
49,836
53,703
(7.2)
7.0
347
473
(26.8)
(26.8)
Central banks and credit institutions
17,260
17,047
1.3
16.8
277
265
4.5
3.8
Marketable debt securities
9,632
8,074
19.3
37.6
—
—
—
—
Other financial liabilities
9,640
11,189
(13.8)
(0.6)
135
141
(4.2)
(4.2)
Other liabilities accounts
3,115
3,579
(13.0)
0.3
72
66
9.1
9.1
Total liabilities
89,483
93,592
(4.4)
10.3
830
945
(12.1)
(12.3)
Total equity
8,138
8,904
(8.6)
5.4
372
259
43.6
44.6
Memorandum items:
Gross loans and advances to customers
B
44,715
48,688
(8.2)
5.9
37
41
(11.0)
(11.0)
Customer funds
61,160
62,775
(2.6)
12.4
347
473
(26.8)
(26.8)
Customer deposits
C
41,528
45,693
(9.1)
4.8
347
473
(26.8)
(26.8)
Mutual funds
19,632
17,082
14.9
32.5
—
—
—
—
Ratios (%), operating means and customers
RoTE
20.0
17.7
2.3
Efficiency ratio
42.5
43.9
(1.4)
NPL ratio
2.71
2.82
(0.11)
NPL coverage ratio
100.4
100.0
0.4
Number of employees
28,957
30,876
(6.2)
Number of branches
1,356
1,369
(0.9)
Number of total customers (thousands)
21,289
20,517
3.8
Number of active customers (thousands)
10,871
10,263
5.9
A. Includes exchange differences.
B. Excluding reverse repos.
C. Excluding repos.
Annual report 2024
474
Contents
Business model
Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
EUR million
South America
Brazil
Underlying income statement
2024
2023
% % excl. FX
2024
2023
% % excl. FX
Net interest income
15,566
13,040
19.4
27.3
10,121
9,116
11.0
19.5
Net fee income
4,864
4,684
3.9
11.2
3,414
3,462
(1.4)
6.1
Gains (losses) on financial transactions
A
601
1,280
(53.1)
(50.4)
(37)
483
—
—
Other operating income
(1,247)
(1,033)
20.8
20.3
39
43
(10.3)
(3.4)
Total income
19,783
17,971
10.1
17.9
13,536
13,104
3.3
11.2
Administrative expenses and amortizations
(6,943)
(6,920)
0.3
7.1
(4,352)
(4,529)
(3.9)
3.4
Net operating income
12,841
11,050
16.2
24.8
9,184
8,574
7.1
15.3
Net loan-loss provisions
(5,478)
(5,401)
1.4
9.0
(4,487)
(4,701)
(4.5)
2.7
Other gains (losses) and provisions
(1,369)
(1,041)
31.6
40.1
(867)
(963)
(9.9)
(3.0)
Profit before tax
5,993
4,608
30.1
39.7
3,830
2,911
31.6
41.6
Tax on profit
(1,617)
(1,121)
44.3
54.1
(1,165)
(776)
50.1
61.6
Profit from continuing operations
4,376
3,487
25.5
35.1
2,665
2,135
24.8
34.4
Net profit from discontinued operations
—
—
—
—
—
—
—
—
Consolidated profit
4,376
3,487
25.5
35.1
2,665
2,135
24.8
34.4
Non-controlling interests
(513)
(449)
14.4
26.0
(243)
(215)
13.2
21.9
Profit attributable to the parent
3,863
3,038
27.1
36.4
2,422
1,921
26.1
35.8
Balance sheet
Loans and advances to customers
147,559
153,244
(3.7)
9.9
88,620
96,399
(8.1)
10.1
Cash, central banks and credit institutions
60,865
67,410
(9.7)
4.8
46,745
53,618
(12.8)
4.4
Debt instruments
58,703
64,352
(8.8)
5.6
45,670
47,325
(3.5)
15.6
Other financial assets
25,121
20,796
20.8
34.8
10,632
8,161
30.3
56.1
Other asset accounts
18,970
19,247
(1.4)
14.0
13,844
14,590
(5.1)
13.7
Total assets
311,218
325,049
(4.3)
9.9
205,510
220,093
(6.6)
11.9
Customer deposits
145,233
155,448
(6.6)
7.6
93,994
110,162
(14.7)
2.2
Central banks and credit institutions
44,760
48,898
(8.5)
3.5
30,878
28,333
9.0
30.6
Marketable debt securities
36,811
39,603
(7.1)
7.5
25,351
27,976
(9.4)
8.6
Other financial liabilities
50,177
42,438
18.2
36.1
34,215
28,625
19.5
43.2
Other liabilities accounts
8,808
12,768
(31.0)
(21.4)
5,582
7,938
(29.7)
(15.7)
Total liabilities
285,790
299,155
(4.5)
9.7
190,020
203,035
(6.4)
12.1
Total equity
25,428
25,894
(1.8)
12.2
15,490
17,058
(9.2)
8.8
Memorandum items:
Gross loans and advances to customers
B
154,323
160,987
(4.1)
9.5
93,785
102,583
(8.6)
9.5
Customer funds
201,241
205,675
(2.2)
12.6
129,881
145,044
(10.5)
7.3
Customer deposits
C
132,496
135,342
(2.1)
12.1
81,378
90,297
(9.9)
8.0
Mutual funds
68,745
70,333
(2.3)
13.6
48,503
54,747
(11.4)
6.1
Ratios (%), operating means and customers
RoTE
18.7
14.4
4.3
17.5
13.7
3.8
Efficiency ratio
35.1
38.5
(3.4)
32.1
34.6
(2.4)
NPL ratio
5.42
5.72
(0.30)
6.14
6.56
(0.42)
NPL coverage ratio
76.5
78.4
(1.9)
82.7
84.7
(2.0)
Number of employees
79,571
80,997
(1.8)
56,619
57,775
(2.0)
Number of branches
2,902
3,309
(12.3)
2,202
2,580
(14.7)
Number of total customers (thousands)
80,405
73,028
10.1
69,455
62,804
10.6
Number of active customers (thousands)
40,527
37,517
8.0
33,123
30,460
8.7
A. Includes exchange differences.
B. Excluding reverse repos.
C. Excluding repos.
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EUR million
Chile
Argentina
Underlying income statement
2024
2023
% % excl. FX
2024
2023
%
Net interest income
1,822
1,383
31.8
48.3
2,919
1,879
55.3
Net fee income
551
572
(3.7)
8.4
602
396
52.2
Gains (losses) on financial transactions
A
238
320
(25.7)
(16.3)
229
341
(32.8)
Other operating income
(18)
11
—
—
(1,263)
(1,071)
17.9
Total income
2,592
2,285
13.4
27.7
2,487
1,544
61.1
Administrative expenses and amortizations
(933)
(1,020)
(8.5)
3.0
(1,022)
(775)
31.9
Net operating income
1,659
1,265
31.1
47.6
1,465
769
90.4
Net loan-loss provisions
(497)
(365)
36.1
53.2
(284)
(150)
89.5
Other gains (losses) and provisions
(51)
51
—
—
(353)
(114)
209.1
Profit before tax
1,111
951
16.7
31.4
827
505
63.8
Tax on profit
(211)
(135)
56.1
75.7
(161)
(117)
38.0
Profit from continuing operations
899
816
10.2
24.1
666
388
71.6
Net profit from discontinued operations
—
—
—
—
—
—
—
Consolidated profit
899
816
10.2
24.1
666
388
71.6
Non-controlling interests
(271)
(234)
15.5
30.0
(1)
(2)
(43.9)
Profit attributable to the parent
629
582
8.1
21.7
665
386
72.2
Balance sheet
Loans and advances to customers
40,332
42,616
(5.4)
1.2
7,684
3,767
104.0
Cash, central banks and credit institutions
5,759
6,373
(9.6)
(3.3)
4,901
4,548
7.8
Debt instruments
7,993
13,273
(39.8)
(35.6)
2,654
1,368
94.0
Other financial assets
13,554
12,159
11.5
19.3
23
11
112.9
Other asset accounts
2,796
2,746
1.8
8.9
978
776
26.1
Total assets
70,434
77,167
(8.7)
(2.4)
16,240
10,470
55.1
Customer deposits
30,181
29,578
2.0
9.2
11,293
6,478
74.3
Central banks and credit institutions
8,133
14,808
(45.1)
(41.2)
852
1,271
(33.0)
Marketable debt securities
10,403
10,775
(3.5)
3.3
158
148
6.4
Other financial liabilities
14,323
12,624
13.5
21.4
968
638
51.6
Other liabilities accounts
1,942
3,733
(48.0)
(44.3)
476
455
4.6
Total liabilities
64,983
71,518
(9.1)
(2.8)
13,746
8,990
52.9
Total equity
5,451
5,648
(3.5)
3.2
2,494
1,479
68.6
Memorandum items:
Gross loans and advances to customers
B
41,405
43,823
(5.5)
1.1
7,938
3,878
104.7
Customer funds
43,383
40,098
8.2
15.7
17,047
10,288
65.7
Customer deposits
C
30,060
29,337
2.5
9.6
11,293
6,478
74.3
Mutual funds
13,324
10,761
23.8
32.5
5,754
3,810
51.0
Ratios (%), operating means and customers
RoTE
17.0
14.8
2.2
34.8
55.6
(20.8)
Efficiency ratio
36.0
44.6
(8.6)
41.1
50.2
(9.1)
NPL ratio
5.37
5.01
0.36
2.06
1.99
0.07
NPL coverage ratio
49.9
52.7
(2.8)
177.1
165.7
11.4
Number of employees
9,587
9,948
(3.6)
8,166
8,455
(3.4)
Number of branches
237
248
(4.4)
301
322
(6.5)
Number of total customers (thousands)
4,311
4,052
6.4
5,117
4,771
7.2
Number of active customers (thousands)
2,556
2,399
6.6
3,674
3,562
3.1
A. Includes exchange differences.
B. Excluding reverse repos.
C. Excluding repos.
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EUR million
Other South America
Underlying income statement
2024
2023
% % excl. FX
Net interest income
703
662
6.2
8.2
Net fee income
298
254
17.3
18.0
Gains (losses) on financial transactions
A
172
137
25.2
24.1
Other operating income
(5)
(16)
(68.4)
(68.3)
Total income
1,168
1,038
12.6
13.9
Administrative expenses and amortizations
(635)
(596)
6.5
7.1
Net operating income
533
441
20.8
23.3
Net loan-loss provisions
(210)
(186)
13.2
14.7
Other gains (losses) and provisions
(97)
(15)
566.6
586.5
Profit before tax
225
241
(6.4)
(4.0)
Tax on profit
(80)
(93)
(13.5)
(12.4)
Profit from continuing operations
145
148
(2.0)
1.4
Net profit from discontinued operations
—
—
—
—
Consolidated profit
145
148
(2.0)
1.4
Non-controlling interests
1
2
(37.1)
(37.0)
Profit attributable to the parent
146
150
(2.5)
0.8
Balance sheet
Loans and advances to customers
10,923
10,463
4.4
6.7
Cash, central banks and credit institutions
3,459
2,870
20.5
21.9
Debt instruments
2,387
2,386
0.1
4.1
Other financial assets
913
466
96.0
102.5
Other asset accounts
1,352
1,135
19.1
20.1
Total assets
19,034
17,320
9.9
12.3
Customer deposits
9,765
9,230
5.8
9.1
Central banks and credit institutions
4,898
4,486
9.2
9.6
Marketable debt securities
898
703
27.7
32.0
Other financial liabilities
671
550
21.9
25.1
Other liabilities accounts
807
641
25.8
28.3
Total liabilities
17,040
15,611
9.2
11.6
Total equity
1,994
1,709
16.6
19.0
Memorandum items:
Gross loans and advances to customers
B
11,196
10,703
4.6
6.9
Customer funds
10,930
10,246
6.7
10.2
Customer deposits
C
9,765
9,230
5.8
9.1
Mutual funds
1,165
1,016
14.7
20.5
A. Includes exchange differences.
B. Excluding reverse repos.
C. Excluding repos.
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5. RESEARCH, DEVELOPMENT
AND INNOVATION (R&D&I)
Research, development and innovation activity
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 trust 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 efforts. 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. See note 18 to
the consolidated financial statements.
Technology 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
is aligned 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 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 including all active players involved in key
decision making.
To implement our technology strategy, we use internal regulation
and the Group's 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 technology that enable more robust,
efficient and secure systems and processes.
Artificial intelligence (AI) 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.
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Santander Digital Services (SDS), a Group service company, is
contributing to the implementation of our global business strategy
using this new technology. It is providing our ONE Santander
platform with components linked to the cloud, process
automation, generative AI or data projects among other areas.
With over 9,000 employees in Spain, Poland, Portugal, the UK,
Mexico, the 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 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 sustainable banking goals as we have reduced our
carbon footprint by 32 tonnes.
Cybersecurity
Cybersecurity is crucial in supporting our purpose of helping people
and businesses prosper and to 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 cybersecurity 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 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 cybersecurity risks from the earliest stages of
initiatives. It is essential to have a culture where security is our
priority as an organization. In particular, we have defined
measures in this area aimed at reinforcing the risk culture,
reducing the attack surface and 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 red team exercises that simulate real cyber-attack
scenarios.
In addition to periodic testing and review, independent certification
authorities review and certify our critical cybersecurity processes.
Certifications, including International Organization for
Standardization (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.
For more details on the cybersecurity initiatives we ran in 2024,
see section 3.3.1 'Conduct with customers' in the 'Sustainability
statement' chapter. For details on the measurement, monitoring
and control of cybersecurity-related risks, and their respective
mitigation plans, see section 5.2 'Operational risk management' in
the 'Risk management and compliance' chapter.
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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.
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6. SIGNIFICANT EVENTS
SINCE YEAR END
• 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').
• As part of our strategy of becoming ONE Santander, through the
simplification and transformation of the Group, and after a year
with our five global businesses in full operation, the board of
directors approved the dissolution of the regional structures. This
is effective from 3 February 2025, having fulfilled their mission
to support the transition to the global operating model. Through
this, we are taking another step in simplifying the Group’s
structure, as the CEOs in our main markets will now report
directly to the Group’s CEO, Héctor Grisi.
• 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.
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7. TREND INFORMATION 2025
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 and compliance' chapter of this report and in
note 54 of the consolidated financial statements.
à Macroeconomic environment
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 forecasts for 2025 by country/region are 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.
United Kingdom
In 2025, we expect the economy to regain momentum and register
growth close to its potential. Growth is likely to be supported by
increased public spending, offsetting part of the slowdown in the
private sector. Households are expected to face weaker growth in
nominal income with slightly higher inflation than in 2024 which,
together with increased fiscal pressure (tax thresholds will not be
adjusted for inflation), would reduce their purchasing power. The
labour market is expected to maintain the stability observed in
recent years, with an unemployment rate at full employment. The
Bank of England is expected to continue relaxing its monetary
policy until the end of the year reaching 3.75%.
Portugal
In 2025, the economy is expected to maintain a growth rate similar
to that observed in 2024, driven by improved external demand
from the eurozone and the dynamism of domestic consumption
supported by improved purchasing power. External demand is
expected to be underpinned by positive trends in tourism services.
The labour market is expected to remain at full employment, with
the unemployment rate around 6.6%. We expect inflation to
remain slightly above the ECB's 2% target.
Poland
The economy in 2025 is expected to accelerate, supported by an
investment boom largely financed from EU funds. While
investment is expected to take the lead, private consumption will
likely continue to support domestic demand, leaving the economy
partially immune to the weak growth expected in the euro area.
The labour market is expected to remain at full employment, and
continue to fuel significant wage increases, albeit less so than in
2024. Inflation is expected to remain around 5%. The central bank
will not consider interest rate cuts until it sees a change in
inflation, which is not expected before the second half of the year.
US
The scope of the economic policies of the new administration is
still unknown. In 2025, positive growth inertia, combined with
deregulation policies and tax cuts, can be expected to offset the
potential negative impact of tariff increases and tightened
migration policies. Thus, we expect growth to remain around 2%,
with inflation slightly higher than expected, but not too far from
the target, which would lead the Fed to pause interest rate cuts
earlier and at a higher level than previously expected.
Mexico
We expect the economy to slow down, reflecting the effects of
fiscal consolidation and reduced investment in infrastructure. The
central bank is expected to continue its cycle of cutting official
rates, with gradual declines, keeping an eye on the Fed's monetary
policy and exchange rate movements.
Brazil
The economy is expected to slow down, toward more moderate
rates compared to the strong dynamism of the last three years.
Monetary and fiscal policies will face major challenges. Brazil’s
central bank is expected to continue the cycle of interest rate hikes
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that restarted in September 2024, which is likely to contribute to
the slowdown of the economy, moderate inflation and anchor its
medium-term expectations. Fiscal policy is expected to undertake a
consolidation process to meet targets and direct the public debt
ratio toward a sustainable path.
Chile
The economy is expected to grow at a similar rate to that of 2024,
but with a solid recovery in domestic demand, especially in
investment. External demand will likely have a smaller
contribution, reflecting increases in imports. Inflation is expected
to moderate, but remain above the 3% target, which is expected to
be reached in 2026. The central bank has room for additional
interest rate cuts depending on inflation and its constraints.
Argentina
The economy is expected to show a clear recovery, consolidating
the improvement in the second half of 2024, with the fiscal
balance remaining close to equilibrium, and inflation is expected to
continue the moderation observed in the final months of 2024.
Expectations of a new agreement with the IMF that would
eventually involve additional funding for Argentina and a more
stable exchange rate are expected to lead to a replenishment of
international reserves.
à Financial markets
Our outlook for 2025 points to cautious optimism: a
macroeconomic environment characterized by lower interest rates
and positive economic growth should support risk appetite.
Tax cuts and deregulation efforts from the new US government are
likely to support profit growth in the US, although the high
valuations of the technology sector could bring some bouts of
volatility. Other opportunities are also expected to arise in other
regions.
While the US and the eurozone are expected to move forward in
the monetary easing cycle, we believe that long-term yields on
sovereign bonds have little room to fall from their current levels.
The Fed and ECB rate cuts are widely discounted, while the new
administration’s agenda puts upward pressure on US Treasury
yields.
Cyclical divergence between the US and the eurozone, geopolitical
uncertainty and relatively higher interest rates in the US are tilting
towards a more appreciated US dollar against the euro in 2025.
Macroeconomic and geopolitical uncertainty are expected to
continue to sustain demand for precious metals.
In developing economies, a major hotspot of uncertainty remains
with respect to the Chinese economy and the effect of the Chinese
government's reaction to the new tariffs introduced by the US. In
Latin America, markets are expected to remain vulnerable to global
uncertainty. In any event, domestic factors are likely to continue to
play a significant role in market behaviour, which pay close
attention to how countries in the region face their main challenges,
in particular, fiscal consolidation and anchoring inflation
expectations to central bank targets.
The financial sector is expected to be marked by monetary policy
normalization, which will have an impact on net interest income.
This impact is expected to be partially offset by an improvement in
business volumes in a stable portfolio credit quality environment.
Risks are slightly skewed to the downside and may come from
non-bank financial institutions, with the risk of disorderly
adjustments in asset prices and disruptions to market liquidity.
Even so, at the moment, most entities currently have solid
solvency positions to face such a scenario.
In addition to the economic environment, banks must cope with
the acceleration of the business digitalization and knowledge and
management of the risks associated with climate change.
à Financial regulation
Elections held across our footprint (the US, Mexico, the UK, the EU)
in 2024, will usher in a new political cycle that will define the
regulatory agenda. The first 100 days of the European Commission
will be critical, focusing on boosting competitiveness and growth
through simplification and with defence and both the green and
digital transitions as the main focus points of its strategy.
Competitiveness and Capital Markets Union 2.0
Recently released publications by political figures such as Enrico
Letta, Christian Noyer and Mario Draghi agree on a lack of
competitiveness and innovation within the EU. The new Savings
and Investments Union (SIU) will be instrumental in channelling
the trillions of euros in European savings towards capital markets,
but this will require less fragmented, more liquid and transparent
markets. The debate on how to complete the Banking Union,
through the creation of a deposit guarantee fund, is expected to
resume.
Prudential and resolution
During 2025, the European Banking Authority (EBA) is expected to
continue developing technical standards to further the
implementation of Basel III in Europe. Some legislative
developments are expected in the field of non-bank financial
intermediaries (NBFIs) and in the macroprudential framework in
Europe. The European Commission will review the securitization
framework and a legislative proposal is expected to be presented
in 2025. In addition, the crisis management and deposit insurance
(CMDI) framework review in Europe is expected to resume.
Sustainability
The sustainability regulatory agenda is expected to be reviewed in
2025, focusing on implementation. In January 2025, the reporting
obligations established in the Corporate Sustainability Reporting
Directive (CSRD) came into force. Although transposition is delayed
in some European countries, companies will still be expected to
comply with this standard and collect data on sustainability for the
2024 financial year. Under the CSRD, general reporting standards
will continue to be implemented and industry-specific standards
will continue to be developed (European Sustainability Reporting
Standards, ESRS).
The European Commission has announced an omnibus proposal
that will reduce the burden on companies, by simultaneously
revising and simplifying sustainability regulations, including
taxonomy, reporting and due diligence standards. In addition, a
proposal to revise the Sustainable Finance Disclosure Regulation
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(SFDR) is expected, which could include a new categorization
system for financial products such as funds.
Regarding prudential matters, in 2025, the EBA will continue to
assess the need for an adjustment in the Pillar 1 framework, to
ensure that climate and environmental risks are adequately
integrated. In addition, it will continue to analyse if emerging
systemic risks, such as ESG, should be managed by using
macroprudential tools.
The Basel Committee is expected to publish the final international
standards on Pillar 3 climate disclosure requirements during 2025.
Developments will continue in countries that have already begun
their work in this area, such as Mexico, Chile and Brazil.
Digital
Discussions will continue to revolve around innovation, data use
and artificial intelligence. Regulators have widened their view on
fraud beyond the financial sector, as a significant amount of fraud
occurs through different digital platforms. Central banks will
continue to explore the opportunities linked to central bank digital
currencies (CBDCs), focused on the wholesale market, with the
exception of some jurisdictions such as the EU, which continues to
design the digital euro. By the end of 2025, the ECB will have to
decide whether to continue with the development of the digital
euro, which depends upon a regulatory framework that remains
under discussion since 2023. Focus will remain on the
implementation of the Digital Markets Act (DMA) whose objective
is to regulate competition in digital markets.
Retail banking
Access to capital markets and consumer protection will continue to
be a priority in the EU's agenda, in line with projects such as the SIU
and the Retail Investment Strategy (RIS). The transposition of the
new directive regarding consumer credit should also occur in 2025.
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Retail & Commercial Banking's top priorities for 2025 are to:
Retail
→Continue our transformation journey towards our vision of becoming a digital bank
Retail & Commercial Banking
with branches underpinned by a common operating model and a global tech platform.
→Adapt our business model towards value creation through stronger customer
relationships and network effects.
A global business integrating our retail
and commercial banking activities
→Strengthen structural efficiency on the back of the transformation of our operating and
business models to drive cost-to-serve efficiencies.
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These are the main management priorities for 2025 in our Global Business segments and countries:
Our vision for 2025 is to continue working on the transformation of
our operating model, to become a digital bank with branches,
powered by the Group's network, with all of our products and
services available to our customers on our websites and
applications, and with the branch network serving as a powerful
sales and advisory channel.
This vision is underpinned by Retail's common operating model,
which leverages our global scale and local presence, and takes
advantage of best practices across the Group. The operating model
is centred around three strategic pillars: i) customer experience; ii)
operational leverage; and iii) global technology platform.
Our transformation efforts in 2024 resulted in increased customer
growth and efficiency. In 2025, we will continue to focus on our
transformation journey building on our three strategic pillars:
• Customer experience. Provide our customers with the best
products and experiences and make them available through
improved customer journeys. Continue enhancing our digital
capabilities to drive engagement and digital sales. Also, continue
implementing our new branch and Work Café model that
provides enhanced capabilities for personal advisory and support
to our customers.
• Operational leverage. Continue to streamline processes and
promote lean organizational structures to drive efficiency,
accuracy and speed. Develop the key role of artificial intelligence
in automating operations, resulting in faster transaction
processing, reduced operational tasks and efficiencies in cost to
serve.
• Global technology platform. Deploy our Global Platform to
deliver best-in-class solutions and reduce the cost per
transaction, promoting efficiency and innovation across the
Group. Continue to converge all units towards the global
platform with focusing on rolling out: Gravity, our award
winning back-end technology, which will increase the number of
transactions it processes while reducing the cost per technical
transaction and ODS, our proprietary cloud-based front-end
technology which enables a superior digital experience, global
products and faster time to market.
Additionally, as part of our business model transformation, we
will deepen our focus on value creation through stronger customer
relationships and network effects.
• Build strong customer relationships and consolidate our position
as their trusted financial partner through a tailored approach to
our core segments (individuals, SMEs and commercial banking).
• Leverage our competitive position to better serve our customers,
taking advantage of the network effect provided by the Group’s
global business structure.
Executing the transformation of our operating and business
models across our footprint to pave the way for structural savings
and cost-to-serve efficiencies, and support value creation for our
shareholders.
Customer experience
Best digital products and
new branch model
Operational leverage
Process automation and
leaner organization
Global platform
Proprietary back-end
(Gravity) and cloud based
front-end (ODS)
technologies
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Consumer
Digital Consumer Bank
Deliver the best solution to customers
(B2B and B2C), while being the most cost
competitive player in the market
Our priorities for 2025 are to:
→Converge towards global platforms and continue transforming our operating model,
automating key processes and gaining efficiencies and providing best customer
experience.
→Grow and consolidate partnerships with our partners, offering solutions with a better
digital experience.
→Promote the network effect through a complete product offering to our customers,
leveraging the Group's capabilities.
→Continue gathering customer deposits to lower funding costs and reduce net interest
income volatility across the cycle, to be able to offer our customers better pricing.
→Enhance and automate our originate-to-share model.
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Our vision is to become the preferred choice of our partners and
our end customers, and offer greater profitability and value
creation to our shareholders, while being the most cost
competitive player in the industry.
In 2025, our strategic priorities include:
• In Auto:
• Continue to consolidate Santander’s leadership position by: i)
strengthening existing partnerships and incorporating new
strategic agreements with OEMs and retailers; ii) expanding
the operational leasing platform across Europe; and iii)
developing new revenue sources.
• Support profitability improvement by simplifying, automating
and digitalizing customer journeys to operate with lower cost
to-serve. Utilize improved digital capabilities to take customer
experience to the next level.
• In the consumer lending business (non-auto), within our
objective to expand our consumer lending offering through Zinia,
we will continue prioritizing the expansion to other products and
markets and continue transforming the check-out lending
business through existing agreements and expanding them
across regions.
• In Openbank: leverage advanced data, tech and product
capabilities to successfully deliver on our plans for the US and
Mexico, expanding our value proposition.
• Finally, we will continue to drive deposit gathering initiatives in
Europe and the expansion of securitization programmes, as part
of our originate-to-share model.
Customer experience
Global solutions and
relationship management
(OEMs, importers and
retailers)
Operational leverage
Operational and commercial
benchmark to maximize
profitability and growth
Global platform
From multiple country
specific platforms to global
platforms (e.g. leasing, BNPL)
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CIB
Corporate & Investment
Banking
Our global platform to support
corporate and institutional clients
Our aim is to become a focused, world-class Corporate & Investment Banking business,
positioning ourselves as a trusted advisor to our clients while delivering profitable
growth. Our priorities for 2025 are to:
→Deepen our client relationships, with a particular focus on the US.
→Fully leverage our enhanced centres of expertise, increase connectivity around the
client agenda and further digitalize our business.
→Keep evolving our active capital management and global operating models.
→Attract, develop and retain top talent.
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In order to deliver on our 2025 priorities, we will focus on the following levers:
• Deepen client relationships:
• Foster and expand our advisory/value-added businesses on the
back of our transformation initiatives, with a particular focus
on fee business.
• Materialize the growth plan for our US franchise, maximizing
impact on global CIB, leveraging our new capabilities and
expanded coverage.
• Continue to foster collaboration with other global businesses
to generate additional value for the Group.
• Operational leverage:
• Consolidate our centres of expertise to strengthen our
positioning in our core markets.
• Further grow our Global Markets franchise on the back of the
investments made and leveraging collaboration opportunities
with Global Transaction Banking and Global Banking.
Customer experience
Trusted advisor to our
clients, building long-term
relationships supported by
our global reach and local
strength
• Advance in the execution of our automatization and
digitalization initiatives, enhancing the business value from our
data and exploring tangible opportunities from AI.
• Global platforms:
• Keep evolving our operating model deepening globalization,
standardization and specialization of our business, improving
client experience, efficiency and risk management.
• Further optimize our originate-to-share model in close
partnership with the Group's Global Asset Desk for active
capital management.
• Attract, develop and retain top talent while strengthening our
culture and risk awareness.
Operational leverage
Consolidate our global
centres of expertise and tech
investments as levers for
growth
Global platform
Further optimize our
originate-to-share and
global operational models,
leveraging technology
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Our priorities for 2025 are to:
Wealth
→Improve our customer experience providing enhanced value-added products and
Wealth Management &
services and expanding our presence to new countries and businesses.
Insurance
→Boost operational leverage by globalizing service and product factories/hubs and
enhancing local distribution.
Globalizing and transforming our Private
Banking, Asset Management and
→Develop common global platforms to transform our operations and distribution model
Insurance businesses
leveraging Group's technology, data and AI.
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We aim to transform Wealth businesses leveraging the Group's
technology and AI as major enablers, while promoting
globalization and simplification to deliver more value to our
customers. This should increase Wealth's contribution to the Group
while maintaining attractive profitability levels.
To deliver on this ambition, our priorities for 2025 are organized
around three growth levers:
• Provide our customers with personalized best-in-class service
and investment & protection solutions, leveraging digital and
data capabilities to enhance customer experience.
We are increasing our penetration in our footprint and expanding
into new markets that are relevant for our business (e.g., Middle
East and the US), which should enable us to increase our
customer base.
We will continue developing products with significant growth
potential, such as alternative investments, life retirement
solutions and non-life high-growth businesses, including health
and cyber insurance.
• Globalize our service and investment & insurance product
factories to better serve local distribution networks with a
simplified value proposition and developing common hubs to
boost operational leverage.
We also plan to continue leveraging the synergies between our
businesses to improve profitability and provide a stable source of
capital, while we keep working to reinforce the collaboration
with the other global businesses.
• Develop common global platforms to transform how our
businesses operate with an increased focus on technology, data
and AI, providing a tailored value proposition and service to our
clients while we evolve and improve our distribution model, for
example, through an embedded and highly contextualized offer
or digital platforms for servicing and claims.
Additionally, we will continue to further reinforce our leadership
and governance, having recently made a few additions and
changes to the board of directors of Santander Insurance Holding.
Customer experience
Providing our customers
with enhanced value-added
products and personalized
services
Operational leverage
Globalize our operations
and product factories while
simplifying our processes
and value proposition
Global platform
Develop common digital
platforms to transform
our operations, service and
distribution capabilities
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Our priorities for 2025 are to:
Payments
→Scale up our global platform of innovative payments and integrated value-added
Payments
solutions.
→Roll out our global payment platform to all our regions and the open market.
Single infrastructures for payments
solutions: PagoNxt and Cards
→Expand our cards business while improving customer experience.
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PagoNxt
In PagoNxt, our priorities by business are:
• Getnet
• Strategic market share management with focus on profitable
growth, investing in commercial capabilities to further expand
business across Santander's banks and capture opportunities in
the open market.
• Focus on product globalization and delivery of strategic value
added services.
• Investment in globalizing technology to improve efficiency and
lower cost per transaction, and scale up our platform
functionalities.
• Ebury
• Customer growth through enhanced product offering and
online capabilities and geographical expansion.
• Introduction of tailored products to capture verticals such as
mass payments.
• Payments
• Migration of Group A2A payments to the new cloud-native
platform.
• Leverage scale and connectivity to drive lower cost-per
transaction and to offer adjacent services and open market
propositions.
• Delivery of an instant cross-border payments solution.
Cards
We aim to provide an exceptional payments experience, foster
customer loyalty and leverage transactional data to enhance
profitability.
To implement this vision, we are focusing on three pillars:
• Profitably expand our credit business:
• Drive profitable growth through credit cards through the use of
data and models through our Cards Risk Data Lab.
• Exploit the commercial cards business, with a complete
offering in their payment management through corporate
cards, leveraging Santander's presence in the corporate and
SME segments.
• Connect card issuing and acquiring platforms, developing new
business opportunities between Cards and Getnet.
• Improve payment experience through cards:
• Offer our customers the most seamless and convenient card
payment experience through Invisible Payments, both for face
to-face and e-commerce purchases.
• Expand, develop and adopt common digital services that
improve customer experience.
• Build and implement our global card processing tech platform:
• Once the debit solution is completed, the aim for 2025 is to
finish the credit solution development and to improve the
solution for corporates.
• After starting the debit integration in Brazil, continue
implementing the platform in the other countries, and start
with the credit integration once the building is complete.
Customer experience
Deliver best-in-class
payment solutions
leveraging our global
and local scale
Operational leverage
Reduce cost per transaction
through capex optimization
and operational efficiency
Global platform
Migrate volumes to
common global platforms
to gain scale and offer
competitive pricing
in the open market
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Secondary segments
Europe
Spain
• Continue to grow and develop our customer base, providing
personalized answers to our customers' needs and the best
experience, to become their main bank.
• Evolve our operating model towards a digital bank with
branches, moving forward in the simplification of products and
services, digitalization and the elimination of operational
processes to focus on value creation.
United Kingdom
• Prioritize profitability, through pricing discipline and planned
balance sheet optimization, growing through customer
engagement and exceptional customer experience.
• Continue transforming the bank through simplification and
digitalization, in order to improve efficiency and performance.
DCB Europe
In 2025, our strategic priorities include:
• Expand our European leadership with strong focus on profitability, through competitive, innovative financing products and
solutions.
• Auto: expand the implementation of the operational leasing platform, digitalize customer journeys, grow partnerships and
deliver the best customer experience.
• Consumer lending: continue to expand partnerships through Zinia and transform our consumer lending business.
• Transform our operating model through global platforms, the simplification and the automatization of processes, aiming to
become the most cost competitive player in the market.
• Reduce sensitivity to interest rates by increasing deposit gathering, optimizing the balance sheet and maintaining a strict capital
allocation.
Portugal
• Further our commercial and digital transformation, focusing on
excellence in customer experience and satisfaction.
• Remain best-in-class in terms of efficiency and profitability,
creating value with an appropriate return on capital.
Poland
• Accelerate our digital transformation, through increased
availability of products and services through digital channels.
• Continue to improve customer and employee experience.
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North America
US
• Deliver strategic priorities through disciplined capital allocation,
focused on customer-centric growth in businesses that benefit
from Santander’s global network or operate at scale locally and
where we have deep expertise.
• Consumer: leverage Group-developed digital platforms to
support profitable growth.
• CIB: enhance advisory and investment banking capabilities
focused on profitable client relationships and expanding our
product and services offering.
• Wealth: accelerate growth through initiatives to expand cross
border client relationships, while enhancing local private
banking.
South America
Brazil
• Focus on being the primary bank for our customers. Sustain value
creation and continue to personalize our offering and improve
customer experience, through intensive use of technology.
• Continue with our sustainable growth strategy, focusing on
disciplined capital management, process optimization and cost
reduction to improve profitability.
• Further diversify our asset portfolio and boost our liabilities
business and transactional revenue.
Chile
• Continue to digitally transform the bank, capturing new
customers, maintaining our NPS leadership and consolidating our
position in the mass segment through new product offerings.
• Strengthen our corporate and private banking franchise, with
specialized value propositions and a leadership position in
transactional foreign exchange and Wealth Management
products.
• Continue to transform our operating model, boosting global
initiatives, converging our platforms, further simplifying our
offering and reducing cost per active customer.
Mexico
• Strengthen our Retail transformation and enhance our model by
focusing on digital offerings and channels, new service models,
continued product simplification and customer primacy.
• Roll-out new digital capabilities, particularly through the launch
of Openbank, to challenge the rise of neobanks with a superior
and fully-digital value proposition.
• Grow selectively, rebalancing our asset mix towards more
profitable and capital-light businesses.
• Reinforce our low-cost producer positioning, offering the best
products at the best price while improving our deposit mix.
Argentina
• Further develop our financial platform, promoting synergies
between businesses and within value chains, and consolidating
recent inorganic acquisitions.
• Continue to pursue our profitable growth and value creation
strategy. Increase productivity and reduce cost to serve by
streamlining products and processes. Focus on operational
excellence and market leadership in customer experience.
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8. ALTERNATIVE PERFORMANCE
MEASURES (APMs)
In addition to the financial information prepared under IFRS, this
consolidated directors’ report contains financial measures that
constitute alternative performance measures (APMs) to comply
with the guidelines on alternative performance measures issued by
the European Securities and Markets Authority on 5 October 2015
and non-IFRS measures.
The financial measures contained in this consolidated directors’
report that qualify as APMs and non-IFRS measures have been
calculated using our financial information but are not defined or
detailed in the applicable financial information framework or under
IFRS and therefore have neither been audited nor are susceptible to
being fully audited.
We use these APMs and non-IFRS measures when planning,
monitoring and evaluating our performance. We consider these
APMs and non-IFRS financial measures to be useful metrics for
management and investors to facilitate operating performance
comparisons from period to period. While we believe that these
APMs and non-IFRS financial measures are useful in evaluating our
business, this information should be considered as supplemental in
nature and is not meant as a substitute of IFRS measures. In
addition, the way in which Santander defines and calculates these
APMs and non-IFRS measures may differ from the calculations
used by other companies with similar measures and, therefore,
may not be comparable.
Additional APMs to those included in this section are presented in
section SN 9. 'Alternative Performance Measures' of the
'Sustainability statement' chapter.
The APMs and non-IFRS measures we use in this document can be
categorized as follows:
Underlying results
In addition to IFRS results measures, we present some results
measures which are non-IFRS and which we refer to as underlying
measures. These measures allow in our view a better year-on-year
comparability given that they exclude items outside the ordinary
performance of our business (e.g. capital gains, write-downs,
impairment of goodwill) or certain line items have been
reclassified in the underlying ("adjusted") income statement, as
their impact on profit is zero, to better understand the trends in the
business. Further information is included at the end of section 3.2
'Results'.
In addition, in section 4. 'Financial information by segment'
covering the primary and secondary segments, results are
presented only on an underlying basis in accordance with IFRS 8.
The use of this information by the Group’s governance bodies and a
reconciliation on an aggregate basis to our IFRS consolidated
results can be found in note 52.c to our consolidated financial
statements.
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Profitability and efficiency ratios
The purpose of the profitability ratios is to measure the ratio of profit to equity, to tangible equity, to assets and to risk-weighted assets,
while the efficiency ratio measures how much general administrative expenses (personnel and other) and amortization costs are needed to
generate revenue.
Additionally, goodwill adjustments have been removed from the RoTE numerator as, since they are not considered in the denominator, we
believe this calculation is more correct.
Ratio
Formula
Relevance of the metric
RoE
Profit attributable to the parent
This ratio measures the return that shareholders obtain on
the funds invested in the bank and as such measures the
(Return on Equity)
Average stockholders’ equity
A (excl. minority
bank’s ability to pay shareholders.
interests)
This is used to evaluate the profitability of the company as a
RoTE
Profit attributable to the parent
B
percentage of its tangible equity. It is measured as the return
(Return on Tangible Equity)
Average stockholders’ equity
A (excl. minority
that shareholders receive as a percentage of the funds
interests) - intangible assets
invested in the bank less intangible assets.
This metric measures the profitability of a company as a
RoA
Consolidated profit
percentage of its total assets. It is an indicator that reflects
(Return on Assets)
Average total assets
the efficiency of the bank’s total assets in generating profit
over a given period.
RoRWA
Consolidated profit
The return adjusted for risk is a derivative of the RoA metric.
The difference is that RoRWA measures profit in relation to
(Return on Risk-Weighted
Average risk-weighted assets
the bank’s risk-weighted assets.
Assets)
RoRAC
Underlying consolidated profit
This is the return on economic capital required internally
(necessary to support all risks inherent in our activity).
(Return on Risk-Adjusted
Average economic capital
Capital)
Economic value added is the profit generated in excess of the
Underlying consolidated profit – (average
cost of economic capital employed. This measures risk-
Economic Value Added
economic capital x cost of capital)
adjusted returns in absolute terms, complementing the
RoRAC approach.
One of the most commonly used indicators when comparing
Efficiency
Operating expenses
C
productivity of different financial entities. It measures the
(Cost-to-income)
Total income
amount of resources used to generate the bank’s total
income.
A. Stockholders’ equity = Capital and Reserves + Accumulated other comprehensive income + Profit attributable to the parent + Dividends.
B. Excluding the adjustment to the valuation of goodwill.
C. Operating expenses = Administrative expenses + amortizations.
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Profitability and efficiency
A B (EUR million and %)
2024
2023
2022
RoE
13.00%
11.91%
10.67%
Profit attributable to the parent
12,574
11,076
9,605
Average stockholders' equity (excluding minority interests)
96,744
93,035
89,986
RoTE
16.27%
15.06%
13.37%
Profit attributable to the parent
12,574
11,076
9,605
(-) Goodwill impairment
(4)
(20)
—
Profit attributable to the parent (excluding goodwill impairment)
12,578
11,096
9,605
Average stockholders' equity (excluding minority interests)
96,744
93,035
89,986
(-) Average intangible assets
19,428
19,361
18,164
Average stockholders' equity (excl. minority interests) - intangible assets
77,316
73,675
71,822
RoA
0.76%
0.69%
0.63%
Consolidated profit
13,744
12,209
10,764
Average total assets
1,803,272
1,773,103
1,720,273
RoRWA
2.18%
1.96%
1.77%
Consolidated profit
13,744
12,209
10,764
Average risk-weighted assets
630,494
624,031
606,952
RoRAC
17.52%
15.34%
14.00%
Consolidated profit
13,744
12,209
10,764
(-) Net capital gains and provisions
—
—
—
Underlying consolidated profit
13,744
12,209
10,764
Average economic capital
78,430
79,605
76,872
Economic value added
4,332
3,285
2,146
Underlying consolidated profit
13,744
12,209
10,764
(-) Average economic capital x cost of capital
(9,412)
(8,924)
(8,617)
Average economic capital
78,430
79,605
76,872
Cost of capital
12.00%
11.21%
11.21%
Efficiency ratio
41.8%
44.1%
45.8%
Underlying operating expenses
26,034
25,425
23,903
Operating expenses
26,034
25,425
23,903
Adjustments to operating expenses for items outside ordinary course of businesses
C
—
—
—
Underlying total income
62,211
57,647
52,154
Total income
61,876
57,423
52,117
Adjustments to total income for items outside ordinary course of businesses
C
335
224
37
A. Averages included in the RoE, RoTE, RoA and RoRWA denominators are calculated using the monthly average over the period, which we believe should not differ materially
from using daily balances.
B. The risk-weighted assets included in the denominator of the RoRWA metric are calculated in line with the criteria laid out in the CRR (Capital Requirements Regulation).
C. Following the adjustments in note 52.c to the consolidated financial statements.
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Ratio
Formula
Relevance of the metric
Profit attributable to the parent excluding goodwill
This indicator is used to evaluate the profitability of the
impairment
company as a percentage of its tangible equity. It's measured as
Global business RoTE
Average stockholders' equity (excl. minority interests) -
the return that shareholders receive as a percentage of the
intangible assets
A
funds invested in the entity less intangible assets.
A. Allocated according to RWA consumption.
RoTE (EUR million and %)
2024
2023
%
Numerator
Denominator
%
Numerator
Denominator
Retail & Commercial Banking
18.9
7,265
38,482
15.1
5,659
37,362
Digital Consumer Bank
9.8
1,663
17,050
11.5
1,901
16,502
Corporate & Investment Banking
18.1
2,740
15,178
17.5
2,440
13,922
Wealth Management & Insurance
78.7
1,650
2,097
72.2
1,467
2,033
Payments
15.6
415
2,664
24.9
627
2,512
PagoNxt
Cards
32.6
16.9
712
2,187
35.5
684
1,928
Europe
6,645
39,292
14.5
5,489
37,931
Spain
21.7
3,762
17,347
14.2
2,371
16,742
United Kingdom
11.1
1,306
11,781
13.0
1,545
11,874
Portugal
25.4
1,001
3,948
25.9
896
3,458
Poland
20.2
800
3,956
17.7
674
3,810
DCB Europe
6.4
642
10,055
12.3
1,199
9,721
North America
11.2
2,580
23,089
9.8
2,360
24,183
US
7.5
1,109
14,742
6.1
932
15,355
Mexico
20.0
1,671
8,343
17.7
1,560
8,814
South America
18.7
3,865
20,671
14.4
3,045
21,097
Brazil
17.5
2,424
13,853
13.7
1,921
13,987
Chile
17.0
629
3,693
14.8
582
3,925
Argentina
34.8
665
1,909
55.6
386
694
Numerator: profit attributable to the parent excluding goodwill impairment.
Denominator: average stockholders' equity (excluding minority interests) - intangible assets, for global businesses allocated according to RWA consumption.
PagoNxt's RoTE is not provided as we do not consider it a relevant metric to measure performance in this type of business.
Efficiency ratio (EUR million and %)
2024
2023
%
Numerator
Denominator
%
Numerator
Denominator
Retail & Commercial Banking
39.7
12,877
32,461
43.1
12,825
29,754
Digital Consumer Bank
40.1
5,183
12,916
42.8
5,263
12,296
Corporate & Investment Banking
45.6
3,807
8,343
45.0
3,387
7,527
Wealth Management & Insurance
35.9
1,313
3,661
37.9
1,216
3,210
Payments
45.0
2,475
5,505
44.2
2,344
5,298
PagoNxt
93.6
1,160
1,240
95.7
1,091
1,140
Cards
1,315
4,265
30.1
1,253
4,158
Europe
9,407
23,510
42.1
9,030
21,439
30.8
40.0
Spain
35.7
4,271
11,974
41.7
4,227
10,132
United Kingdom
55.9
2,918
5,216
49.7
2,745
5,525
Portugal
26.1
548
2,100
27.3
542
1,982
Poland
27.1
965
3,555
27.1
862
3,182
DCB Europe
45.9
2,604
5,679
47.6
2,618
5,502
North America
48.2
6,701
13,915
49.1
6,465
13,174
US
50.5
3,830
7,580
51.0
3,679
7,209
Mexico
42.5
2,665
6,278
43.9
2,588
5,899
South America
35.1
6,943
19,783
38.5
6,920
17,971
Brazil
32.1
4,352
13,536
34.6
4,529
13,104
Chile
36.0
933
2,592
44.6
1,020
2,285
Argentina
41.1
1,022
2,487
50.2
775
1,544
Numerator: underlying operating expenses.
Denominator: underlying total income.
Annual report 2024
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Credit risk indicators
The credit risk indicators measure the quality of the credit portfolio and the percentage of non-performing loans covered by provisions.
Ratio
Formula
Relevance of the metric
The NPL ratio is an important variable regarding financial
institutions' activity since it gives an indication of the
Credit impaired customer loans and advances, guarantees
NPL ratio
level of credit risk the entities are exposed to. It
and undrawn balances
(Non-performing loans
calculates risks that are, in accounting terms, declared to
Total Risk
A
ratio)
be credit impaired as a percentage of the total
outstanding amount of customer credit and contingent
liabilities.
The NPL coverage ratio is a fundamental metric in the
Total allowances to cover impairment losses on customer
financial sector. It reflects the level of provisions as a
loans and advances, guarantees and undrawn balances
NPL coverage ratio
percentage of the credit impaired assets. Therefore, it is a
Credit impaired customer loans and advances, guarantees
good indicator of the entity's solvency against customer
and undrawn balances
defaults both present and future.
This ratio quantifies loan-loss provisions arising from
Allowances for loan-loss provisions over the last 12 months
Cost of risk
credit risk over a defined period of time for a given loan
Average loans and advances to customers over the last 12
portfolio. As such, it acts as an indicator of credit quality.
months
A. Total risk = non-impaired and impaired customer loans and advances and guarantees + impaired undrawn customer balances.
Credit risk (I) (EUR million and %)
2024
2023
2022
NPL ratio
3.05%
3.14%
3.08%
Credit impaired customer loans and advances, guarantees and undrawn balances
35,265
35,620
34,673
Gross loans and advances to customers registered under the headings 'financial assets measured
at amortized cost' and 'financial assets designated at fair value through profit or loss' classified in
stage 3 (OCI), excluding POCI (Purchased or Originated Credit Impaired)
33,568
33,821
32,617
POCI exposure (Purchased or Originated Credit Impaired) that is additionally impaired
163
273
271
Customer guarantees and undrawn balances classified in stage 3
1,521
1,517
1,776
Doubtful exposure of loans and advances to customers at fair value through profit or loss
13
9
9
Total risk
1,157,274
1,133,898
1,124,121
Impaired and non-impaired gross loans and advances to customers
1,076,195
1,059,135
1,058,688
Impaired and non-impaired customer guarantees and impaired undrawn customer balances
81,079
74,763
65,433
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Credit risk (II) (EUR million and %)
2024
2023
2022
NPL coverage ratio
64.8%
65.9%
67.5%
Total allowances to cover impairment losses on customer loans and advances, guarantees
and undrawn balances
22,835
23,490
23,418
Total allowances to cover impairment losses on loans and advances to customers
measured at amortized cost and designated at fair value through OCI
22,125
22,788
22,684
Total allowances to cover impairment losses on customer guarantees and undrawn
balances
710
702
734
Credit impaired customer loans and advances, guarantees and undrawn balances
35,265
35,620
34,673
Gross loans and advances to customers registered under the headings 'financial assets
measured at amortized cost' and 'financial assets designated at fair value through profit or
loss' classified in stage 3 (OCI), excluding POCI (Purchased or Originated Credit Impaired)
33,568
33,821
32,617
POCI exposure (Purchased or Originated Credit Impaired) that is additionally impaired
163
273
271
Customer guarantees and undrawn balances classified in stage 3
1,521
1,517
1,776
Doubtful exposure of loans and advances to customers at fair value through profit or loss
13
9
9
Cost of risk
1.15%
1.18%
0.99%
Underlying allowances for loan-loss provisions over the last 12 months
12,333
12,458
10,509
Allowances for loan-loss provisions over the last 12 months
12,685
12,932
10,836
Adjustments to loan-loss provisions for items outside ordinary course of businesses
-352
-474
-327
Average loans and advances to customers over the last 12 months
1,075,821
1,059,566
1,059,972
NPL ratio (EUR million and %)
2024
2023
%
Numerator
Denominator
%
Numerator
Denominator
Retail & Commercial Banking
3.18
20,468
643,782
3.21
20,961
652,382
Digital Consumer Bank
5.07
10,992
216,613
4.75
9,831
207,107
Corporate & Investment Banking
0.86
2,068
241,078
1.36
3,007
221,593
Wealth Management & Insurance
0.67
169
25,226
1.40
330
23,612
Payments
5.14
1,266
24,615
5.02
1,191
23,710
PagoNxt
Cards
5.25
2.15
1,235
23,526
5.11
1,151
22,513
Europe
13,774
640,094
2.32
14,495
624,696
Spain
2.68
7,672
285,883
3.06
8,529
278,569
United Kingdom
1.33
3,299
248,061
1.42
3,518
247,360
Portugal
2.40
993
41,418
2.59
1,024
39,503
Poland
3.66
1,636
44,704
3.55
1,397
39,329
DCB Europe
2.50
3,527
141,312
2.12
2,877
135,608
North America
4.22
8,375
198,607
4.09
7,805
190,720
US
4.72
7,012
148,643
4.57
6,303
137,893
Mexico
2.71
1,352
49,927
2.82
1,489
52,785
South America
5.42
9,287
171,301
5.72
10,142
177,380
Brazil
6.14
6,418
104,519
6.56
7,479
113,937
Chile
5.37
2,394
44,590
5.01
2,332
46,565
Argentina
2.06
173
8,411
1.99
78
3,903
Numerator: credit impaired customer loans and advances, guarantees and undrawn balances.
Denominator: total risk.
PagoNxt's NPL ratio is not provided as we do not consider it a relevant metric for this type of business.
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NPL coverage ratio (EUR million and %)
2024
2023
%
Numerator
Denominator
%
Numerator
Denominator
Retail & Commercial Banking
58.4
11,949
20,468
61.4
12,868
20,961
Digital Consumer Bank
73.6
8,088
10,992
76.5
7,521
9,831
Corporate & Investment Banking
39.3
812
2,068
41.2
1,240
3,007
Wealth Management & Insurance
80.3
135
169
29.3
97
330
Payments
140.1
1,774
1,266
139.8
1,665
1,191
PagoNxt
Cards
141.9
50.2
1,752
1,235
142.1
1,636
1,151
Europe
6,909
13,774
49.3
7,147
14,495
Spain
52.6
4,039
7,672
49.1
4,185
8,529
United Kingdom
29.3
967
3,299
30.3
1,066
3,518
Portugal
79.4
789
993
82.7
847
1,024
Poland
61.9
1,013
1,636
73.3
1,024
1,397
DCB Europe
82.5
2,910
3,527
88.0
2,532
2,877
North America
69.7
5,836
8,375
73.8
5,763
7,805
US
63.8
4,471
7,012
67.7
4,265
6,303
Mexico
100.4
1,358
1,352
100.0
1,489
1,489
South America
76.5
7,103
9,287
78.4
7,948
10,142
Brazil
82.7
5,311
6,418
84.7
6,338
7,479
Chile
49.9
1,196
2,394
52.7
1,230
2,332
Argentina
177.1
307
173
165.7
128
78
Numerator: total allowances to cover impairment losses on customer loans and advances, guarantees and undrawn balances.
Denominator: credit impaired customer loans and advances, guarantees and undrawn balances.
PagoNxt's coverage ratio is not provided as we do not consider it a relevant metric for this type of business.
Cost of risk (EUR million and %)
2024
2023
%
Numerator
Denominator
%
Numerator
Denominator
Retail & Commercial Banking
0.92
5,845
632,300
1.02
6,540
638,166
Digital Consumer Bank
2.16
4,562
210,747
2.04
4,106
201,376
Corporate & Investment Banking
0.10
174
180,565
0.10
165
168,553
Wealth Management & Insurance
0.18
41
23,264
(0.08)
(17)
22,366
Payments
7.39
1,714
23,183
7.22
1,666
23,060
PagoNxt
Cards
7.64
0.32
1,698
22,225
7.44
1,642
22,058
Europe
1,862
590,624
0.44
2,533
582,256
Spain
0.50
1,259
249,759
0.62
1,522
246,660
United Kingdom
0.03
64
251,348
0.10
247
251,362
Portugal
0.03
11
38,454
0.20
77
38,546
Poland
1.38
511
37,138
2.08
674
32,385
DCB Europe
0.88
1,209
137,165
0.62
792
128,583
North America
2.04
3,786
185,873
2.05
3,733
182,037
US
1.82
2,507
137,581
1.92
2,593
135,190
Mexico
2.64
1,277
48,439
2.43
1,135
46,729
South America
3.50
5,478
156,397
3.36
5,401
160,644
Brazil
4.51
4,487
99,532
4.77
4,701
98,555
Chile
1.19
497
41,582
0.80
365
45,637
Argentina
4.59
284
6,190
6.64
150
2,262
Numerator: underlying allowances for loan-loss provisions over the last 12 months.
Denominator: average loans and advances to customers over the last 12 months.
PagoNxt's cost of risk is not provided as we do not consider it a relevant metric for this type of business.
Annual report 2024
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statement
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financial review
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Other indicators
The Group has a series of additional financial metrics which facilitate analysis of the underlying business trends and performance.
Ratio
Formula
Relevance of the metric
This is a very commonly used ratio used to measure the
TNAV per share
Tangible book value
A
company’s accounting value per share having deducted the
(Tangible net asset
intangible assets. It is useful in evaluating the amount each
value per share)
Number of shares excluding treasury stock
shareholder would receive if the company were to enter into
liquidation and had to sell all the company’s tangible assets.
This is one of the most commonly used ratios by market
Share price
participants for the valuation of listed companies both in
Price to tangible book
absolute terms and relative to other entities. This ratio
value per share (X)
TNAV per share
measures the relationship between the price paid for a
company and its accounting equity value.
This is an indicator of the bank's liquidity. It measures the
LTD ratio
Net loans and advances to customers
total loans and advances to customers net of loan-loss
(Loan-to-deposit)
Customer deposits
provisions as a percentage of customer deposits.
In order to aid analysis of the commercial banking activity,
Loans and advances
Gross loans and advances to customers excluding reverse
reverse repos are excluded as they are highly volatile treasury
(excl. reverse repos)
repos
products.
In order to aid analysis of the commercial banking activity,
Deposits (excl. repos)
Customer deposits excluding repos
repos are excluded as they are highly volatile treasury
products.
PAT + After tax fees (in
Net profit + fees ceded by Santander Asset Management and
Metric to assess Wealth Management & Insurance’s total
Wealth Management
Santander Insurance to the branch network, net of taxes,
contribution to the Group’s profit.
& Insurance)
excluding Private Banking customers
A. Tangible book value = Stockholders’ equity (excl. minority interests) - intangible assets.
Others (EUR million and %)
Dec-24
Dec-23
Dec-22
TNAV (tangible book value) per share
5.24
4.76
4.26
Tangible book value
79,342
75,552
70,459
Number of shares excl. treasury stock (million)
15,137
15,886
16,551
Price to tangible book value per share (X)
0.85
0.79
0.66
Share price (euros)
4.465
3.780
2.803
TNAV (tangible book value) per share
5.24
4.76
4.26
Loan-to-deposit ratio
100%
99%
103%
Net loans and advances to customers
1,054,069
1,036,349
1,036,004
Customer deposits
1,055,936
1,047,169
1,009,722
2024
2023
PAT + After tax fees (in Wealth) (Constant EUR million)
3,399
3,039
Profit after tax
1,728
1,518
Net fee income net of tax
1,671
1,521
Annual report 2024
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1,232.389
893.635
Contents
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statement
governance
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Impact of exchange rate movements
on profit and loss accounts
We make use of certain financial measures in local currency to help
in the assessment of our ongoing operating performance. These
non-IFRS financial measures include the results of operations of
our subsidiary banks located outside the eurozone, excluding the
impact of foreign exchange. Because changes in foreign currency
exchange rates do not have an operating impact on the results, we
believe that evaluating their performance on a local currency basis
provides an additional and meaningful assessment of performance
to both management and the company’s investors.
The Group presents, at both the Group level as well as the business
unit level, the real changes in euros in the income statement as
well as the changes excluding the exchange rate effect (i.e.,
"excluding FX" or "constant euros"), as it considers the latter
facilitates analysis, since it enables business movements to be
identified without taking into account the impact of converting
each local currency into euros.
Said variations, excluding the impact of exchange rate movements,
are calculated by converting income statement lines for the
different business units comprising the Group into our presentation
currency, the euro, applying the average exchange rate for 2024 to
all periods contemplated in the analysis. We use this method for
all countries with the exception of Argentina, where we use the
exchange rate on the last working day of each period presented,
given it is a hyperinflationary economy, to mitigate the distortions
caused by the hyperinflation.
Impact of exchange rate movements
on the balance sheet
The Group presents, at both the Group level as well as the business
unit level, the changes in euros as well as the changes excluding
the exchange rate effect ("excluding FX" or "constant euros") for
loans and advances to customers excluding reverse repurchase
agreements (repos) and customer funds (which comprise deposits
and mutual funds) excluding repos. Additionally, we present
changes in the main balance sheet lines of the Group's countries
and regions both in euros as well as the changes excluding the
exchange rate effect. As with the income statement, the reason is
to facilitate analysis by isolating the changes in the balance sheet
that are not caused by converting each local currency into euros.
These changes excluding the impact of exchange rate movements
are calculated by converting the balances, into our presentation
currency, the euro, applying the closing exchange rate on the last
working day of December 2024 to all periods contemplated in the
analysis. We use this method to calculate the variations for all
countries with the exception of Argentina, where we use the
exchange rate on the last working day of each period presented,
given it is a hyperinflationary economy, to mitigate the distortions
caused by the hyperinflation.
Due to the significant divergence between the official Argentine
peso exchange rate and other macroeconomic magnitudes, mainly
inflation, we applied an alternative exchange rate to 2024 results
which reflects the exchange rate observed in transactions ordered
between market participants under the prevailing economic
conditions, such as the repatriation of dividends from businesses in
Argentina. This alternative exchange rate takes the dollar contado
con liquidación rate (CCL) as a reference, which is the exchange rate
resulting from the sale of local bonds denominated in Argentine
pesos in US dollars (dual denomination peso/dollar bonds). At the
end of the year, the value of this exchange rate did not significantly
differ from other market rates or the official exchange rate.
The average and period-end exchange rates for the main currencies
in which the Group operates are set out in the table below.
Exchange rates: 1 euro/currency parity
Average (income statement)
Period-end (balance sheet)
2024
2023
2024
2023
US dollar
1.082
1.081
1.039
1.105
Pound sterling
0.846
0.870
0.829
0.868
Brazilian real
5.809
5.397
6.427
5.365
Mexican peso
19.723
19.158
21.554
18.691
Chilean peso
1,020.473
906.417
1,032.560
965.192
Argentine peso
A
Polish zloty
4.305
4.538
4.275
A. Average exchange rates for the Argentine peso are not included since we use the exchange rate on the last working day of each period presented given it is a
hyperinflationary economy. For 2024 data, we apply an alternative exchange rate for the Argentine peso that better reflects the evolution of inflation (we continue to apply
the official ARS exchange rate to all prior periods).
Annual report 2024
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500
Average inflation 2024 (%)
Average inflation
last 12 months
Retail & Commercial Banking
A
3.4
Digital Consumer Bank
A
2.7
Corporate & Investment Banking
A
3.2
Wealth Management & Insurance
A
3.1
Payments
A
3.3
Europe
2.8
Spain
2.8
United Kingdom
2.5
Portugal
2.4
Poland
3.7
DCB Europe
2.4
North America
3.7
US
3.0
Mexico
4.7
South America
A
3.9
Brazil
4.4
Chile
4.3
Total Group
A
3.3
A. Excluding the impact of inflation in Argentina.
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Impact of inflation on operating
expenses
Santander presents, for both the Group and the business units
included in the primary and secondary segments: i) the changes in
operating expenses in euros; ii) the changes excluding the
exchange rate effect with the exception of Argentina which is
calculated as described above; and iii) the changes excluding the
exchange rate effect minus the effect of average inflation over the
year except for Argentina as cost growth in euros should already
largely reflect the effect of hyperinflation on exchange rates. The
reason is that the two latter facilitate analysis for management
purposes.
Inflation is calculated as the arithmetic average of the last 12
months for each country and, for the regions and global
businesses, as the weighted average the inflation rate of each
country comprising the regions or global business, weighted by
each country's operating expenses in the region or global business.
For the Group, the global businesses and South America, we
exclude the impact of inflation in Argentina from the calculation of
the region's average inflation as cost growth in euros should
already largely reflect the effect of hyperinflation on exchange
rates.
The table below shows the average inflation rates calculated as
indicated.
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RISK MANAGEMENT
AND COMPLIANCE
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Our risk management and compliance is
key to making us a solid, safe
and sustainable bank that helps people
and businesses prosper
2024 Highlights
→Credit quality indicators improved despite the macro and geopolitical
scenario.
NPL ratio
3.05%
-9 bp /2023
Cost of risk
1.15%
-3 bp /2023
→VaR remained at moderate levels in an economic context marked by
geopolitical risk and the evolution of inflation. Robust and diversified
liquidity buffer.
Avg. VaR
€17.1 Mn
+5.4 Mn /2023
LCR ratio
1
168%
→Capital optimization with updated models that allow for better capital
allocation in our businesses.
Fully-loaded CET1 ratio
2
12.8%
+51 bp /2023
RWAs
€625 Bn
+1 Bn /2023
1 Group LCR: Calculated since 2024 to better reflect the restrictions to transferability of assets,
using an internal methodology that determines the minimum common coverage percentage
simultaneously across all the Group’s jurisdictions, considering all existing restrictions on
liquidity transfer in third countries.
2 Fully-loaded IFRS 9.
→The operational risk profile did not show
significant changes in the year, maintaining a focus
on risks related to process execution, suppliers and
cyberrisk.
→In compliance risk, our profile remained stable,
with continuous progress in enhancing the Group's
FCC risk profile and proactive management of
conduct related risks to support delivering effective
customer outcomes.
→During 2024, technological transformation was
strengthened and the model risk function was
simplified, making it more efficient. Additionally,
the model inventory was reviewed from the
perspective of the five global businesses, seeking
effective management aligned with the Group's
strategy.
→In strategic risk, we focused on monitoring the
evolution and potential impact of geopolitical risks,
and on effectively challenging our three-year
financial plan and strategic initiatives to support
the Group's transformation.
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governance
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1. RISK MANAGEMENT AND CONTROL MODEL
505
1.1 Risk principles and culture
505
1.2 Key risk types
505
1.3 Risk and compliance governance
506
1.4 Risk management processes and tools
508
Risk appetite and structure of limits
508
Risk profile assessment (RPA)
510
Scenario analysis
510
Risk reporting structure
511
1.5 Internal control system
511
2. CREDIT RISK
512
2.1 Introduction
512
2.2 Credit risk management
512
2.3 Key metrics
513
2.4 Other credit risk details
519
3. MARKET, STRUCTURAL AND LIQUIDITY RISK
524
3.1 Introduction
524
3.2 Market risk management
524
3.3 Key market risk metrics
527
3.4 Structural balance sheet risk management
530
3.5 Key structural balance sheet risk metrics
531
3.6 Liquidity risk management
533
3.7 Key liquidity risk metrics
533
3.8 Actuarial, pension and insurance risk management
534
4. CAPITAL RISK
535
4.1 Introduction
535
4.2 Capital risk management
535
4.3 Key metrics
536
5. OPERATIONAL RISK
537
5.1 Introduction
537
5.2 Operational risk management
537
5.3 Key metrics
542
6. COMPLIANCE RISK
543
6.1 Introduction
543
6.2 Compliance risk management
543
7. MODEL RISK
549
7.1 Introduction
549
7.2 Model risk management
549
8. STRATEGIC RISK
551
8.1 Introduction
551
8.2 Strategic risk management
551
8.3 Emerging risks in 2024
552
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1. RISK MANAGEMENT
AND CONTROL MODEL
Our risk management and control model is underpinned by common
principles, a solid risk culture, a clear governance structure and
advanced management processes for different risk types.
Robust corporate governance is crucial to the functioning of banks
and, especially, to risk management. According to regulatory
requirements, Grupo Santander's governance structure and risk
management enable the board of directors and top management
to receive accurate information, make decisions on strategy and
oversee every risk to which the bank is exposed to check
consistency with our risk appetite and set limits.
1.1 Risk principles and culture
Grupo Santander's risk management and control must follow these
mandatory principles and our risk culture (Risk Pro), which consider
regulatory requirements and best market practices:
1. All employees are risk managers who must understand the
risks that their work can pose and avoid taken risks that will
exceed the Group’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 our risk culture and
making sure we keep our risk profile within risk appetite.
3. Independence of risk management and control functions,
according to our three lines of defence model (described in
detail in section 1.3 'Risk and compliance governance') and
with clearly defined roles and responsibilities.
4. We take a forward-looking, comprehensive approach for all
businesses and risk types, which should be proactive and
analyse trends over different time periods and under different
scenarios.
5. Effective information management to identify, assess, manage
and disclose risks at appropriate levels.
Risk culture - Risk Pro
One of the pillars of the Group's culture, The Santander Way, is our
solid risk culture, Risk Pro (or 'I AM RISK' in the US), which is a key
lever of the Group's purpose to help people and businesses
prosper.
Risk Pro is each employee’s accountability for the risks taken in
their day to day and their individual contribution to identifying,
assessing and managing risks properly and responsibly. In addition,
it is part of all stages of the employee life cycle: recruitment,
training, day-to-day activities, remuneration, and recognition.
Because communication is a key tool in embedding our risk culture,
in 2024 we enhanced all units’ communications and awareness
plans in this area.
For more details about Group's risk culture, see the section '4.1. Corporate
culture' of the 'Sustainability statement'.
1.2 Key risk types
Grupo Santander has suitable procedures in place to identify,
measure, manage, control and report the risks that we are exposed
to in our day-to-day operations and under special circumstances.
The Risk and Compliance functions follow internal regulations for
each type of risk. These regulations define the processes, tools,
responsibilities, roles, and governance requirements necessary to
establish our control environment.
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Credit risk
Operational risk
Market risk
Financial crime risk
Liquidity risk
Model risk
Structural risk
Reputational risk
Strategic risk
ESG risk factors
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Our corporate risk framework defines each key risk type. They are
(click on each one type for more details):
Given the cross-cutting impact that ESG (environmental, social and
governance) risk factors can have on the different types of risks
that exist in different time horizons, our ESG risk management
requires a comprehensive view to be able to manage and control
these risks correctly, align with the Group’s sustainability strategy,
and meet regulatory requirements and supervisory expectations.
For more details about ESG factor management, see the section
'2.3 Embedding ESG in risk management' of the 'Sustainability
statement'.
1.3 Risk and compliance governance
Our risk and compliance governance structure emanates from our
board of directors and is set up to promote autonomy between
management and control functions according to our three lines of
defence model. Our units’ adherence to corporate frameworks
gives us a common governance model that we replicate across our
footprint.
Lines of defence
Grupo Santander’s risk governance keeps the functions of each line
of defence separate to manage and control risks effectively. This
model is key to ensuring that the Group remains robust, secure and
sustainable.
1
st
The business and support functions that take or
originate risks are primarily responsible for managing
them. The first line 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 of defence executes the mitigation plans for
the risks where we have identified shortcomings in
their control environment.
2
nd
The second line of defence, comprising the risk and
compliance functions, independently oversees and
challenges risk management at the first line of
defence. Its duties include promoting that risks are
managed according to the senior management
approved risk appetite, and strengthening our risk
culture across the Group. The second line of defence
must supervise and challenge the control environment
implemented by the first line.
3
rd
The third line of defence, which is the Internal Audit
functions, is fully independent to give the board and
senior management assurance of high-quality and
efficient internal control, governance and risk
management to verify that we comply with the law
and to preserve our value, solvency and reputation.
Risk, compliance and internal audit functions are sufficiently
separate and independent from each other. Each function has
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.
Risk and compliance committees' structure
The Group’s risk and compliance governance covers our day-to-day
operations and special situations. It is supported by a clearly
defined committee structure, from the board of directors and board
committees to top level committees and lower level forums.
Our governance aims to facilitate effective and efficient decision
making on risks, oversee risk control, and check that we manage
risks according to the risk appetite set by the Group and subsidiary
boards of directors. To achieve these aims, our risk and compliance
governance keeps risk control and risk-taking separate.
The board of directors has final oversight of risk and compliance
management and control to promote a sound risk culture and to
review and approve risk appetite and policy, with support from its
risk supervision, regulation and compliance committee (RSRCC)
and its executive committee.
For more details, see section 4.8 ‘Risk supervision, regulation and
compliance committee activities in 2024’ on 'Corporate governance'
chapter.
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Contents
Board level:
Board of directors
Risk management
Risk control
Risk supervision, regulation
Executive committee
and compliance committee
Executive
Executive risk
Risk control
Compliance and
level:
committee (ERC)
committee (RCC)
conduct committee
Chair:
CEO
CRO
CCO
Frequency:
Weekly
Monthly
Monthly
• Model approval forum
• Market, structural, liquidity and
• Corporate product governance
• Risk proposal forum
capital risk control forum
forum
Fora:
• Credit risk control forum
• Financial crime compliance
• Provisions forum
forum
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 implementation
and execution of our risk strategy and promotes proper risk
culture, is in charge of overseeing all risks, as well as challenging
and advising business lines on risk management.
The Group chief compliance officer (CCO) leads the
implementation and execution of the compliance risk strategy and
is in charge of overseeing the risks within their purview and
reporting on them to the CRO.
The CRO and the CCO report directly to both the risk supervision,
regulation and compliance committee and the board of directors.
The executive risk committee, the risk control committee and the
compliance and conduct committee are executive committees with
powers delegated from the board.
Executive risk committee (ERC)
The ERC manages risk with board-given authority to accept, modify
or escalate the important models as well as actions and
transactions that may pose significant risk to the Group. It makes
the highest-level risk decisions, mindful of risk appetite. It is
formed of the CEO and other senior managers from the Risk,
Finance and Compliance areas. The CRO can veto the committee’s
resolutions.
Risk control committee (RCC)
The RCC controls and provides a holistic overview of risks. It makes
sure business lines are managed according to the board-approved
risk appetite. It also determines and checks the impact of existing
and emerging risks on Grupo Santander's risk profile. It is formed
of senior officers from the Risk, Compliance, Financial Accounting
and Control, and other areas. From time to time, subsidiary-level
CROs to report the committee on their risk profile.
Compliance & conduct committee
This committee monitors and reviews compliance risk
management and oversees corrective measures for new risks and
risks detected among management-related deficiencies. It is
formed of senior officers from the Compliance, Risk, Financial
Accounting and Control, and other areas. The chair holds the
casting vote over the committee’s resolutions.
Executive-level committees delegate some duties to management
and control fora and meetings (see chart above) that:
• inform the CRO, the CCO, the risk control committee, and the
compliance and control committee if risks are being managed
within risk appetite;
• regularly monitor each key risk type; and
• oversee measures to meet supervisors' and auditors’
expectations.
In 2024, the reputational risk forum was embedded in the
compliance committee as a simplification proposal suggested.
Recurrent updates on these reputational risk matters are presented
to the compliance committee.
Grupo Santander can establish additional governance measures for
special situations. We have upgraded the monitoring of all risks,
with special attention to the main macroeconomic indicators,
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P&L volatility
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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.
Group-subsidiary relations
Grupo Santander subsidiaries’ risk and compliance management
and control model is consistent with the frameworks approved by
the Group board of directors. Subsidiaries adhere to the
frameworks through their own boards and can only adapt to higher
standards according to local law and regulation.
As part of our aggregate risk oversight, we challenge and ratify
subsidiaries’ internal regulation and transactions to create a
common risk management and control model across the Group.
The risk and compliance functions will continue to support the
businesses and oversee risk control both globally and locally.
Throughout the year, we continued to build on our group
subsidiary governance 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, the CCO and regional heads of risk are involved in appointing,
setting objectives for, reviewing and compensating their country
unit counterparts and assessing whether risks are properly
controlled.
Key risks
Financial
Credit
Market
Liquidity
Structural
Operat.
Model
Reputat.
Strategic
Risk Appetite
Crime
risk
risk
risk
risk
risk
risk
risk
risk
axes
Risk
Control of P&L volatility associated with business plan under baseline 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 concentration levels in customers, sectors and portfolios
Non financial
Solid controls on non financial risks aimed to minimize financial, operative, technological losses, as well
risks & control
as legal and regulatory breaches, and conduct events or reputational damage
environment
Our subsidiaries work together to strengthen group- subsidiary
relations effectively through these common initiatives:
• Enhancing organizational structures based on subsidiary
benchmarks and strategic vision to promote more advanced risk
management infrastructures and practices;
• Exchanging best practices to strengthen processes and drive
innovation to have a quantitative impact;
• Promoting internal talent and encouraging geographic and
functional mobility, which we placed special emphasis on in
2024. Continuous investment in our risk employees’
development and promoting diverse teams and a global outlook
are key to boosting risk expertise across our footprint.
For more details on our relationship with our subsidiaries, see section
7. ‘Group structure and internal governance’ of the 'Corporate
Governance' chapter.
1.4 Risk management processes
and tools
In the following section, we describe Grupo Santander's processes
and tools to carry out effective risk management.
Risk appetite and structure of limits
Risk appetite is the aggregate level and types of risk we deem
prudent for our business strategy, even in unforeseen
circumstances.
The risk appetite is expressed through qualitative statements and
quantitative limits and metrics representative of the bank’s risk
profile. Those metrics cover all key risk types according to our
corporate risk framework. We articulate them in five axes that
provide us with a holistic view of all risks we incur in the
development of our business model:
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Our risk appetite and business model rests on:
• a medium-low, predictable target risk profile, customer focus,
internationally diversified operations and a significant 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 to safeguard their risk profiles against
compromising the Group’s 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.
Risk appetite is governed throughout the Group by the following
principles:
• Risk appetite is part of the board's duties. It prepares the risk
appetite statement (RAS) for the whole Group every year. In a
cascading down process, each subsidiary's board also sets its
own risk appetite.
• Comprehensiveness and forward-looking approach. Our
appetite includes of all material risks that we are exposed to and
defines our target risk profile for the current and medium term
with a forward-looking view considering stress scenarios.
To promote that all material risks are adequately represented, we
use corporate methodologies to identify and assess the risk to
which we are exposed to, in the different counties, and are
inherent to our activities (emerging risks and risk control self
assessment — RCSA— among others).
For more details on these exercises see sections ‘Management and control
model’ 5.2 Operational risk management' and '8.3 Emerging risks'.
• Common standards embedded in the day-to-day risk
management. The Group shares the same risk appetite model,
which sets common requirements for processes, metrics,
governance bodies, controls and standards. It also facilitates an
effective and traceable embedding of our appetite into more
granular management policies and limits across our subsidiaries.
• 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. We
verify that the three-year strategic plans, the annual budget, and
capital and liquidity planning are within the limits set in the RAS
before we approve them.
RAF
RAS
(Risk appetite statement
and limits)
Group's RAS
RAS
Unit 1
RAS
Unit 2
RAS
Unit n
RAF
(Management
limits)
Global
limits &
policies
Risk
limits
& policies
Unit 1
Risk
limits
& policies
Unit 2
Risk
limits
& policies
Unit n
RAF Risk appetite framework
We promote that strategic and business plans are aligned with our
risk appetite by:
• considering the risk appetite, long-term strategic view and the
risk culture when drafting strategic and business plans.
• challenging business and strategic plans against the risk
appetite. Misalignments trigger a review of either the three-year
strategic plan (to make sure we stay within RAS limits) or risk
appetite limits, with independent governance.
• control through the three lines of defence model that the risk
appetite limits are subject to periodic oversight and that the
specialized control functions report on risk profile and
compliance with limits to the board and its committees every
month.
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Risk profile assessment (RPA)
Risk identification and assessment activities, and risk profile
calculation extend to all types of risks arising from the entity's
activities. The risk framework, reviewed annually, defines the key
risk types resulting from the Group's main risk identification and
assessment exercises.
Risk identification encompasses all processes aimed at detecting
risks and vulnerabilities, both internal and external, to which the
Group is exposed. These processes enable the responsible
functions to become aware of these risks and form the starting
point for effective management and control.
Risk assessment includes processes through which the relevance
of identified risks is determined, quantitatively and/or qualitatively,
considering both inherent risk (before considering the effects of
associated mitigant and controls) and residual risk levels.
We systematically evaluate the Group's risk profile and its
subsidiaries using a unique RPA methodology, based on the
fundamental principles of the risk identification and assessment
model: responsibility of all functions, efficiency, common
methodologies, completeness in covering all risks, materiality, and
orientation towards corrective and mitigation actions.
The calculation of the risk profile according to this methodology
generates results through a scoring system composed of four
materiality categories: low, medium-low, medium-high and high.
This allows for monitoring the risk appetite approved by the board.
Additionally, it provides a holistic view of all risks at a given point in
time, enabling the identification of management weaknesses and
potential deviations from the business plan, on which corrective
actions can be taken. It provides evidence of prudent risk
management, confirming strong solvency ratios and comfortable
liquidity levels.
Our objective is to maintain a medium-low risk profile, stable in an
environment dominated by market volatility, a gradual decline in
inflation, and ongoing geopolitical tensions. Prudent and forward
looking risk management means strong profitability indicators and
credit quality at year-end, as well as a solid liquidity risk profile.
Scenario analysis
Scenario analyses enable us to measure the resilience of our
balance sheet, financial statements and our capital adequacy under
stressful conditions. We use the findings of these analyses to
review our risk appetite and draw up actions to mitigate expected
losses or, if needed, to reduce capital and liquidity.
Scenario analyses also enable senior management to comprehend
the nature and scope of the vulnerabilities to which the Group is
exposed in the execution of its business plan.
Our Research department plays a key role in determining
scenarios, macroeconomic variables and other factors that can
affect our risk profile in our markets.
We conduct a systematic review of our risk exposure under base,
adverse and favourable scenarios that predict an impact on
solvency and liquidity. These exercises are fundamental to our
processes:
• Regulatory exercises based on EU and domestic supervisors'
guidelines.
• Business planning to help set the Group’s risk strategy and
profile, with:
• internal capital and liquidity adequacy assessment processes
(ICAAP and ILAAP) that measure capital and liquidity in various
scenarios;
• budget and strategic planning when implementing a new risk
approval policy, in assessing the risk profile or when
monitoring specific portfolios and business lines;
• our annual recovery plan, which specifies which tools Grupo
Santander could use to survive a severe financial crisis. The
plan’s financial and macroeconomic stress scenarios have
various levels of severity, plus idiosyncratic and/or systemic
events; and
• risk appetite, with stressed metrics to determine how much
risk we want to expose ourselves to.
• Recurrent risk management also uses scenario analyses for:
• provisions estimates, which involve adjusting the value of
credit operations due to existing or prospective risk factors that
have not been considered in the initial approval and rating
process, both for individual customers and for the portfolio as a
whole; and
• regular credit and market risk stress tests that simulate
changes in expected losses to estimate required capital and
absorb unexpected losses.
For more details on scenario analysis, see sections 3.2 ‘Market risk
management’ and 3.6 'Liquidity risk management' and section 'Expected
loss estimation' in Note 54 to the consolidated financial statement.
• Climate change scenario analysis, for which we have embedded
the scenarios defined by the Network for Greening the Financial
System (NGFS), by Representative Concentration Pathways (RCP)
and by the Intergovernmental Panel on Climate Change (IPCC),
which our Research department integrates and expands by
adjusting them to more specific variables by country and sector
to offer a more complete and tailored view of our portfolios.
This enables us to boost our forward-looking capabilities to
quantify the impact on our customers of a transition to a lower
greenhouse gas emissions economic model, as well as potential
physical risk events.
To make stress testing more consistent and robust:
• Our three lines of defence and senior management are
involved in scenario analysis governance and oversight.
• The models we develop estimate future metric values (e.g.
credit losses).
• Our backtesting and reverse stress exercises challenge model
outcomes regularly.
• Our teams contribute expert opinions and a vast understanding
of portfolios.
• And we thoroughly monitor models, scenarios, assumptions,
results and mitigating management measures.
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Amid an economic 'soft landing', where falling inflation is paving
the way for central banks to cut interest rates; the unfolding of
armed conflicts; election outcomes; early signs of GDP weakness in
some economies; and the effects of floods in Brazil, hurricanes in
the US, flash floods in Spain and other climate events, scenario
analysis proved vital in 2024 to identify and manage correctly the
potential impacts of these events on our portfolios.
We boosted our management and forecasting capacity by drawing
up action points, adapting our strategy to maintain solvency levels
and considering our more vulnerable customers due to the
macroeconomic environment and some specific events.
Risk reporting structure
In order for senior management to have a complete and up-to-date
view of the risk profile for proper decision-making, we report
recurrently and in a consolidated manner on current and future
risks. Reporting is comprehensive and dynamic, adapts to needs,
and prioritizes all significant risks in a timely and appropriate
manner.
Our reports cover every risk included in our corporate risk
framework, with all necessary considerations for their proper risk
assessment. They also provide a consolidated view of all risks,
maintaining the quality and consistency of information according
to our corporate data framework.
Our risk reporting structure continues to strike a balance between
data, analysis and qualitative commentary, incorporating forward
looking measures, risk appetite information and limits, emerging
risks, and other elements.
We continue to enhance our reporting with simpler, automated
processes and tighter controls that adapt to new needs. In 2024,
we continued to report and monitor all the impacts of ongoing
armed conflicts and natural disasters; escalated cases of risk from
macroeconomic and geopolitical volatility; and paid close attention
to every emerging risk that could have a direct or indirect impact on
the Group. Moreover, we adapted reporting by embedding the
global businesses to be consistent with the Group’s strategic
objectives and round off the existing geographical view.
1.5 Internal control system
Our internal control system (ICS) comprises the risk and control
procedures that the board of directors, senior management and the
rest of our employees perform as part of scheme of individual
responsibilities. Its aim is to provide reasonable guarantee
regarding the operational efficiency; the reliability of financial and
sustainability reports; and compliance with internal policies, by
acting responsibly and covering every process across the
organization (business, risk and support areas).
Our ICS is consistent with the most demanding international
standards and follows the guidelines set out by the Committee of
Sponsoring Organisations of the Treadway Commission (COSO).
We base it on these principles:
• Tone at the top: the board of directors oversees the ICS's
integrity, while senior management sets an appropriate ICS. Both
groups work to raise awareness of the ICS's importance,
especially in new initiatives (transformation projects, regulatory
compliance, and others).
• Risk Control Self-Assessment (RCSA): it is where we identify,
document and assess the ICS’s risks and controls to measure —
dynamically and proactively — the likelihood and exposure of
each operational risk related to our targets once we’ve assessed
the effectiveness of the control that mitigates such exposure.
• Oversight: ongoing review of the ICS’s effectiveness as well as
the management of material deteriorations and oversight of the
mitigation plans drawn up to resolves any issues correctly.
Monitoring the implementation of the ICS helps to reinforce its
robustness and effectiveness.
• Governance & reporting: to make sure that we adopt accurate
and clear information, and disclosure procedures for decision
making, as well as form strict governance to assess the status
and performance of the ICS continuously.
To establish a robust control environment, the first line of defence:
• identifies and documents risk and control based on its
knowledge and understanding of its businesses and processes.
This covers the risks that we face in performing our activities and
achieving the targets we set; and the controls we need to
mitigate risks.
• keeps our ICS dynamic to reflect the Group’s reality, the risks that
affect us, and the controls to mitigate them; and
• assesses the effectiveness of internal controls and exposure to
risks, and sets and monitors the mitigation of control
shortcomings and undesired exposure.
We run all of this on our Heracles system to provide a
comprehensive view of Santander's ICS.
As the second line of defence, the Internal Control function:
• sets the standards and methodology for, and oversees the
implementation of, the Group’s ICS. This will help safeguard the
suitability and integrity of the internal risks and controls that
each function sets to provide reasonable guarantee regarding the
achievement of targets.
• oversees and challenges the ICS’s effectiveness by monitoring its
main shortcomings, unwanted risk exposure and the correct
execution of mitigation plans.
• reports a comprehensive overview of the internal control
environment regularly to senior management and governance
bodies to enhance our risk management.
We compile the key conclusions and main shortcomings of the
RCSA in a report to submit to the CRO, CAO and governance bodies.
The report outlines whether we have overcome those
shortcomings correctly or have remediation plans in place to do so.
It helps the CEO, CFO and CAO decide on the ICS’s effectiveness
according to the Sarbanes-Oxley Act (SOx).
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2. CREDIT RISK
2.1 Introduction
Credit risk is the risk of financial loss when a customer or
counterparty whom Santander has financed or has a contractual
obligation with defaults or loses creditworthiness. It includes
counterparty risk, country risk and sovereign risk and generates the
most exposure and capital consumption.
2.2 Credit risk management
We take a holistic view of the credit risk cycle, including the
transaction, the customer and the portfolio to identify, analyse and
make decisions about credit risk.
Credit risk identification facilitates active and effective portfolio
management. We classify external and internal risk in each
business to adopt any corrective or mitigating measures through:
1
Planning
Strategic commercial plans (SCPs) are a risk
management and control tool the business
and risk areas prepare for different credit
portfolios. It helps us determine business
targets, risk policies, infrastructure, to have a
holistic view of the portfolios, and draw up
actions plans aligned with our risk appetite
statement.
2
Risk assessment and credit rating
Risk approval depends on the applicant’s
ability to repay the debt, for which we review
their regular sources of income, including
funds and net cash flows from any
businesses. The credit quality assessment
models are based on the credit rating engines
for each of our segments.
3
Scenario analysis
Scenario analyses determine potential risks in
credit portfolios; give us a better
understanding of their performance under
various macroeconomic and environmental
conditions; and enable us to bring forward
and employ management strategies to avoid
future deviations from set targets.
4
Monitoring
Our holistic, regular monitoring of every
customer enables us to track credit quality,
spot risk trends early and check business
performance against original plans, which are
key to credit risk management.
5
Mitigation techniques
We approve risk according to a borrower’s
ability to make due payment, regardless of
any additional collateral or personal
guarantees we may require. We always
consider guarantees or collateral as a
reinforcement measure to mitigate a loss if
the borrower defaults on their payment
obligation.
6
Collections and recoveries
The Collections & Recoveries area draws up a
strategy based on local economic conditions,
business models and other recovery-related
particulars. For effective and efficient
recoveries management, the area segments
customers based on certain aspects and the
use of new digital channels.
For more details on the credit cycle, see the 'Credit risk
management' section in Note 54 to the consolidated financial
statement.
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2.3 Key metrics
During 2024, increasing geopolitical tensions, different electoral
processes, uncertainty associated with the pace of inflation
decline, the cut in interest rates by central banks in some
geographies, as well as uncertainty about economic growth, have
marked market behaviour.
Although the financial system, in general terms, has benefited
throughout much of the year from the increase in credit margins, it
is also facing certain adverse factors (headwinds) related to lower
loan demand, deterioration in credit quality, and potential increase
in credit losses due to the reduction in disposable income of
households, despite the strength of labor markets, as fiscal policies
that have supported families and businesses are being withdrawn.
The macroeconomic outlook has influenced Grupo Santander's
performance and led us to strengthen our credit risk control
framework with a more anticipatory vision in all processes, in order
to strengthen our resilience to possible future economic
disruptions. Our geographical and business diversification, prudent
balance sheet management, and proactive risk management,
among others, help us face this challenging environment.
Our credit risk maintained a strong, diversified balance of mature
and emerging markets: Europe (56%), North America (17%), South
America (15%) and Digital Consumer Bank Europe (12%).
The distribution of credit risk by global businesses (including gross
loans to customers, guarantees, and documentary credits) is
shown below:
Main credit risk performance metrics from our activity with customers
Dec. 24 data
Credit risk with customers
A
Impaired loans
NPL ratio
(EUR million)
(EUR million)
(%)
2024
2023
2022
2024
2023
2022
2024
2023
2022
Retail & Commercial Banking
643,782
652,382
657,201
20,468
20,961
22,033
3.18
3.21
3.35
Digital Consumer Bank
216,613
207,107
197,290
10,992
9,831
8,027
5.07
4.75
4.07
Corporate & Investment Banking
241,078
221,593
218,691
2,068
3,007
2,457
0.86
1.36
1.12
Wealth Management & Insurance
25,226
23,612
23,177
169
330
159
0.67
1.40
0.69
Payments
24,615
23,710
21,938
1,266
1,191
1,103
5.14
5.02
5.03
Total Grupo
1,157,274
1,133,898
1,124,121
35,265
35,620
34,673
3.05
3.14
3.08
NPL Coverage Ratio
(%)
2024
2023
2022
Net loan-loss provisions
B
(EUR millions)
2024
2023
2022
Cost of risk
C
(%)
2024
2023
2022
Retail & Commercial Banking
58.4
61.4
61.6
Digital Consumer Bank
73.6
76.5
90.9
Corporate & Investment Banking
39.3
41.2
35.3
Wealth Management & Insurance
80.3
29.3
78.5
Payments
140.1
139.8
140.1
Total Grupo
64.8
65.9
67.5
5,845
6,540
5,887
4,562
4,106
3,222
174
165
257
41
(17)
21
1,714
1,666
1,132
12,333
12,458
10,509
0.92
1.02
0.89
2.16
2.04
1.69
0.10
0.10
0.16
0.18
-0.08
0.09
7.39
7.22
5.76
1.15
1.18
0.99
Total Group includes Corporate Centre.
A. Includes gross loans and advances to customers, guarantees and documentary credits
B. Loan-loss provisions net of post write-off recoveries (EUR 1,606 million).
C. Cost of risk calculated as the ratio of loan-loss provisions over the past 12 months / average customer loans and advances of the last 12 months.
For more details on secondary segments, see 2. 'Main aggregates and
variations' section in Note 54 to the consolidated financial statement.
Credit quality in December 2024 was as follows:
The NPL ratio stood at 3.05% (-9 bps versus 2023 year end), since
the impaired loans remained stable, reaching EUR 35,265 million,
with increase in Consumer and Payments, which were offset by the
positive behaviour in Retail, CIB and Wealth. Gross credit risk with
customers (total risk) grew 2.1% in 2024 to EUR 1,157 million,
owing mainly to the strong performance of CIB.
Per IFRS 9 guidelines, Group loan-loss provisions for 2024
amounted to EUR 12,333 million, 1% less than the previous year
despite normalization in Consumer, an increase in provisions for
Swiss Franc mortgages in Poland, and an increase in Wealth (after
registering net releases in 2023), which was partially offset by a
strong performance in Retail (in Europe). In general, our credit
profile in the global businesses and markets remained positive.
The cost of risk stood at 1.15% (-3 bps versus 2023 year end), in
line with our target for the year, due to the good performance of
loan-loss provisions and total risk.
The NPL coverage ratio fell to 65%, with loan-loss reserves
standing at EUR 22,835 million. Coverage remains at a comfortable
level, considering that 66% of the Group’s portfolio is backed by
collaterals.
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Risk management
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To alleviate the mortgage burden for clients considered vulnerable,
since the rates reduction, derived from the decreases in official
rates in some countries, has not yet been applied to the entire
portfolio, the Group maintains the aid measures proposed by
various governments, and particularly in Spain, the ICO lines for
those affected by the flash floods and the promotion of social
housing.
For more details on segments, see section '4.1 Description of segments'
of the 'Economic and financial review' chapter.
Our credit risk management performance within the five global
businesses at 2024 year end was as follows:
The Retail portfolio mainly comprises high quality mortgages (90%
of which have a loan to value ratio of lower than 80%) and a
corporate portfolio in which around 50% is backed by collateral or
real estate guarantee.
Portfolio distribution by region and by performing loans and
credit impaired
Dec.24
Europe
75%
South America
16%
North America
9%
623,314
631,421
635,168
20,468
20,961
22,033
Performing
Credit impaired
2024
2023
2022
The Retail credit risk with customers is distributed between
Mortgages (52%), Corporates (24%), SMEs (14%), and Other
individuals (10%).
The NPL ratio decreased 3 bps to 3.18%, owing to a 2.4% decrease
in impaired loans mainly in Mexico, the UK and Spain on the back of
non-performing portfolio sales, partially offset by growths in South
America and the US . The credit risk with customers (total risk) fell
slightly in the year (-1.3%).
Loan-loss provisions in 2024 fell 11% in comparison with the
same period in 2023, largely due to strongly performing European
portfolios, which were partially offset by an increase, due to
normalization in Mexico and Chile.
The cost of risk decreased 10 bps to 0.92% in comparison with
2023, explained by the positive loan-loss provision effect.
The NPL coverage ratio fell slightly to 58%. Since Retail includes
the mortgage portfolios for Spain and the UK, which are backed by
quality collateral, this ratio is at a suitable level versus the portfolio
risk.
Digital Consumer Bank
Digital Consumer Bank brings together all our consumer finance
businesses in Europe and the Americas, and also includes
Openbank, Open Digital Services (ODS) and SBNA Consumer. The
portfolio mainly comprises auto loans (80% of the total) that
originate from our strategic alliances with manufacturers, the
leasing business, and consumer loans.
In the second half of the year, we launched a new digital
proposition in the US under the Openbank brand. This launch will
help ramp up the execution of our profitable growth strategy for
the US by capturing deposits to provide liquidity to our auto
lending subsidiary.
Portfolio distribution by region and by performing loans and
credit impaired
Dec.24
DCB Europe
65%
South America
8%
North America
27%
205,621
197,276
189,263
10,992
9,831
8,027
Performing
Credit impaired
2024
2023
2022
The NPL ratio stood at 5.07%, up 32 bps in comparison to 2023,
owing to an increase in impaired loans mainly in the United States
and Europe, which the growth in credit risk with customers (total
risk) could not offset because of lower auto loan volume in Europe
and the US.
Loan-loss provisions in 2024 grew 11% in comparison with the
same period in 2023, due to normalization in Europe, higher
volume in Latin America, an increase in the coverage of the Swiss
franc mortgage portfolio, lower portfolio sales, and less regulatory
burden.
The cost of risk climbed 12 bps to 2.16% in comparison with
December 2023; the growth in loan-loss provision could not offset
by credit risk with customers (total risk) growth (+4.5%)
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The NPL coverage ratio fell slightly to 74%, which is considered a
comfortable level considering the positive effect of the evolution of
vehicle prices and the increased weight of the guaranteed loan
portfolio, mainly in the US.
Corporate & Investment Banking
Corporate & Investment Banking is a wholesale business in which
over 85% of our customers have a credit rating higher than
'investment grade'. It’s a business with a strong component of
advisory services and high value added solutions.
Portfolio distribution by region and by performing loans and
credit impaired
Dec.24
Europe
57%
South America
14%
North America
29%
239,010
218,586
216,234
2,068
3,007
2,457
Performing
Credit impaired
2024
2023
2022
The NPL ratio improved by 50 bps during the year, reaching 0.86%,
due to a 31% drop in impaired loans (mainly in Brazil),
accompanied by a 9% growth in the primarily in Spain and the US,
driven by the New York branch.
Loan-loss provisions in 2024 grew 6% in comparison with the
same period in 2023, due to significant growth in Spain and the
United States portfolios, partly offset by good performance of
loan-loss provision in Brazil.
The cost of risk, meanwhile, remained stable at 0.10%.
The NPL coverage ratio stood at 39%, down 2 pp from December
2023, owing to the outflow of some credit impaired assets with an
above-average level of coverage.
Wealth Management & Insurance brings together Santander
Private Banking in Miami and Switzerland, Santander Asset
Management, and Santander Insurance.
Portfolio distribution by region and by performing loans and
credit impaired
Dec.24
Europe
69%
South America
8%
North America
23%
25,057
23,282
23,018
169
330
159
Performing
Credit impaired
2024
2023
2022
The NPL ratio closed at 0.67%, with a decrease of 73 bps during
the year, almost halving impaired loans, mainly in Europe and
Brazil. On the other hand, gross credit risk with customers (total
risk) increased by 7% over the period.
Loan-loss provisions in 2024 stood at EUR 41 million, compared
with a EUR 17 million release in the same period one year earlier.
The cost of risk increased by 26 basis points during the year,
changing from negative to positive, standing at 0.18%.
The NPL coverage ratio climbed to 80%.
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Contents
Payments
Payments brings together the Group’s digital payment services. It
offers global technology solutions for our banks and our customers
in the open market. The portfolio groups our exposure to payment
and transfer processor operations (PagoNxt) and the Cards
businesses, which are typified by rapid turnover and profitability
that is appropriate to their level of risk.
Portfolio distribution by region and by performing loans and
credit impaired
Dec.24
Europe
24%
South America
59%
North America
17%
23,349
22,519
20,835
1,266
1,191
1,103
Performing
Credit impaired
2024
2023
2022
The NPL ratio closed at 5.14%, 12 bps above 2023 year-end, due to
a 6% increase in impaired loans, mainly in Brazil and, to a lesser
extent, in Europe. Though Mexico performed strongly, it was not
enough to offset the other markets. On the other hand, gross credit
risk with customers (total risk) increased by 4% comparing to
2023, although in constant euros it increased by 15% during the
year, thanks to the good commercial dynamics in all countries,
with a clear strategic focus on growth, service quality, and
technological transformation to offer the Group's payments and
cards customers an improved experience and quality of service.
Loan-loss provisions, which are concentrated in Cards, reached
EUR 1,714 million, increased by 3% comparing to 2023, owing to
performance in South America and Mexico.
The cost of risk increased by 17 bps during the year, reaching
7.39%, due to the growth in provisions and the portfolio. The
anticipatory measures adopted have allowed the improvement of
the quality and profitability of new production, contributing to a
balanced risk profile with the portfolio's economic profitability.
The NPL coverage ratio remained high and stable at 140%.
Annual report 2024
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=
+
Gross credit risk with customers
A
1,157,274
Gross credit risk with
customers
Gross loans and advances to customers & others
1,076,195
Contingent
liabilities
1,157,274
81,079
Loans and advances to
customers(Gross)
1,076,195
=
Financial assets
measured
at amortized cost
(Gross)
B
1,033,025
+
Financial assets held
for trading
B
26,591
+
Financial assets at
fair value (Gross)
B
16,579
Loan-loss reserves
-22,125
=
Loan-loss
reserves
-21,983
+
Loan-loss
reserves
-142
Net loans and advances
to customers
=
Net financial assets
measured at
amortized cost
+
Financial assets
held for trading
+
Net financial assets at
fair value
1,054,070
1,011,042
26,591
16,437
Net loans and advances to customers
1,054,070
Section 2. Credit risk
Balance sheet item from consolidated financial statement
A. Includes gross loans and advances to customers, guarantees and documentary credits.
B. Before loan-loss allowances.
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Reconciliation of key figures
Santander’s 2024 consolidated financial statements disclose loans
and advances to customers before and after loan-loss reserves.
Credit risk with customers also includes off-balance sheet risk or
contingent liabilities. This table shows the relationship between
those concepts:
Financial asset impairment
IFRS 9 amended the criteria for provisioning financial assets subject
For more details on financial asset impairment and the calculation of
to credit risk, from only recognizing losses once they had occurred
provisions under IFRS 9, see section '2. Main aggregates and variations' in
to requiring provisions from the time the transaction receives
Note 54 to the consolidated financial statement.
approval (based on expected losses) because the credit risk exists
from that moment as opposed to upon default. This gave rise to
IFRS 9 classifies financial assets in stages according to changes in
modification of the models and methodologies we use to calculate
the level of credit risk from the time of approval to the date of
expected losses for customers and portfolios, which now consider
analysis to establish transaction prices and with varying criteria to
economic forecasts and the residual life of individual transactions.
calculate expected loss. Transactions with contrasting likelihood of
default should be pegged to different interest rates or spreads that
We quantify expected losses from credit events and, therefore,
cover each transaction’s expected losses.
impairment provisions, using an unbiased, weighted consideration
of up to five future scenarios that could affect our ability to collect
If a transaction’s risk increases significantly compared to when it
contractual cash flows. They consider the time-value of money,
was approved, the original interest rate will no longer cover the
information from past events, and current conditions and
potential risk, which calls for greater provisions. Under IFRS 9,
projections of GDP, house prices, unemployment, interest rates,
transactions are split according to three stages:
and other important macroeconomic factors.
• Stage 1 includes financial assets with no significant increase in
We calculated impairment losses using parameters (mainly EAD
1,
credit risk since initial approval or registration. Thus, the
PD
2, LGD
3 and discount rate) based on internal models and
impairment provision reflects expected credit losses from
regulatory and management expertise. As they are far from a
defaults over the next 12 months from the reporting date.
simple adaptation, we define, update and validate them according
to IFRS 9 guidelines.
1 Exposure at Default.
2 Probability of Default.
3 Loss Given Default.
Annual report 2024
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.
.
.
.
Ä
Ä
Ä
+
Stage 1
-
Stage 2
Stage 3
|
}
Credit
Credit
quality
quality
Performing credit assets
Credit assets that have
with no significant credit
experience a significant
Impaired credit assets
risk increase since initial
credit risk increase since
recognition
initial recognition
Expected losses 12 months
Expected losses over residual life (Lifetime)
Contents
256,568
237,043
41,418
44,400
173,865
121,103
48,307
170,411
103,755
44,483
8,411
141,297
1,090,569
Write-off
(13,212)
(13,847)
(12,235)
Spain
231,751
17,145
7,672
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• Stage 2 include financial assets that show a significant credit risk
• Stage 3 includes financial assets with true signs of credit risk
impairment as a result of one or more events resulting in a loss.
increase since initial registration or the time for approval but no
Thus, the impairment provision reflects expected losses for credit
materialized impairment event. Thus, the impairment provision
risk over the instrument’s expected lifetime.
reflects expected losses from defaults over the transaction’s
lifetime.
Impairment provisions or loan loss reserves include expected credit
Stage 3 financial assets (showing impairment) performed as
risk losses over the expected residual life of purchased or
follows:
originated credit impaired (POCI) financial assets.
2022 - 2024 Impaired credit assets
The following table shows credit risk exposure by stage and
EUR million
geography:
2024
2023
2022
Start of period
35,620
34,673
33,234
Exposure by stage and geography
A,B
Net entries
13,787
14,658
13,257
EUR million. Dec.24
Perimeter
17
(59)
—
Stage 1
Stage 2
Stage 3
Total
FX and others
(947)
195
417
Europe
537,090
48,589
13,774
599,453
End of period
35,265
35,620
34,673
UK
209,782
23,962
3,299
Portugal
37,129
3,296
993
The following table shows the calculation of IFRS 9 loan loss
Poland
38,651
4,112
1,636
reserves for assets subject to credit risk:
North America
149,875
15,615
8,375
2022 - 2024 loan-loss reserves
US
102,907
11,184
7,012
EUR million
Mexico
42,939
4,016
1,352
2024
2023
2022
South America
144,619
16,505
9,287
Brazil
86,544
10,793
6,418
Start of period
23,490
23,418
23,698
Chile
38,223
3,866
2,394
Stage 1 and 2
9,026
9,272
9,983
Stage 3
14,464
14,146
13,714
Argentina
7,115
1,123
173
Gross provision for impaired assets
and write-downs
13,511
13,524
11,665
DCB Europe
130,618
7,151
3,527
Total Group
967,367
87,938
35,265
Provision for other assets
428
526
305
A. Does not include EUR 34,668 million in temporary purchases of stage 1 assets,
nor EUR 32,230 million in unimpaired risk.
FX and other
(1,382)
(132)
(14)
B. Total Group includes the Corporate Centre.
Write-off
(13,212)
(13,847)
(12,235)
End of period
22,835
23,490
23,418
Stage 1 and 2
8,535
9,026
9,272
Stage 3
14,300
14,464
14,146
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Forbearance
Grupo Santander's forbearance policy follows the EBA Guidelines
on management of non-performing and forborne exposures. It is a
standard for our subsidiaries and meets supervisory expectations.
The policy establishes criteria for identification, classification and
monitoring forbearances, to underwrite and monitor these
transactions with the utmost diligence. Forbearance must aim to
recover outstanding debt, with payment obligations adapted to
customers' circumstances.
Forborne debt should remain appropriately classified for sufficient
time in order to determine both associated risk and reasonable
certainty about recovery of ability to pay. Forbearance may never
be used to delay the immediate recognition of losses or hinder the
appropriate recognition of risk of default.
In 2024, forbearance stock continued to fall (15% in the year), and
stood at EUR 27,144 million, due to consistent payment behaviour
in our core markets. In terms of credit quality, 54% are classified as
credit impaired with average coverage of 41%.
Key forbearance figures
EUR million
2024
2023
2022
Performing
12,459
16,919
18,988
Credit impaired
14,685
15,044
15,185
Total forborne
27,144
31,963
34,173
% Total coverage
A
26%
25%
24%
A. Total forbearance portfolio loan-loss allowances/total forborne portfolio.
2.4 Other credit risk details
Credit risk from financial markets activities
This section covers the credit risk generated from treasury activity
with customers (especially credit institutions) through money
market financing and counterparty risk products to meet the needs
of customers and the Group's own needs in their management.
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. We have 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, we follow 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,
we calculate 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, we recalculate 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.
We perform risk control through a real-time integrated system,
which allows us to know at any moment the available exposure
limit with any counterparty, in any product and term, and across all
subsidiaries.
Counterparty risk exposures: over-the-counter (OTC)
transactions and organized markets (OM)
As at December 2024, the positive market value of total exposure
(under management criteria) with netting and collateral
agreements for counterparty risk was 15,855 million euros (net
credit risk equivalent of 52,604 million euros). Despite the
environment in which we operate, the 9% increase in exposure
compared to the previous year is driven by the 26% increase in the
Group's trading volume in notional terms over this period.
Counterparty risk: exposure in terms of market value and
credit risk equivalent, including the mitigation effect
A
EUR million
2024
2023
2022
Market value with netting effect
and collateral
B
15,855
13,428
13,249
Net CRE
C
52,604
48,372
45,157
A. Figures under internal risk management criteria. Listed derivatives have a market
value of zero. No collateral is received for these types of transactions.
B. Includes the mitigation of netting agreements and deducting the collateral
received.
C. CRE (credit risk equivalent): net value of replacement plus the maximum potential
value, less collateral received.
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Credit derivatives
B
24,528
14,765
Equity derivatives
20,326
26,177
Fixed income derivatives
4,793
13,320
Exchange rate derivatives
1,256,997
1,069,870
Interest rate derivatives
6,775,004
5,538,173
Commodity derivatives
20,061
13,496
Total OTC derivatives
7,909,027
6,479,325
Derivatives organised
markets
C
192,682
196,476
Repos
421,937
259,946
Securities lending
61,374
52,269
Total counterparty risk
D
10,757,636
8,585,020
6,988,017
45,628
28,431
17,567
1,391,564
8,718,567
23,762
9,994,422
231,098
457,977
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The chart below shows counterparty risk products (especially
interest rate and FX hedging instruments) by nominal risk:
Counterparty risk by nominal
A
EUR million
2024
2023
2022
Nominal
Nominal
Nominal
A. Figures under internal risk management criteria.
B. Credit derivatives acquired including hedging of loans.
C. Refers to transactions involving listed derivatives (proprietary portfolio). Listed
derivatives have a market value of zero. No collateral is received for these types of
transactions.
D. Spot transaction not included.
As the following table shows, most of Santander’s derivatives
reach maturity in up to five years, and repurchase agreements and
securities lending in up to one year.
Counterparty risk: Distribution of nominal risk by maturity
A
EUR million. Dec.24 data
Up to 1
Up to 5
Up to 10 More than
year
years
years
10 years
Credit derivatives
B
28%
47%
21%
3%
Equity derivatives
59%
27%
15%
—%
Fixed income
derivatives
97%
3%
—%
—%
Exchange rate
derivatives
57%
27%
11%
6%
Interest rate derivatives
44%
36%
12%
7%
Commodity derivatives
79%
19%
1%
—%
Total OTC derivatives
45%
35%
12%
7%
Derivatives organised
markets
C
67%
24%
8%
1%
Repos
95%
5%
—%
—%
Securities lending
99%
1%
—%
—%
Total counterparty risk
48%
34%
12%
7%
A. Figures under internal risk management criteria.
B. Credit derivatives acquired, including coverage of loans.
C. Refers to transactions involving listed derivatives (proprietary portfolio). Listed
derivatives have a market value of zero. No collateral is received for these types of
transactions.
Even if the credit quality of some counterparties declines, most
counterparty credit risk is with customers with high credit quality
(90% rated A or higher).
In terms of notional value, 97% of operations with counterparty
credit risk belong to CIB's customer and are handled under its
management model.
Counterparty risk: Notional values by customer rating
A
Dec.24 data
Rating
%
AAA
0.67%
AA
1.11%
A
87.84%
BBB
9.27%
BB
1.04%
B
0.07%
Other
0.01%
A. Ratings based on internally defined equivalences between internal ratings and
credit agency ratings.
Transactions with clearing houses and financial institutions are
subject to netting and collateral agreements, which we also seek
to use to cover all other transactions. In general, the collateral
agreements Santander signs are bilateral; still, we do sign some
unilateral agreements in the customer’s favour, mainly with
multilateral organizations and securitization funds.
Counterparty risk: Notional values by customer segment
Dec.24 data
75%
3%
1%
20%
1%
Clearing houses
Corporates/Project Finance
Commercial banking/Individuals
Financial Institutions
Sovereign/supranational
We use collateral to reduce counterparty risk. It consists of highly
liquid instruments with economic value. They are deposited or
transferred from one counterparty to another to guarantee or
reduce counterparty credit risk from portfolios of cross-risk
derivatives.
We measure trades subject to collateral agreements daily, with
parameters to determine the amount of collateral to be paid or
received from the counterparty (in cash or securities). Our
processes to manage collateral properly and more often have
proved effective amid high volatility.
Most of the collateral received under Credit Support Annex (CSA),
Overseas Securities Lending Agreement (OSLA), International
Securities Market Association (ISMA), Global Master Repurchase
Agreement (GMRA) and other agreements signed by the Group has
been effective (44%); the rest is subject to strict quality policies in
regard to the issuer and their rating, debt seniority and haircuts.
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Because of the credit risk we assume with each counterparty, we
apply credit valuation adjustments (CVA) to over-the-counter (OTC)
derivatives when calculating the results of trading portfolios.
A CVA is a change to the market value of OTC derivatives that
accounts for counterparty credit risk throughout the contract life. A
counterparty’s CVA adds up to the CVA on all maturity dates. It
discounts the value of a derivative offered by a buyer based on the
chance that the counterparty will default. We calculate it with
exposure at default, probability of default, loss given default, the
discount curve and other inputs.
We also apply debt valuation adjustments (DVA), which are similar
to CVA but result from credit risk assumed by OTC counterparties
trading with Grupo Santander. Both CVA and DVA are done within
the potential period of exposure.
As of December 2024, CVA adjustments amounted to EUR 272
million (representing a 7.2% decrease compared to December
2023) and DVA adjustments were EUR 317 million (3.9% decrease
vs December 2023). These decreases are mainly due to drops in
interest rate markets in EUR and USD, a decrease in inflation, and
movements in credit markets where spread levels have moderately
decreased compared to those in December 2023.
Counterparty risk, organized markets and clearing
houses
Santander’s policies promote early action according to regulation
on OTC derivatives, repurchase agreements and securities lending
(whether settled through clearing houses or bilaterally). In recent
years, we have been standardizing OTC transactions to settle and
clear new contracts through clearing houses according to current
regulation, in addition to promoting internal use of electronic
execution systems.
We actively manage contracts not settled by clearing houses to
optimize volume, in accordance with regulation on margins and
capital.
While our counterparty risk management does not contemplate
credit risk in such transactions, we have been calculating
regulatory credit exposure for organized market exchanges since
the Basel principles on capital calculation.
The table below shows the weight of contracts settled by CCP
versus total counterparty risk as of December 2024:
Counterparty risk: Notional values by settlement channel and product
A
Nominal in EUR million
Bilateral
CCP
B
Organised markets
C
Total
Nominal
%
Nominal
%
Nominal
%
Credit derivatives
17,944
39.3%
27,684
60.7%
—
—%
45,628
Equity derivatives
21,315
75.0%
574
2.0%
6,542
23.0%
28,431
Fixed income derivatives
17,471
99.5%
96
0.5%
—
—%
17,567
Exchange rate derivatives
1,316,307
94.6%
39,420
2.8%
35,838
2.6%
1,391,564
Interest rate derivatives
810,896
9.3%
7,740,492
88.8%
167,179
1.9%
8,718,567
Commodity derivatives
2,223
9.4%
—
—%
21,539
90.6%
23,762
Repos
275,003
60.0%
182,973
40.0%
—
—%
457,977
Securities lending
73,845
99.6%
294
0.4%
—
—%
74,139
Total
2,535,003
7,991,535
231,098
10,757,636
A. Figures under internal risk management criteria.
B. Central counterparties (CCP).
C. Refers to transactions involving listed derivatives (proprietary portfolio). Listed derivatives have a market value of zero. No collateral is received for these types
of transactions.
Risk settled by CCP and product
A
Nominal in EUR million
Credit derivatives
We use credit derivatives to hedge transactions, customer business
in financial markets and trading. The credit derivatives Santander
has negotiated have a low notional value: 0.4% of the notional
value of counterparty risk. Furthermore, we subject credit
derivatives to internal robust controls and procedures to minimize
operational risk.
Credit derivatives
Equity derivatives
Fixed income derivatives
Sept. 2024
27,684
574
96
2023
10,140
559
—
2022
4,848
758
15
Exchange rate derivatives
39,420
44,152
24,349
Interest rate derivatives
7,740,492
5,844,580
4,555,519
Commodity derivatives
—
—
—
Repos
182,973
193,386
109,248
Securities lending
294
—
—
Total
7,991,535
6,092,817
4,694,737
A. Figures under internal risk management criteria.
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Concentration risk
Concentration risk control is key to our management. We
continuously monitor credit risk concentration by region and
country, economic sector, customer type and other criteria.
The board sets concentration limits according to risk appetite.
Accordingly, the executive risk committee develops risk policies
and reviews the appropriate exposure levels so we can effectively
manage credit risk concentration.
Because Santander is subject to the Capital Requirements
Regulation (CRR) stipulations on large risks, exposure with a
customer or group of associated customers will be considered
'large exposure' if its value is equal to, or greater than, 10% of
eligible capital.
No large exposure should exceed 25% of the entity’s eligible
capital, including the credit risk reduction effect set out in the
regulation.
The use of risk mitigation techniques resulted in no groups
triggering those thresholds as at the end of December. 5.5% of
total credit risk (including loans to customers and off-balance
sheet risk) is with the 20 'large exposure' groups, according to
regulation on credit exposure. While 8.4% of total credit risk is
with the 40 'large exposure' groups.
Our Risk division works closely with the Finance division on actively
managing credit portfolios with credit derivatives, securitizations
and other techniques to reduce exposure concentration and
optimize risk-reward.
As indicated in the key metrics section of this chapter, our credit
risk is diversified among our core markets (Spain 25%, the UK 21%,
the US 12%, Brazil 9%, etc.). Grupo Santander is enhancing our
markets with global businesses that will help boost local
performance to add value.
In terms of sector diversification, 56% of our credit risk is with
individuals, who are inherently highly diverse. It is also well
distributed, with no significant concentration in a particular
industry. The chart below shows credit risk by industry as at
December 2024:
Diversification by economic sector
A
2%
2%
11%
3%
4%
16%
4%
2%
3%
20%
10%
3%
3%
6%
1%
10%
Agriculture, livestock and
fishing
Extractive industries
Manufacturing industry
Electricity, gas and water
supply
Construction
Trade and repairs
Transport and storage
Hotels and restaurants
Information and
communications
Financial and insurance
activities
Real estate activities
Professional, scientific
and technical activities
Administrative activities
Government agencies
Other social services
Other services
A. Includes total risk (gross) on balance for all clients with economic activity but
excludes individuals and reverse repos.
Sectors identification and management
Grupo Santander conducts 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. It considers:
• 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.
We 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. We 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.
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Country risk
In credit risk, country risk involves transactions with customers
residing in a particular country with unusual business risk. It
includes sovereign risk and transfer risk, as well as war, natural
disaster, balance of payments crisis and other things that can
disrupt international finance. To cover potential losses arising from
these types of events, we integrate country risk into our models
and provisioning processes in accordance with applicable
regulation.
We assume country risk very selectively in transactions that
enhance our global relations with customers. And we follow highly
cautious standards to manage it.
Sovereign risk and risk with government
agencies
Sovereign risk arises from central bank transactions (including
regulatory cash reserves), government bonds (public debt) and
transactions with non-commercial government institutions funded
exclusively by a state’s budget revenue.
Our standard for sovereign risk differs somewhat from the EBA's
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.
We continue to track and manage transactions with sovereign risk
based on available information, such as reports by rating agencies
and international organizations. We monitor each country where
we have cross-border
4 and sovereign risk. We 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.
In recent years, total sovereign risk exposure has remained within
regulatory requirements and strategy defined for its management.
Because exposure spans several countries, each with its distinct
macroeconomic outlook and growth scenario, it varies due to our
liquidity management strategy and our interest and FX rate
coverage, which apply limits based on each country’s credit rating.
At the end of December 2024, total sovereign risk exposure was
EUR 198,627 million, which was 23% higher than 2023.
For more details on sovereign risk exposure, see section '4. Other credit
risk aspects' in Note 54 to the consolidated financial statement.
Our exposure to local sovereign risk not in the issuer country’s
currency at the end of December 2024 was minor (EUR 4,459
million or 1.1% of total sovereign risk), based on our management
criteria. Exposure to non-local sovereign issuers with cross-border
risk was also minor
5 (EUR 11,494 million or 2.8% of total sovereign
risk). The sovereign debt we hold in Latin America, which is
recorded in local ledgers, is predominantly in local currency and
short-term.
Additionally, our investment strategy for sovereign risk considers
country’s credit quality to set the maximum exposure limits.
The table below shows exposure ratios by rating
6 December 2024:
2024
2023
2022
AAA
21%
18%
27%
AA
18%
19%
19%
A
41%
41%
34%
BBB
11%
12%
11%
Lower than BBB
9%
10%
9%
4 Risks with domestic public or private borrowers in foreign currency and originated outside the country.
5 Countries that are not considered low risk by Banco de España.
6 Internal ratings are applied.
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3. MARKET, STRUCTURAL
AND LIQUIDITY RISK
3.1 Introduction
This section is about Grupo Santander’s management and control
of market risk in 2024, including trading risk, liquidity risk and
structural risk. It provides a brief description of our methodologies
and metrics.
Market risk comes from movements in interest rates, inflation,
foreign exchange, equity prices, credit spread, commodity prices,
volatility, liquidity risk from products and the balance sheet, and
other market variables that can affect transaction performance. It
also includes trading and structural risk.
For more details on market factors see section 'Activities subject to
market risk and types of market risk', in Note 54 to the consolidated
financial statement.
Options, futures, forwards, swaps and other derivatives can
mitigate some or all of these risks.
Market risk factors that require more complex hedging are
correlation, market liquidity, pre-payment and underwriting risk.
On-balance sheet liquidity risk is also key (for more detail, see 3.6
'Liquidity risk management'), as pension and actuarial risk also
depend on market variables (for more details, see 3.8 'Pension and
actuarial risk management' at the end of this section).
We check our compliance with the Basel Committee’s
Fundamental Review of the Trading Book (FRTB) and its
implementation according to the EU’s Capital Requirements
Regulation (CRR II) and the EBA’s guidelines on market risks.
In 2024, we ran several projects to give control teams the best
tools to manage market risk and capital consumption. They
included:
• Running numerous initiatives to enhance the calculation of
market risk-related capital requirements under the Fundamental
Review of the Trading Book - Standard Approach (FRTB- SA)
methodology. In particular we:
◦rounded off the scope of calculation for entities and risk factors
subject to market risk-related capital;
◦made necessary amendments to adapt the calculation to the
CRR III;
◦strengthened the control environment over metrics, static risks
and technical procedures through an overhaul of data
architecture to reduce calculation times and enable us to run
simulations; and
◦built up the exploitation layer of capital data under FRTB SA.
◦developed new regulatory reporting required by the EBA; and
◦strengthen our governance framework for FRTB-SA procedures
by redefining the functions of certain forums, adapting internal
regulation, and setting new escalation criteria.
• Enhancing the procedures to classify financial instruments under
the fair value hierarchy.
• Updating the stress test programme for trading portfolios to
meet regulator's expectations.
• Implementing new valuation adjustment methodologies in all
units using corporate tools and common standards.
• Broadening the content and analysis of market risk reporting to
top management.
• Enhancing the governance framework for the approval and use
of market risk models.
3.2 Market risk management
Because factors inside and outside a unit can give rise to market
risk, management and control must cover all potential risk sources
with coordinated, uniform treatment by all subsidiaries.
The Group's senior management receives thorough, accurate
reporting on a regular basis to measure subsidiaries’ risk profiles
and gain a holistic view of market risk for global analysis and
control.
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Limits management and control system
The market risk area runs daily checks so that market positions
remain within approved limits. It also assesses the performance of,
and significant changes in, related metrics.
We set market risk limits in a dynamic process according to risk
appetite levels in the annual limits plan prepared by senior
management and extended to all subsidiaries.
We take a prudent approach to manage market risk activity from
multiple perspectives and to establish appetite limits on different
metrics including:
• value at risk (VaR) and stressed VaR (sVaR) limits;
• equivalent and/or nominal position limits;
• interest rate sensitivity limits;
• vega limits;
• limits for risk of delivery of short sales (bonds and equities);
• limits to reduce effective losses or protect profits during the year
(loss trigger and stop loss);
• credit limits (limits for total exposure and jump-to-default by
issuer); and
• origination limits.
Those general limits have sub-limits that make the structure
granular enough to control market risks from trading. We monitor
subsidiaries’ positions every day.
We set global approval and control limits, global approval limits
with subsidiary-run control and subsidiary-level approval and
control limits. Each subsidiary’s business unit manager requests
limits based on business particulars and budgetary targets so that
they will match the risk-reward ratio. Risk bodies approve limits
according to established governance.
Subsidiaries must adhere to approved limits. The day a limit breach
occurs, subsidiary business managers must provide a written
explanation with an action plan to correct it.
Market risk-related capital requirements
We use internal and standard models to determine market risk
related capital requirements. We also use internal models to
calculate regulatory capital for the trading books of our
subsidiaries in Chile, Mexico and Spain (Santander España’s trading
book includes Santander London Branch, which helps diversify its
positions).
In 2024, we continued to work on enhancing the calculation of
market risk-related capital, most notably to adapt our
infrastructure to new FRTB requirements. Moreover, we worked to
enrich internal regulation and reporting on market risk-related
capital to meet supervisory expectations.
We rolled out all these enhancements in our core markets through
corporate tools, enabling us to automate processes and reduce the
use of expert judgement significantly.
Our internal market risk model calculates the Group's consolidated
regulatory capital as subsidiaries’ total regulatory capital that the
ECB has approved. Because it does not consider capital savings
owing to geographical diversification, our model is conservative.
It uses advanced methods with VaR, stressed VaR, Incremental Risk
Charge (IRC) and Risk Not in Model (RNIM) as fundamental metrics
to calculate ECB-approved regulatory capital in trading
consistently with the CRR.
Methodologies and key aspects
a) Value at Risk (VaR)
Value at risk (VaR), our standard methodology for managing and
controlling market risk, measures maximum expected loss with a
certain confidence level over a given time. For standard historical
simulation, the confidence level is 99% and the time window is one
day. We also apply a two-year horizon or VaR over 520 days and
other statistical adjustments in order to quickly and efficiently
account for recent events that influence risk levels.
We report the highest of two VaR figures, which we calculate every
day. One figure includes an exponential decay factor with a low
weighting on the oldest observations; the other weights all
observations the same. We also use the same methodology to
calculate value at earnings (VaE), which gives maximum potential
earnings within a certain confidence level and time horizon.
As a risk metric, historical VaR simulation has many advantages. It
states a portfolio’s market risk in a single figure according to
market movements. Still, it does have its limitations:
• VaR is calibrated to a certain confidence level, above which it
does not reveal potential losses.
• The liquidity horizon of products in a portfolio is longer than the
VaR model’s.
• VaR is not a dynamic measure of risk even if it is subject every
day to significant, albeit unlikely, changes.
• High sensitivity to time windows.
• Inability to show plausible high-impact events outside the time
window.
• No market inputs (e.g. correlations, dividends or recovery rates)
for measurement parameters.
• Slow adaptation to new volatility and correlations, as the
weighting of the newest and the oldest data is the same.
To circumvent some limitations, we use stressed VaR (sVaR) and
expected shortfall (ES); calculate VaR with exponential decay;
make conservative measurement adjustments; and run analyses
and backtesting to assess the accuracy of the VaR calculation
model.
b) Stressed VaR (sVaR) and Expected Shortfall (ES)
Every day, we calculate sVaR for our main portfolios using the
same VaR calculation method but with these exceptions:
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• A window of 260 observations (as opposed to 520 for VaR) over a
continuous stress period. For each portfolio, we review the
history of a subset of market risk factors (selected with expert
criteria) and the most significant positions per book.
• Unlike VaR, the percentile we take to get sVaR has uniform
weighting and is not the highest one based on exponential and
uniform weightings.
We calculate ES as expected loss above VaR at a 99% confidence
level. We also weight all observations the same. Unlike VaR, ES has
the advantage of showing tail risk (i.e. the risk of loss due to a rare
event) while being a subadditive metric. According to the Basel
Committee, 97.5% ES is a risk level similar to 99% VaR.
c) Scenario analysis
Santander’s risk measures are based on normal market conditions,
price stability, sufficient liquidity and other assumptions used in
daily risk management and decision-making. However, some
extreme movements and vast unforeseen changes might not be
properly anticipated.
Scenario analysis enables us to recognize unexpected outcomes
and estimate how much capital could be needed to absorb losses
stemming from those outcomes.
We regularly calculate and review stress test scenarios for all the
trading books of the Group and our subsidiaries, such as:
Historical scenarios
Historical scenarios consider trading portfolio performance during
a crisis or significant past market events to estimate maximum
losses based on existing positions.
Hypothetical scenarios
We use extreme scenarios based on market risk shocks that do not
relate to past events (e.g. abrupt crisis with strong movements in
all risk factors, worst-case scenarios, scenarios based on
regulatory stress exercises, and forward-looking scenarios). Unlike
generally ex post historical scenarios, hypothetical scenarios are ex
ante.
Reverse stress test scenarios
Reverse stress test scenarios indicate loss-causing market
variables that may compromise the bank’s survival. They
supplement traditional stress test scenarios and point out
potentially vulnerable business areas, hidden risks and correlations
between risk factors.
Climate change scenarios
We use climate change scenarios to measure the potential impact
of current exposure to climate-sensitive economic activities on
trading portfolios resulting from climate and environmental risks.
They include both exposure to physical risk and transition risk.
Other stress test scenarios
In addition to the above scenarios, we conduct other stress tests
every quarter to identify potential losses or significant impacts on
capital arising from extreme market movements (e.g. IRC
scenarios, proxy stress scenarios in the VaR calculation stress
scenarios in valuation adjustments).
d) Calibration and backtesting
According to regulation, the VaR model must accurately show
material risks. Because VaR uses statistical techniques under
normal conditions for a certain confidence level over a set time
horizon, the estimate of maximum potential loss may differ from
actual losses. We review and contrast the VaR calculation model
on a regular basis to verify its accuracy.
We run internal backtesting, contrast VaR and review assumptions
about portfolios for subsidiaries that follow the internal market
risk model. For subsidiaries with an approved internal model, we
run regulatory backtesting to find exceptions (where daily profit or
loss is higher than VaR or VaE) that will influence the calculation of
regulatory capital requirements for market risk.
Through backtesting, we assess the quality and general
effectiveness of our risk measurement model. Our backtesting
compares daily VaR/VaE observed on D-1 to profit and loss (P&L)
observed on D: Economic P&L, actual P&L, hypothetical P&L, and
theoretical P&L.
We run daily backtesting for our subsidiaries, as well as daily,
weekly and monthly internal (non-regulatory) backtesting
depending on portfolio granularity.
The number (or proportion) of exceptions we record is one of the
most intuitive indicators of a model’s soundness. As our regulatory
backtesting covers a historical period of one year (250 days) and a
99% VaR, we expect two to three exceptions per year. To calculate
regulatory capital for market risk, we take the regulatory K
7 from
the number of exceptions we find in actual and hypothetical
backtesting.
e) Analysis of positions, sensitivities and results
Santander uses positions to quantify the market value of derivative
transactions by main risk factor and with the Delta value of futures
and options. We can express risk positions in subsidiaries’ base
currency and in the currency used to standardize information. We
monitor positions every day to correct any incidents we find
immediately.
Sensitivity to market risk is the estimated impact of change in a risk
factor on the market value of an instrument or portfolio. We
measure it with partial derivatives or a full portfolio revaluation to
get an analytical approximation.
The Market risk area’s daily P&L statement is an excellent indicator
of the impact of changes of financial variables on portfolios.
f) Derivatives activities and credit management
Because of their atypical characteristics, we have special measures
to monitor derivatives and credit management daily. On the one
hand, we monitor the sensitivity of underlying assets to price
movements (Delta and Gamma) to volatility (Vega
8) and over time
(Theta). On the other hand, we systematically check
measurements of their sensitivity to spread risk, jump-to-default
risk and position concentrations by rating.
Based on regulation and the Basel Committee’s recommendations,
we also calculate the IRC, an additional metric for credit risk in the
trading book.
7 K: Parameter to calculate regulatory capital consumption for market risk.
8 Vega represents the sensitivity of the value of a portfolio to changes in the value of market volatility.
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The IRC covers default risk and rating migration risk (which VaR
does not show adequately) by taking credit spread changes into
account. In general, we apply it to government and corporate
bonds; to forwards, options and other bond derivatives; and to
credit default swaps, asset-backed securities and other credit
derivatives. To calculate it, we take direct measurements of loss
distribution tails at the right percentile (99.9%) over a one-year
horizon and follow the Monte Carlo method with one million
simulations.
g) Credit valuation adjustment (CVA) and debit valuation
adjustment (DVA)
The Group calculates trading book results through CVA and DVA.
For more details on CVA and DVA see 'Credit risk from financial markets
activities' in section 2.4 'Other credit risk details'
3.3 Key market risk metrics
In 2024, trading risk levels remained low, slightly above 2023
levels, amid the high volatility caused by uncertainty over inflation
and the pace of central bank monetary policy tightening and its
effects on global economies. Moreover, political issues such as
elections in certain countries and the conflicts in Ukraine and the
Middle East compounded market volatility.
Risks continued to originate from trading non-complex instruments
with customers. Most were hedges for interest rate and FX risk.
2024 saw generally low consumption of trading limits, which are
based on the Group's market risk appetite.
VaR 2022-2024
EUR million. VaR at 99% over a one day horizon
VaR analysis
As the VaR of CIB’s trading book shows, market risk strategy
focuses on trading with customers to minimize net directional
exposure and keep risk diversified by geography and risk factor.
In 2024, VaR fluctuated between EUR 23.0 and EUR 11.6 million.
Average VaR in 2024 was EUR 17.1 million, higher than 2023 and
2022 (EUR 11.7 million and EUR 14.1 million, respectively). Market
volatility throughout the year (especially in terms of interest rates)
caused VaR to stay above its three-year average for almost the
entire period.
VaR at the end of December (EUR 18.7 million) was EUR 5.2 million
higher 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.
Average VaR was higher for all risk factors, especially interest
rates. Temporary VaR increases owe more to short-term price
volatility than to significant changes in positions.
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.
For more details on VaR and expected shortfall (ES) by risk factor and
region see table on section '2. Trading market risk management', in Note
54 to the consolidated financial statement
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Backtesting
Actual losses can differ from predicted losses because of VaR’s
daily profit greater than VaE) to VaR and VaE at 99% confidence
limitations. Santander measures the accuracy of our VaR
level.
calculation model to make sure it is reliable (see ‘Methodologies’ in
section 3.2 ‘Market risk management’). The most important tests
• These results are consistent with assumptions in the VaR
we run involve backtesting:
calculation model.
• Backtesting of hypothetical P&L and of the entire trading book
showed no exceptions in 2024 (daily loss greater than VaR or
Backtesting of trading portfolios: daily results vs. VaR for previous day
EUR million
Derivatives risk management
Change in risk over time (VaR) of structure derivatives
Our operations with derivatives consist mainly in selling
EUR million. VaR Vega at a 99% over a one day horizon
investment products and hedging risks for customers. We aim to
keep open net risk as low as possible. Trading includes equity,
fixed-income and FX options, chiefly in Spain, Brazil, the UK, the US
and Mexico.
The graph shows the VaR vega of structural derivatives over the
past three years. On average, it has increased some EUR 3.0
million. In general, high VaR values stem from sudden spikes in
market volatility, such as changes to monetary policy on the back
of inflation performance, or at times of political uncertainty in our
geographies.
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Average VaR was based mainly on equities, followed by interest
rates and FX rates. In December 2024, average risk (EUR 3.5
million) was slightly higher than in 2023 and more or less the
same as in 2022 (see table below):
Financial derivatives. Risk (VaR) by risk factor
EUR million. VaR at a 99% over a one day horizon
c
2024
2023
2022
Total VaR Vega
Diversification effect
Interest rate VaR
0.8
1.3
3.0
0.9
Equity VaR
—
3.1
5.2
3.8
FX VaR
0.5
1.1
2.9
1.5
Commodity VaR
—
—
—
—
Minimum
Average
Maximum
Latest
Average
Latest
Average
Latest
1.9
3.5
5.4
4.5
2.4
2.1
3.2
2.7
0.6
(2.0)
(5.7)
(1.7)
(1.9)
(1.2)
(1.1)
(1.0)
2.0
1.5
2.0
1.4
1.4
1.2
1.4
0.9
0.9
0.6
0.9
1.4
—
—
—
—
Santander's exposure to complex structured instruments and
assets is very limited, this reflects our risk culture and prudent risk
management. The Group’s risk appetite restricts total level 3
assets and liabilities (those whose fair value is calculated using
significant unobservable inputs in market data) to 5% of the
Group's total assets and liabilities measured at fair value.
At the end of December 2024, our exposure to hedge funds
amounted to EUR 111 million (indirect as the counterparty in
derivative contracts). We review this type of counterparty risk on a
case-by-case basis, setting collateralization ratios based on each
fund's characteristics and assets.
Our policy on approving new derivatives transactions has always
been extremely prudent and conservative. It is reviewed by senior
management.
Scenario analysis
The table below shows worst case scenario results from the end of
December 2024:
Stress scenario: maximum volatility (worst case)
EUR million. Dec 2024
Interest rate
Equities
Total trading
(275.8)
26.3
Europe
(118.4)
27.6
North America
(151.9)
(0.2)
South America
(5.5)
(1.1)
Exchange rate
(83.2)
(80.3)
(1.9)
(1.0)
Credit spread
(69.2)
(69.2)
—
—
Commodities
—
—
—
—
Total
(401.9)
(240.3)
(154.0)
(7.6)
Our analysis found that Santander's trading books would lose EUR
402 million in market value in the worst-case scenario of market
stress. Losses would mainly affect Europe (especially in interest
rates if rates rise, in exchange rates if the euro were to appreciate
and finally in credit spreads if credit prices rise) and North America
(especially if interest rates rise).
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Connection with balance sheet items
Below are items on Santander’s consolidated balance sheet that
generate market risk. The table distinguishes positions whose
main risk metric is VaR from other positions that are monitored
with other risk metrics.
Risk metric values on the consolidated balance sheet
EUR million. Dec. 2024
Main market
risk metrics
Balance sheet
Main risk factors for
Assets subject to market risk
amount
VaR
Other 'Other' balance
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 at fair value through other comprehensive income
89,898
2,193
87,705 Interest rate, spread
Financial assets measured at amortised 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 amortised cost
1,484,322
1,484,322 Interest rate, spread
Hedging derivatives
4,752
Interest rate,
4,752 exchange rate
Changes in the fair value hedged items in portfolio hedges of interest rate risk
(9)
(9) Interest rate
Other liabilities
52,178
Total liabilities
1,729,754
Total equity
107,327
3.4 Structural balance sheet risk
management
Structural risk is the risk that market or balance sheet movements
will change the value or profit generation of assets or liabilities in
the banking book.
It covers insurance and pension risks, as well as the risk that
Santander will not have sufficient capital (in terms of quantity or
quality) to meet internal business targets, regulatory requirements
or market expectations.
Limits management and control systems
The internal policies set by senior management dictate
mechanisms to monitor and control structural risk according to
regulatory requirements and our risk appetite. These mechanisms
consider sub-types of structural risk and their implications,
contingencies and interrelations.
The Structural risk area’s role in the second line of defence is to
oversee that structural risks are understood, controlled and
reported to senior management according to established
governance:
• It sets interest rate risk metrics and reviews and challenges the
structural risk appetite and limits proposed by the first line of
defence.
• It oversees the first line of defence’s structural risk management
and checks compliance with set limits.
• It regularly reports on our risk profile to senior management and
issues guidelines to business lines about measures it deems
necessary.
• It reviews and challenges business proposals and helps senior
management and business units understand the interest rate risk
of the Group’s businesses and operations.
• It develops and revises models and policy, and checks that
structural risk procedures are fit and proper.
Like market risk, structural risk also has an annual plan framework
to set structural balance sheet risk limits according to risk appetite.
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These are the main limits we use:
• Structural interest risk in the banking book:
• Net interest income (NII) sensitivity limit over a one-year
horizon.
• Economic value of equity (EVE) sensitivity limit.
• Limit of the negative impact on shareholder equity of changes
to the value of assets carried at fair value in the banking book
stemming from adverse movements in the market.
• Structural FX risk:
• Limit on the net permanent position of the core capital ratio.
• Limit on the individual hedge required for each currency.
We supplement these limits with other alerts and triggers that
monitor certain aspects of such risks and complement the metrics
described above.
Business lines’ risk managers must provide explanations for
potential limit and sub-limit breaches as well as an action plan to
correct them.
Methodologies and other key details
a) Structural interest rate risk
As part of structural risk, interest rate risk in the banking book
(IRRBB) is a key balance sheet risk.
Santander measures the potential impact of interest rate
movements on EVE and NII. Because of the effect of changing
rates, we must manage and control many subtypes of interest rate
risk, such as repricing risk, yield curve risk, basis risk and option risk
(e.g. behavioural or automatic).
Interest rate positions on the balance sheet and market conditions
and outlooks could necessitate certain financial measures to
achieve the Group’s risk profile target.
Metrics for checking IRRBB include NII and EVE sensitivity to
interest rate movements.
• Net interest income (NII) and sensitivity: 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 Santander). It enables us to
see short-term risks and supplement economic value of equity
(EVE) sensitivity.
• Economic value of equity (EVE) and sensitivity: EVE is the
difference between the present value of all assets minus the
present value of all liabilities in the banking book. It does not
include shareholder equity and non-interest-bearing
instruments. It enables us to see long-term risks and supplement
NII sensitivity.
b) Credit spread risk
The metrics we use to monitor credit spread risk in the banking
book (CSRBB) includes NII and EVE sensitivity to changes in spread
curves as well as the impact of stress scenarios on positions that
have been identified as affecting CSRBB.
In 2024, we embedded the CSRBB monitoring framework in our
units and added limits and metrics to track the impact of adverse
movements in credit spreads on market value, EVE, and NII.
c) Interest rate models
Interest rate risk metrics consider the behaviour of financial
products under stress scenarios in which uncertainty is common
and the failure to meet contractual obligations is possible. We have
methodologies that help explain how such products will behave.
These are our key interest rate risk models:
• Treatment of liabilities without stated maturity. The Group’s
model shows balances of all accounts without maturity using
stable and unstable volumes, settlement speed over time,
customer and market types, and other variables.
• Prepayment treatment for certain assets. Prepayment risk
mainly affects fixed-rate mortgages in subsidiaries where
contractual rates are below market rates and customers have the
incentive to pay off all or part of their mortgage early.
d) Structural exchange rate risk/hedging of results
We measure FX positions, VaR and P&L every day.
In 2024, we introduced new limits to FX positions in the banking
book to complement the structural FX metrics and monitor
exchange rate risk in full.
e) Structural equity risk
We measure equity positions, VaR and P&L.
3.5 Key structural balance sheet
risk metrics
In line with previous years, the market risk profile of the Group’s
balance sheet remained moderate in 2024.
Each subsidiary’s Finance division manages interest rate risk from
retail banking and is responsible for handling structural risk from
interest rate fluctuations.
Grupo Santander measures interest rate risk by analysing changes
to EVE and NII triggered by movements in parallel and non-parallel
interest rates, balance sheet composition, and shifts in customer
behaviour. Once we’ve measured these risks, we decide whether to
follow strategies to mitigate structural risk with interest-rate
instruments (such as bonds and derivatives) and keep an interest
rate risk profile within risk appetite.
Exposure across all our footprint was moderate in relation to the
annual budget and capital levels in 2024.
The NII and EVE sensitivities below are based on scenarios of
parallel interest rate movements between ±100 pbs.
Structural interest rate risk
Europe
At the end of December, sensitivity of NII on our core balance
sheets to interest rate hikes was positive, while EVE sensitivity was
negative in the case of UK and positive in Spain considering the
same scenario.
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Under the scenarios described above, at the end of December, the
most significant risk of NII sensitivity to the euro amounted to EUR
877 million; to the pound sterling, EUR 211 million; to the Polish
zloty, EUR 61 million; and to the US dollar, EUR 54 million, all with
the risk of rate cuts.
Net interest income (NII) sensitivity
% of total
65.6%
20.9%
6.7% 6.8%
Parent
UK
Poland
Others
* Other: Portugal and SCF.
Significant risk of EVE sensitivity to yield curves of the euro was
EUR 753 million; of the pound sterling, EUR 662 million; of the
Polish zloty, EUR 244 million; and of the US dollar, EUR 132
million, related to the risk of interest rate increases, except for the
US dollar.
Economic value of equity (EVE) sensitivity
% of total
25.6%
35.3%
39.1%
Parent
UK
Others*
* Other: Poland, Portugal and SCF.
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.
At the end of December, the most significant risk to NII was mainly
in the US and amounted to EUR 125 million.
Net interest income (NII) sensitivity
% of total
91.9%
8.1%
US
Mexico
The most significant risk to EVE was in the US and amounted to
EUR 639 million.
Economic value of equity (EVE) sensitivity
% of total
76.4%
23.6%
US
Mexico
South America
The EVE and NII of our main South American balance sheets are
positioned for interest rate cuts.
At the end of December, the most significant risks to NII were
mainly in Brazil (EUR 124 million) and Chile (EUR 4 million).
Net interest income (NII) sensitivity
% of total
86.1%
2.8% 11.1%
Brazil
Chile
Others*
* Other: Argentina, Peru and Uruguay.
The most significant risks to EVE were in Brazil (EUR 411 million)
and Chile (EUR 323 million).
Economic value of equity (EVE)
% of total
54.3%
42.7%
3.0%
Brazil
Chile
Others*
* Other: Argentina, Peru and Uruguay.
Structural foreign exchange rate risk/results
hedging
Our structural FX risk exposure mainly stems from the
performance of, and hedges for, permanent financial investments.
In our dynamic management of this risk, we aim 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 shareholder equity) were, from largest to smallest, in
the US dollar, British pounds sterling, Brazilian reais, Mexican
pesos, Polish złoty and Chilean pesos.
We 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
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.
Equities in the banking book at the end of September 2024 were
diversified, with securities from Spain, China, Morocco, Poland and
other countries. Most of them invest in the financial and insurance
sectors. We have minor equity exposure to property and other
sectors.
Structural equity positions are exposed to market risk. We
calculate their VaR with a set of market prices and proxies. At the
end of December 2024, VaR at a 99% confidence level over a one-
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day horizon was EUR 127 million (EUR 171 million in 2023 and EUR
In general, the structural VaR of our total assets and equity is
195 million in 2022).
minor.
Structural VaR
Homogenous metrics like VaR make it possible to monitor all
market risk in the banking book (minus CIB trading; see section
3.3 ‘Key market risk metrics’). We differentiate fixed income based on
interest rates and credit spreads in ALCO portfolios, FX rates and
shares.
Structural VaR
EUR million. VaR at a 99% over a one day horizon
2024
2023
2022
Minimum
Average
Maximum
Latest
Average
Latest
Average
Latest
Structural VaR
620.7
747.7
910.0
687.5
705.0
749.5 0
664.0
538.5
Diversification effect
(237.2)
(386.4)
(575.5)
(268.6)
(416.6)
(444.7)
(417.1)
(422.4)
VaR Interest Rate
A
210.7
412.0
685.6
235.2
348.4
380.2
350.8
304.5
VaR Exchange Rate
526.9
571.7
629.8
594.4
580.4
642.9
493.4
461.0
VaR Equities
120.3
150.4
170.1
126.5
192.8
171.1
236.9
195.4
A. Includes credit spread VaR on ALCO portfolios.
3.6 Liquidity risk management
Liquidity risk occurs if the bank is unable to meet payment
obligations promptly or would do so at a high price. Losses may
result from a forced asset disposal and a cash flow imbalance.
The second line of defence oversees that this risk is understood,
controlled and reported to senior management and across the
Group according to established governance. For this purpose:
• defines liquidity risk and provides detailed measurements of
current and emerging liquidity risks;
• sets liquidity risk metrics, and reviews and challenges risk
appetite and limits proposed by the first line of defence;
• assesses and challenges commercial and business proposals, and
gives senior management and business units the information
they need to understand Santander’s liquidity risk;
• oversees the first line of defence’s liquidity risk management and
measures how long business will remain within risk appetite
limits;
• reports to governing bodies (risk control committee, RSRCC and
board of directors) on compliance with risk appetite limits and
any exceptions;
• provides a comprehensive overview of our liquidity risk exposure
and profile; and
• makes sure that liquidity risk procedures are appropriate to
manage the business within risk appetite limits.
The market remained stable throughout 2024. Debt markets
operated under normal conditions and we achieved our proposed
financing targets. Additionally, our subsidiaries have a sound
balance sheet and stable funding structure, supported by a large
base of customer deposits, low dependence on short-term funding
and liquidity metrics that are well above local and corporate
regulatory requirements and within risk appetite limits.
3.7 Key liquidity risk metrics
Our solid liquidity position stands on a decentralized model under
which each subsidiary manages its own liquidity autonomously. To
measure liquidity risk, we use tools and metrics for the right risk
factors. We follow the guidelines set out in the Capital
Requirements Regulation (CRR) and the Capital Requirements
Directive (CRD) to draw up liquidity risk metrics. We determine
liquidity scenarios for internal metrics based on the behaviour of
other banks in liquidity crises, regulatory assumptions, and expert
opinion.
These are our core monitoring metrics in the Group:
A) Regulatory metrics:
a. Liquidity coverage ratio (LCR) assesses the short-term resilience
of our liquidity profile by making sure we have enough high-quality
liquid assets to withstand a considerable market stress scenario for
30 calendar days. In 2024, the Group’s LCR remained stable and
well above the regulatory threshold.
b. Net stable funding ratio (NSFR) measures long-term liquidity
risk. It is the ratio of available stable funding to required stable
funding. In 2024, the NSFR of our core subsidiaries and the Group
remained above the regulatory requirement of 100% and the
internal risk appetite.
B) Internal metrics:
a. Liquidity buffer assesses whether liquid assets are enough for
the bank to survive for set time horizons under several liquidity
stress scenarios.
b. Wholesale counterparty concentration metric measures the
impact of our largest non-financial counterparties withdrawing
deposited funds. We use it to measure the quality of our liquidity
and to uncover excessive dependency on a small number of
customers.
c. Structural asset encumbrance metrics. We calculate two metrics
to measure asset encumbrance risk. One the one hand, the asset
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encumbrance ratio is encumbered assets to total assets; on the
other hand, 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).
d. Other liquidity metrics. Grupo Santander has a set of additional
liquidity indicators to complement those listed above and to
measure other non-covered liquidity risk factors.
e. Liquidity risk scenario analysis. Grupo Santander has five
standard scenarios:
i. An idiosyncratic scenario of events that are detrimental only to
Santander.
ii. A local market scenario of events that are highly detrimental to
Grupo Santander’s base country’s financial system or real
economy.
iii. A global market scenario of events that are highly detrimental
to the global financial system.
iv. A combined scenario of more severe idiosyncratic and local and
global market events, occurring simultaneously in an
interconnected manner.
v. Climate scenarios, with various stress situations based on the
potential economic effects of climate change.
We use these stress test outcomes as tools to determine risk
appetite and support business decision-making.
f. Early-warning liquidity indicators. The system of early warning
indicators consists of quantitative and qualitative liquidity
indicators that help predict stress situations and weaknesses in the
funding and liquidity structure of Grupo Santander entities.
External indicators relate to market-based financial variables;
internal indicators relate to our own performance.
g. Intraday liquidity metrics. Santander follows Basel regulation
and calculates several metrics and stress scenarios for intraday
liquidity risk to maintain a high level of control.
For more details on liquidity metrics, see section 3.4 ‘Liquidity and
funding management’ in the 'Economic and financial review' chapter.
3.8 Actuarial, pension and insurance
risk management
Actuarial risk
Actuarial risk stems from biometric changes in defined benefit
recipients’ and life insurance policyholders’ life expectancy; and
from suddenly higher non-life insurance payments.
These are the actuarial risks we distinguish:
• Life liability risk: Risk of loss on liabilities due to changing risk
factors that affect pension obligations, split into mortality/
longevity risk, morbidity risk, withdrawal/surrender risk, expense
risk, and catastrophe risk.
• Non-life liability risk: Risk of loss on liabilities due to changing
risk factors that increase Santander's non-life payment
obligations towards employees, split into premium risk, reserve
risk, and catastrophe risk.
Pension risk
Grupo Santander runs several defined benefit pension schemes
that generate financial, market, credit and liquidity risks from
assets and investments, as well as market and actuarial risks from
pension obligations.
Our pension risk management and control involves identifying,
measuring, mitigating and reporting on sources of pension risk to
reduce long-term exposure.
Grupo Santander uses a VaR methodology to measure pension risk,
set pension risk appetite limits and calculate economic capital.
Moreover, we estimate combined losses each year on assets and
liabilities under a stress scenario that includes shifts in interest
rates, exchange rates, inflation, stock markets, property values and
credit spreads.
The majority of our defined benefit pension schemes are in Brazil,
Germany, Portugal, Spain and the UK.
In 2024, the impact of market performance on pension risk was
slightly negative, owing to contrasting behaviour of discount rates
in our core markets and a rise in inflation in the markets that are
exposed to this risk. Throughout the year, we took measures to
reduce our exposure to pension and actuarial risk by taking
advantage of interest rate levels.
Insurance risk
Grupo Santander’s insurance risk model is based on our own
insurers and partnerships with insurers in which we hold a non
majority interest (joint ventures).
These insurers assume financial, non-financial, actuarial and other
risks according to their risk profile.
Our core aim in managing and controlling insurance risk is to
identify, measure, mitigate and convey all sources of risk in the
insurance business to help meet our commitments to policyholders
and shareholders.
We continuously monitor the solvency of our insurers by
calculating regulatory solvency levels and making sure that they
stay within the established risk appetite. Moreover, we run
sensitivity analyses and stress scenarios on the most significant
risks to assess their impact on solvency.
In 2024, our insurers’ risks remained stable. Regarding actuarial
risk, though natural disasters have generally increased in our
markets, they have not had a significant impact on solvency due to
reinsurance programmes and other public and private protection
schemes.
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4. CAPITAL RISK
4.1 Introduction
Grupo Santander’s structural risk includes the risk that the bank
has insufficient capital to absorb losses stemming from its
operations or to meet internal business objectives, regulatory
requirements and market expectations.
We oversee first-line capital management and check that our
capital adequacy and coverage match our risk profile and Group
strategy through our Capital Risk area, which is part of our second
line of defence. We also oversee transactions that could be
considered significant risk transfers (SRT).
Capital management falls under the Group’s capital framework
and model. It brings together capital planning and adequacy,
budget execution and tracking, and the ongoing measurement,
reporting and disclosure of capital data.
4.2 Capital risk management
We independently oversee the capital activities carried out by the
first line of defence. These activities are split into four workflows to
promote an appropriate level and efficient use of capital, meet
internal solvency targets and regulatory requirements, and match
our risk profile:
Capital planning
We draw up a capital plan (consistent with the strategic plan) that
sets out our solvency targets and the actions required to execute it.
The control area reviews the plan’s viability to identify, assess and
quantify the risks that may impact on fulfilling it.
Capital adequacy
We measure capital levels against the risk assumed, based on a
risk profile assessment and our risk appetite framework, and under
stress scenarios. Oversight of this process aims to:
• cover all significant risks in the course of our operations;
• confirm that results are reasonable and consistent with business
strategy, the macroeconomic environment and system variables;
and
• check that planning methodologies and assumptions are
appropriate.
Capital risk assessment
Capital measurement is an internal risk management process to
calculate the metrics we use in capital management, supervisory
reporting and market disclosures regularly.
The continuous monitoring of our capital measurement is an
additional control function to achieve the right capital risk profile. It
involves a review of capital metrics and set thresholds, as well as
oversight of compliance with solvency risk appetite to keep capital
levels above internal and regulatory requirements, and market
expectations.
Origination (risk transfer initiatives)
Origination is where we oversee the structuring and launch of the
Group’s initiatives to release shareholder equity and their
subsequent monitoring.
We oversee securitizations that might be significant risk transfers
originated by Santander in order to release capital, according to
articles 243 and 245 of Regulations (EU) 2017/2401 and
2017/2402.
Oversight is an essential prerequisite for synthetic and traditional
securitizations, especially if they can reduce risk-weighted assets
(RWA) under regulatory standards.
The aim is to make sure that oversight includes analysis of the
conditions that could alter the securitization’s SRT classification,
namely:
• if it meets the requirements of an effective risk transfer;
• if it complies with all prudential regulation requirements;
• if its risk parameters follow our methodology; and
• if its economic rationale meets Group-wide standards.
In today’s macroeconomic landscape of geopolitical tension,
market volatility and other events, we focused on protecting the
Group’s solvency and meet the internal objectives. We pinpointed
and assessed the risks that could affect solvency and continuously
monitored key metrics.
The capital risk function regularly assesses potential deviations in
capital forecasts to set budget uncertainty levels. We oversee
progress with the organic capital plan, securitization plan and
other initiatives that impact on capital, as well as the supervisor’s
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review of capital calculation (Internal Model Investigations -IMIs-,
On-Site Inspections -OSIs- and others).
In 2024, we continued to enhance monitoring of the achievement
of subsidiaries’ capital contribution targets to spot risk and
opportunity relating to our capital targets for the year. We also
checked the impact of market variables on capital levels. Against
this backdrop, we continue to implement hedging policies to
mitigate exchange rate volatility on our CET1 ratio.
The second and first line of defence set the solvency appetite
limits, which were consistent with the Group’s medium-low risk
profile and resilient to stress conditions.
Regarding planning, in 2024 we performed a more detailed review
of our Group and subsidiary recovery plans to enhance measures
and hypotheses.
We introduced stricter standards to enhance reporting and
governance of SRT securitization oversight during origination. To
make monitoring more robust, subsidiaries became more involved
in regular analysis and we drove further automation through use of
the corporate tool.
4.3 Key metrics
Banco Santander’s strong capital position is consistent with our
business model, balance sheet structure, risk profile and
regulatory requirements. Our robust balance sheet and profitability
enable us to finance growth and accumulate capital.
Our model of subsidiaries with autonomy over liquidity and capital
enables us to mitigate risk. Our capital metrics are stable, with
ratios that remain comfortably above regulatory requirements.
The distribution of risk-weighted assets (RWA) by risk type and by
region at year end reflects the Group's core business in credit risk
and geographic diversification:
RWA by risk type
A
RWA by region
B
Dec.24 data
Dec. 24 data
At the end of December, our fully-loaded CET1 ratio was 12.8%,
above our 12% target.
The fully-loaded CET1 ratio rose 51 bps. We achieved gross organic
generation of 209 bps and recognized a 100 bps charge for
shareholder remuneration in 2024 (consistent with the target
payout of 50%) and a negative regulatory and model impact of 59
bps.
Under IFRS 9 transitional arrangements, the CET1 phased-in ratio
at the end of December was 12.8% and the total phased-in capital
ratio was 17.4%, comfortably meeting the Basel Committee's
9.6% and 13.9% minimum levels, respectively.
Throughout the year, we maintained all the Group's risk appetite
metrics above the established solvency limits.
For more details, see section 3.5 ‘Capital management and adequacy.
Solvency ratios' in the 'Economic and financial review' chapter.
11%
3%
86%
Operational
Market
Credit
41%
19%
24%
13%
Europe
North America
South America
DCB Europe
A. Credit risk included counterparty credit risk, securitizations and amounts below
the thresholds for deduction.
B. Others, not included, represent 3% (Corporate centre)
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5. OPERATIONAL RISK
5.1 Introduction
Operational risk is inherent in all products, activities, processes,
and systems, as well as in all business and support areas. All
employees are responsible for managing and controlling the
operational risks generated by their activities.
Santander defines operational risk, according to the Basel
framework, as the risk of loss resulting from inadequate or failed
internal processes, people, or systems, or from external events.
Also, it covers categories of risks such as fraud, technological,
cyber, legal
9, and conduct risks are included.
5.2 Operational risk management
Management and control model
Our operational risk and control model establishes the core
components needed to manage and control this risk properly
throughout the cycle according to advanced regulatory standards
and best practices. Execution of the model supports the correct
setting and update of management priorities as well as the
definition and implementation of internal controls to mitigate risk
throughout the organization.
In this section we first detail the risk management cycle, as well as
the instruments we use to manage and control operational risk.
We then focus on operational resilience and the core operational
risks and their mitigation plans. Last, we describe how we use
insurance as a risk transfer mechanism and operational risk
management in the wholesale banking business.
The operational risk cycle comprises:
• strategic planning: this covers the activities necessary to define
the Group's objective operational risk profile, including setting
the risk appetite, estimating annual losses and reviewing the
management perimeter;
• identification and assessment of risks and internal controls:
this process aims to identify the risks and factors that may cause
operational risk in the organization and assess their potential
impact quantitatively or qualitatively;
• ongoing monitoring of the operational risk profile, to analyse
available information regularly on the nature and extent of the
risks incurred in the undertaking of the Group's activities through
an adequate alerts system, based on tools, such as indicators and
escalation procedures.
• risk response decisions including risk mitigation and risk
transfer measures: operational risk can emerge in any Group
procedure, so its management requires mitigation measures for
risks considered unacceptable following identification and
assessment.
The analysis of operational risk exposure can conclude with the
acceptance of that level of risk, the implementation of action
plans to manage it, the transfer of risk through insurance or
other outsourcing mechanisms or, alternatively, the
discontinuation of the related activity.
Against this backdrop, contingency and business continuity plans
are key as they enable us to continue activity and limit losses in
the event of severe business interruptions, which are particularly
sensitive in financial markets. According to the EU Digital
Operational Resilience Act (DORA), it is necessary to increase
digital operational resilience such as the capacity to build,
support and review operational integrity and reliability,
contribute to keep networks and information systems secure,
and continuously provide quality financial services even in the
face of disruption.
• disclosure and reporting of information necessary for decision
making.
9 Legal proceedings stemming from operational risk.
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Additionally, at Grupo Santander, we have various tools that allow
us to effectively manage and control risk throughout the
management cycle, such as:
Internal event database
The internal events database collects and records internal
operational risk events, whose impacts could be financial impact
(e.g., losses and provisions, regardless of their amount) or non
financial impact (i.e. relating to regulation, customers and/or
services). This information:
◦ enables us to conduct root-cause analysis;
◦ increases the awareness of risks for better operational risk
management;
◦ enables the escalation of relevant operational risk events to
senior risk executives in the shortest time possible;
◦ facilitates regulatory reporting;
◦ facilitates the development of the economic capital model
within the internal capital adequacy assessment process
(ICAAP).
External event database
This database contains quantitative and qualitative information
about external operational risk events, which facilitates detailed
analysis of relevant events in the industry; comparison with Group
and subsidiaries’ loss profiles; and preparation for the Risk control
self-assessment (RCSA) exercises, insurance and scenario analysis.
It provides an additional source of information to internal events,
which boosts operational risk management.
Scenario analysis
This is a tool to analyse highly unlikely events that could result in
significant losses and establish appropriate mitigating measures
based on the assessment and opinion of experts from business
lines and risk managers. Scenario analysis results are also used as
input to the economic capital models.
RCSA
The RCSA is an assessment of the operational risks and control
environment associated with the Group's activities and operations.
Its key aim is to assess inherent and residual operational risk, as
well as the design and effectiveness of controls and whether they
need to be strengthened or new mitigating actions need to be put
in place.
It includes detailed reviews to identify cyber, technology, fraud,
supplier and other risk factors that could generate operational risk
or a failure to observe the law. The RCSA also covers regulatory
compliance, conduct risk and financial crime.
Key operational risks (KORs)
Top-down assessment that considers senior managers’ concerns
and opinions about operational risk so that the rest of the
organization can review them appropriately and we can include
them in the RCSA.
Key risk indicators (KRIs)
These provide quantitative information about our risk exposure and
control environment. The most relevant indicators are those
related to the bank’s main risk exposures, and are part of the
operational risk appetite.
Risk appetite
It has the following structure:
• A global non-financial risk appetite statement, which asserts our
commitment to controlling and limiting non-financial risk events
that can result in financial losses; fraud events; operational and
technological incidents; legal and regulatory infractions; issues
associated with conduct; or reputational damage. This statement
has associated loss and control environment metrics.
• Statements regarding technology risk, cyber risk, the cloud,
fraud, financial crime compliance, product sales, regulatory
compliance, model risk, data management, and supplier risk
management, and their own forward-looking monitoring
metrics.
Economic capital model
Our economic capital model for operational risk takes a loss
distribution approach (LDA) that captures our operational risk
profile and calculates economic capital based on information
collected from the internal and external event databases and
scenario analyses. We use it to determine operational risk
economic capital and estimate expected and stressed losses to set
operational risk appetite.
Moreover, we use other instruments to analyse and manage
operational risk, such as the assessment of new products and
services and transformation initiatives; business continuity plans
(BCP); review of the management perimeter and corporate
insurance policy coverage; recommendations from internal and
external auditors and supervisors; and the quality assurance
process.
Our management, assessment and reporting system for
operational risk, Heracles, supports the operational risk
programme and tools through a governance, risk and compliance
(GRC) approach and provides information on our subsidiaries and
the Group. Heracles also facilitates better operational risk
management decisions by using a common set of taxonomies and
methodological standards to allow for information consolidation,
duplication prevention, and reporting simplification. Through
Heracles, we aim for employees to have a timely, complete, and
precise view of their operational risks.
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Operational resilience and the business
continuity plan
The digital transformation, which is ramping up due to the entry of
new players with more digital business models, is revolutionizing
how banks operate and presenting new business opportunities. At
the same time, this structural change has increased exposure to
emerging risks such as technology risk, cyber risk, and further
dependency on third party suppliers, which heighten the potential
exposure to events that could affect the services that we offer to
customers.
Thus, regulation continues to focus on the importance of
operational resilience through:
• the DORA Act, along with its implementing rules, which
complements the perspective of risk related to Information and
Communication Technologies (ICT). It encompasses any
reasonably identifiable circumstance related to the use of
networks and information systems that, if it occur, may
compromise the security of networks, systems, tools, processes,
operations, or the provision of services;
• the Basel Principles for Operational Resilience guidelines;
• the Building the UK Financial Sector’s Operational Resilience
rules published by the Bank of England (BoE), the Financial
Conduct Authority (FCA) and the Prudential Regulation Authority
(PRA);
These regulations require us to strengthen our ability to prevent
and recover from disruptive events and verify that we can deliver
services to our customers in all our businesses and maintain
systemic stability.
To comply with the law and keep our services running, we have an
operational resilience and business continuity management
system (OR BCMS) that seeks to establish the continuity of services
and business activities in all our subsidiaries should a disaster or
major incident occur. It is a holistic management process that
identifies potential threats and their impact to our operations and
resources (people, apps, data, properties and others). It also
defines the proper protocols and governance to provide an
effective response and recovery in the shortest time possible.
Our operational resilience and business continuity application
(ARK@) is vital to maintain and manage the information we use in
this process.
In 2024, we continued to enhance and revise our BCMS to adapt it
to the new Operational Resilience regulatory requirements, with
particular emphasis on:
• critical services identification, establishing the impact tolerance
for disruption for each of them, according to the bank’s risk
appetite, risk capacity and risk profile;
• the Group’s board of directors approved operational resilience
approach, considering our risk appetite and the tolerance for
disruption to critical services;
• internal continuity strategies to minimize the impact on business
activities derived from the potential disruptions to the services
provided by critical suppliers;
• mandatory risk assessments and cost-benefit analyses in order
to select the necessary continuity strategies for each contingency
scenario identified;
• bolstering the tests we run every year to check our strategies and
plans for every scenario, especially application outage;
• enhancing the methodology to manage and monitor the maturity
level of subsidiary business continuity programmes.
Important mitigating measures
Mitigation measures aim to reduce or eliminate exposure to the
main sources of risk that our internal and external tools uncover
and to significant emerging or potential risks.
Below are the principal sources of operational risk (such as fraud,
cyber risk, technology risk, supplier risk, and others) and their
respective mitigation measures:
Fraud
The transformation and digitalization of the business has given rise
to new risks and threats, such as more payment scams and fraud in
loan applications.
To mitigate these risks, we enhanced control mechanisms and
implemented new solutions, including:
• stronger authentication for customers;
• increased anti-fraud alerts in loan applications;
• transaction monitoring using advanced fraud prevention models.
Additional examples of controls that we are implementing for
online banking fraud include:
→strong customer authentication and signature to approve
transactions;
→behavioural biometrics and anti-malware protection;
→identification and secure registration of customer devices.
Moreover, the second line of defence made progress with internal
fraud management in 2024 by enhancing a related policy that
applies to all Group subsidiaries and coordinating several activities
to standardize how we manage these events, based on best
practice and identified controls.
Cyber risk
At Santander, cyber risk management is an integral part of our
operational risk control and management model. Our cybersecurity
management is designed to align with international best practices
and provide a framework to measure and monitor the cyber risk
profile and control environment, including threats and incidents
associated with the use of external service providers.
The increasing reliance on digital systems puts cybersecurity at the
heart of managing non-financial risks in the financial industry. Our
goal is to make Grupo Santander a cyberresilient organization,
capable of preventing, detecting, and quickly responding to
cyberattacks, while constantly improving and evolving our
defences.
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Ransomware in all its forms (data encryption and exfiltration)
continues to be the prominent external threat. Moreover,
distributed denial of service (DDoS) attacks associated with
geopolitical tension and international conflicts in Ukraine and the
Middle East, also continue to have a high incidence.
During 2024, multiple events were responded to, including those
involving third-party service providers. For example, on May 14,
2024, Santander announced that it had become aware of
unauthorized access to a Santander database hosted by an external
provider, which included certain customer and employee
information. Numerous measures were immediately implemented
to manage the incident, such as blocking access to the database,
strengthening fraud prevention, taking preventive actions to avoid
a similar incident from occurring again, and maintaining direct
contact with regulatory bodies and collaborating in the
investigation with law enforcement agencies.
In this regard, we continue to improve risk management and
develop controls in line with the Group's global cybersecurity
framework and international best practices.
From the second line of defence perspective, there is a framework
to measure and monitor the cyber risk profile and its control
environment. The key aspects of our cyber risk oversight
programme in 2024 were:
• the expansion of the services and scope of a global second line of
defence Centre of Excellence for cyber risk, providing an
opportunity to strengthen control risk activities while achieving
efficiencies, simplification and harmonization;
• an update of internal regulation to align with new regulatory
requirements (e.g. DORA Regulation);
• a review of our oversight procedures (risk indicators, risk appetite
and reference risk);
• participation in the ECB’s first Cyber Resilience Stress Test;
• the automation of dashboards to embed several sources of
information and provide a consolidated view of cyber risk.
For more details on cyber security, see section 5 'Research,
development and innovation (R&D&I)' on 'Economic and
financial review' chapter.
IT risk
Our aim to become the best open financial services platform on the
back of digital transformation requires constant review,
assessment and enhancement of our controls to mitigate and
manage technological risk.
Despite a demanding environment under constant change, we are
quickly adapting our business model and our technology to support
the global businesses in their digital transformation by providing
them with global platforms that draw on innovative capabilities to
meet the new needs of our customers and new regulatory
requirements. This also aims to strengthen our position as a digital
bank with a global footprint that can adapt to the changing
demands of the market.
For 2024, the key aspects of our IT Risk Management programme
were:
• monitoring the implementation of actions to meet the
requirements of DORA regulation, including a deep dive into the
operational resilience scenario mitigation strategy in relation to
data mismanagement;
• making key IT assets less obsolete to fit with our risk appetite;
• strengthening the Public Cloud control model by embedding
essential controls within the risk and control self-assessment for
the first time;
• continuing to enhance automation to correlate data, analyse and
report on technology risks to facilitate the collection and
consolidation of information, prioritize risk management, and
enable more effective independent oversight;
• making headway with the implementation of automated
solutions to analyse back-up and inventory controls that help
enhance the monitoring and control of technological risk.
Supplier risk management
Our digitalization strategy sets out to offer our customers the best
solutions and products in the market. This may lead to an increase
in third-party services, cloud services and the large-scale use of
new technologies.
In 2024, we boosted our supplier management model and internal
control framework due to increased cyber risk, environmental
(ESG) risks and regulatory requirements (especially DORA). We
implemented a new IT platform to assess and manage the risks in
outsourcing and third-party agreements.
We continued to bolster our methodologies and contractual
frameworks to enhance the monitoring of third-party risk in our
subsidiaries. Moreover, we used a risk-based approach that
focused on suppliers that could increase the potential risk level in
our operations and customer services in the Group’s subsidiaries.
We increased monitoring of those suppliers to check that:
• they have an appropriate control environment in accordance with
established Group policies and that mitigate the risk level of the
service provided;
• business continuity plans are in place to enable the delivery of
the service even in the event of a disruption;
• the proper controls are in place to protect the information
processed during the provision of services;
• contracts and third-party agreements include the required
clauses to protect the interests of our customers and the Group,
while providing coverage of the legal obligations in force;
• regular monitoring of these suppliers is carried out, with
particular attention to service level agreements and the regular
testing of their business continuity plans;
• exit strategies are defined, including reversion or migration
plans, particularly for those services with a high impact on
business continuity and difficult to replace.
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We continue to embed our environmental, social and governance
approach in our strategy and culture to build a more responsible
bank. Because our suppliers may have an impact on the
environment and broader society, we implemented a new
certification procedure to verify that they follow the Group’s ESG
sustainability standards and criteria.
Other key mitigating actions
We are constantly improving our risk mitigation measures related
to customer, products, and business practices. Santander has
specific frameworks and policies on the marketing and selling of
products and services; customer complaint handling and analysis;
financial crime prevention; and compliance with new regulations.
For more details on compliance risk mitigation, see section
6.2 'Compliance risk management'.
Insurance in operational risk management
Santander considers insurance a key component of operational risk
management. The Corporate Insurance function is responsible for
the use of risk transfer formulas to optimize and safeguard the
bank's financial results.
We have global insurance programmes for property damage, civil
liability, fraud, expenses arising from cybersecurity breaches, and
third-party claims against directors and officers of the Group (D&O
insurance). We supplement these global policies with a wide range
of local insurance policies that adapt to the characteristics of each
subsidiary and are taken out according to the insurance risk
management model that the Corporate Insurance area implements
in each market.
This area works with the Non-Financial Risk (NFR) function to
perform continuous monitoring and oversight of the proper
application of policies and procedures to manage risk that is
insurable in our subsidiaries.
This collaboration is governed by:
• NFR's participation as a permanent member in the quarterly
corporate insurance forum;
• NFR's attendance at the quarterly claims forum, which monitors
and enhances processes for loss recovery via insurance;
• procedures outlining the interaction model between NFR and
Corporate Insurance, as well as other functions that correspond
to the various insurance typologies (e.g., facilities, cybersecurity
and, legal, among others). These procedures pursue the proper
management of insurance throughout the entire process of
identification, assessment, transfer, and retention of risk;
• twice-yearly coordination of the mapping of risks to insurance
across the Group, with the objective of monitoring the
effectiveness of insurance coverage, and identifying and
correcting any potential gaps in coverage.
We continue to adapt how we use insurance to align our
management with changes in the risk environment. Against this
backdrop, we extended our analysis and added coverage related to
climate change, cyber risk, the digital landscape and other
elements to make sure that the policies and governance of the
non-financial risk and corporate insurance functions respond to
these and other emerging cross-cutting risks.
Analysis and oversight of controls in Corporate
& Investment Banking (CIB)
Given the nature, specificity and complexity of financial markets,
CIB must enhance operational risk management and control
continuously. We implemented these enhancements in 2024:
• Enrichment of processes to drive automation and operational
excellence in the services provided to our customers, based on a
culture of quality that promotes the best CIB standards in every
market;
• Reinforcement of the control framework for market activity by
enhancing the design of controls, the quality of their execution,
and other aspects. We continue to focus on the risk of
unauthorized trading as a CIB risk management priority, for
which we have clearly defined controls;
• Strengthening of the vendor risk management function through
monitoring focused on critical and high risk services and targeted
reviews of critical third-party processes to boost the risk profile
and promote compliance with internal and regulatory
requirements. We placed special emphasis in 2024 on meeting
all the requirements set out under the DORA's Act;
• Strengthening cybersecurity control measures to protect against
information leaks and cyber attacks in interactions with third
parties (including SaaS
10 providers); controls over user access to
systems (privileged user access); and technological contingency
tests. In addition, we enhanced monitoring and challenge
exercises to execute controls correctly.
SaaS - Software as a Service
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5.3 Key metrics
Net losses (including incurred losses and net provisions) as per
Basel
11 risk categories in the last three years were:
Net losses by operational risk category
A
(% o/total)
0.8%
13.1%
1.1%
78.2%
0.4%
0.8%
5.7%
2022
2023
2024
I - Internal fraud
II - External fraud
III - Employees
practices and
workplace safety
IV - Practices with
customer,
products and
business
V - Damage to
physical assets
VI - Business
disruption and
system failures
VII - Execution,
delivery and
process
management
A. Does not include employees litigations in Brazil.
Santander considers employee litigation in Santander Brazil to be a
The net losses by country were:
staff expense. Our governing bodies (risk control committee,
RSRCC and board of directors) continuously monitor expense levels
Net losses by country
A
with specific risk appetite metrics and take special actions to
(% o/total)
reduce them. These expenses are reported under the categories
defined by the Basel Operational Risk framework.
In 2024, the most significant losses by category and geography are
related to litigation in Santander Brazil, the UK, Poland and Spain.
In the case of the UK, operational risk losses increased in 2024 due
to the provision made for the case of vehicle financing
commissions (see section on legal provisions in the consolidated
financial statements). Excluding this case, UK losses would be
lower compared to the previous year.
Brazil
20%
UK
28%
Spain
12%
Poland
13%
US
7%
Others
20%
A. Does not include employees litigations in Brazil.
11 The Basel categories incorporate risks which are detailed in section 6 'Compliance risk'.
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6. COMPLIANCE RISK
6.1 Introduction
The compliance risk function is an independent control function
within the second line of defence. It reports directly and regularly
to the board of directors and its committees through the Group
Chief Compliance Officer (CCO). It facilitates critical, independent
debate, oversight and control in terms of corporate compliance,
product governance, consumer protection, reputational risk, and
financial crime. It also measures the impact of compliance and
conduct risk on risk appetite. The compliance function regularly
reports to the relevant governance bodies at management and
board level, on compliance related risks and the effectiveness of
the compliance programme in managing them. This function works
closely with the wider risk team to promote a common risk and
compliance culture.
Our compliance operating model and framework is well
established and delivered consistently across the Group. It
considers all applicable legal and regulatory requirements and
expectations of the Group, and promotes well-defined ethical
principles and good conduct requirements, for the benefit of
employees, customers, shareholders and the communities we
serve in.
In 2024 we focused on enhancing our operating model to
strengthen the progression of our commitments, with specific
focus on managing our financial crime risks in the face of ongoing
geopolitical challenges, and delivering enhanced compliance
support to the Group’s global divisions.
6.2 Compliance risk management
We have a robust and consistent compliance operating model and
framework to meet all legal and regulatory requirements at Group
and subsidiary level. Programmes are risk-based and reflect the
size and complexity of the Group. The key risks that we cover and
describe in the current section include but are not limited to the
following:
• Employee compliance: risk of non-compliance with legal and
regulatory requirements as outlined in Grupo Santander's Code
of Conduct, due to the behaviours and conduct of our employees.
Every employee is expected to operate based on the highest
ethical considerations and free of any conflict of interest at all
times.
• Conduct risk: risk arising from inadequate practices in the
Group's relationship with customers, including the way they are
treated, as well as the products and services offered and their
suitability for each customer. Inadequate treatment of customers
includes the risk of not taking due account of the vulnerability or
special circumstances and/or economic stress of customers, so
that we act in their best interests and offer them viable solutions
where possible.
• Reputational risk: risk of current or potential negative economic
impact to the bank due to damage to the perception of the bank
on the part of employees, customers, shareholders, investors
and the wider community.
• Financial crime risk: risk that Santander is used or exploited to
make funds or assets with illicit origin and/or that enable
criminal activity to appear as legitimate, specifically through
money laundering, terrorism financing, sanctions violations and
such other crimes as bribery, corruption or fraud.
In addition, ESG factors
12 are cross-cutting in all the organization
and managed according to our risk and compliance, and
sustainability frameworks. From a compliance programme
perspective, they mainly relate to FCC, conduct and reputational
risk, where we continue to enhance the risk and compliance control
environment in relation to the ESG management.
For more details on ESG factors management, see section'2.3 Embedding
climate in risk management' in the 'Sustainability statement' chapter.
Corporate compliance
This function oversees and controls regulatory risk from
employees, those related to personal data processing, securities
markets (markets conduct) and regulatory disclosures to the
Spain's stock markets authority, Comisión Nacional del Mercado de
Valores (CNMV), and other regulatory bodies where Santander is a
publicly traded company. The core elements of corporate
compliance are:
12 A set of potential negative impacts relating to ESG factors (environmental, social and governance), considered as material by the Group according to the corporate
risk framework.
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A. Employees
We promote a culture of ethics and compliance among our
employees, with standards for preventing corporate financial crime
risk, conflicts of interest and anti-competitive practices according
to the General Code of Conduct (GCC). To support this, we operate
Canal Abierto, Grupo Santander´s whistleblowing channel, through
which employees and other stakeholders can anonymously and
confidentially report financial and accounting irregularities, as well
as violations of internal or external regulations and our corporate
behaviours.
Employees’ compliance
Canal Abierto
→ Provide a channel for employees to report unethical
conduct and breaches of internal or external
regulations.
→ Manage and investigate reported cases.
→ Promote a culture of speaking up and truly listening.
Disciplinary proceedings
→ Investigate conduct that is misaligned with our ethics
and compliance principles.
→ Assess disciplinary measures.
Appointments
→ Assess the suitability of the Group’s board and senior
management nominations.*
Training and awareness
→ Develop employee training programmes and
awareness campaigns on corporate defense, anti
trust and employee compliance.
→ Issue messages about ethics to the entire Group to
build relationships based on trust.
Policies and procedures
→ Promote compliance with the GCC and enact special
policies and procedures to enforce it.
→ Report to governing bodies regularly.
Queries about ethics
→ Manage queries from employees and members of
governing bodies about ethics and internal
regulation.
(*) Run by the Corporate Centre, Corporate Compliance, Legal and Internal Governance areas.
For more details on Canal Abierto, see section '4.3 Ethical channels' of the
'Sustainability statement' chapter.
B. Privacy
At Santander, we have a specialist office that enforces our
corporate policy on personal data protection and sets out
guidelines for all our subsidiaries. In 2024, we increased data
protection awareness following the 14th of May incident related to
the unauthorized access to a Santander database hosted by a third
party provider. We adopted coordinated and reinforced measures
to strengthen our data protection culture and foster collective
consciousness about the value and protection of personal data.
C. Market regulation
The Markets Conduct team within Corporate Compliance oversees
enforcement of the Code of Conduct in Securities Markets (CCSM).
It is also responsible for the control environment applicable to
treasury shares transactions and Santander's buyback programmes
and for monitoring the use and contribution of benchmarks.
In addition to the application of the CCSM, the risk of market abuse
is primarily managed by the relevant business line, with support
from CIB Compliance, as outlined below:
• The global control room function is responsible for preventing
unlawful disclosures of inside information and transactional
conflicts of interest.
• The surveillance function is responsible for: (i) monitoring the
bank's activity in financial markets; (ii) deterring and detecting
market abuse and other types of misconduct; and (iii)
establishing monitoring systems for both the bank's orders and
transactions in financial markets and for the communications of
employees carrying out this activity.
• The CIB compliance function also oversees compliance with core
international market regulations, including, but not limited to:
• EU laws and regulations: monitoring of compliance with EU
Regulations (for example, MiFID II and EMIR), with the focus in
2024 on regulatory reporting, inducements and Algorithmic
Trading requirements.
• UK laws and regulations: continued monitoring of divergences
of UK vs. EU regulations.
• US laws and regulations: monitoring of US compliance
programmes and their global application, in particular Dodd-
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Frank Swap Dealer and Security Based Swap Dealer; and the
Volcker Rule.
D. Relevant Information
The core functions of Corporate Compliance’s Relevant Information
team are: (i) leading the assessment to decide whether a particular
piece of information could be classified as inside or other relevant
information; (ii) disclosing relevant information as well as key
inside information on the Group to the markets, which can be
found on both our website and the CNMV's; and (iii) reporting on
transactions with treasury shares or significant holdings of Banco
Key corporate compliance lines of action in 2024
Policies, procedures and guidelines
→Enhanced Santander's GCC to avoid conflicts of interest that
could arise between Group professionals who have a family
member within the Group.
→Revised Santander's CCSM to align its content to the current
regulatory framework and best practices and to adopt an
approach closer to the expectations of US regulators.
Risk management, methodologies and control
→Successfully completed the transition to the enhanced
methodology of EURIBOR contribution set by the European
Money Markets Institute.
→Implemented the amendments stemming from EMIR-Refit.
→Applied a control framework to the two buyback programmes
carried out in the year (for an amount of EUR 1,459 million and
EUR 1,525 million) to contribute to their compliance with
applicable regulation.
Santander, and on transactions and share-based remuneration
schemes of executive directors and senior managers to the CNMV
and other regulatory bodies in markets where Santander is a
publicly traded company.
E. Automatic exchange of tax information between
countries
The data management function oversees automatic tax disclosure
between subsidiaries (pursuant to FATCA
13 and CRS
14) by checking
regular reporting obligations and execution of local action plans.
Subsidiaries Oversight and Awareness
→Ongoing coordination to facilitate proactive identification,
management and reporting of any data related risk.
→Established foundation for countries not affected by GDPR
to apply similar standards through a comprehensive
compliance program which manages personal data
protection risks effectively.
→The focus of the Surveillance function was on the continued
harmonization of global tools and processes across both
trade and communications.
→Benchmark Oversight of subsidiaries and global businesses
strengthened through the execution of Risk assessments,
and through the advice to local units and businesses.
Conduct and reputational risk
The conduct and reputational risk function promotes suitable
levels of consumer protection by fostering a good customer
relationship culture throughout the overall customer lifecycle
(from design of products, sales, post-sales and in all engagement
throughout a customer’s relationship with the Group) to protect
consumers' rights and promote their fair treatment while
managing and mitigating all potential conduct risks with them.
It also promotes a low reputational risk profile by defining criteria
and controls to minimize risk that seek to prevent, mitigate and
proactively manage stakeholder relationships within the Group.
A. Conduct risk
Customer conduct risk can potentially arise through failures in
marketing processes, including product design (e.g. definition of
target market and price), in sales (e.g. transparency and suitability)
and post-sales (e.g. customer service and consideration of
customers in special circumstances).
The first line of defence (i.e. business and its supporting functions),
are responsible for identifying, mitigating, managing and resolving
risks across all these phases and when dealing with customers.
Compliance, as the second line of defence, advises the first line of
defence of the global business and the local compliance teams on
the implementation of the Group´s conduct risk management
model and oversees the control environment and remediation
plans, where applicable.
13 Foreign Account Tax Compliance Act
14 Common Reporting Standards
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Key elements of the conduct risk management model
Internal regulation and governance
Oversight of key processes
Risk management
→Define principles and processes through
a strong regulatory-based conduct risk
management model.
→Oversee of local product governance
forums and run the corporate one to
mitigate conduct risk in the product and
service approval.
→Our products and services meet
customer needs.
→Sales target the right markets with
transparency, ensuring proper
training, and customer-centric
incentives.
→Our customer service and post-sale
services are high-quality and fair.
→Monitor results of marketing controls.
→Identify and assess risks using
customer voice, risk management
tools, and supervisory and sectorial
information.
→Escalate issues and action plans.
Our conduct risk model promotes basing our actions on customers’
interests, regulation, our values and our principles. That means
driving a customer-centric culture throughout the marketing and
servicing processes and retail customer relations with a Simple,
Personal and Fair approach.
Key conduct risk lines of action in 2024
Implementation of responsible practices with end users
→Vulnerable customers policy implementation.
→Annual review of sales force remuneration, ensuring consistency with Group standards.
→Thematic review on fair lending practices for credit cards and overdrafts.
→Monitoring of responsible pricing, fraud management, and contact centre activities.
Contribution to the simplification strategy
→Conduct risk assessments of product catalogue simplification.
→Optimization of product approval processes.
Promoting best practices in digital strategy
→New guidelines to mitigate conduct risk and improve customer experience in digital sales.
→Policies for crypto and digital Assets and several initiatives approved after expert review.
→Ongoing collaboration in public discussions on digital assets.
→AI project in Brazil to analyse customer complaints better, enhancing depth and speed.
For more details on conduct with customers, see section '3.3 Our
customers' of the 'Sustainability' chapter.
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B. Reputational risk
Reputational risk is predominantly rooted in stakeholders'
perception of the bank in every market where we operate.
Reputational risk can arise from multiple sources: from business or
business support activities, as a consequence of other risks, from
the economic, social and political environment, or from events
related to our competitors. Our reputation could also suffer if we
are the subject of negative coverage in the media, whether merited
or not.
Reputational risk applies to all Group activities and is identified,
managed and mitigated by business and support functions, in
particular the ones that engage with stakeholders. The second line
of defence, in compliance, draws up policies, oversees the risks,
Key reputational risk lines of action in 2024
challenges the first line of defence and report and escalate to the
relevant governing bodies (compliance and conduct committee,
CSRRC and board).
Our reputational risk model takes a preventive management and
control approach, with effective handling of early warnings as well
as procedures to identify, manage and monitor risk events. It also
includes elements to identify, analyse and monitor key
stakeholders’ perception of Grupo Santander and the financial
sector, and how that perception may change. Our model is also
consistent with the overall risk management and control processes
(risk profile, risk appetite, economic capital, emerging risks, and
others).
Policies, procedures and guidelines
→ Reviewed models, policies and criteria in sensitive activities: the defence sector and subsidiaries oversight.
→ Collaborated with other functions to implement greenwashing guidelines, awareness and meet regulatory requirements.
→ Reviewed our humanitarian crisis management guidelines and set assessment criteria for Santander aid deployment.
→ Collaboration in definition of a protocol to mitigate reputational risk when restricting or ending business relationships due to
FCC reasons.
Risk management, methodologies and control
→ Ran initiatives to share best practices with subsidiaries, including enhancements of collaborative tools.
→ Enhanced methodologies to quantify reputational risk for economic capital and developed a methodology to quantify
reputational impact related to climate & environmental risks.
Subsidiaries oversight and reporting
→ Enhanced subsidiary oversight, governance and challenge processes.
→ Updated the methodology and processes for the control environment at Group and subsidiary-level (quality assurance,
oversight perimeter, etc.).
→ Bolstered the process of risk reporting and consolidation in the corporation and subsidiaries for reputational risks, based on a
forward-looking approach.
Financial Crime Compliance (FCC)
Financial crime risk arises from acts or the use of the Group's
means, products and services for criminal or illegal activities.
The business functions form the first line of defence who is
primarily responsible for identifying, managing, mitigating and
reporting financial crime risk, taking into consideration the Group's
risk culture. The Accountable Executive for FCC oversees that the
business embraces, implements and executes the FCC Framework
and FCC Programme effectively.
The FCC function, as a second line of defence, oversees financial
crime risks and maintains suitable policies and procedures to
manage the business activities within the Group's established risk
appetite.
In addition, in 2024, we continued to focus on these priorities:
• Priority crime threats, geopolitical events, and focus on
information sharing drove the general FCC Group activity for
prevention and mitigation purposes against money laundering,
terrorism financing and sanctions violation.
• Moreover, we focused on the growing risk in international
financial sanctions in an increasingly global and interrelated
environment, appropriate knowledge and updating customer due
diligence files and, where appropriate, their structures and new
businesses and services such as cryptoassets and payment
gateways, coupled with the growing risks of fraud, and will
continue to do so in the future.
• Continuous cooperation with law enforcement and competent
authorities is key to disrupt threatening finance networks
support the communities that the Group serves, and the Group is
fully committed in this regard.
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• Forged and maintained relationships with domestic financial
intelligence units, law enforcement agencies and public financial
institutions to enhance overall capabilities to prevent, mitigate
and detect suspicious activities.
• Enhanced and developed methodologies, procedures, processes
and systems to detect and mitigate financial crime, to respond
correctly to existing and emerging threats.
• The ongoing FCC strategic programme enables a strong approach
to the Group’s control framework and operating model,
embedding a dynamic model and continuous improvement of
scenarios on internal systems such as transaction monitoring and
sanctions screening.
Key FCC lines of action in 2024
Frameworks & policies
→Continued evolution of AML policies and procedures as
part of ongoing update of the AML/CFT framework
regulation.
Financial Intelligence units
→Enhanced information sharing activities through a new
platform to feed and share information within the
Group, enhancing functionality, confidentiality and
security controls.
Trainings
→Targeted training to introduce the new EU AML
package and provided an online training module on
sanctions.
One FCC strategic program
→Continued to build on the control framework in
several units as a consequence of strengthening the
control environment and implementing One FCC
strategic program.
Oversight
→Enhanced the methodology for the FCC unit’s
oversight to check that all subsidiaries follow a
consistent approach to supervise and assess financial
crime risk.
Relationship with other associations
→Banco Santander is a founding member of the
Wolfsberg Group (association of 12 global banks that
aims to develop financial services industry standards
for financial crime) and is actively involved in its
activities and initiatives.
For more details on FCC, see section 4.2.3 'Financial Crime Compliance
(FCC)' in 'Sustainability statement'.
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7. MODEL RISK
7.1 Introduction
A model is a system, approach or a quantitative method that
applies statistical, economic, financial or mathematical theories,
techniques and assumptions to transform data into quantitative
estimates.
We use models mainly for credit scoring/rating, performance,
capital and provisioning, market and structural risk, operational,
compliance and liquidity risk, and financial accounting and control,
among others.
The use of models entails model risk, which is defined as the
potential negative consequences of decisions based on poorly
developed, poorly implemented or incorrectly used models. Model
risk can lead to financial losses, inappropriate business or strategic
decisions or damage to the Group's operations.
7.2 Model risk management
At Grupo Santander we have been measuring, managing and
controlling model risk for years. The Model Risk area, which
extends to both the corporation and the main subsidiaries, seeks to
manage and supervise this risk.
For the proper management of model risk, we have clear internal
regulations that establish the principles, responsibilities and
processes to organise, approve, manage and govern models
through their entire life cycle.
The intensity of model risk management and monitoring is relative
to the importance of each model for Santander Group. Through the
tiering process, we summarize and classify the level of importance
of non-regulatory models. The regulatory models, given their
particular relevance for the Group, follow the most intense control
and management standards.
At Grupo Santander we define the following phases of the model's
life cycle:
1. Identification
The identified models must be included in the scope of model risk
control and, consequently, in the Group centralised inventory, a
single platform based on an uniform taxonomy for all models used
in the business units. This inventory is key for sound management,
as it contains all relevant information of each model, enabling to
closely monitor them according to their relevance and the tiering
criteria.
2. Planning
An internal annual exercise approved by our subsidiaries’
governance bodies
15 and reviewed in an aggregated form, which
formulates strategic measures for models managed by the Model
Risk area and pinpoints needs for any models to be developed,
reviewed or implemented during the year.
3. Development
In this phase, the Model unit helps strengthen risk management by
developing models and using data according to existing regulatory
requirements.
15 The subsidiaries’ local governance bodies (including the local executive risk committee — ERC — or equivalent) approve the plan for the models under their remit. At
corporate level, the subsidiaries’ plans and global model plan are presented to the model approval forum (MAF) for review and to the ERC for approval.
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This unit leads the development of models for all risk types, with
the spotlight on complying with regulatory expectations (Internal
Rating Based Approach — IRB —, IFRS9, Internal Model Approach
— IMA —, and other models). To develop models, we have
specialized local and global teams. The experts in each geography
are responsible for the development of local models since they are
well-versed in the particularities and needs of each unit, while the
global experts define the modelling standards, develop global
models and support the geographies on the application of these
standards and on the development of their own models, where
required.
Moreover, we use a boxification methodology that enables us to
automate, standardize and maintain the quality of model
development.
Throughout the year, we completed the final developments under
the IRB Repair Program. Per supervisory requirements, we also
delivered on the IRB strategy update, which sought to pursue the
consistent use of IRB models in the Group’s units. We will execute
this strategy in the coming years. We built on models for stress
tests, climate change risk management, and others.
At Santander, we believe in innovation, such as the responsible use
of machine learning and generative artificial intelligence. Our aim
is to delve deeper into these new techniques by running process
enhancement and simplification initiatives.
4. Internal validation
Independent model validation is a regulatory requirement and key
feature of our model risk management and control.
A specialist unit that is totally independent from developers and
users issues technical assessments of internal model suitability.
These assessments are expressed through a rating that
summarizes the model risk associated to it. Validation intensity
and frequency are well-defined and risk-driven.
We have an unique validation approach led by the Single Validation
Office, which strengthen the second line of defence ensuring a
consistent and standardised model risk management across the
Group. It has allowed a greater decentralised organizational
structure.
5. Approval
Before the model´s implementation and use, internal governing
bodies
16 must approve it through a governance circuit in place for
our model inventory, based on its level of importance.
6. Implementation and use
In this phase, we add new models to our IT systems. Because this is
another source of model risk, technical teams and model owners
test proper model integration based on methodology and
expectations.
7. Monitoring and control
We regularly review models so that they are working correctly and
that they are suitable for their purpose. Otherwise, they must be
adapted and redesigned. Control teams must make sure models
are managed according to the general model risk framework and
other related internal rules.
Main activities in 2024
To strengthen the Group's model risk culture and position
Santander as a benchmark in this area within the banking industry,
in 2024 our strategy has focused on:
• implementation of the IV Next project for the evolution of the
validation function, reinforcing the identification of root causes of
incidents and the binding role of the Internal Validation teams;
• technological transformation and simplification of the function
towards a more efficient model;
• continuous improvement of the IRB regulatory models to meet
supervisory expectations and adaptation to the new FRTB
regulatory framework;
• review of the model inventory from the point of view of the five
global businesses, thus enabling effective model risk
management aligned with the Group's strategy.
16 The ERC, model approval forum (MAF), local model governance bodies or the model owner will approve models based on model type or use (regulatory or not); if the model
is local or global; the type of amendment to the model; global tiering; and the powers delegated to each subsidiary.
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8. STRATEGIC RISK
8.1 Introduction
Strategic risk is the risk of loss or damage arising from strategic
decisions or their poor implementation, or the inability to adapt to
a changing environment, which may impact the medium- and long
term interests of our key stakeholders.
Grupo Santander’s business model is a key element of our strategic
risk. It must be viable, sustainable and capable of generating
results in line with our annual objectives and in a manner that is
consistent with the Group's long-term vision.
Strategic risk has three key components:
1
Business model risk, which includes the risk of the model
being out of date, becoming irrelevant and/or losing its
capacity to continue generating the desired results.
2
Strategy design risk, which relates to the strategy and
assumptions set out in the Group’s long-term plan,
considering that this plan may be unsuitable in its nature
or because of its assumptions, which could result in the
Group not achieving the expected results.
3
Strategy execution risk, which involves the three-year
strategic plan and potential deviations from it due to
internal and external factors, the lack of capacity to
respond to changes in the business environment and the
risks associated with corporate development transactions
and the marketing of new products and services.
8.2 Strategic risk management
Our strategy and business model pillars are customer focus, our
global scale with local presence, and geographical, business and
product diversification. Our five global businesses are key to
driving more value creation, profitability and shareholder
remuneration, while helping us maintain a solid and diversified
balance sheet thanks to our prudent risk management.
Grupo Santander views strategic risk as a transversal risk. We
therefore have an operating model, to which the Group's
subsidiaries refer to, that covers the governance, procedures and
necessary tools for robust monitoring and control, all within our
board-approved risk appetite.
We constantly monitor changes in competition, regulation, market
conditions, our organization and other areas to determine the
existence of mitigating factors, as well as action plans and the
potential need to revise our strategy. The Strategic Risk function
engages with key areas of the first and second lines of defence to
ready mitigating measures for implementation when necessary.
Our strategic risk operating model is based on:
• Challenging strategic plans: With the support of other specialized
areas within the Risk division, the Strategic Risk team challenges
the three-year financial plan and long-term strategic plan by
identifying potential threats that could undermine our objectives.
In 2024, we bolstered this by defining a set of binding constraints
that we embedded in the Group's three-year plan as well as by
fully integrating our five global businesses into this process.
• Emerging risks: Santander proactively identifies, measures,
monitors and manages risks that, under stressed scenarios, could
have a significant impact on the Group's profitability, liquidity
and solvency. In 2024, we updated the methodology we use to
identify and assess these risks by enhancing its foresight
component. For more details on the emerging risks we spotted in
2024, see the next section.
• Analysis of business model performance: To identify and assess
the main threats to the bank’s and our subsidiaries' business plan
and strategic objectives in three areas:
• Strategy execution: Assessing the risk of deviation from plans,
targets and strategic initiatives.
• Viability and sustainability: Assessing our position against
competitors and the risk of failing to create shareholder value.
• Business plan predictability: The risk of results becoming
unpredictable and unstable over time.
In 2024, we simplified and strengthened our business model
assessment methodology by reducing the number of metrics,
dimensions and volatility, giving greater relevance to strategic
execution, as well as reinforcing the backtesting of strategic
planning
• Participation in the assessment and validation of proposals for
new products and services prior to their release by verifying they
are consistent with the Group's strategy and weighing up their
risk against profitability.
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• Corporate development transactions: Encouraging that the
analysis of these transactions includes an assessment of their
impact on the Group's risk profile and risk appetite.
• Monitoring strategic projects: The Group strategy committee sets
out the strategic initiatives inventory every year. We jointly
review progress of these initiatives performance twice a year,
including an independent challenge from the second line of
defence. In 2024, we launched several initiatives, such as those
related to the use of Artificial Intelligence, to boost productivity
and process automation and increase customer satisfaction. We
are also promoting the interoperability of instant payment
systems in Europe as a cross-border solution. Moreover, we
continued to modernize the Group's core processes — based on
cloud computing — to boost efficiency and strengthen our global
strategy, which the five global businesses underpin.
The strategic risk function is responsible for providing a
consolidated view of the exposure to this risk, providing an
independent opinion and challenging the activities of the first line
of defence. Senior management regularly receives the Strategic
Risk Report, which includes an update on strategy execution,
emerging risks, business model performance, corporate
development transactions, product marketing, and strategic
initiatives.
8.3 Emerging risks in 2024
Our emerging risks exercise aims to detect, assess and monitor
risks that may have a significant impact on our business model,
profitability and solvency under stressful conditions with low
likelihood of occurrence.
Proactive emerging risk management is essential to avoid and
mitigate potentially negative impacts on, and deviations from,
targets through action plans drawn up in advance.
This involves both the first and second line of defence in our
subsidiaries and at the corporate centre. We also embed identified
risks in the idiosyncratic scenarios of the Group's Internal Capital
Adequacy Assessment Process (ICAAP) and viability, recovery and
resolution plans.
In 2024, the main emerging risk drivers were geopolitical and
macroeconomic uncertainty in relation to the potential escalation
of ongoing military conflicts and deteriorating US-China relations
as well as technology risks such as possible service disruptions
caused by key suppliers and cyber attacks.
We highlight the following emerging risks:
Geopolitical uncertainty
While this has always formed part of our analysis, it has recently
become one of the most important elements to consider in
weighing up the potential threats to Grupo Santander. In 2024, we
considered these events:
• Potential escalation of the conflicts in Ukraine and the Middle
East, which could lead to tighter monetary policy if energy prices
and inflation soar.
• Potentially disruptive policies in the US (with an impact on the
global economy) and Mexico following recent elections in both
countries.
• China-US relations: with a possible shift in the balance of power
between economic blocs, an increase in trade tensions related to
technology exchange, and the situation involving Taiwan and the
South China Sea.
Macroeconomic landscape
This includes threats that often arise from geopolitical events but
that are not part of our central scenario and have a very low
likelihood of occurrence according to our emerging risks
methodology. For instance:
• Severe recession in Germany, caused by a loss of
competitiveness and leadership (especially in the automotive
sector), which could trigger a potential systemic recession in the
EU.
• Potential increase in market volatility, which could generate a
sharp deleveraging of non-bank financial institutions and lead to
further price adjustments that may spill over to the real economy
and the banking sector.
• Vast fiscal imbalance in the EU, political clashes among EU
members, and slowdown or even regression in EU integration,
which could lead to loss of confidence and higher risk premiums.
Macroeconomic and geopolitical uncertainty can potentially hinder
our growth and profitability and diminish asset quality due to a
slowdown in one or many of our markets, as well as impacting on
our customers and the recoverability of loans and increasing our
losses or additional provisioning needs.
In Grupo Santander, we carry out a proactive risk management and
have robust risk policies and procedures to keep our risk profile
within the limits set in our risk appetite statement. This, coupled
with our geographical and business diversification, makes us more
resilient to macroeconomic and geopolitical risk.
In addition, the constant reinforcement of mitigating measures
helped reduce the potential severity of these risks. We performed
these actions in 2024:
• Held frequent monitoring meetings, including special situation
forums (where necessary) to review risk profile, with the
spotlight on key indicators for its monitoring and control.
• Definition and implementation of playbooks to pursue a quick,
forward-looking and proactive response to challenging
circumstances.
• Adjusted limits and exposures in relation to our risk appetite
(where necessary) and updated internal sovereign risk ratings.
• Continuous monitoring of the US’s, China's and the EU's decisions
on international trade and tariffs.
• Held asset-liability committee (ALCO) and market committee
meetings to monitor structural, interest rate and FX risk,
including the coverage of our capital ratios in all major currencies
and, where necessary, adjusting our limits and exposure so that
we remain within our risk appetite.
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statement
governance
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and compliance
Growing legislative and regulatory pressure
An increase in requirements due to new laws and amendments or
the extension of legislative measures in the markets where we
operate could threaten our capitalization and solvency objectives,
stymie profitability, and undermine our ability to extend credit. An
example of this would be the potential extension of the windfall
tax on banks in Spain.
The key mitigation measures for this risk are:
• Initiatives included under the capital plan such as mobilizing
assets through securitization, portfolio sales and other means;
and
• Multidisciplinary working groups in cooperation with banking
associations, regulators and other stakeholders to anticipate and
mitigate the possible outcomes of these measures.
Risks related to generative artificial intelligence (AI)
AI is a technology that aims to create intelligent systems that can
operate with certain autonomy to generate results (such as
predictions, recommendations or decisions) with impact in both
physical and virtual environments.
The major AI risks relate to a potential decline in equality
(algorithmic bias), privacy and data processing, design errors and
cyber risk. We also consider climate risk due to the high
computational intensity of these technologies.
We are firmly committed to promoting the transformation of the
financial sector through the responsible use of AI that prioritizes
transparency and customer protection.
That’s why we set potential AI use cases under our risk
management framework. Moreover, we have an AI policy with
clearly defined roles and responsibilities, which aligns with the
Group's risk appetite and the EU AI Act
17 . Additionally, it is
necessary to consider the progressive entry into force of the AI
Regulation in the EU (AI Act), which will have a high regulatory
impact on the implementation and use of AI systems classified as
high-risk. Our generative AI platform makes sure that the
developments we undertake in the Group comply with our internal
security and ethical control policies.
Potential disruption of a critical ICT
18 supplier
Digitalization is increasing banks’ reliance on information and
communication technology (ICT) and making them particularly
vulnerable to potential disruptions and associated threats. This
could result in the loss of data and disruption to our business.
Some of Grupo Santander's mitigating measures in this regard are
comprehensive and strictly governed due diligence prior to ICT
supplier onboarding, including supplier certification and regular
monitoring and review; and exit strategies and business continuity
plans for potential failures or disruptions, which we test regularly.
Central bank digital currencies (CBDC) and disintermediation
risk
The digital versions of fiduciary currencies issued by central banks
(central bank digital currency — CBDC), especially those that target
retail customers, could impact on financial system stability if they
replace traditional current accounts, which in turn could affect
commercial banks’ volume, structure and cost of funding. To
mitigate CBDC risk, the Group:
• Actively participates in the debate on CBDC with domestic and
international authorities to explain the risks to financial stability
and propose solutions to mitigate them.
• Monitors central banks’ CBDC projects to analyse their impact on
the business or the possibility of developing new services for our
customers to mitigate impact.
• Sets up multidisciplinary working groups with banking
associations, think tanks, regulators and others to foresee and
escalate, if necessary, potential CBDC impacts.
Risk of suffering a severe cyber attack
Our goal is to achieve a cyber-resilient organization capable of
withstanding large-scale cyberattacks that could disrupt the
normal functioning of the bank. In line with new regulatory
requirements, the objective is to enhance all necessary capabilities
to preserve the security of networks and information systems that
underpin the continuous provision of financial services and their
quality, even in the face of significant disruptions.
To achieve this, we have a governance and control framework that
allows us to measure and monitor the cyber risk profile and its
control environment, with the aim of maintaining a high level of
digital operational resilience and an effective and prudent
management of ICT-related risks.
For more details on the main cybersecurity risks, see
'Cyber risk' in section 5.2 ‘Operational risk
management’.
To counter these threats, Santander runs several
counts with different initiatives described in section
'5. Research, development and innovation (R&D&i)'
of the 'Economic and financial review' chapter.
17 European regulation on artificial intelligence.
18 Information and communication technology.
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statement
governance
financial review
and compliance
GLOSSARY OF TERMS, ACRONYMS
AND ABBREVIATIONS
2023 AGM
Annual general shareholders’ meeting of Banco Santander held on 31 March 2023 at second call
2024 AGM
Annual general shareholders’ meeting of Banco Santander held on 22 March 2024 at second call
2025 AGM
Annual general shareholders’ meeting of Banco Santander called for 3 or 4 April 2025 at first or
second call, respectively
A2A
Account-to-account
ABC
Anti-bribery and corruption
Act 10/2014
Active customer
Those customers who comply with the minimum balance, income and/or transactionality
requirements as defined according to the business area
ADR
American depositary receipts
ADS
American depositary shares
AEOI
Automatic Exchange of Information standard
AI
Artificial intelligence
ALCO
Assets and liabilities committee
ALM
Asset and liability management
AML
Anti-money laundering
API
Application programming interface
APM
Alternative performance measure
AuM
Assets under management
B2B
Business-to-business
B2C
Business-to-commerce
Banesto
Banco Español de Crédito, S.A.
BCMS
Business continuity management system
bn
Billion
BNPL
Buy now, pay later. Short-term financing that allows consumers to make purchases and pay for
them at a future date
bps
Basis points
BREEAM
Building research establishment environmental assessment method
BRL
Brazilian real
BRRD
Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions
and investment firms, as amended from time to time
Bylaws
Bylaws of Banco Santander
CAE
Chief Audit Executive
CAO
Chief Accounting Officer
CapEx
Capital expenditure
CARF
Conselho Administrativo de Recursos Fiscais (Administrative Council for Tax Appeals)
CBDC
Central bank digital currency
CCO
Chief Compliance Officer
CCoB
Capital conservation buffer
CCPS
Contingent convertible preferred stock
CCR
Counterparty credit risk
CCSM
Code of Conduct in Securities Markets
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Risk management
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statement
governance
financial review
and compliance
CCyB
Countercyclical capital buffer
CDI
CREST Depositary Interests
CEO
Chief Executive Officer
CF
Corporate Finance
CFO
Chief Financial Officer
CFT
Combating the financing of terrorism
CHF
Swiss franc
CIB
Corporate & Investment Banking (primary business segment)
CNBV
Comisión Nacional Bancaria y de Valores (Mexican stock market authority)
CNMV
Comisión Nacional del Mercado de Valores (Spanish stock market authority)
CO2e
Carbon dioxide equivalent
CoE
Cost of equity
COFINS
Contribuiçao para Financiamiento da Seguridade Social (Contribution for Social Security Financing)
Constant euros
Excluding exchange rates impact
Consumer
Digital Consumer Bank (primary business segment)
Costs in real terms
Costs excluding the effect of average inflation over the last twelve months
CPGF
Corporate product governance forum
CRD
Capital Requirements Directive
CRE
Commercial real estate
CRO
Chief Risk Officer
CRR
Regulation (EU) 575/2013 on prudential requirements for credit institutions and investment firms, as
amended from time to time
CSLL
Contribuçao Social sobre o Lucro Liquido (Social Contribution on Net Profit)
CSRBB
Credit spread risk in the banking book
CSRD
Corporate Sustainability Reporting Directive. Directive (EU) 2022/2464 of the European Parliament
and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive
2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability
reporting (as updated from time to time)
CVA
Credit valuation adjustment
DCBE
Digital Consumer Bank Europe (secondary business segment)
DCM
Debt capital markets
Digital customer
Every consumer of commercial banking services who has logged on to their personal online banking
and/or mobile banking in the last 30 days
DNSH
Do no significant harm
DORA
Digital Operational Resilience Act. Regulation (EU) 2022/2554 of the European Parliament and of the
Council of 14 December 2022 on Digital Operational Resilience for the Financial Sector and
Amending Regulations (EC) No 1060/2009, (EU) No 648/2012, (EU) No 600/2014, (EU) No 909/2014
and (EU) 2016/1011
DTA
Deferred tax asset
DVA
Debt valuation adjustment
E&CC
Environmental and climate change related
E&S
Environmental and social
EAD
Exposure at default
EBA
European Banking Authority
EBITDA
Earnings before interest, taxes, depreciation and amortization
ECB
European Central Bank
EFRAG
European Financial Reporting Advisory Group
EIA
Environmental impact assessment
EIB
European Investment Bank
EMIR
European Market Infrastructure Regulation
eNPS
Employee Net Promoter Score is a method of measuring employee satisfaction
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Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
EOIR
Exchange Of Information on Request standard
EP
Equator Principles
EPC
Energy performance certificate
EPG
Equal pay gap. It measures differences in remuneration between women and men in the same job at
the same level
EPS
Earnings per share
Equal pay gap
The equal pay gap measures differences in remuneration between women and men in the same job
at the same level
ESCC
Environmental, social and climate change related
ESG
Environmental, social and governance
ESMA
European Securities and Markets Authority
ESRS
European Sustainability Reporting Standards
EU
European Union
EUR
Euro
EV
Electric vehicle
EVA
Economic value added
EVE
Economic value of equity
FCA
Financial Conduct Authority
FCC
Financial crime compliance
FDIC
Federal Deposit Insurance Corporation
Fed
Federal Reserve
FiDA
Financial Data Access Regulation
Financial inclusion
Number of people who are unbanked, underbanked, in financial difficulty, with difficulties in
accessing credit who, through the Group's products and services, are able to access the financial
system or receive tailored finance. Financially underserved groups are defined as people who do not
have a current account, or who have an account but obtained alternative (non-bank) financial
services in the last 12 months. Beneficiaries of various programmes are included in the
quantification process only once in the entire period. Only new empowered people are counted,
taking as a base year those existing since 2019
First 2024 Buyback
First buyback programme carried out within the 2024 shareholder remuneration policy
Programme
FL CET1
Fully-Loaded Common Equity Tier 1
FRTB
Fundamental review of the trading book
FSB
Financial Stability Board
FX
Foreign exchange
G-SIB
Global systemically important bank
GAR
Green asset ratio
GB
Global Banking
GBP
Sterling pound
GCC
General Code of Conduct
GDF
Global Debt Financing
GDP
Gross Domestic Product
GDPR
General Data Protection Regulation
Gender pay gap
The gender pay gap measures differences in remuneration between women and men in an
organization, business, industry or the broader economy, irrespective of the type of work
GFANZ
Glasgow Financial Alliance for Net Zero
GHG
Greenhouse gases
GM
Global Markets
GPG
Gender pay gap. It measures differences in remuneration between women and men in an
organization, business, industry or the broader economy, irrespective of the type of work
GSGM
Group-Subsidiary governance model
GTB
Global Transaction Banking
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Economic and
Risk management
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statement
governance
financial review
and compliance
GW
Gigawat
GWh
Gigawatt per hour
HQLA
High-quality liquid assets
ICAAP
Internal capital adequacy assessment process
ICAC
Instituto de Contabilidad y Auditoría de Cuentas (Institute of accounting and auditing)
ICE
Internal combustion engines
ICFR
Internal control over financial reporting
ICMA
International Capital Markets Association
ICO
Instituto Oficial de Crédito (Spanish public credit institution)
ICS
Internal control system
ICT
Information and communication technology
Identified staff
Other executives whose activities may have a significant impact on the Group's risk profile
IEA
International Energy Agency
IFC
International Finance Corporation
IFRS
International Financial Reporting Standards
ILAAP
Internal liquidity adequacy assessment process
IMF
International Monetary Fund
IRB
Internal ratings-based
IRC
Incremental risk charge
IROs
Impacts, risks and opportunities
IRPJ
Imposto sobre a Renda das Pessoas Jurídicas (Corporate Income Tax)
IRRBB
Interest rate risk in the banking book
ISO
International Organization for Standardization
IT
Information technology
JPY
Japanese yen
KPI
Key performance indicators
LCR
Liquidity coverage ratio
LDA
Loss distribution approach
Ley de Sociedades de Capital Ley de Sociedades de Capital. Spanish Companies Act, approved by Legislative Royal Decree 1/2010,
on 2 July
LGD
Loss given default
LTD
Loan to deposit ratio. Ratio of loans and advances to customers over customer deposits
LTV
Loan to value ratio. Ratio of loans and advances to customers to the value of the asset used as
collateral
LUC
Land use change
M&A
Mergers and acquisitions
M/LT
Medium-and long-term
MDR
Minimum disclosure requirement
MiFID
Markets in Financial Instruments Directive
mn
Million
MREL
Minimum requirements for own funds and eligible liabilities which are required under the BRRD
MSS
Minimum social safeguards
Mt
Metric tone
MWh
Megawatt per hour
NACE
Nomenclature of Economic Activities of the European Union
NCF
Non-financial corporate
NFR
Non-financial risk
NFRD
Non-Financial Reporting Directive
NGFS
Network for greening the financial system
NGO
Non-governmental organization
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Corporate
Economic and
Risk management
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statement
governance
financial review
and compliance
NGO TMT
Non-governmental organization Trygg Mat Tracking
NII
Net interest income
NPL
Non-performing loans
NPS
Net promoter score
NSFR
Net stable funding ratio
NYSE
New York Stock Exchange
NZAM
Net Zero Asset Managers initiative
NZBA
Net Zero Banking Alliance
ODS
Open digital services
OECD
Organization for Economic Cooperation and Development
OEM
Original equipment manufacturer
OTC
Over-the-counter
P&L
Profit and loss statement
P2R
Pillar 2 requirement
Payments
PagoNxt (Getnet, Ebury and PagoNxt Payments) and Cards (cards platform and card business in the
countries where we operate). Payments is a primary business segment
PBT
Profit before taxes
PCAF
Partnership for Carbon Accounting Financials
PCAOB
Public Company Accounting Oversight Board
PD
Probability of default
PHEV
plug-in hybrid electric vehicle
PIS
Programa de Integraçao Social (Social Integration Programme)
PLA
Polylactic acid
POCI
Purchased or originated credit impaired
pp
Percentage point
PVC
Polyvinyl Chloride
RAS
Risk appetite statement
RBSCC
Responsible banking, sustainability and culture committee
RCP
Representative concentration pathway
RCSA
Risk control self-assessment
Repos
Repurchase agreements
Retail
Retail & Commercial (primary business segment)
RoA
Return on assets
RoE
Return on equity
RoRWA
Return (net of tax) on risk weighted assets for a particular business
RoTE
Return on tangible equity
RoTE post-AT1
Return on tangible equity: Group attributable profit – cost of AT1s / average of: net equity (excluding
minority interests) – intangible assets (including goodwill)
RPA
Risk profile assessment
RPK
Revenue passenger kilometers
RWA
Risk-weighted assets
SAM
Santander Asset Management
SASB
Sustainability Accounting Standards Board
SBNA
Santander Bank N.A.
SBTi
Science Based Targets initiative
SC USA
Santander Consumer US
SCF
Santander Consumer Finance
SDG
Sustainable development goals
SEC
Securities and Exchange Commission
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Sustainability
Corporate
Economic and
Risk management
and strategy
statement
governance
financial review
and compliance
Second 2024 Buyback
Second share buyback programme charged against 2024 results
Programme
SFDR
Sustainable Finance Disclosure Regulation
SFICS
Sustainable finance and investment classification system
SHUSA
Santander Holding USA, Inc
SME
Small and medium enterprises
SN
Sustainability note
SOx
Sarbanes-Oxley Act of 2002
Spanish Corporate
CNMV's Good Governance Code for Listed Companies
Governance Code
Spanish Securities Markets
Act 6/2023, of 17 March, on the Securities Markets and on Investment Services
Act
SPF
Simple, Personal and Fair
SRB
European Single Resolution Board
SREP
Supervisory review and evaluation process
SRI
Socially responsible investment
SRT
Significant risk transfer
SSM
Single Supervisory Mechanism. The system of banking supervision in Europe. It is composed of the
ECB and the competent supervisory authorities of the participating EU countries
STEM
Science, Technology, Engineering, Mathematics
sVaR
Stressed value at risk
SyRB
Systemic risk buffer
T&O
Technology & operations
TCFD
Task Force on Climate-related Financial Disclosures
tCS
Tonne of crude steel
TJ
Terajoule
TLAC
Total loss-absorbing capacity requirement which is required to be met under the CRD V package
TLTRO
Targeted longer-term refinancing operations
TMT
Technology, media and telecom
TNAV
Tangible net asset value
TNFD
Taskforce on Nature-related Financial Disclosure
TPV
Total payments volume
TSR
Total shareholder return
UK
United Kingdom
UN
United Nations
UNEP FI
United Nations Environmental Programme Finance Initiative
UNGP
United Nations Guiding Principles
UoP
Use of Proceeds
US
United States of America
USD
United States dollar
VaE
Value at earnings
VaR
Value at risk
VAT
Value added tax
vkm
Vehicle-kilometer
Wealth
Wealth Management & Insurance (primary business segment)
YoY
Year-on-Year
Annual report 2024
559
Auditor's
report
Consolidated
financial statements
Notes to the consolidated
financial statements
Appendix
Contents
AUDITOR'S REPORT
AND FINANCIAL STATEMENTS
Annual report 2024
560
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Auditor's report
562
Consolidated financial statements
512
Consolidated balance sheets as of 31 December
2024, 2023 and 2022
513
Consolidated income statements for the years
ended 31 December 2024, 2023 and 2022
517
Consolidated statements of recognised income and expense
for the years ended 31 December
2024, 2023 and 2022
519
Consolidated statements of changes in total equity for the
years ended 31 December 2024, 2023 and 2022
520
Consolidated statements of cash flows for the years
ended 31 December 2024, 2023 and 2022
526
Notes to the consolidated financial statements
588
1. Introduction, basis of presentation of the
consolidated financial statements (consolidated
annual accounts) and other information
589
2. Accounting policies
594
3. Grupo Santander
620
4. Distribution of Banco Santander’s profit, shareholder
remuneration scheme and earnings per share
624
5. Remuneration and other benefits paid to the Bank’s
directors and senior managers
626
6. Loans and advances to central banks and credit
institutions
639
7. Debt securities
640
8. Equity instruments
642
9. Trading derivatives (assets and liabilities)
and short positions
643
10. Loans and advances to customers
643
11. Trading derivatives
649
12. Non-current assets
649
13. Investments
649
14. Insurance contracts linked to pensions
651
15. Liabilities under insurance contracts
652
16. Tangible assets
653
17. Intangible assets - Goodwill
656
18. Intangible assets - Other intangible assets
659
19. Other assets
660
20. Deposits from central banks and credit institutions
661
21. Customer deposits
661
22. Marketable debt securities
662
23. Subordinated liabilities
665
24. Other financial liabilities
669
25. Provisions
670
26. Other liabilities
687
27. Tax matters
688
28. Non-controlling interests
695
29. Other comprehensive income
696
30. Shareholders' equity
702
31. Issued capital
702
32. Share premium
704
33. Accumulated retained earnings
704
34. Other equity instruments and own shares
705
35. Memorandum items
706
36. Hedging derivatives
706
37. Discontinued operations
731
38. Interest income
731
39. Interest expense
731
40. Dividend income
732
41. Commission income
732
42. Commission expense
732
43. Gains or losses on financial assets and liabilities
732
44. Exchange differences, net
733
45. Other operating income and expenses
734
46. Staff costs
734
47. Other general administrative expenses
740
48. Gains or losses on non financial assets, net
742
49. Gains or losses on non-current assets held for
sale not classified as discontinued operations
742
50. Fair value of financial instruments
742
51. Other disclosures
759
52. Primary and secondary segments reporting
772
53. Related parties
785
54. Risk management
788
55. Explanation added for translation to English
823
Appendix
824
Appendix I. Subsidiaries of Banco Santander, S.A.
825
Appendix II. Societies of which the Group owns more
than 5%, entities associated with Grupo Santander
and jointly controlled entities
848
Appendix III. Issuing subsidiaries of shares and
preference shares
855
Appendix IV. Notifications of acquisitions and
disposals of investments in 2024
856
Appendix V. Other information on the Group’s banks
857
Appendix VI. Annual banking report
864
Annual report 2024
561
Auditor's
report
Consolidated
financial statements
Notes to the consolidated
financial statements
Appendix
Contents
AUDITOR'S REPORT
Annual report 2024
562
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
Annual report 2024
563
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
Annual report 2024
564
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
Annual report 2024
565
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
Annual report 2024
566
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
Annual report 2024
567
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
Annual report 2024
568
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
Annual report 2024
569
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
Annual report 2024
570
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
Annual report 2024
571
Auditor's
report
Notes to the consolidated
financial statements
Appendix
Contents
CONSOLIDATED
FINANCIAL
STATEMENTS
Annual report 2024
572
Consolidat ed
financial statements
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
Translation of the consolidated annual accounts originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Group in Spain (see Notes 1
and 55). In the event of a discrepancy, the Spanish- version prevails.
Grupo Santander
CONSOLIDATED BALANCE SHEETS AS OF 31 DECEMBER 2024, 2023 AND 2022
EUR million
ASSETS
Note
2024
2023
A
2022
A
CASH, CASH BALANCES AT CENTRAL BANKS AND OTHER DEPOSITS ON DEMAND
192,208
220,342
223,073
FINANCIAL ASSETS HELD FOR TRADING
230,253
176,921
156,118
Derivatives
9 and 11
64,100
56,328
67,002
Equity instruments
8
16,636
15,057
10,066
Debt securities
7
82,646
62,124
41,403
Loans and advances
66,871
43,412
37,647
Central banks
6
12,966
17,717
11,595
Credit institutions
6
27,314
14,061
16,502
Customers
10
26,591
11,634
9,550
NON-TRADING FINANCIAL ASSETS MANDATORILY AT
FAIR VALUE THROUGH PROFIT OR LOSS
6,130
5,910
5,713
Equity instruments
8
4,641
4,068
3,711
Debt securities
7
447
860
1,134
Loans and advances
1,042
982
868
Central banks
6
—
—
—
Credit institutions
6
—
—
—
Customers
10
1,042
982
868
FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
7,915
9,773
8,989
Debt securities
7
2,897
3,095
2,542
Loans and advances
5,018
6,678
6,447
Central banks
6
—
—
—
Credit institutions
6
408
459
673
Customers
10
4,610
6,219
5,774
FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
89,898
83,308
85,239
Equity instruments
8
2,193
1,761
1,941
Debt securities
7
76,558
73,565
75,083
Loans and advances
11,147
7,982
8,215
Central banks
6
—
—
—
Credit institutions
6
363
313
—
Customers
10
10,784
7,669
8,215
FINANCIAL ASSETS AT AMORTIZED COST
1,203,707
1,191,403
1,147,044
Debt securities
7
120,949
103,559
73,554
Loans and advances
1,082,758
1,087,844
1,073,490
Central banks
6
16,179
20,082
15,375
Credit institutions
6
55,537
57,917
46,518
Customers
10
1,011,042
1,009,845
1,011,597
HEDGING DERIVATIVES
36
5,672
5,297
8,069
CHANGES IN THE FAIR VALUE OF HEDGED ITEMS IN
PORTFOLIO HEDGES OF INTEREST RATE RISK
36
(704)
(788)
(3,749)
Annual report 2024
573
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
CONSOLIDATED BALANCE SHEETS AS OF 31 DECEMBER 2024, 2023 AND 2022
EUR million
ASSETS
Note
2024
2023
A
2022
A
INVESTMENTS
13
7,277
7,646
7,615
Joint venture entities
2,061
1,964
1,981
Associated entities
5,216
5,682
5,634
ASSETS UNDER REINSURANCE CONTRACTS
222
237
308
TANGIBLE ASSETS
32,087
33,882
34,073
Property, plant and equipment
16
31,212
32,926
33,044
For own-use
12,636
13,408
13,489
Leased out under an operating lease
18,576
19,518
19,555
Investment properties
16
875
956
1,029
Of which leased out under an operating lease
749
851
804
INTANGIBLE ASSETS
19,259
19,871
18,645
Goodwill
17
13,438
14,017
13,741
Other intangible assets
18
5,821
5,854
4,904
TAX ASSETS
30,596
31,390
29,987
Current tax assets
11,426
10,623
9,200
Deferred tax assets
27
19,170
20,767
20,787
OTHER ASSETS
8,559
8,856
10,082
Insurance contracts linked to pensions
14
81
93
104
Inventories
6
7
11
Other
19
8,472
8,756
9,967
NON-CURRENT ASSETS HELD FOR SALE
12
4,002
3,014
3,453
TOTAL ASSETS
1,837,081
1,797,062
1,734,659
A. Presented for comparison purposes only (note 1.d).
The accompanying notes 1 to 55 and appendices are an integral part of the consolidated balance sheet as of 31 December 2024.
Annual report 2024
574
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
CONSOLIDATED BALANCE SHEETS AS OF 31 DECEMBER 2024, 2023 AND 2022
EUR million
LIABILITIES
Note
2024
2023
A
2022
A
FINANCIAL LIABILITIES HELD FOR TRADING
152,151
122,270
115,185
Derivatives
9 and 11
57,753
50,589
64,891
Short positions
9
35,830
26,174
22,515
Deposits
58,568
45,507
27,779
Central banks
20
13,300
7,808
5,757
Credit institutions
20
26,284
17,862
9,796
Customers
21
18,984
19,837
12,226
Marketable debt securities
22
—
—
—
Other financial liabilities
24
—
—
—
FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
36,360
40,367
40,268
Deposits
28,806
34,996
34,841
Central banks
20
1,774
1,209
1,740
Credit institutions
20
1,625
1,735
1,958
Customers
21
25,407
32,052
31,143
Marketable debt securities
22
7,554
5,371
5,427
Other financial liabilities
24
—
—
—
Memorandum items: subordinated liabilities
23
—
—
—
FINANCIAL LIABILITIES AT AMORTIZED COST
1,484,322
1,468,703
1,423,858
Deposits
1,126,439
1,125,308
1,111,887
Central banks
20
24,882
48,782
76,952
Credit institutions
20
90,012
81,246
68,582
Customers
21
1,011,545
995,280
966,353
Marketable debt securities
22
317,967
303,208
274,912
Other financial liabilities
24
39,916
40,187
37,059
Memorandum items: subordinated liabilities
23
35,813
30,912
25,926
HEDGING DERIVATIVES
36
4,752
7,656
9,228
CHANGES IN THE FAIR VALUE OF HEDGED ITEMS IN
PORTFOLIO HEDGES OF INTEREST RATE RISK
36
(9)
55
(117)
LIABILITIES UNDER INSURANCE CONTRACTS
15
17,829
17,799
16,426
PROVISIONS
25
8,407
8,441
8,149
Pensions and other post-retirement obligations
1,731
2,225
2,392
Other long term employee benefits
915
880
950
Taxes and other legal contingencies
2,717
2,715
2,074
Contingent liabilities and commitments
710
702
734
Other provisions
2,334
1,919
1,999
TAX LIABILITIES
9,598
9,932
9,468
Current tax liabilities
3,322
3,846
3,040
Deferred tax liabilities
27
6,276
6,086
6,428
OTHER LIABILITIES
26
16,344
17,598
14,609
LIABILITIES ASSOCIATED WITH NON-CURRENT ASSETS HELD FOR SALE
—
—
—
TOTAL LIABILITIES
1,729,754
1,692,821
1,637,074
Annual report 2024
575
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
CONSOLIDATED BALANCE SHEETS AS OF 31 DECEMBER 2024, 2023 AND 2022
EUR million
EQUITY
Note
2024
2023
A
2022
A
SHAREHOLDERS´ EQUITY
30
135,196
130,443
124,732
CAPITAL
31
7,576
8,092
8,397
Called up paid capital
7,576
8,092
8,397
Unpaid capital which has been called up
—
—
—
SHARE PREMIUM
32
40,079
44,373
46,273
EQUITY INSTRUMENTS ISSUED OTHER THAN CAPITAL
34
—
720
688
Equity component of the compound financial instrument
—
—
—
Other equity instruments issued
—
720
688
OTHER EQUITY
34
217
195
175
ACCUMULATED RETAINED EARNINGS
33
82,326
74,114
66,702
REVALUATION RESERVES
33
—
—
—
OTHER RESERVES
33
(5,976)
(5,751)
(5,454)
Reserves or accumulated losses in joint venture investments
1,831
1,762
1,553
Others
(7,807)
(7,513)
(7,007)
(-) OWN SHARES
34
(68)
(1,078)
(675)
PROFIT OR LOSS ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT
12,574
11,076
9,605
(-) INTERIM DIVIDENDS
4
(1,532)
(1,298)
(979)
OTHER COMPREHENSIVE INCOME OR LOSS
29
(36,595)
(35,020)
(35,628)
Items that will not be reclassified to profit or loss
(4,757)
(5,212)
(4,635)
Items that may be reclassified to profit or loss
(31,838)
(29,808)
(30,993)
NON-CONTROLLING INTEREST
28
8,726
8,818
8,481
Other comprehensive income or loss
(2,020)
(1,559)
(1,856)
Other items
10,746
10,377
10,337
TOTAL EQUITY
107,327
104,241
97,585
TOTAL LIABILITIES AND EQUITY
1,837,081
1,797,062
1,734,659
MEMORANDUM ITEMS: OFF BALANCE SHEET AMOUNTS
35
Loan commitments granted
302,861
279,589
274,075
Financial guarantees granted
16,901
15,435
12,856
Other commitments granted
134,493
113,273
92,672
A. Presented for comparison purposes only (note 1.d).
The accompanying notes 1 to 55 and appendices are an integral part of the consolidated balance sheet as of 31 December 2024.
Annual report 2024
576
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
CONSOLIDATED INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2024, 2023 AND 2022
EUR million
(Debit) Credit
Note
2024
2023
A
2022
A
Interest income
38
112,735
105,252
71,430
Financial assets at fair value through other comprehensive income
7,324
5,995
5,479
Financial assets at amortized cost
84,309
77,701
59,214
Other interest income
21,102
21,556
6,737
Interest expense
39
(66,067)
(61,991)
(32,811)
Interest income/(charges)
46,668
43,261
38,619
Dividend income
40
714
571
488
Income from companies accounted for using the equity method
13
711
613
702
Commission income
41
17,602
16,321
15,867
Commission expense
42
(4,592)
(4,264)
(4,077)
Gain or losses on financial assets and liabilities not measured
at fair value through profit or loss, net
43
(114)
96
149
Financial assets at amortized cost
(190)
(3)
34
Other financial assets and liabilities
76
99
115
Gain or losses on financial assets and liabilities held for trading, net
43
1,459
2,322
842
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
842
Gains or losses on non-trading financial assets and liabilities mandatorily
at fair value through profit or loss
43
495
204
162
Reclassification of financial assets at fair value through other comprehensive income
—
—
—
Reclassification of financial assets at amortized cost
—
—
—
Other gains (losses)
495
204
162
Gain or losses on financial assets and liabilities measured
at fair value through profit or loss, net
43
691
(93)
968
Gain or losses from hedge accounting, net
43
16
63
74
Exchange differences, net
44
(274)
41
(542)
Other operating income
B
45
803
1,104
1,510
Other operating expenses
45
(2,324)
(2,827)
(2,803)
Income from insurance and reinsurance contracts
470
460
2,698
Expenses from insurance and reinsurance contracts
(449)
(449)
(2,540)
Annual report 2024
577
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
CONSOLIDATED INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2024, 2023 AND 2022
EUR million
(Debit) Credit
Note
2024
2023
A
2022
A
Total income
61,876
57,423
52,117
Administrative expenses
(22,740)
(22,241)
(20,918)
Staff costs
46
(14,328)
(13,726)
(12,547)
Other general administrative expenses
47
(8,412)
(8,515)
(8,371)
Depreciation and amortisation cost
16 and 18
(3,294)
(3,184)
(2,985)
Provisions or reversal of provisions, net
25
(3,883)
(2,678)
(1,881)
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)
(10,863)
Financial assets at fair value through other comprehensive income
—
(44)
(7)
Financial assets at amortized cost
10
(12,644)
(12,912)
(10,856)
Impairment or reversal of impairment of investments in
subsidiaries, joint ventures and associates, net
17 and 18
—
—
—
Impairment or reversal of impairment on non-financial assets, net
(628)
(237)
(239)
Tangible assets
16
(386)
(136)
(140)
Intangible assets
17 and 18
(231)
(73)
(75)
Others
(11)
(28)
(24)
Gain or losses on non-financial assets and investments, net
48
367
313
12
Negative goodwill recognized in results
—
39
—
Gains or losses on non-current assets held for sale
not classified as discontinued operations
49
(27)
(20)
7
Operating profit/(loss) before tax
19,027
16,459
15,250
Tax expense or income from continuing operations
27
(5,283)
(4,276)
(4,486)
Profit/(loss) from continuing operations
13,744
12,183
10,764
Profit/(loss) after tax from discontinued operations
37
—
—
—
Profit/(loss) for the year
13,744
12,183
10,764
Profit/(loss) attributable to non-controlling interests
28
1,170
1,107
1,159
Profit/(loss) attributable to the parent
12,574
11,076
9,605
Earnings/(losses) per share
Basic
4
0.771
0.654
0.539
Diluted
4
0.768
0.651
0.537
A. Presented for comparison purposes only (note 1.d).
The accompanying notes 1 to 55 and appendices are an integral part of the consolidated income statement for the year ended 31 December 2024.
B. Includes EUR -1,225 million at 31 December 2024 (EUR -1,016 and EUR -674 at 31 December 2023 and 2022, respectively) derived from the net loss generated in
Argentina as a result of the application of IAS 29 Financial reporting in hyperinflationary economies.
Annual report 2024
578
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
CONSOLIDATED STATEMENTS OF RECOGNISED INCOME AND EXPENSE
FOR THE YEARS ENDED 31 DECEMBER 2024, 2023 AND 2022
EUR million
Note
2024
2023
A
2022
A
CONSOLIDATED PROFIT/(LOSS) FOR THE YEAR
13,744
12,183
10,764
OTHER RECOGNISED INCOME AND EXPENSE
(2,339)
614
(2,660)
Items that will not be reclassified to profit or loss
29
219
(964)
(399)
Actuarial gains and losses on defined benefit pension plans
(584)
(1,038)
(56)
Non-current assets held for sale
—
—
—
Other recognised income and expense of investments in
subsidiaries, joint ventures and associates
(3)
(5)
17
Changes in the fair value of equity instruments measured at fair value through other
comprehensive income
447
(162)
(497)
Gains or losses resulting from the accounting for hedges of equity instruments measured at
fair value through other comprehensive income, net
36
—
—
—
Changes in the fair value of equity instruments measured at fair value through other
comprehensive income (hedged item)
20
(29)
18
Changes in the fair value of equity instruments measured at fair value through other
comprehensive income (hedging instrument)
(20)
29
(18)
Changes in the fair value of financial liabilities at fair value through profit or loss
attributable to changes in credit risk
277
(120)
88
Income tax relating to items that will not be reclassified
82
361
49
Items that may be reclassified to profit or loss
29
(2,558)
1,578
(2,261)
Hedges of net investments in foreign operations (effective portion)
36
420
(1,888)
(2,467)
Revaluation gains (losses)
420
(1,888)
(2,467)
Amounts transferred to income statement
—
—
—
Other reclassifications
—
—
—
Exchanges differences
(3,047)
1,017
3,658
Revaluation gains (losses)
(3,047)
1,009
3,658
Amounts transferred to income statement
—
8
—
Other reclassifications
—
—
—
Cash flow hedges (effective portion)
36
558
2,592
(3,016)
Revaluation gains (losses)
(698)
(30)
(1,762)
Amounts transferred to income statement
1,256
2,622
(1,254)
Transferred to initial carrying amount of hedged items
—
—
—
Other reclassifications
—
—
—
Hedging instruments (items not designated)
36
—
—
—
Revaluation gains (losses)
—
—
—
Amounts transferred to income statement
—
—
—
Other reclassifications
—
—
—
Debt instruments at fair value with changes in other comprehensive income
(493)
858
(2,086)
Revaluation gains (losses)
29
(447)
852
(2,591)
Amounts transferred to income statement
(46)
6
(99)
Other reclassifications
—
—
604
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
85
Income tax relating to items that may be reclassified to profit or loss
112
(1,020)
1,565
Total recognised income and expenses for the year
11,405
12,797
8,104
Attributable to non-controlling interests
709
1,401
1,410
Attributable to the parent
10,696
11,396
6,694
A. Presented for comparison purposes only (note 1.d).
The accompanying notes 1 to 55 and appendices are an integral part of the consolidated statement of recognised income and expense for the year ended 31 December
2024.
Annual report 2024
579
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL EQUITY FOR THE YEARS ENDED 31 DECEMBER 2024, 2023 AND 2022
EUR million
Equity
instruments
Accumulated
Capital
Share
premium
issued (not
capital)
Other equity
instruments
retained
earnings
Balance at 31 December 2023
A
8,092
44,373
720
195
74,114
Adjustments due to errors
—
—
—
—
—
Adjustments due to changes in accounting policies
—
—
—
—
—
Opening balance at 1 January 2024A
8,092
44,373
720
195
74,114
Total recognised income and expense
—
—
—
—
—
Other changes in equity
(516)
(4,294)
(720)
22
8,212
Issuance of ordinary shares
—
—
—
—
—
Issuance of preferred shares
—
—
—
—
—
Issuance of other financial instruments
—
—
—
—
—
Maturity of other financial instruments
—
—
(751)
—
—
Conversion of financial liabilities into equity
—
—
—
—
—
Capital reduction
(516)
(4,294)
—
—
—
Dividends
—
—
—
—
(1,485)
Purchase of equity instruments
—
—
—
—
—
Disposal of equity instruments
—
—
—
—
—
Transfer from equity to liabilities
—
—
—
—
—
Transfer from liabilities to equity
—
—
—
—
—
Transfers between equity items
—
—
—
—
9,697
Increases (decreases) due to business combinations
—
—
—
—
—
Share-based payment
—
—
—
(62)
—
Others increases or (-) decreases in equity
—
—
31
84
—
Balance at 31 December 2024
7,576
40,079
—
217
82,326
A. Presented for comparison purposes only (note 1.d).
The accompanying notes 1 to 55 and appendices are an integral part of the consolidated statement of changes in total equity for the year ended 31 December 2024.
Annual report 2024
580
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
Revaluation
reserves
—
—
Other
reserves
(5,751)
—
Profit
attributable to
(-) Own
shareholders
shares
of the parent
(1,078)
11,076
—
—
(-) Interim
dividends
(1,298)
—
Other
comprehensive
income
(35,020)
—
Non-controlling interest
Other
comprehensive
income
Other items
(1,559)
10,377
—
—
Total
104,241
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(5,751)
—
(225)
—
(1,078)
—
1,010
—
11,076
12,574
(11,076)
—
(1,298)
—
(234)
—
(35,020)
(1,878)
303
—
(1,559)
(461)
—
—
10,377
1,170
(801)
—
104,241
11,405
(8,319)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(590)
—
(1,341)
—
—
—
—
—
516
—
—
8
4,294
—
(4,038)
754
—
—
—
—
—
(1,532)
—
—
—
—
—
—
—
—
—
—
(93)
(660)
—
—
(93)
(3,677)
(4,038)
762
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(215)
—
—
(534)
(5,976)
—
—
—
—
(68)
(11,076)
—
—
—
12,574
1,298
—
—
—
(1,532)
303
—
—
—
(36,595)
—
—
—
—
(2,020)
(7)
(8)
—
557
10,746
—
(8)
(62)
138
107,327
Annual report 2024
581
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL EQUITY FOR THE YEARS ENDED 31 DECEMBER 2024, 2023 AND 2022
EUR million
Equity
instruments
Accumulated
Capital
Share
premium
issued (not
capital)
Other equity
instruments
retained
earnings
Balance at 31 December 2022
A
8,397
46,273
688
175
66,702
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
Total recognised income and expense
—
—
—
—
—
Other changes in equity
(305)
(1,900)
32
20
7,412
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)
—
—
—
Dividends
—
—
—
—
(963)
Purchase of equity instruments
—
—
—
—
—
Disposal of equity instruments
—
—
—
—
—
Transfer from equity to liabilities
—
—
—
—
—
Transfer from liabilities to equity
—
—
—
—
—
Transfers between equity items
—
—
—
—
8,375
Increases (decreases) due to business combinations
—
—
—
—
—
Share-based payment
—
—
—
(60)
—
Others increases or (-) decreases in equity
—
—
32
80
—
Balance at 31 December 2023
A
8,092
44,373
720
195
74,114
A. Presented for comparison purposes only (note 1.d).
The accompanying notes 1 to 55 and appendices are an integral part of the consolidated statement of changes in total equity for the year ended 31 December 2024.
Annual report 2024
582
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
Revaluation
reserves
—
—
Other
reserves
(5,454)
—
Profit
attributable to
(-) Own
shareholders
shares
of the parent
(675)
9,605
—
—
(-) Interim
dividends
(979)
—
Other
comprehensive
income
(35,628)
—
Non-controlling interest
Other
comprehensive
income
Other items
(1,856)
10,337
—
—
Total
97,585
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(5,454)
—
(297)
—
(675)
—
(403)
—
9,605
11,076
(9,605)
—
(979)
—
(319)
—
(35,628)
320
288
—
(1,856)
294
3
—
10,337
1,107
(1,067)
1
97,585
12,797
(6,141)
1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
305
—
—
13
1,900
—
(3,109)
806
—
—
—
—
—
(1,298)
—
—
—
—
—
—
—
—
—
—
—
(748)
—
—
—
(3,009)
(3,109)
819
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(37)
—
—
(578)
(5,751)
—
—
—
—
(1,078)
(9,605)
—
—
—
11,076
979
—
—
—
(1,298)
288
—
—
—
(35,020)
3
—
—
—
(1,559)
(3)
(364)
—
47
10,377
—
(364)
(60)
(419)
104,241
Annual report 2024
583
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL EQUITY FOR THE YEARS ENDED 31 DECEMBER 2024, 2023 AND 2022
EUR million
Equity
instruments
Accumulated
Capital
Share
premium
issued (not
capital)
Other equity
instruments
retained
earnings
Balance at 31 December 2021A
8,670
47,979
658
152
60,273
Adjustments due to errors
—
—
—
—
—
Adjustments due to changes in accounting policies
—
—
—
—
—
Opening balance at 1 January 2022A
8,670
47,979
658
152
60,273
Total recognised income and expense
—
—
—
—
—
Other changes in equity
(273)
(1,706)
30
23
6,429
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
(273)
(1,706)
—
—
—
Dividends
—
—
—
—
(869)
Purchase of equity instruments
—
—
—
—
—
Disposal of equity instruments
—
—
—
—
—
Transfer from equity to liabilities
—
—
—
—
—
Transfer from liabilities to equity
—
—
—
—
—
Transfers between equity items
—
—
—
—
7,298
Increases (decreases) due to business combinations
—
—
—
—
—
Share-based payment
—
—
—
(49)
—
Others increases or (-) decreases in equity
—
—
30
72
—
A
Balance at 31 December 2022
8,397
46,273
688
175
66,702
A. Presented for comparison purposes only (note 1.d).
The accompanying notes 1 to 55 and appendices are an integral part of the consolidated statement of changes in total equity for the year ended 31 December 2024.
Annual report 2024
584
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
Revaluation
reserves
—
—
Other
reserves
(4,477)
—
Profit
attributable to
(-) Own
shareholders
shares
of the parent
(894)
8,124
—
—
(-) Interim
dividends
(836)
—
Other
comprehensive
income
(32,719)
—
Non-controlling interest
Other
comprehensive
income
Other items
(2,104)
12,227
—
—
Total
97,053
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(4,477)
—
(977)
—
(894)
—
219
—
8,124
9,605
(8,124)
—
(836)
—
(143)
—
(32,719)
(2,911)
2
—
(2,104)
251
(3)
—
12,227
1,159
(3,049)
9
97,053
8,104
(7,572)
9
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(756)
(756)
—
—
—
—
—
—
—
—
—
—
—
—
—
273
—
—
7
1,706
—
(2,050)
563
—
—
—
—
—
(979)
—
—
—
—
—
—
—
—
—
—
—
(500)
—
—
—
(2,348)
(2,050)
570
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(12)
—
—
—
(8,124)
—
836
—
2
—
(3)
—
3
31
—
31
—
—
—
—
(1,245)
(5,454)
—
—
(675)
—
—
9,605
—
—
(979)
—
—
(35,628)
—
—
(1,856)
—
(1,836)
10,337
(49)
(2,979)
97,585
Annual report 2024
585
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED 2024, 2023 AND 2022
EUR million
Note
2024
2023
A
2022
A
A. CASH FLOWS FROM OPERATING ACTIVITIES
(24,155)
5,015
27,706
Profit or loss for the year
13,744
12,183
10,764
Adjustments made to obtain the cash flows from operating activities
28,361
26,948
23,970
Depreciation and amortisation cost
3,294
3,184
2,985
Other adjustments
25,067
23,764
20,985
Net increase/(decrease) in operating assets
117,996
74,982
108,774
Financial assets held-for-trading
62,460
18,332
30,837
Non-trading financial assets mandatorily at fair value through profit or loss
31
286
218
Financial assets at fair value through profit or loss
(1,850)
874
(7,083)
Financial assets at fair value through other comprehensive income
10,225
(4,470)
(22,358)
Financial assets at amortized cost
45,995
60,525
105,618
Other operating assets
1,135
(565)
1,542
Net increase/(decrease) in operating liabilities
57,616
46,080
107,244
Financial liabilities held-for-trading
34,256
5,450
29,533
Financial liabilities designated at fair value through profit or loss
(3,854)
(11)
27,705
Financial liabilities at amortized cost
34,164
40,138
55,595
Other operating liabilities
(6,950)
503
(5,589)
Income tax recovered/(paid)
(5,880)
(5,214)
(5,498)
B. CASH FLOWS FROM INVESTING ACTIVITIES
(3,712)
(5,366)
(3,898)
Payments
11,355
15,056
11,776
Tangible assets
16
8,494
11,446
9,066
Intangible assets
18
2,104
2,197
1,774
Investments
13
686
139
152
Subsidiaries and other business units
71
1,274
784
Non-current assets held for sale and associated liabilities
—
—
—
Other payments related to investing activities
—
—
—
Proceeds
7,643
9,690
7,878
Tangible assets
16
5,966
7,074
5,558
Intangible assets
18
—
—
—
Investments
13
681
814
533
Subsidiaries and other business units
8
885
734
Non-current assets held for sale and associated liabilities
12
988
917
1,053
Other proceeds related to investing activities
—
—
—
C. CASH FLOW FROM FINANCING ACTIVITIES
(5,510)
(2,058)
(9,964)
Payments
14,045
10,187
10,665
Dividends
4
3,017
2,261
1,848
Subordinated liabilities
23
4,096
2,931
2,291
Redemption of own equity instruments
751
—
—
Acquisition of own equity instruments
4,038
3,109
2,050
Other payments related to financing activities
2,143
1,886
4,476
Proceeds
8,535
8,129
701
Subordinated liabilities
23
7,001
7,007
119
Issuance of own equity instruments
—
—
—
Disposal of own equity instruments
765
825
573
Other proceeds related to financing activities
769
297
9
Annual report 2024
586
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED 2024, 2023 AND 2022
EUR million
Note
2024
2023
A
2022
A
D. EFFECT OF FOREIGN EXCHANGE RATE DIFFERENCES
5,243
(322)
(1,460)
E. NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
B
(28,134)
(2,731)
12,384
F. CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR
220,342
223,073
210,689
G. CASH AND CASH EQUIVALENTS AT END OF THE YEAR
192,208
220,342
223,073
COMPONENTS OF CASH AND CASH EQUIVALENTS AT END OF THE YEAR
Cash
9,253
8,621
8,929
Cash equivalents at central banks
170,914
199,932
200,830
Other financial assets
12,041
11,789
13,314
Less, bank overdrafts refundable on demand
—
—
—
TOTAL CASH AND CASH EQUIVALENTS AT END OF THE YEAR
192,208
220,342
223,073
In which, restricted cash
—
—
—
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 54, Liquidity Risk section).
The accompanying notes 1 to 55 and appendices are an integral part of the consolidated statement of cash flows for the year ended 31 December 2024.
Annual report 2024
587
Auditor's
report
Consolidated
financial statements
Appendix
Contents
NOTES TO THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Annual report 2024
588
Notes to the consolidat ed
financial statements
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Banco Santander, S.A., and Companies
composing Grupo Santander
Notes to the consolidated financial statements (consolidated
annual accounts) for the year ended 31 December 2024.
1. Introduction, basis of presentation
of the consolidated financial
statements (consolidated annual
accounts) and other information
a) Introduction
Banco Santander, S.A. ('the parent' 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 ('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.
At 31 December 2024, Grupo Santander consisted of 735
subsidiaries of Banco Santander, S.A. In addition, other 205
companies are associates of the Group, joint ventures or
companies of which the Group holds more than 5% (excluding the
Group companies of negligible interest with respect to the fair
presentation that the annual accounts must express).
Grupo Santander consolidated financial statements for 2022 were
approved by the shareholders at the group´s annual general
meeting on 31 March 2023. Grupo Santander consolidated
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 the parent 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.
b) Basis of presentation of the consolidated
financial statements
Under Regulation (EC) n.º 1606/2002 of the European Parliament
and of the Council of 19 July 2002 all companies governed by the
law of an EU Member State and whose securities are admitted to
trading on a regulated market of any Member State must prepare
their consolidated financial statements for the years beginning on
or after 1 January 2005 in conformity with the International
Financial Reporting Standards ('IFRS') previously adopted by the
European Union ('EU-IFRS').
In order to adapt the accounting system of Spanish credit
institutions with the principles and criteria established by the IFRS
adopted by the European Union ('EU-IFRS'), the Bank of Spain
published circular 4/2017, dated 27 November 2017, on Public and
Confidential Financial Reporting Standards and Financial
Statement Formats and the following regulations.
Particularly, during 2023 and 2021, the Bank of Spain published
Circulars 1/2023 of 24 February of 2023, and 6/2021 of 22
December of 2021, amending Circular 4/2017 of 27 November to
credit institutions on Public and Confidential Financial Reporting
Standards and Financial Statement Formats.
Grupo Santander consolidated financial statements for 2024 were
authorised by the Bank's directors (at the board meeting on 25
February 2025) in accordance with International Financial
Reporting Standards as adopted by the European Union and with
Bank of Spain circular 4/2017 and subsequent modifications, and
Spanish corporate and commercial law applicable to the Group,
using the basis of consolidation, accounting policies and
measurement bases set forth in note 2, accordingly, they present
fairly the Group's equity and financial position at 31 December
2024, 2023 and 2022 and the consolidated results of its operations
and the consolidated cash flows in 2024, 2023 and 2022. These
consolidated annual accounts have been prepared on the basis of
the accounting records held by Banco Santander and by each of the
other companies of the Group, and include the adjustments and
reclassifications required to standardise the accounting policies
and valuation criteria applied by Grupo Santander.
The notes to the consolidated financial statements contain
additional information to that presented in the consolidated
balance sheet, consolidated income statement, consolidated
statement of recognised income and expense, consolidated
statement of changes in total equity and consolidated 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 consolidated annual accounts are presented in
millions of euros unless another alternative monetary unit is
indicated, rounded to the nearest million unit.
Annual report 2024
589
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Adoption of new standards and interpretations issued
The following modifications came into force and were adopted by
the European Union in 2024:
• Amendment to IFRS 16 Lease Liability in a Sale and Leaseback
requires a seller-lessee to subsequently measure lease liabilities
arising from a leaseback without recognising any amount of the
gain or loss that relates to the right of use retained. This new
requirement does not prevent a seller-lessee from recognising in
profit or loss any gain or loss relating to the partial or full
termination of a lease.
• Classification of Liabilities, amendments to IAS 1 Presentation of
Financial Statements, considering non-current liabilities those in
which the entity has the possibility of deferring payment for
more than 12 months from the closing date of the reporting
period.
Likewise, an additional amendment to IAS 1 on the classification
of liabilities with covenants as current or non-current has been
approved, specifying that covenants that must be complied with
after the reporting date do not affect the classification of
liabilities and require additionally their respective breakdowns.
They should be applied retrospectively in accordance with the
normal requirements of IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors.
• IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments:
Additional disclosures are required for companies entering into
supplier financing arrangements. The objective of the new
disclosures is to provide information on Supplier Finance
Arrangements (SFA) that allows investors to evaluate the effects
on an entity's liabilities, cash flows and liquidity risk exposure.
The application of the aforementioned amendments to accounting
standards and interpretations did not have any material effects on
Grupo Santander consolidated financial statements.
Likewise, at the date of approval of these consolidated annual
accounts, the following standards which effectively came into
force have effective dates after 31 December 2024:
• IAS 21 Effects of changes in foreign currency exchange rates: IAS
21 established the requirements to apply when there is a
temporary lack of interchangeability between two currencies,
but did not give indications when this situation was not
temporary. Given this scenario, IAS 21 has been modified
establishing the criteria to identify these situations, specifying
how entities should estimate the spot exchange rate, the
methodologies and data to be considered, as well as the
associated disclosure requirements. It will be applicable from 1
January 2025.
Finally, at the date of approval of these consolidated annual
accounts, the following standards which effectively come into
force after 31 December 2024 had not yet been adopted by the
European Union:
• Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial
Instruments: Disclosures: (i) amendments to classification and
measurement requirements related to the assessment of
contractual cash flows of certain financial assets (with ESG
characteristics, non-recourse or contractually linked); (ii) an
accounting policy option for the derecognition of financial
liabilities settled through an electronic payment system is
included; (iii) the disclosure requirements related to equity
instruments designated at fair value through other
comprehensive income are amended; (iv) disclosure
requirements are included for financial instruments with
contingent characteristics that may modify their contractual cash
flows. These amendments will be applicable from 1 January
2026.
• Amendments to IFRS 9 and IFRS 7 - Nature-dependent electricity
contracts for electricity contracts dependent on energy sources
and susceptible to variations due to uncontrollable factors, such
as weather conditions, this modification: (i) clarifies the
application of the 'own use' requirements; (ii) allows hedge
accounting if these contracts were used as hedging instruments;
and, (iii) adds new filing requirements for greater clarity on the
impact of these contracts. These modifications will be applicable
form 1 January 2026.
• Amendments to IFRS Improvement Cycle: introduces minor
amendments, effective from 1 January 2026, to the following
standards:
• IFRS 1 First-time Adoption of International Financial Reporting
Standards, for hedge accounting in first adoption.
• IFRS 7 Financial Instruments: Disclosures: updated references
and alignment with IFRS 13, as well as clarifications in the
Implementation Guidance.
• IFRS 9 Financial Instruments: amendment to apply
derecognition criteria to lease liabilities recorded by the lessee
and replacement of the term 'transaction price' with 'the
amount determined in accordance with IFRS 15'.
• IFRS10 Consolidated Financial Statements: Determining a 'de
facto agent'.
• IAS 7 Statement of Cashflows: replacing the term 'cost method'
with 'cost'.
• IFRS 18 Presentation and Disclosure in Financial Statements,
which replaces IAS 1 Presentation of Financial Statements: this is
the new standard with a focus on updates to the statement of
profit or loss. The key new concepts introduced in IFRS 18 relate
to: (i) the structure of the statement of profit or loss; (ii) required
disclosures in the financial statements for certain profit or loss
performance measures that are reported outside an entity's
financial statements (that is, management-defined performance
measures); and (iii) enhanced principles on aggregation and
disaggregation which apply to the primary financial statements
and notes in general. Applicable from 1 January 2027.
Annual report 2024
590
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
• IFRS 19 Subsidiaries without Public Accountability: Disclosures:
this new standard works alongside other IFRS Accounting
Standards. An eligible subsidiary applies the requirements in
other IFRS Accounting Standards except for the disclosure
requirements and instead applies the reduced disclosure
requirements in IFRS 19. A subsidiary is eligible if: (i) it does not
have public accountability; and (ii) it has an ultimate or
intermediate parent that produces consolidated financial
statements available for public use that comply with IFRS
Accounting Standards. Applicable from 1 January 2027.
During 2024, the Group has started a project with the aim of
adapting its accounting policies related to hedging transactions to
the requirements on hedge accounting established in Chapter 6 of
IFRS 9, in accordance with IFRS' accounting options related to this
subject. The Group expects to complete the project throughout
2025 without significant impacts.
Grupo Santander is currently analyzing the possible effects of
these new standards and interpretations, and unless expressly
indicated otherwise, no significant impacts are expected from their
application.
All accounting policies and measurement bases with a material
effect on the consolidated financial statements for 2024 were
applied in the preparation of these consolidated annual accounts.
c) Use of critical estimates
The consolidated results and the determination of consolidated
equity are sensitive to the accounting policies, measurement bases
and estimates used by the directors of Banco Santander in
preparing the consolidated financial statements.
The main accounting policies and measurement bases are set forth
in note 2.
In the consolidated financial statements estimates were
occasionally made by the senior management of Grupo 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, 16, 17, 18 and 54).
• The assumptions used in the actuarial calculation of the post
employment benefit liabilities and commitments and other
obligations (see note 25).
• The useful life of the tangible and intangible assets (see notes 16
and 18).
• The measurement of goodwill arising on consolidation (see note
17).
• The calculation of provisions and the consideration of contingent
liabilities (see note 25).
• The fair value of certain unquoted assets and liabilities (see notes
6, 7, 8, 9, 10, 11, 20, 21 and 22).
• The recoverability of deferred tax assets (see note 27).
• The fair value of the identifiable assets acquired and the
liabilities assumed in business combinations in accordance with
IFRS 3 (see note 17).
To update the previous estimates, the Group'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 Group 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 10, 17, 50 and 54).
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
consolidated 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 consolidated
income statement.
d) Information relating to 2023 and 2022
The information contained in the consolidated financial statements
for the financial years 2023 and 2022 was prepared with the
standards in force in said years, and exclusively for comparative
purposes with the information relating to the year ended 31
December 2024.
Regarding the first application of IFRS 17, it has been restated the
balance sheet information relating to 'Liabilities under insurance
contracts' corresponding to the years closed on 31 December
2022, of a portfolio of products for an amount of approximately
EUR 16 billion (see Note 2.i).
Additionally, the segment information corresponding to the years
ended 31 December 2023 and 2022 was restated for comparative
purposes. In accordance with the Group's organizational structure,
as required by IFRS 8 (see note 52).
In order to interpret the changes in the balances with respect to 31
December 2024, it is necessary to take into consideration the
exchange rate effect arising from the volume of foreign currency
balances held by Grupo Santander in view of its geographic
diversity (see note 52.b) and the impact of the appreciation/
depreciation of the various currencies against the euro in 2024,
based on the exchange rates at the end of 2024: Mexican peso
(-13.28%), US dollar (6.39%), Brazilian real (-16.53%), Sterling
pound (4.62%), Chilean peso (-6.52%), and Polish zloty (1.59%); as
well as the evolution of the comparable average rates: Mexican
peso (-2.87%), US dollar (-0.06%), Brazilian real (-7.09%), Sterling
pound (2.74%), Chilean peso (-11.18%) and Polish zloty (5.41%).
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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.
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.
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• 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.
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.
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At 31 December 2024 Grupo Santander met the minimum
capital requirements established by current legislation (see note
54.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 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,
the Group does not have any environmental liability, expenses,
assets, provisions or contingencies that might be material with
respect to its consolidated equity, financial position or results (see
note 54.a).
g) 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 accounting policies applied in preparing the consolidated
financial statements were as follows:
a) Foreign currency transactions
i. Presentation currency
Banco Santander’s functional and presentation currency is the
euro. Also, the presentation currency of the Group is the euro.
ii. Translation of foreign currency balances
Foreign currency balances are translated to euros in two
consecutive stages:
• Translation of foreign currency to the functional currency
(currency of the main economic environment in which the entity
operates).
• Translation to euros of the balances held in the functional
currencies of entities whose functional currency is not the euro.
Translation of foreign currency to the functional currency
Foreign currency transactions performed by consolidated entities
(or entities accounted for using the equity method) not located in
European Monetary Union ('EMU') countries are initially recognised
in their respective currencies. Monetary items in foreign currency
are subsequently translated to their functional currencies using the
closing rate.
Furthermore:
• Non-monetary items measured at historical cost are translated
to the functional currency at the exchange rate at the date of
acquisition.
• Non-monetary items measured at fair value are translated at the
exchange rate at the date when the fair value was determined.
• Income and expenses are translated at the average exchange
rates for the year for all the transactions performed during
the year. When applying this criterion, the Group considers
whether there have been significant changes in the exchange
rates in the year which, in view of their materiality with respect
to the consolidated financial statements taken as a whole, would
make it necessary to use the exchange rates at the transaction
date rather than the aforementioned average exchange rates.
• The balances arising from non-hedging forward foreign
currency/foreign currency and foreign currency/euro purchase
and sale transactions are translated at the closing rates
prevailing in the forward foreign currency market for the related
maturity.
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Translation of functional currencies to euros
The balances in the financial statements of consolidated entities
(or entities accounted for using the equity method) 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.
iii. Recognition of exchange differences
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 consolidated income statement, except for exchange
differences arising on financial instruments at fair value through
profit or loss, which are recognised in the consolidated 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 29).
The exchange differences arising on the translation to euros of the
financial statements denominated in functional currencies other
than the euro are recognised in 'Other comprehensive income–
Items that may be reclassified to profit or loss–Exchange
differences' in the consolidated balance sheet, whereas those
arising on the translation to euros of the financial statements of
entities accounted for using the equity method are recognised in
equity under 'Other comprehensive income–Items that may be
reclassified to profit or loss and Items not reclassified to profit or
loss–Other recognised income and expense' of investments in
subsidiaries, joint ventures and associates (see note 29), until the
related item is derecognised, at which time they are recognised in
profit or loss.
Exchange differences arising on actuarial gains or losses when
converting to euros the financial statements denominated in the
functional currencies of entities whose functional currency is
different from the euro are recognised under equity 'Other
comprehensive income–Items not reclassified to profit or loss–
Actuarial gains or (-) losses' on defined benefit pension plans (see
note 29).
iv. Entities located in hyperinflationary economies
When a subsidiary operates in a country with hyperinflationary
economy, IAS 29 Financial Information in Hyperinflationary
Economies is applied, which means that:
– Historical cost of non-monetary assets and liabilities and of
the various items of equity have to be adjusted to reflect the
changes in the purchasing power of the currency due to
inflation from their date of acquisition or incorporation into
the consolidated balance sheet.
– The different items of the income statement are adjusted by
the inflationary index since their generation, with a balancing
entry in 'Other comprehensive income'.
– The loss on the net monetary position is recorded in the
income for the year against 'Accumulated Other
comprehensive income'.
– All components of the financial statements of the subsidiary
are translated at the closing exchange rate.
The deterioration of the economic situation in Argentina over the
last years caused, among other impacts, a significant increase in
inflation, which by the end of 2018 had reached 48% per year
(147% accumulated in three years). This led the Group to conclude
that it was necessary to apply IAS 29 Financial Information in
Hyperinflationary Economies to its activities in the country in
question in its consolidated financial statements from that year on.
The Group has decided, in the year 2024, to apply an alternative
exchange rate for the conversion of its businesses in Argentina in
the preparation of its consolidated annual accounts, as a
consequence of the divergence observed between the official
exchange rate and certain macroeconomic variables, mainly
inflation, together with the fact that for certain operations, such as
the repatriation of dividends, the exchange rate implicit in orderly
transactions between market participants did not correspond to
the official exchange rate. As of 31 December 2024, the
alternative exchange rate used takes as a reference the CCL dollar
('contado con liquidación'), which is the exchange rate that results
from the sale in US dollars of local bonds denominated in
Argentine pesos (bonds with dual peso denomination /dollar),
which as of this date does not differ significantly with other market
rates.
Inflation during 2024, to the national consumer price index
published by the National Statistics and Census Institute, was
117.8% for the year (211.2% at 31 December 2023). The official
exchange rate at 31 December 2024 has been of 1,071.16
Argentine pesos per euro (893.63 Argentine pesos per euro at 31
December 2023). The exchange rate applied by the Group as of 31
December 2024 was 1,232.39 Argentine pesos per euro.
At 31 December 2024, no other country in which the consolidated
and associated entities of Grupo Santander are located is
considered to have a hyperinflationary economy in accordance with
the criteria established in this regard by the International Financial
Reporting Standards adopted by the European Union.
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v. Exposure to foreign currency risk
Grupo Santander hedges a portion of its long-term foreign
currency positions using foreign exchange derivative financial
instruments (see note 36). Also, the Group manages foreign
exchange risk dynamically by hedging its short-term position (with
a potential impact on profit or loss) in order to limit the impact of
currency depreciations while optimising the cost of financing the
hedges.
The following tables show the sensitivity of the consolidated
income statement and consolidated equity to percentage changes
of ± 1% in the foreign exchange rate positions arising from
investments in Grupo Santander companies with currencies other
than the euro (with its hedges) and in their results (with its
hedges), in which the Group maintains significant balances.
The estimated effect on the consolidated equity attributable to
Grupo Santander and on consolidated profit and loss account of a
1% appreciation of the euro against the corresponding currency is
as follows:
EUR million
Effect on
Effect on
consolidated equity
consolidated profit
Currency
2024
2023
2022
2024
2023
2022
US dollar
(168.4) (136.9) (146.0)
(3.9)
(3.4)
(4.4)
Chilean peso
(15.3)
(35.3)
(14.8)
(2.1)
(2.3)
(2.0)
Pound
sterling
(96.5)
(79.1)
(94.7)
(4.4)
(3.1)
(1.5)
Mexican peso
(33.9)
(36.4)
(27.7)
(0.5)
(0.1)
(2.0)
Brazilian real
(144.1) (175.7) (100.1)
(4.3)
(6.5)
(5.9)
Polish zloty
(25.1)
(48.8)
(19.8)
(0.4)
—
(1.3)
Argentine
peso
(18.3)
(7.5)
(17.1)
(6.6)
(4.2)
(2.1)
Similarly, the estimated effect on the Group’s consolidated equity
and on consolidated profit and loss account of a 1% depreciation of
the euro against the corresponding currency is as follows:
EUR million
Effect on
Effect on
consolidated equity
consolidated profit
Currency
2024
2023
2022
2024
2023
2022
US dollar
171.8
139.7
148.9
4.0
3.4
4.5
Chilean peso
15.6
36.0
15.1
2.2
2.3
2.1
Pound
sterling
98.4
80.7
96.7
4.5
3.1
1.5
Mexican peso
34.6
37.1
28.2
0.5
0.1
2.0
Brazilian real
147.0
179.3
102.1
4.3
6.6
6.0
Polish zloty
25.6
49.8
20.2
0.4
—
1.4
Argentine
peso
18.7
7.7
17.4
6.7
4.2
2.2
The above data were obtained as follows:
a) Effect on consolidated equity: in accordance with the accounting
policy detailed in note 2.a.iii, foreign exchange rate impact
arising on the translation to euros of the financial statements in
the functional currencies of the Group entities whose functional
currency is not the euro are recognised in consolidated equity.
The potential effect that a change in the exchange rates of the
related currency would have on the Group’s consolidated equity
was therefore determined by applying the aforementioned
change to the net value of each unit’s assets and liabilities
including, where appropriate, the related goodwill- and by
taking into consideration the offsetting effect of the hedges of
net investments in foreign operations.
b) Effect on consolidated profit: the effect was determined by
applying the up and down movements in the average exchange
rates of the year, as indicated in note 2.a.ii (except in the case of
Argentina, which is a hyperinflationary economy and has applied
the closing exchange rate), to translate to euros the income and
expenses of the consolidated entities whose functional currency
is not the euro, taking into consideration, where appropriate, the
offsetting effect of the various hedging transactions in place.
The estimates used to obtain the foregoing data were performed
considering the effects of the changes in the exchange rate in
standalone basis not considering the effect of the performance of
other variables whose changes would affect equity and profit or
loss, such as variations in the interest rates of the reference
currencies or other market factors. Accordingly, all variables other
than the exchange rate variations were kept constant with respect
to their positions at 31 December 2024, 2023 and 2022.
b) Basis of consolidation
i. Subsidiaries
Subsidiaries are defined as entities over which the Bank has the
capacity to exercise control. The Bank controls an entity when it is
exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns
through its power over the investee.
The financial statements of the subsidiaries are fully consolidated
with those of the Bank. Accordingly, all balances and effects of the
transactions between consolidated companies are eliminated on
consolidation.
On acquisition of control of a subsidiary, its assets, liabilities and
contingent liabilities are recognised at their acquisition-date fair
values. Any positive differences between the acquisition cost and
the fair values of the identifiable net assets acquired are
recognised as goodwill (see note 17). Negative differences are
recognised in profit or loss on the date of acquisition.
Additionally, the share of third parties of Grupo Santander equity is
presented under 'Non-controlling interests' in the consolidated
balance sheet (see note 28). Their share of the profit for the year is
presented under 'Profit attributable to non-controlling interests' in
the consolidated income statement.
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The results of subsidiaries acquired during the year are included in
the consolidated income statement from the date of acquisition
to year-end. Similarly, the results of subsidiaries for which control
is lost during the year are included in the consolidated income
statement from the beginning of the year to the date of disposal.
At 31 December 2024, apart from the structured consolidated
entities, Grupo Santander does not control any company in which it
maintains a percentage of direct participation in its share capital of
less than 50%.
The appendices contain significant information on the subsidiaries.
ii. Interests in joint ventures
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.
In the consolidated financial statements, investments in joint
ventures are accounted for using the equity method, i.e. at the
Group’s share of net assets of the investee, after taking into
account the dividends received therefrom and other equity
eliminations. The profits and losses resulting from transactions
with a joint venture are eliminated to the extent of the Group’s
interest therein.
The appendices contain relevant information on the joint ventures.
iii. Associates
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.
In the consolidated financial statements, investments in associates
are accounted for using the equity method, with the same criteria
applicable to shares in joint ventures.
There are certain investments in entities which, although Grupo
Santander owns 20% or more of their voting power, are not
considered to be associates because the Group is not in a position
to exercise significant influence over them. As of 31 December
2023 and 2022, the investment in Project Quasar Investments
2017, S.L. was in this situation, despite maintaining a 49% stake in
the share capital. The rest of the investments are not significant for
the Group.
There are also certain investments in associates where the Group
owns less than 20% of the voting rights, as it is determined that it
has the capacity to exercise significant influence over them. The
impact of these companies is immaterial in the Group's
consolidated financial statements.
The appendices contain significant information on the associates.
iv. Structured entities
In some cases, Grupo Santander incorporates entities, or holds
ownership interests therein, to enable its customers to access
certain investments, or for the transfer of risks or other purposes.
Those entities are called 'structured entities' and they are
characterized by the fact that since the voting, or similar power is
not a key factor in deciding who controls the entity. The control is
determined by using internal criteria and procedures and taking
into consideration the applicable legislation, as described above.
Specifically, for those entities to which this policy applies (mainly
investment funds and pension funds), the Group analyses the
following factors:
• Percentage of ownership held by Grupo Santander; 20% is
established as the general threshold.
• Identification of the fund manager, and verification as to whether
it is a company controlled by the Group since this could affect
Grupo Santander ability to direct the relevant activities.
• Existence of agreements between investors that might require
decisions to be taken jointly by the investors, rather than by the
fund manager.
• Existence of currently exercisable removal rights (possibility of
removing the manager from his position), since the existence of
such rights might limit the manager’s power over the fund, and it
may be concluded that the manager is acting as an agent of the
investors.
• Analysis of the fund manager’s remuneration regime, taking into
consideration that a remuneration regime that is proportionate
to the service rendered does not, generally, create exposure of
such importance as to indicate that the manager is acting as the
principal. Conversely, if the remuneration regime is not
proportionate to the service rendered, this might give rise to an
exposure that would lead the Group to a different conclusion.
These structured entities also include the securitisation special
purpose vehicles, which are consolidated in the case of the Special
Purpose Vehicles (SPVs) over which, being exposed to variable
yield, it is considered that the Group continues to exercise control.
The exposure associated with unconsolidated structured entities,
additional to investments in the equity of investment funds (note
8), are not material with respect to the Group’s consolidated
financial statements.
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v. Business combinations
A business combination is the bringing together of two or more
separate entities or economic units into one single entity or group
of entities.
Business combinations whereby Grupo Santander obtains control
over an entity or a business are recognised for accounting purposes
as follows:
• Grupo Santander measures the cost of the business combination,
which is normally the consideration transferred, defined as the
acquisition-date fair values of the assets transferred, the
liabilities incurred to the former owners of the acquiree and the
equity instruments issued, if any, by the acquirer. In cases where
the amount of the consideration to be transferred has not been
definitively established at the acquisition date, but rather
depends on future events, any contingent consideration is
recognised as part of the consideration transferred and
measured at its acquisition-date fair value. Moreover,
acquisition-related costs do not for these purposes form part of
the cost of the business combination.
• The fair values of the assets, liabilities and contingent liabilities
of the acquired entity or business, including any intangible assets
identified in the business combination which might not have
been recognised by the acquiree, are estimated and recognised in
the consolidated balance sheet; the Group also estimates the
amount of any non-controlling interests and the fair value of the
previously held equity interest in the acquiree.
• Any positive difference between the aforementioned items is
recognised as discussed in note 2.m. Any negative difference is
recognised under 'Negative Goodwill' recognised in the
consolidated income statement.
Goodwill is only calculated and recognised once, when control of a
business or an entity is obtained.
vi. Changes in the levels of ownership interests in
subsidiaries
Acquisitions and disposals not giving rise to a change in control are
recognised as equity transactions, and no gain or loss is recognised
in the income statement and the initially recognised goodwill is not
remeasured. The difference between the consideration transferred
or received and the decrease or increase in non-controlling
interests, respectively, is recognised in reserves.
Similarly, when control over a subsidiary is lost, the assets,
liabilities and non-controlling interests and any other items
recognised in 'Other Comprehensive income' of that company are
derecognised from the consolidated balance sheet, and the fair
value of the consideration received and of any remaining equity
interest is recognised. The difference between these amounts is
recognised in profit or loss.
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 associates and joint ventures (see note 13).
• Rights and obligations under employee benefit plans (see
note 25).
• Rights and obligations under insurance contracts (see note 15).
• Contracts and obligations relating to employee remuneration
based on own equity instruments (see note 34).
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.
Grupo Santander business models refer to the way in which it
manages its financial assets to generate cash flows. In defining
these models, the Group 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. The Group 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 the Group in carrying out this analysis, the
following ones are included:
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• 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 Group 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. IFRS
9 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.
Grupo Santander uses the following criteria for the classification of
the financial debt instruments:
• 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 IFRS 9,
with changes in profit or loss, unless the Group 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 consolidated 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 Group, other than those represented by
securities, as well as finance lease receivables and other debit
balances of a financial nature in favour of the Group 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.
– 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.
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• 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 Group 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 consolidated 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
Group of 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 Group’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 consolidated balance sheet:
• Deposits: includes all repayable balances received in cash by
Grupo Santander, 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:
– 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 Group 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
the Group, of derivatives, including embedded derivatives
separated from the host contract, which do not form part of
hedge accounting.
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• 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 consolidated 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 Group’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 Group 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 Group
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 Group 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, IFRS 9 states that regular way purchases or sales of
financial assets shall be recognised and derecognised on the trade
date or on the settlement date. Grupo Santander has opted to
make such recognition on the trading date or settlement date,
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.
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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 consolidated 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 consolidated 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
Group 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 Group’s maximum exposure
to credit risk at each reporting date. Also, Grupo 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.
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 50. 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.
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iv. Recognition of fair value changes
As a general rule, changes in the carrying amount of financial
assets and liabilities are recognised in the consolidated 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 consolidated 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 Group's consolidated equity
until the asset giving rise to them is impaired or derecognised, at
which time they are recognised in the consolidated 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
The consolidated entities use 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.
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 Group 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 Group’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
consolidated 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 consolidated 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
consolidated 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.
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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 consolidated 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
consolidated 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:
1. If the Group 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 Group 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 Group 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, Grupo
Santander 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:
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• 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 IFRS 9. 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.
• 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
consolidated balance sheet at their net amount, only if the Group
entities 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
Grupo 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 consolidated 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 consolidated 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
Group 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
consolidated 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.).
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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 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 Group 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 Group 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 considers the following 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 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.
Quantitative Within the quantitative thresholds, two types are
criteria
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 54, below, and is marked by
the type of portfolio and characteristics such as the
starting point of the average credit quality of the
portfolio.
In addition to the quantitative criteria indicated, various
indicators are used that are aligned with those used by
the Group in the normal management of credit risk.
Irregular positions of more than 30 days and renewals
are common criteria in all Group units. In addition, each
Qualitative
unit can define other qualitative indicators, for each of
criteria
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.
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.
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– 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.
Grupo 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 event, except in the case of financial instruments with
effective collateral covering a substantial portion of the
transaction amount, the Group generally consider as remote the
following:
- Those operations that, after an individualized analysis, are
categorized as unsustainable debt, assuming an
irrecoverability of such debt.
- Transactions classified as doubtful due to non-performing
loans with recovery costs that exceed the amounts receivable.
- The operations on which the award is executed. The queue of
these operations shall be included under default risk, as the
recovery of the flows, provided that no further guarantees
associated with the operation remain after the award of the
property.
- Those operations on which a deduction is made, the portion of
the operation corresponding to that deduction, will be given
as a balance at the time of signature.
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
Grupo 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 Group 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.
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 Group 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.
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For the purposes of the collective assessment of expected credit
losses, the Group 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.
Grupo 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, depending on the characteristics of each unit,
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.
Grupo 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.
Grupo 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 (IFRS 9 Par. B5.5.55).
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 Group based its
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 IFRS 9.
• 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
Group'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.
The definition of default implemented by the Group 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 IFRS 9, 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.
Grupo 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 around 19 basis points, with no
material impact on the provision figures for credit risk.
In addition, the Group 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.).
IFRS 9 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 Group applies 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.
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– Assets with low credit risk at the reporting date: the Group
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 54.b.
iv. Detail of individual estimate of impairment
For the individual estimate of the assessment for impairment of
the financial asset, the Group 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
Grupo Santander assesses the effectiveness of all the guarantees
associated considering the following:
• The time required to execute these guarantees.
• Grupo 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 Group 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
Grupo 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
Grupo 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 of local
units for certain types of assets.
• 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 of
each of the units, estimating:
• Period of adjudication.
• Estimated time of sale of the asset.
In addition, the Group 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 Group applies an additional adjustment ('index
forward') in order to adjust the value of the guarantees to future
valuation expectations.
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v. Impairment individual assessment scope
Grupo Santander determines the perimeter over which it makes an
estimate of the assessment for impairment on an individual basis
based on a relevance threshold set by each of the geographical
areas 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 Group'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 the
consolidated entities as total or partial settlement of their debtors’
payment obligations to them are deemed to be 'Non-current assets
held for sale', unless the consolidated entities have decided to
make continuing use of these assets.
'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
International Financial Reporting Standards 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
Group obtains, at the time of award, the fair value of the
corresponding asset by requesting an appraisal from external
valuation agencies.
Grupo 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 Group 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 Group worked in Spain 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.
Also, this policy establishes that the various subsidiaries abroad
work with appraisal companies that have recent experience in the
area and the type of asset under appraisal and meet the
independence requirements established in the corporate policy.
They should verify, inter alia, that the appraisal company is not a
party related to the Group and that its billings to the Group in the
last twelve months do not exceed 15% of the appraisal company’s
total billings.
At 31 December 2024 the fair value less costs to sell of non
current assets held for sale exceeded their carrying amount by EUR
553 million (EUR 624 million at 31 December 2023); however, in
accordance with the accounting standards, this unrealised gain
could not be recognised.
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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.
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.
1. The assets in a situation of 'stopped development' are included under 'land
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.
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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 Group
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.
– 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 the Group 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.
Grupo 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 the Group 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
consolidated 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.
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i) Assets under reinsurance contracts and
Liabilities under insurance contracts
The Group has prepared the accounting policy that establishes the
criteria for recording insurance contracts, in accordance with IFRS
17. This standard defines insurance contracts as contracts under
which one party accepts a significant insurance risk from another
party by agreeing to compensate the policyholder if a specific
uncertain future event negatively affects the policyholder.
IFRS 17 requires a level of aggregation of contracts that the Group
identifies in portfolios of contracts with similar risks and that are
managed jointly. The Group then divides each portfolio into a
minimum of three groups: (i) contracts that are onerous on initial
recognition; (ii) contracts that, upon initial recognition, have no
significant possibility of subsequently becoming onerous; and (iii)
any remaining contract.
For contracts that are considered not to be onerous, a profit margin
is recognized in the profit and loss account (referred to as
'Contractual Service Margin' or 'CSM') throughout the period in
which the entity performs the service. However, if at the time of
initial recognition, or during the period in which the entity performs
the service, the contract is onerous, the entity recognizes the loss
in the income statement.
Contract limits define the term up to which compliance cash flows
must be considered in order to measure an insurance contract.
Fulfillment cash flows comprise an unbiased, probability-weighted
estimate of future cash flows, a discount adjustment to the present
value to reflect the time value of money for monetary and financial
risks, and a risk adjustment for non-fulfillment risks. financial. The
identification of the contractual limit under IFRS 17 is essential not
only for measuring the fulfillment cash flows of a group of
contracts, but also for determining the applicable measurement
model, in case the contractual limits are identified in a year or
more.
Cash flows are within the contractual limit of an insurance contract
if they arise from substantial rights and obligations that exist
during the reporting period, in which the entity can obligate the
insurance policyholder to pay premiums or in which the entity has
a substantive obligation to provide services to the insured.
The Group has carried out an analysis of the limits of insurance and
reinsurance contracts under IFRS 17, separately, generally applying
the General Model (Building Block Approach) to all contracts,
except those eligible to be valued by the Simplified Model
(Premium Allocation Approach), or the Variable Commission
Approach ('VCA' or Variable Fee Approach).
The general model measures a group of contracts as the sum of
the fulfillment cash flows and the Contractual Service Margin. The
CSM represents benefits not yet recorded that the entity will
recognize as providing services under the insurance contract.
Insurance contracts with direct participation apply the VCA as a
modified version of the General Model. This should reduce the
volatility of results due to the asymmetry between the accounting
treatment of the profit and losses of the underlying items
attributable to the policyholders and the accounting treatment of
the liability owed to those policyholders.
Another aspect considered in measuring the present value of the
future cash flows of a group of insurance contracts is the discount
rate applied to reflect the time value of money and the financial
risks related to those cash flows. The Group has established a
generally chosen methodology and guarantees that the calculation
components have a homogeneous basis, previously approved by
the Group, establishing the base curves provided by the Group and
allowing adjustments to these curves based on the expert criteria
of each local address.
Likewise, measuring compliance cash flows requires a risk
adjustment for non-financial risk. Risk adjustment for non-financial
risk is the compensation necessary to withstand uncertainty about
the amount and timing of cash flows arising from non-financial
risks. If a change in the assumptions occurs, it could affect the
income statement or the Other comprehensive income, depending
on its nature. The risks covered by the risk adjustment for non
financial risk are insurance risk and other non-financial risks, such
as interruption risk and expense risk.
j) Tangible assets
Tangible assets includes the amount of buildings, land, furniture,
vehicles, computer hardware and other fixtures owned by the
consolidated entities 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 consolidated entities 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
consolidated 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):
Average
annual rate
Buildings for own use
2.7%
Furniture
9.8%
Fixtures
9.8%
Office and IT equipment
23.9%
Lease use rights
Less than the lease
term or the useful life
of the underlying asset
At the end of each reporting period, consolidated entities assess
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.
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Similarly, if there is an indication of a recovery in the value of a
tangible asset, the consolidated entities recognise 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 consolidated 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 Grupo 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 Group 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 (IFRS 16) adopted by
the Group are included below:
When the Group 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 Group.
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 Group 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 Group; in this regard, the Group 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:
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– 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
leasing company has its own financing, this has been used as the
starting point for determining the incremental borrowing rate. On
the other hand, for those Grupo Santander entities that do not have
their own financing, the information from the financing of the
consolidated subgroup to which they belong was used as the
starting point for estimating the entity's curve, analysing other
factors to assess whether it is necessary to make any type of
negative or positive adjustment to the initially estimated credit
spread.
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.
The Group 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
the consolidated entities.
Only assets whose cost can be measured reliably and it is likely
that the consolidated entities obtain 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 consolidated
entities and entities 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:
a. 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.
b. If it is attributable to specific intangible assets, by recognising it
explicitly in the consolidated balance sheet provided that the
fair value of these assets within twelve months following the
date of acquisition can be measured reliably.
c. 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
Group’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.
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 consolidated
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.
Other intangible assets can have an indefinite useful life -when,
based on an analysis of all the relevant factors, it is concluded that
there is no foreseeable limit to the period over which the asset is
expected to generate net cash inflows for the consolidated
entities- or a finite useful life, in all other cases.
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Intangible assets with indefinite useful lives are not amortised, but
rather at the end of each reporting period or whenever there is any
indication of impairment the consolidated entities review the
remaining useful lives of the assets in order to determine whether
they continue to be indefinite and, if this is not the case, to take the
appropriate steps.
Intangible assets with finite useful lives are amortised over those
useful lives using methods similar to those used to depreciate
tangible assets.
The intangible asset amortisation charge is recognised under
'Depreciation and amortisation' in the consolidated income
statement.
In both cases the consolidated entities recognise 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 consolidated' 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.k).
Internally developed computer software
Internally developed computer software is recognised as an
intangible asset if, among other requisites (basically the Group’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 consolidated 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.
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 consolidated 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 consolidated 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 consolidated
entities, 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 consolidated entities, 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 consolidated entities. They
include the present obligations of the consolidated entities when
it is not probable that an outflow of resources embodying
economic benefits will be required to settle them. The Group
does not recognise the contingent liability. The Group 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
Group. Contingent assets are not recognised in the consolidated
balance sheet or in the consolidated 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.
Grupo Santander’s consolidated 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.
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Provisions are classified according to the obligations covered as
follows (see note 25):
▪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 Group
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 the consolidated entities. Other
provisions includes, inter alia, any provisions for restructuring
costs and environmental measures.
p) 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.
▪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 consolidated 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.
q) 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, Grupo
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.
r) Recognition of income and expenses
The most significant criteria used by Grupo 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 consolidated entities’ right to receive them arises.
ii. Commissions, fees and similar items
Fee and commission income and expenses are recognised in the
consolidated 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.
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s) 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.
Grupo Santander initially recognises the financial guarantees
provided on the liability side of the consolidated 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 Group 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 consolidated balance sheet for the present value of the fees,
commissions and interest outstanding.
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 25). These provisions are
recognised and reversed with a charge or credit, respectively, to
'Provisions or reversal of provisions', net, in the consolidated
income statement.
t) Assets under management and investment
and pension funds managed by the Group
Assets owned by third parties and managed by the consolidated
entities are not presented on the face of the consolidated balance
sheet. The investment funds and pension funds managed by the
consolidated companies are also not presented in the Group's
consolidated balance sheet, as they are owned by third parties.
The commissions generated by these activities are included in the
balance of the 'Commission income' chapter of the consolidated
profit and loss account.
Note 2.b.iv describes the internal criteria and procedures used to
determine whether control exists over the structured entities,
which include, inter alia, investment funds and pension funds.
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.
Grupo Santander's post-employment obligations to its employees
are deemed to be defined contribution plans when the Group
makes pre-determined contributions (recognised under Personnel
expenses in the consolidated 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 25).
Defined contribution plans
The contributions made in this connection in each year are
recognised under 'Personnel expenses' in the consolidated 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 consolidated
balance sheet.
Defined benefit plans
Grupo Santander recognises under 'Provisions - Provision for
pensions and similar obligations on the liability side of the
consolidated 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 the consolidated entities, but by a legally
separate third party that is not a party related to the Group.
▪ They are only available to pay or fund post-employment benefits
and they cannot be returned to the consolidated entities 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 Grupo Santander.
If Grupo 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 Group
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 consolidated balance sheet.
Grupo 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'.
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• 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 consolidated 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).
▪ 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 consolidated
income statement (see note 25).
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 expense for Spanish income tax and other similar taxes
applicable to the foreign consolidated entities is recognised in the
consolidated income statement, except when they arise from a
transaction whose results are recognised directly in equity, in
which case the related tax effect is recognised 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 consolidated 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 Group 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. In this regard, no deferred tax
liabilities of EUR 331.2 million were recognised in relation to the
taxation that would arise from the undistributed earnings of
certain Group holding companies, in accordance with the
legislation applicable in those jurisdictions.
Deferred tax assets are only recognised for temporary differences
to the extent that it is considered probable that the consolidated
entities 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
consolidated 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 51 it is provided an analysis of the maturities of the
balances of certain items in the consolidated balance sheet.
Santander Group has recorded as 'time liabilities' those recognised
financial liabilities in which the counterparty may require
payments.
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Likewise, when Grupo Santander has 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 has recorded the maximum amount of the financial
guarantee issued in the first year in which the guarantee can be
executed.
z) Consolidated statement of recognised
income and expense
This statement presents the income and expenses generated by
the Group as a result of its business activity in the year, and a
distinction is made between the income and expenses recognised
in the consolidated income statement for the year and the other
income and expenses recognised directly in consolidated equity.
Accordingly, this statement presents:
a. Consolidated 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 consolidated recognised income and expense, calculated
as the sum of a) to d) above, presenting separately the amount
attributable to the parent company and the amount relating to
non-controlling interests.
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
consolidated 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 consolidated equity arising as a result of
the retrospective restatement of the balances in the
consolidated 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 consolidated 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 consolidated equity.
ab) Consolidated statement of cash flows
The following terms are used in the consolidated 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.
Grupo Santander classifies as cash and cash equivalents the
balances recognised under 'Cash, cash balances at central banks'
and 'Other deposits on demand' in the consolidated 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 Grupo Santander received interest amounting to EUR
117,046 million (EUR 101,029 and EUR 69,282 in 2023 and 2022,
respectively) and paid interest amounting to EUR 61,091 million
(EUR 50,954 and EUR 23,390 in 2023 and 2022, respectively).
Also, dividends received and paid by the Group are detailed in
notes 4, 28 and 40, including dividends paid to minority interests
(non-controlling interests)
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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.
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 three 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 balance sheet (see note 12).
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.
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Once the offers were concluded and settled, Banco Santander
v. Purchase by SHUSA for shares of Santander
proceeded to: (i) withdraw the ADSs from the listing on the New
Consumer USA
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 represent more
than 95% of the shares of Santander Mexico, as required by the
Mexican Securities Market Law.
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.
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.
Annual report 2024
622
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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 167 employees 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
Sub.
Branch
Council of the
EU blacklist
Sub.
Branch
OECD
b
Sub. Branch
Jersey
1
Isle of Man
1
Cayman Islands
1
2024
—
3
—
—
—
—
2023
c
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, 2023 and 2022.
Annual report 2024
623
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
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
Dividends paid in cash
—
Distributable maximum amount
6,176
Available liquidity
87,847
373
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.
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.
Annual report 2024
624
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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 23), 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
2022
Profit (Loss) attributable
to the Parent (EUR
million)
12,574
11,076
9,605
Remuneration of PPCC
and PPCA (EUR million)
(note 23)
(620)
(492)
(529)
11,954
10,584
9,076
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
9,076
Weighted average
number of shares
outstanding
15,497,607,269 16,172,084,714 16,848,344,667
Basic earnings (Loss)
per share (euros)
0.771
0.654
0.539
Of which, from
discounted operations
(euros)
—
—
—
Basic earnings (Loss)
per share from
continuing operations
(euros)
0.771
0.654
0.539
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 23), 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
2022
Profit (Loss) attributable
to the Parent (EUR
million)
12,574
11,076
9,605
Remuneration of PPCC
and PPCA (EUR million)
(Note 23)
(620)
(492)
(529)
Dilutive effect of
changes in profit for the
period arising from
potential conversion of
ordinary shares
—
—
—
11,954
10,584
9,076
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
9,076
Weighted average
number of shares
outstanding
15,497,607,269 16,172,084,714 16,848,344,667
Dilutive effect of
options/rights on shares
70,110,570
75,180,407
55,316,206
Adjusted number of
shares
15,567,717,839 16,247,265,121 16,903,660,873
Diluted earnings (Loss)
per share (euros)
0.768
0.651
0.537
Of which, from
discounted operations
(euros)
—
—
—
Diluted earnings (Loss)
per share from
continuing operations
(euros)
0.768
0.651
0.537
Annual report 2024
625
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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 director
A
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
1,768
1,700
and compliance committee
Other committees (excluding executive committee)
1,560
1,500
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:
Annual report 2024
626
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
• 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.
Annual report 2024
627
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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:
EUR thousand
2024
Bylaw-stipulated emoluments
Annual emolument
Risk
Board
F
Executive
committee
Audit
1
committee
Nomination
committee
2 Remuneration
committee
supervision,
regulation
and
compliance
oversight
committee
3
Responsible
banking,
sustainability
and culture
committee
4
Innovation
and
technology
committee
5
Attendance
fees and
commissions
Ana Botín
98
170
—
—
—
—
—
44
56
Héctor Grisi
98
170
—
—
—
—
—
28
56
José Antonio
Álvarez
128
170
—
—
—
—
—
28
56
Glenn Hutchins
415
—
—
28
78
—
—
82
97
Bruce Carnegie-
Brown
A
22
—
—
18
6
—
—
—
31
Homaira Akbari
98
—
43
—
—
—
28
28
88
Javier Botín
B
98
—
—
—
—
—
—
—
46
Sol Daurella
98
—
—
28
28
—
50
—
88
Henrique de Castro
98
—
43
—
28
—
—
28
103
Gina Díez
98
—
—
28
—
—
28
—
71
Luis Isasi
98
170
—
—
28
43
—
—
101
Ramiro Mato
C
48
83
21
—
—
21
38
—
60
Belén Romana
98
170
43
67
—
59
6
28
128
Pamela Walkden
98
—
59
—
—
97
22
—
105
Germán de la
Fuente
98
—
97
—
—
43
—
—
100
Carlos Barrabés
D
50
—
—
14
—
—
18
14
31
Antonio Weiss
E
50
—
—
—
—
—
—
—
22
Total 2024
1,791
933
306
183
168
263
190
280
1,240
Total 2023
1,700
1,147
328
162
191
285
139
287
1,096
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.
Changes in the chairship of the committees:
1. Germán de la Fuente was appointed Chair of the AC on 23 March 2024 replacing Pamela Walkden.
2. Belén Romana was appointed Chair of the NC on 23 March 2024, succeeding Bruce Carnegie-Brown.
3. Pamela Walkden was appointed Chair of the RSRCC on 23 March 2024, replacing Belén Romana.
4. 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.
5. Glenn Hutchins was appointed Chair of ITC on 23 March 2024, replacing Ana Botín.
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).
Annual report 2024
628
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
2024
2023
Short-term and deferred (not subject to long-term goals) salaries of
executive directors
Variable - immediate
payment
Deferred variable
In
In
Pension
Other
Fixed
In cash instruments
In cash instruments
Total
contribution
remuneration
Total
Total
Ana Botín
3,435
1,851
1,851
1,110
1,111
9,358
1,339
1,062
12,127
11,544
Héctor Grisi
3,150
1,279
1,279
767
768
7,243
1,105
437
9,137
8,257
José Antonio Álvarez
—
—
—
—
—
—
—
3,316
3,698
3,553
Glenn Hutchins
—
—
—
—
—
—
—
—
700
372
Bruce Carnegie-
Brown
A
—
—
—
—
—
—
—
—
78
576
Homaira Akbari
—
—
—
—
—
—
—
—
285
265
Javier Botín
B
—
—
—
—
—
—
—
—
144
137
Sol Daurella
—
—
—
—
—
—
—
—
292
249
Henrique de Castro
—
—
—
—
—
—
—
—
300
284
Gina Díez
—
—
—
—
—
—
—
—
225
211
Luis Isasi
—
—
—
—
—
—
—
1,000
1,440
1,417
Ramiro Mato
C
—
—
—
—
—
—
—
—
271
518
Belén Romana
—
—
—
—
—
—
—
—
599
572
Pamela Walkden
—
—
—
—
—
—
—
—
381
341
Germán de la Fuente
—
—
—
—
—
—
—
—
338
271
Carlos Barrabés
D
—
—
—
—
—
—
—
—
128
—
Antonio Weiss
E
—
—
—
—
—
—
—
—
72
—
Total 2024
6,585
3,130
3,130
1,877
1,879
16,601
2,444
5,815
30,214
—
Total 2023
6,271
3,000
3,000
1,800
1,800
15,871
2,110
5,251
28,567
Footnotes in previous table.
Annual report 2024
629
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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 46.
EUR thousand
2024
2023
Variable subject to long
term
objectives
1
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 46).
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 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.
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.
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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.
As of 31 December 2024 and 2023, no life insurance commitments
exist for the Group in respect of any other directors.
Annual report 2024
631
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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 46):
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.
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.
Annual report 2024
632
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
Shares delivered
in 2023
(immediate
payment 2022
variable
remuneration)
Shares delivered S
in 2023
(deferred
payment 2021
variable
remuneration)
hares delivered
in 2023
(deferred
payment 2020
variable
remuneration)
Maximum
number of shares
to be delivered at
January 1,2023
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
—
—
—
—
—
—
—
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.
Annual report 2024
633
657,923
427,498
1,085,421
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
22,988
57,388
—
—
—
—
—
—
—
—
—
—
—
—
(34,400)
(22,988)
(57,388)
—
—
—
—
70,905
47,386
118,290
—
—
—
—
—
—
—
—
—
—
(35,452)
(23,693)
(59,145)
—
—
—
—
35,452
23,693
59,145
111,821
60,737
172,558
(18,674)
(10,143)
(28,817)
—
—
—
—
—
—
(31,049)
(16,865)
(47,914)
—
—
—
—
—
—
62,098
33,729
95,827
710,698
479,644
1,190,342
—
—
—
—
—
—
(177,675)
(119,911)
(297,586)
—
—
—
—
—
—
—
—
533,023
359,733
892,756
358,419
241,954
600,374
—
—
—
—
(62,334)
(42,079)
(104,413)
—
—
—
—
—
—
—
—
—
—
296,085
199,875
495,961
1,127,209
749,143
1,876,352
—
—
(469,286)
(321,645)
(790,931)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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). Weight of 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%.
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.
Annual report 2024
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Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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 (deferred
Cash paid (deferred
Cash paid (immediate
payments from 2022,
Cash paid (immediate
payments from 2021,
payment 2023
2021, 2020 and 2019
payment 2022
2020, 2019 and 2018
variable
variable
variable
variable
remuneration)
remuneration)
remuneration)
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 46):
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)
—
—
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.
Annual report 2024
635
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
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
Ana Botín
Loans and
credits
—
2024
Guarantees
—
—
Loans and
credits
26
2023
Guarantees
—
Total
26
Héctor Grisi
—
—
—
Total
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
Juan Carlos Barrabés
C
—
138
—
—
—
138
4
—
—
—
4
—
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 .
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
instruments
3
Pensions
Other
remuneration
1
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.
Annual report 2024
636
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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 46):
EUR thousand
Variable remuneration
subject to long-term
objectives
1
Number of
Cash
Instrument
Year
people
payment
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 46):
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:
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)
72,734
Deferred conditional variable remuneration
plan and linked to objectives (2019)
88,352
Deferred conditional variable remuneration
plan and linked to objectives (2020)
292,737
Deferred conditional variable remuneration
plan and linked to objectives (2021)
456,206
Deferred conditional variable remuneration
—
57,730
71,294
185,261
351,777
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.
Annual report 2024
637
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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).
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.
Annual report 2024
638
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
consolidated balance sheets is as follows:
EUR million
CENTRAL BANKS
2024
2023
2022
Classification
Financial assets held for trading
12,966
17,717
11,595
Non-trading financial assets mandatorily at
fair value through profit or loss
—
—
—
Financial assets designated at fair value through profit or loss
—
—
—
Financial assets designated at fair value
through other comprehensive income
—
—
—
Financial assets at amortised cost
16,179
20,082
15,375
29,145
37,799
26,970
Type
Time deposits
16,179
17,747
15,180
Reverse repurchase agreements
12,966
20,052
11,790
Impaired assets
—
—
—
Valuation adjustments for impairment
—
—
—
29,145
37,799
26,970
CREDIT INSTITUTIONS
Classification
Financial assets held for trading
27,314
14,061
16,502
Non-trading financial assets mandatorily at
fair value through profit or loss
—
—
—
Financial assets designated at fair value through profit or loss
408
459
673
Financial assets designated at fair value
through other comprehensive income
363
313
—
Financial assets at amortised cost
55,537
57,917
46,518
83,622
72,750
63,693
Type
Time deposits
9,036
8,560
8,891
Reverse repurchase agreements
48,932
35,846
27,321
Non- loans advances
25,659
28,353
27,487
Impaired assets
—
—
—
Valuation adjustments for impairment
(5)
(9)
(6)
83,622
72,750
63,693
CURRENCY
Euro
43,347
34,229
26,024
Pound sterling
2,424
3,539
4,474
US dollar
22,539
17,602
18,468
Brazilian real
39,379
47,151
34,863
Other currencies
5,078
8,028
6,834
TOTAL
112,767
110,549
90,663
The loans and advances to credit institutions classified under
'Financial assets at amortised' cost are mainly time accounts and
deposits.
Note 51 contains a detail of their residual maturity periods.
This line item also includes irrevocable payment commitments to
the Single Resolution Fund made in accordance with article 70.3 of
Regulation 806/2014, which establishes uniform rules and a
uniform procedure for the resolution of credit institutions and
certain security service companies. investment within the
framework of a Single Resolution Mechanism and a Single
Resolution Fund, for which, in accordance with the standard, no
provision has been recorded, these commitments have not been
significant regarding the consolidated annual accounts.
At 31 December 2024 the gross exposure by impairment stage of
the assets accounted subject to impairment for amounts to EUR
72,084 million, EUR 0 million and EUR 0 million (EUR 78,321, EUR
0 million and EUR 0 million in 2023 and EUR 61,898 million, EUR 1
million and EUR 0 million in 2022), and the loan loss provision by
impairment stage amounts to EUR 5 million, EUR 0 million and EUR
0 million (EUR 9 million, EUR 0 million and EUR 0 million in 2023
and EUR 6 million, EUR 0 million and EUR 0 million in 2022) in
stage 1, stage 2 and stage 3, respectively.
Annual report 2024
639
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
7. Debt securities
a) Detail
The detail, by classification, type and currency, of Debt securities in
the consolidated balance sheets is as follows:
EUR million
2024
2023
2022
Classification
Financial assets held for trading
82,646
62,124
41,403
Non-trading financial assets mandatorily at fair value through profit or loss
447
860
1,134
Financial assets designated at fair value through profit or loss
2,897
3,095
2,542
Financial assets designated at fair value through other comprehensive income
76,558
73,565
75,083
Financial assets at amortised cost
120,949
103,559
73,554
283,497
243,203
193,716
Type
Spanish government debt securities
56,919
40,321
26,876
Foreign government debt securities
164,747
145,732
121,018
Issued by financial institutions
16,776
14,681
10,176
Other fixed-income securities
44,703
42,294
35,468
Impaired financial assets
701
461
404
Impairment losses
(349)
(286)
(226)
283,497
243,203
193,716
Currency
Euro
118,456
90,857
63,903
Pound sterling
15,630
9,284
6,732
US dollar
48,189
38,161
37,749
Brazilian real
44,432
46,190
35,841
Other currencies
57,139
58,997
49,717
Debt securities excluding impairment adjustments
283,846
243,489
193,942
Impairment losses
(349)
(286)
(226)
283,497
243,203
193,716
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.
Likewise, the increase in the debt securities portfolio under the
heading 'Financial assets at amortized cost' is due to the
continuation of the strategy started in year 2022 in which two new
business models were created for the optimization of excess
liquidity and the management of the maturity of the balance sheet
credit and deposit portfolios.
At 31 December 2024, 2023 and 2022 the gross exposure by
impairment stage of the book assets amounted to EUR 196,514
million, EUR 176,697 million and EUR 148,384 million in stage 1;
EUR 597 million, EUR 203 million and EUR 75 million in stage 2,
and EUR 701 million, EUR 461 million and EUR 404 million in stage
3, respectively.
In addition, at 31 December 2024, the Group had EUR 44 million of
exposure in assets purchased with impairments, which correspond
mainly to the business combinations carried out by the Group with
any additional impairment signs.
Annual report 2024
640
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
b) Breakdown
The breakdown, by origin of the issuer, of debt securities at 31
December 2024, 2023 and 2022, net of impairment losses, is as
follows:
EUR million
2024
2023
2022
Private
Public
Private
Public
Private
Public
fixed
fixed
fixed
fixed
fixed
fixed
income
income
Total
%
income
income
Total
%
income
income
Total
%
Spain
1,901
56,919
58,820 20.75%
2,525
40,321
42,846 17.62%
1,015
26,876
27,891 14.40%
United Kingdom
3,077
9,903
12,980
4.58%
2,816
4,748
7,564
3.11%
2,545
3,013
5,558
2.87%
Portugal
3,224
5,138
8,362
2.95%
2,826
4,815
7,641
3.14%
2,572
3,603
6,175
3.19%
Italy
3,072
22,954
26,026
9.18%
2,968
12,945
15,913
6.54%
1,948
8,329
10,277
5.31%
Ireland
4,557
14
4,571
1.61%
5,632
11
5,643
2.32%
6,141
11
6,152
3.18%
Poland
2,472
15,224
17,696
6.24%
2,937
12,482
15,419
6.34%
2,830
9,443
12,273
6.34%
Other European
countries
11,593
12,702
24,295
8.57%
9,797
15,495
25,292 10.40%
8,161
9,655
17,816
9.20%
United States
12,475
27,811
40,286 14.21%
8,959
22,992
31,951 13.14%
8,950
22,318
31,268 16.14%
Brazil
12,738
32,645
45,383 16.01%
13,551
32,342
45,893 18.87%
9,201
28,191
37,392 19.30%
Mexico
2,190
20,822
23,012
8.12%
1,969
20,738
22,707
9.34%
481
17,578
18,059
9.32%
Chile
96
6,982
7,078
2.50%
49
11,995
12,044
4.95%
28
10,009
10,037
5.18%
Other American
countries
3,336
4,502
7,838
2.76%
2,315
2,546
4,861
2.00%
1,560
5,960
7,520
3.88%
Rest of the world
1,100
6,050
7,150
2.52%
806
4,623
5,429
2.23%
390
2,908
3,298
1.70%
61,831 221,666
283,497
100%
57,150 186,053 243,203
100%
45,822 147,894 193,716
100%
The detail, by issuer rating, of Debt securities at 31 December
2024, 2023 and 2022 is as follows:
EUR million
2024
2023
2022
Private
Public
Private
Public
Private
Public
fixed
fixed
fixed
fixed
fixed
fixed
income
income
Total
%
income
income
Total
%
income
income
Total
%
AAA
16,889
6,440
23,329
8.23%
15,152
7,887
23,039
9.47%
13,481
5,494
18,975
9.80%
AA
16,972
47,254
64,226
22.65%
15,142
36,704
51,846 21.32%
9,542
30,502
40,044 20.67%
A
10,056
87,814
97,870
34.53%
11,175
68,112
79,287 32.60%
10,058
48,341
58,399 30.15%
BBB
8,900
44,483
53,383
18.83%
7,749
39,173
46,922 19.29%
5,181
29,900
35,081 18.11%
Below BBB
5,543
35,675
41,218
14.54%
4,654
34,177
38,831 15.97%
2,974
33,657
36,631 18.91%
Unrated
3,471
—
3,471
1.22%
3,278
—
3,278
1.35%
4,586
—
4,586
2.37%
61,831 221,666 283,497
100%
57,150 186,053 243,203
100%
45,822 147,894 193,716
100%
During 2024, Portugal's rating for sovereign issuances has been
modified from BBB+ to A-. For the years 2023 and 2022, the
distribution of the exposure by rating level of the previous table
has not been affected by ratings reviews of the sovereign issuers.
Annual report 2024
641
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The detail, by type of financial instrument, of private fixed-income
securities at 31 December 2024, 2023 and 2022, net of
8. Equity instruments
impairment losses, is as follows:
a) Breakdown
EUR million
The detail, by classification and type, of Equity instruments in the
2024
2023
2022
consolidated balance sheets is as follows:
Securitised mortgage bonds
10,709
9,310
9,222
EUR million
Other asset-backed bonds
11,624
10,243
7,120
Floating rate debt
17,323
15,376
12,397
Fixed rate debt
22,175
22,221
17,083
Total
61,831
57,150
45,822
c) Impairment losses
The changes in the impairment losses on debt securities are
summarised below:
Financial assets held for trading
Non-trading financial assets
mandatorily at fair value through
profit or loss
Financial assets designated at fair
value through other
comprehensive income
16,636
4,641
2,193
15,057
4,068
1,761
10,066
3,711
1,941
23,470
20,886
15,718
Type
Shares of Spanish companies
3,730
3,540
3,284
Balance at beginning of year
286
226
215
Shares of foreign companies
17,153
15,185
10,494
Net impairment losses for the year
A
226
24
16
Shares of investment funds
2,587
2,161
1,940
Of which:
23,470
20,886
15,718
Impairment losses charged to
income
234
36
30
Note 29 contains a detail of the 'Other comprehensive income',
Impairment losses reversed with a
credit to income
Assets written off
(8)
(131)
(12)
0
(14)
0
recognised in equity, on 'Financial assets designated at fair value
through other comprehensive income'.
Exchange differences and other items
(32)
36
(5)
b) Changes
Balance at end of year
349
286
226
The changes in 'Financial assets at fair value through other
Of which:
comprehensive income' were as follows:
By geographical location of risk:
European Union
America
23
326
22
264
26
200
EUR million
2024
2023
2022
Balance at beginning of the year
1,761
1,941
2,453
A. Of the EUR 226 million corresponding to net provisions for the year ended 31
December 2024 (EUR 24 million and EUR 16 million at 31 December 2023 and
2022, respectively), EUR 227 million relates to financial assets at amortized cost
(EUR 23 million and EUR 17 million at 31 December 2023 and 2022,
respectively) and EUR -1 million relates to financial assets designated at fair
value through other comprehensive income (EUR 1 million and EUR -1 million at
Net additions (disposals)
Changes in the fair value of equity
instruments measured at fair value
through other comprehensive
income (EIGR)
A
(35)
447
11
(162)
(33)
(497)
31 December 2023 and 2022, respectively).
At 31 December 2024, 2023 and 2022 the loan loss provision by
impairment stage of the assets accounted for under IFRS9
Changes in the RV hedged with
micro-hedging transactions
Balance at end of year
20
2,193
(29)
1,761
18
1,941
amounted to EUR 39 million, EUR 30 million and EUR 25 million in
A. They do not include fair value movements for currency risk hedged with hedging
stage 1, EUR 9 million, EUR 8 million and EUR 2 million in stage 2,
instruments.
and EUR 301 million, EUR 248 million and EUR 199 million in stage
3, respectively.
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.
2024
2023
2022
Classification
EUR million
2024
2023
2022
Annual report 2024
642
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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 the Group is as follows (see note 11):
EUR million
2024
2023
2022
Debit
Credit
Debit
Credit
Debit
Credit
balance balance balance balance balance balance
Interest
rate risk
30,834
24,754
31,480
26,014
38,789
37,641
Currency
risk
29,395
29,110
22,834
23,094
26,391
26,063
Price risk
1,765
1,632
1,279
904
1,347
817
Other
risks
2,106
2,257
735
577
475
370
64,100
57,753
56,328
50,589
67,002
64,891
b) Short positions
Following is a breakdown of the short positions (liabilities):
EUR million
2024
2023
2022
Borrowed securities
Debt instruments
2,566
3,263
1,979
Of which:
Banco Santander México, S.A.,
Institución de Banca Múltiple,
Grupo Financiero Santander
México
1,199
1,881
1,362
Banco Santander, S.A.
1,347
1,383
617
Equity instruments
538
546
993
Of which:
Banco Santander, S.A.
358
312
934
Short sales
Debt instruments
32,726
22,365
19,543
Of which:
Banco Santander, S.A.
23,813
16,143
12,902
Banco Santander (Brasil) S.A.
5,950
3,462
3,857
Santander US Capital Markets
LLC
2,382
2,442
2,690
35,830
26,174
22,515
10. Loans and advances to customers
a) Detail
The detail, by classification, of Loans and advances to customers in
the consolidated balance sheets is as follows:
EUR million
2024
2023
2022
Financial assets held for trading
26,591
11,634
9,550
Non-trading financial assets
mandatorily at fair value through
profit or loss
1,042
982
868
Financial assets designated at fair
value through profit or loss
4,610
6,219
5,774
Financial assets at fair value
through other comprehensive
income
10,784
7,669
8,215
Financial assets at amortized cost 1,011,042 1,009,845 1,011,597
Of which:
Impairment losses
(22,125)
(22,788)
(22,684)
1,054,069 1,036,349 1,036,004
Loans and advances to
customers disregarding
impairment losses
1,076,194 1,059,137 1,058,688
Note 51 contains a detail of the residual maturity periods of
'Financial assets at amortized cost'.
Note 54 shows the Group’s total exposure, by geographical origin
of the issuer.
There are no loans and advances to customers for material
amounts without fixed maturity dates.
Annual report 2024
643
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
b) Breakdown
Following is a breakdown of the loans and advances granted to the
Group's customers, which reflect the Group's exposure to credit
risk in its main activity, without considering the balance of value
adjustments for impairment, taking into account the type and
situation of the transactions, the geographical area of their
residence and the type of interest rate on the transactions:
EUR million
2024
2023
2022
Loan type and status
Commercial credit
53,209
55,628
56,688
Secured loans
557,463
554,375
565,609
Reverse repurchase agreements
59,648
44,184
39,500
Other term loans
296,339
295,485
290,031
Finance leases
40,120
38,723
39,833
Receivable on demand
10,756
12,277
11,435
Credit cards receivables
24,928
24,371
22,704
Impaired assets
33,731
34,094
32,888
1,076,194 1,059,137 1,058,688
Geographical area
Spain
198,164
203,680
212,804
European Union (excluding Spain)
223,525
211,368
202,958
United States and Puerto Rico
142,773
126,894
125,436
Other OECD countries
A
372,696
374,812
385,906
South America (non - OECD)
112,979
120,610
112,803
Rest of the world
26,057
21,773
18,781
1,076,194 1,059,137 1,058,688
Interest rate formula
Fixed rate
678,994
647,349
642,537
Floating rate
397,200
411,788
416,151
1,076,194 1,059,137 1,058,688
A. Includes, mainly, customers from the United Kingdom.
At 31 December 2024, 2023 and 2022 the Group had granted loans
amounting to EUR 16,562 million, EUR 15,544 million and EUR
14,698 million to Spanish public sector agencies which had a rating
at 31 December 2024 of A (ratings of A at 31 December 2023 and
31 December 2022), and EUR 13,593 million, EUR 11,530 million,
and EUR 12,467 million to the public sector in other countries (at
31 December 2024, the breakdown of this amount by issuer rating
was as follows: 3.5% AAA, 13.7% AA, 39.5% A, 31.1% BBB, 10.8%
below BBB and 1.4% without rating).
Without considering the public administrations, the amount of the
loans and advances at 31 December 2024, 2023 and 2022
amounts to EUR 1,046,039 million, EUR 1,032,063 million and EUR
1,031,523 million, of which, EUR 1,012,389 million, EUR 998,010
million and EUR 998,689 million are classified as performing,
respectively.
Annual report 2024
644
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Following is a detail, by activity, of the loans to customers at 31
December 2024, net of impairment losses:
EUR million
Secured loans
Net exposure
Loan to value ratio
C
More
More
More
than
than
than
40% and 60% and 80% and
Of which
Of which
Less than
less than less than less than
More
Total
Without
collateral
property
collateral
other
collateral
or equal
to 40%
or equal
to 60%
or equal
to 80%
or equal
to 100%
than
100%
Public sector
26,902
25,179
169
1,554
73
69
14
1,540
27
Other financial institutions (financial
business activity)
109,110
40,813
2,306
65,991
1,976
985
417
64,060
859
Non-financial corporations and individual
entrepreneurs (non-financial business
activity) (broken down by purpose)
330,025
174,064
72,803
83,158
29,010
27,544
23,192
47,590
28,625
Of which:
Construction and property
development
21,793
1,967
18,275
1,551
7,373
5,984
1,945
2,619
1,905
Civil engineering construction
3,182
1,998
80
1,104
77
50
234
666
157
Large companies
173,280
110,225
20,435
42,620
8,528
7,031
7,125
26,178
14,193
SMEs and individual entrepreneurs
131,770
59,874
34,013
37,883
13,032
14,479
13,888
18,127
12,370
Households – other (broken down by
purpose)
564,687
111,389
357,377
95,921
103,138
130,087
120,000
57,983
42,090
Of which:
Residential
350,450
1,910
348,437
103
93,356
120,164
107,941
25,131
1,948
Consumer loans
196,757
105,729
2,382
88,646
5,527
7,273
9,520
29,171
39,537
Other purposes
17,480
3,750
6,558
7,172
4,255
2,650
2,539
3,681
605
Total
A
1,030,724
351,445
432,655
246,624
134,197
158,685
143,623
171,173
71,601
Memorandum item
Refinanced and restructured transactions
B
19,998
6,532
7,594
5,872
3,557
1,845
1,906
1,403
4,755
A. In addition, the Group has granted advances to customers amounting to EUR 23,345 million, bringing the total of loans and advances to EUR 1,054,069 million.
B. Includes the net balance of the impairment of the accumulated value or accumulated losses in the fair value due to credit risk.
C. The ratio is the carrying amount of the transactions at 31 December 2024 provided by the latest available appraisal value of the collateral.
Note 54 contains information relating to the forborne loan
portfolio.
Annual report 2024
645
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Following is the movement of the gross exposure broken down by
2022
impairment stage of loans and advances to customers recognised
EUR million
under 'Financial assets at amortised cost' and 'Financial assets at
Stage 1
Stage 2
Stage 3
Total
fair value through other comprehensive income' during 2024, 2023
Balance at the beginning of
and 2022:
year
878,700
67,584
31,287 977,571
Movements
2024
Transfers
EUR million
To stage 2 from stage 1
(31,811)
31,811
—
Stage 1
Stage 2
Stage 3
Total
To stage 3 from stage 1
(11,143)
11,143
—
Balance at the beginning
of year
929,133
76,654
33,821 1,039,608
To stage 3 from stage 2
(8,487)
8,487
—
Movements
To stage 1 from stage 2
18,907
(18,907)
—
Transfers
To stage 2 from stage 3
3,250
(3,250)
—
To stage 2 from stage 1
(49,316)
49,316
—
To stage 1 from stage 3
456
(456)
—
To stage 3 from stage 1
(11,517)
11,517
—
Net changes on financial
assets
86,459
(8,839)
(2,568)
75,052
To stage 3 from stage 2
(10,083)
10,083
—
Write-offs
—
—
(12,235) (12,235)
To stage 1 from stage 2
21,475
(21,475)
—
Exchange differences and
To stage 2 from stage 3
2,358
(2,358)
—
others
1,293
284
209
1,786
To stage 1 from stage 3
447
(447)
—
Balance at the end of the
Net changes on financial
year
942,861
66,696
32,617 1,042,174
assets
43,281
(11,616)
(4,889)
26,776
Write-offs
—
—
(13,212)
(13,212)
In addition, at 31 December 2024, the Group had EUR 515 million
Exchange differences and
(EUR 694 million at 31 December 2023 and EUR 322 million at 31
others
(8,090)
(699)
(947)
(9,736)
December 2022) of exposure in assets purchased with impairment
Balance at the end of the
of which EUR 163 million still show signs of additional impairment,
year
925,413
84,455
33,568 1,043,436
which correspond mainly to the business combinations carried out
by the Group.
2023
EUR million
Stage 1
Stage 2
Stage 3
Total
Balance at the beginning
of year
942,861
66,696
32,617 1,042,174
Movements
Transfers
To stage 2 from stage 1
(43,278)
43,278
—
To stage 3 from stage 1
(12,636)
12,636
—
To stage 3 from stage 2
(9,915)
9,915
—
To stage 1 from stage 2
15,180
(15,180)
—
To stage 2 from stage 3
2,899
(2,899)
—
To stage 1 from stage 3
488
(488)
—
Net changes on financial
assets
29,696
(10,673)
(4,218)
14,805
Write-offs
—
—
(13,847)
(13,847)
Exchange differences and
others
(3,178)
(451)
105
(3,524)
Balance at the end of the
year
929,133
76,654
33,821 1,039,608
Annual report 2024
646
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
c) Impairment losses on loans and advances to
customers at amortised 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 amortised cost and at fair value
through other comprehensive income - Loans and advances -
Customers:
Following is the movement of the loan loss provision broken down
by impairment stage of loans and advances to customers during
2024, 2023 and 2022:
2024
EUR million
Stage 1
Stage 2
Stage 3
Total
Loss allowance at the
beginning of the year
3,596
4,954
14,238
22,788
EUR million
2024
2023
2022
Amount at beginning of the year
22,788
22,684
22,964
Impairment losses charged to income
for the year
13,608
14,011
11,676
Of which:
Impairment losses charged to profit
or loss
23,703
21,413
19,879
Impairment losses reversed with a
credit to profit or loss
(10,095)
(7,402)
(8,203)
Change of perimeter
—
(48)
—
Write-off of impaired balances against
recorded impairment allowance
(13,212) (13,847) (12,235)
Exchange differences and other
changes
(1,059)
(12)
279
Amount at end of the year
22,125
22,788
22,684
Which correspond to:
Impaired assets
14,088
14,238
13,931
Other assets
8,037
8,550
8,753
Of which:
Individually calculated
2,258
2,951
2,493
Collective calculated
19,867
19,837
20,191
In addition, provisions for debt securities amounting to EUR 226
million were recorded at 31 December 2024 (provisions amounting
to EUR 24 million and EUR 16 million as of 31 December 2023 and
2022, respectively), written-off assets recoveries have been
recorded in the year amounting to EUR 1,605 million at 31
December 2024 (EUR 1,592 million and EUR 1,459 million at 31
December 2023 and 2022, respectively).
EUR 415 million were recorded in the account for losses on
renegotiation or contractual modification at 31 December 2024
(EUR 513 and EUR 630 million at 31 December 2023 and 2022,
respectively) mainly due to the impact of the adjustment of the
gross amount of mortgage loans denominated and indexed to
foreign currencies in Poland, and of the Moratorium law approved
in July 2022 in this same country (see note 25.e.)
With this, the impairment recorded in Impairment or reversal of
impairment at financial assets not measured at fair value through
profit or loss and net gains and losses from changes: 'Financial
assets at fair value through other comprehensive income' and
'Financial assets at amortised cost (IFRS 9) and, Loans and
receivables (IAS 39)'; amounts EUR 12,644 million at 31 December
2024 (EUR 12,956 million and EUR 10,863 million at 31 December
2023 and 2022, respectively).
Transfers
To stage 2 from stage 1
(626)
2,676
2,050
To stage 3 from stage 1
(385)
4,548
4,163
To stage 3 from stage 2
(1,591)
3,444
1,853
To stage 1 from stage 2
109
(725)
(616)
To stage 2 from stage 3
278
(693)
(415)
To stage 1 from stage 3
23
(156)
(133)
Net changes of the
exposure and modifications
in the credit risk
755
(704)
6,655
6,706
Write-offs
—
—
(13,212) (13,212)
FX and other movements
(179)
(144)
(736)
(1,059)
Loss allowance at the end
of the year
3,293
4,744
14,088
22,125
2023
EUR million
Stage 1
Stage 2
Stage 3
Total
Loss allowance at the
beginning of the year
3,626
5,127
13,931
22,684
Transfers
To stage 2 from stage 1
(696)
2,954
2,258
To stage 3 from stage 1
(405)
4,278
3,873
To stage 3 from stage 2
(1,820)
3,721
1,901
To stage 1 from stage 2
149
(905)
(756)
To stage 2 from stage 3
282
(920)
(638)
To stage 1 from stage 3
27
(184)
(157)
Net changes of the exposure
and modifications in the
credit risk
875
(557)
7,212
7,530
Write-offs
—
—
(13,847) (13,847)
FX and other movements
20
(127)
47
(60)
Loss allowance at the end
of the year
3,596
4,954
14,238
22,788
Annual report 2024
647
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
2022
EUR million
Stage 1
Stage 2
Stage 3
Total
Loss allowance at the
beginning of the year
4,188
5,226
13,550
22,964
Transfers
To stage 2 from stage 1
(713)
3,046
2,333
To stage 3 from stage 1
(557)
4,586
4,029
To stage 3 from stage 2
(1,802)
3,182
1,380
To stage 1 from stage 2
215
(894)
(679)
To stage 2 from stage 3
400
(933)
(533)
To stage 1 from stage 3
9
(161)
(152)
Net changes of the exposure
and modifications in the
credit risk
414
(1,056)
5,940
5,298
Write-offs
—
—
(12,235) (12,235)
FX and other movements
70
207
2
279
Loss allowance at the end
of the year
3,626
5,127
13,931
22,684
d) Impaired assets and assets with unpaid past
due amounts
The detail of the changes in the balance of the financial assets
classified as 'Financial assets Loans to customers' considered to be
impaired due to credit risk is as follows:
EUR million
2024
2023
2022
Balance at beginning of year
34,094
32,888
31,645
Net additions
13,779
14,944
13,060
Written-off assets
(13,212)
(13,847)
(12,235)
Changes in the scope of
consolidation
17
(59)
—
Exchange differences and other
(947)
168
418
Balance at end of year
33,731
34,094
32,888
This amount, after deducting the related allowances, represents
the Group’s best estimate of the discounted value of the flows that
are expected to be recovered from the impaired assets.
At 31 December 2024, the Group’s written-off assets totalled EUR
49,939 million (EUR 48,138 million and EUR 43,675 million at 31
December 2023 and 2022, respectively).
Set forth below for each class of impaired asset are the gross
amount, associated allowances and information relating to the
collateral and/or other credit enhancements obtained at 31
December 2024:
EUR million
Estimated
Gross
amount
Allowance
recognised
collateral
value
A
Without associated real
collateral
14,207
8,037
—
With real estate collateral
9,519
2,371
6,979
With other collateral
10,005
3,680
5,789
Total
33,731
14,088
12,768
A. Including the estimated value of the collateral associated with each loan.
Accordingly, any other cash flows that may be obtained, such as those arising
from borrowers’ personal guarantees, are not included.
When classifying assets in the previous table, the main factors
considered by the Group to determine whether an asset has
become impaired are the existence of amounts past due —assets
impaired due to arrears— or other circumstances that may arise
which will not result in all contractual cash flows 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
'Loans and advances to customers' includes, inter alia, the
securitised loans transferred to third parties on which the Group
has retained the risks and rewards, albeit partially, and which
therefore, in accordance with the applicable accounting standards,
cannot be derecognised. This is mainly due to mortgage loans,
loans to companies and consumer loans in which the group retains
subordinate financing and/or grants some kind of credit
enhancement to new holders.
Securitisation is used as a tool for the management of regulatory
capital and as a means of diversifying the Group's liquidity sources.
The breakdown of securitized loans held on the balance sheet,
according to the nature of the financial instrument in which they
are originated, is shown below:
EUR million
2024
2023
2022
Retained on the balance sheet
80,824
75,738
82,603
Of which
Securitised mortgage assets
17,782
16,994
16,265
Of which: UK assets
9,034
6,096
4,144
Other securitised assets
63,042
58,744
66,338
Total
A
80,824
75,738
82,603
A. Note 22 details the liabilities associated with these securitisation transactions.
At 31 December 2024, Grupo Santander had loans that had been
fully derecognised and for which it retained servicing amounting to
EUR 14,919 million (EUR 13,923 million and EUR 13,711 million at
31 December 2023 and 2022, respectively).
Annual report 2024
648
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
11. Trading derivatives
The detail of the notional amounts and the market values of the
trading derivatives held by the Group in 2024, 2023 and 2022 is as
follows:
EUR million
2024
2023
2022
Notional
Market
Notional
Market
Notional
Market
amount
value
amount
value
amount
value
Trading derivatives
Interest rate risk
Forward rate agreements
1,992,413
13
829,913
3
100,579
Interest rate swaps
6,127,812
6,364
5,381,966
5,514
4,844,043
2,387
Options, futures and other derivatives
377,285
(297)
398,519
(51)
495,994
(1,261)
Credit risk
Credit default swaps
41,111
(572)
22,462
(86)
16,185
(6)
Foreign currency risk
Foreign currency purchases and sales
514,268
595
471,955
33
384,024
Foreign currency options
221,159
528
77,934
288
54,967
Currency swaps
625,765
(838)
586,405
(581)
496,441
(245)
Securities and commodities derivatives and other
78,328
554
68,664
619
71,237
641
Total
9,978,141
6,347
7,837,818
5,739
6,463,470
2,111
12. Non-current assets
13. Investments
The detail of Non-current assets held for sale in the consolidated
a) Breakdown
balance sheets is as follows:
The detail, by company, of Investments is as follows:
EUR million
2024
2023
2022
EUR million
Tangible assets
2,851
2,991
3,435
2024
2023
2022
Associated entities
5,216 5,682 5,634
Of which:
Foreclosed assets
2,621
2,773
3,101
Merlin Properties, SOCIMI, S.A.
1,803 1,621 1,653
Of which property assets in Spain
1,896
2,138
2,596
Caceis (Notes 3 and 12)
— 1,139 1,046
Other tangible assets held for
Zurich Santander Insurance
sale
230
218
334
America, S.L. - Consolidated
884
936
916
Other assets
1,151
23
18
Metrovacesa, S.A.
841
899
979
Of which: Caceis (Note 3)
A
1,137
—
—
CNP Santander
397
423
406
Total
4,002
3,014
3,453
Pluxee Beneficios Brasil S.A.
A
309
—
—
Other companies
982
664
634
A. As a result of the agreement for the sale of the stake in Caceis, as of 31
December 2024, this participation has been reclassified, at its carrying value,
Joint Ventures entities
2,061 1,964 1,981
from the caption 'Investments' to the caption 'Non-current assets held for sale'
in the balance sheet (see note 3).
Santander Caceis Latam Holding 1, S.L. -
Consolidated (previously Santander Securities
At 31 December 2024, the provisions recognised for the total non-
Services Latam Holding, S.L)
381
389
359
current assets held for sale totalled EUR 2,606 million (EUR 2,956
Santander Vida Seguros y Reaseguros, S.A.
356
362
356
million and EUR 3,425 million at 31 December 2023 and 2022,
respectively). The charges recorded in those years amounted to
U.C.I., S.A. - Consolidated
325
349
416
EUR 163 million, EUR 139 million and EUR 204 million,
Fortune Auto Finance Co., Ltd
261
254
244
respectively, and the recoveries during these exercises are
Hyundai Capital UK Limited
249
205
223
amounted to EUR 71 million, EUR 88 million and EUR 110 million,
Banco RCI Brasil S.A.
94
92
95
respectively.
Other companies
395
313
288
Total Associated entities and Joint ventures
7,277 7,646 7,615
A. Acquisition of 20% of Pluxee Beneficios Brasil, S.A. in 2024.
Annual report 2024
22
423
150
649
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Of the entities included above, at 31 December 2024, the entities
Merlin Properties, SOCIMI, S.A, and Metrovacesa, S.A. and
Compañía Española de Viviendas en Alquiler, S.A., are the only
listed companies.
Below is a breakdown of the Goodwill of the main investments in
joint ventures and associates included in the balance of this
heading:
EUR million
2024
2023
2022
Goodwill
1,238
1,460
1,508
Of which:
Zurich Santander Insurance
America, S.L. - Consolidated
Pluxee Beneficios Brasil, s.a.
A
526
122
526
—
526
—
Caceis (Notes 3 and 12)
—
337
337
A. Acquisition of 20% of Pluxee Beneficios Brasil, S.A. in 2024.
b) Changes
The changes in the investments were as follows:
EUR million
2024
2023
2022
Balance at beginning of year
7,646
7,615
7,525
Acquisitions (disposals) of companies
and capital increases (reductions)
A
1,011
52
142
Changes in the consolidation method
(note 3)
(13)
(43)
(320)
Of which:
Ebury Partners Limited
—
—
(382)
Transfers to Non current Assets
B
(1,137)
—
—
Effect of equity accounting
711
613
702
Dividends distributed and
reimbursements of share premium
(745)
(565)
(560)
Of which:
Zurich Santander Insurance América,
S.L. - Consolidado
(202)
(202)
(160)
Caceis
(114)
—
—
CNP Santander
(88)
(51)
(15)
Santander Vida Seguros y Reaseguros,
S.A.- Consolidated
(82)
(52)
(40)
CIP S.A.
(56)
—
—
Merlin Properties, SOCIMI, S.A.
(53)
(51)
(139)
Metrovacesa, S.A.
(52)
(50)
(124)
Hyundai Capital UK Limited
—
(58)
—
Other global result
(32)
(24)
70
Exchange differences and other changes
(164)
(2)
56
Balance at end of year
7,277
7,646
7,615
A. Includes the acquisition of 20% of Pluxee Beneficios Brasil, S.A. and the capital
increase of Merlin Properties, SOCIMI, S.A.
B. Stake in Caceis (Notes 3 and 12).
c) Impairment adjustments
During the years 2024, 2023 and 2022 there was no evidence of
significant impairment in the Group's associated interests.
Annual report 2024
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Contents
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Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
d) Other information
A summary of the financial information at the end of December
2024 of the main associates and joint ventures (obtained from the
information available at the date of preparation of the consolidated
financial statements) is shown below:
EUR million
Associates
Joint ventures
Santander
Merlin
Properties,
SOCIMI,
S.A.
A
Metrovacesa,
S.A.
A
Pluxee
Benefici
os Brasil
S.A.
Zurich
Santander
Insurance
América, S.L. -
Consolidated
CNP
Santander
Santander
Caceis Latam
Holding, S.L. -
Consolidated
U.C.I., S.A. -
Consolidated
Hyundai
Capital
UK
Limited
Fortune
Auto
Finance
Co., LTD
Vida Seguros
y
Reaseguros,
S.A.-
Consolidated
(note 3)
Banco RCI
Brasil S.A.
Current assets
600
2,137
643
1,850
215
159
219
2,321
174
130
12
Non current assets
11,465
396
639
18,384
2,273
537
9,698
3,354
2,195
1,689
1,985
Total assets
12,065
2,533
1,282
20,234
2,488
696
9,917
5,675
2,369
1,819
1,997
Current liabilities
215
555
292
718
108
152
127
2,366
36
186
82
Non current liabilities
5,312
292
450
18,541
1,990
12
9,187
2,812
1,812
1,088
1,677
Total liabilities
5,527
847
742
19,259
2,098
164
9,314
5,178
1,848
1,274
1,759
Attributable profit for the
period
(83)
(21)
79
481
105
80
(77)
65
22
123
40
Other accumulated
comprehensive income
(22)
—
(43)
(801)
(21)
(304)
98
14
(1)
(26)
(228)
Rest of equity
6,643
1,707
504
1,295
306
756
582
418
500
448
426
Total Equity
6,538
1,686
540
975
390
532
603
497
521
545
238
Total liabilities and equity
12,065
2,533
1,282
20,234
2,488
696
9,917
5,675
2,369
1,819
1,997
Ordinary activities income
473
585
419
5,784
878
146
640
369
188
882
277
Profit (loss) from continuing
operations
(83)
(21)
79
481
105
80
(77)
65
22
123
40
Profit (loss) for the year from
discontinuing operations
—
—
—
—
—
—
—
—
—
—
—
A. Data as of 31 December 2023, latest accounts available.
14. Insurance contracts linked to
pensions
The detail of Insurance contracts linked to pensions in the
consolidated balance sheets is as follows:
EUR million
2024
2023
2022
Assets relating to insurance
contracts covering post
employment benefit plan
obligations:
Banco Santander, S.A.
81
93
104
81
93
104
Annual report 2024
651
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
15. Liabilities under insurance
contracts
The detail of Liabilities under insurance contracts and reinsurance
assets in the consolidated balance sheets (see
note 2.i) is as follows:
EUR million
2024
2023
2022
Liabilities under insurance
contracts
17,829
17,799
16,426
Liability for Remaining
Coverage (LRC)
17,377
17,333
15,919
Liabilities relating to
insurance contracts
measured under BBA/VFA
17,292
17,262
15,841
Current value of future
cashflows (PVFCF)
16,614
16,627
15,206
Risk adjustment for
non-financial risk (RA)
199
211
154
Contractual service
margin (CSM)
479
424
481
Liabilities relating to
insurance contracts
measured under PAA
85
71
78
Liability for incurred claims
(LIC)
452
466
507
The balance of liabilities under insurance contracts reflected in the
consolidated balance sheet includes the following elements:
• Liability for Remaining Coverage (LRC): amount of obligations
provisioned to meet the fulfillment of future services assigned to
the group on a date for a specific coverage period.
• Liabilities relating to insurance contracts measured under BBA/
VFA, formed from the sum of the following elements:
- Current value of future cashflows (PVFCF): present value of
future inflow and outflow cash flows weighted by their
probability of occurrence.
- Risk adjustment for non-financial risk (RA): reflects
compensation for the uncertainty of cash flows by
quantifying the amount necessary to compensate for
unexpected losses in liability flows.
- Contractual service margin (CSM): future benefit to be
recognized during the coverage period.
• Liabilities relating to insurance contracts measured under PAA,
valued using the premium allocation method, represent the
portion of premiums written for the remaining hedge net of
acquisition expenses.
• Liability for Incurred Claims (LIC): amount of obligations
provisioned to meet the fulfillment of past services assigned to
the group on a date.
The insurance activity is carried out mainly in the life insurance
sector in its life-savings modality. Within the amount of liabilities
for insurance contracts, Individual Life Annuities are the product
that has the greatest weight in the consolidated balance sheet.
This product consists of life annuities where the client contributes a
single premium and receives a constant and periodic insured
income (monthly, quarterly, semi-annual or annual) until his death
where, at that time, the beneficiaries will receive the insured
capital of 102% or 101% of the premium contributed.
The income and expenses recorded in the profit and loss account
for the insurance activity, including reinsurance income and
expenses, are not material in the Group's consolidated annual
accounts.
Annual report 2024
652
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
16. Tangible assets
a) Changes
The changes in Tangible assets in the consolidated balance sheets
were as follows:
EUR million
Of which:
For leasing
Tangible assets
Leased
Leased
out under
out under
an operating
Investment
For own use
lease
property
Total
an operating Investment
For own use
lease
property
Total
Cost
Balance at 1 January 2022
25,529
24,423
1,537
51,489
4,429
—
—
4,429
Additions / disposals (net) due to
change in the scope of consolidation
14
89
—
103
1
—
—
1
Additions / disposals (net)
604
(822)
(64)
(282)
109
A
—
—
109
Transfers, exchange differences and
other items
423
1,476
107
2,006
153
—
—
153
Balance at 31 December 2022
26,570
25,166
1,580
53,316
4,692
—
—
4,692
Additions / disposals (net) due to
change in the scope of consolidation
11
37
—
48
(13)
—
—
(13)
Additions / disposals (net)
1,122
742
(34)
1,830
125
A
—
—
125
Transfers, exchange differences and
other items
(1,460)
(641)
30
(2,071)
33
—
—
33
Balance at 31 December 2023
26,243
25,304
1,576
53,123
4,837
—
—
4,837
Additions / disposals (net) due to
change in the scope of consolidation
28
(1,192)
—
(1,164)
—
—
—
—
Additions / disposals (net)
730
(1,716)
(17)
(1,003)
179
A
—
—
179
Transfers, exchange differences and
other items
(1,345)
1,003
(104)
(446)
(235)
—
—
(235)
Balance at 31 December 2024
25,656
23,399
1,455
50,510
4,781
—
—
4,781
Accumulated depreciation
Balances at 1 January 2022
(12,015)
(5,238)
(149)
(17,402)
(1,789)
—
—
(1,789)
Disposals due to change in the scope of
consolidation
(7)
(30)
4
(33)
—
—
—
—
Disposals
1,065
2,882
16
3,963
164
—
—
164
Charge for the year
(1,821)
—
(13)
(1,834)
(636)
—
—
(636)
Transfers, exchange differences and
other items
(114)
(3,192)
(30)
(3,336)
(4)
—
—
(4)
Balance at 31 December 2022
(12,892)
(5,578)
(172)
(18,642)
(2,265)
—
—
(2,265)
Disposals due to change in the scope of
consolidation
7
—
—
7
7
—
—
7
Disposals
284
2,540
—
2,824
160
—
—
160
Charge for the year
(1,744)
—
(11)
(1,755)
(609)
—
—
(609)
Transfers, exchange differences and
other items
1,708
(2,744)
(16)
(1,052)
98
—
—
98
Balance at 31 December 2023
(12,637)
(5,782)
(199) (18,618)
(2,609)
—
—
(2,609)
Disposals due to change in the scope of
consolidation
—
686
—
686
—
—
—
—
Disposals
672
3,214
—
3,886
196
—
—
196
Charge for the year
(1,602)
—
(9)
(1,611)
(492)
—
—
(492)
Transfers, exchange differences and
other items
948
(2,902)
46
(1,908)
91
—
—
91
Balance at 31 December 2024
(12,619)
(4,784)
(162) (17,565)
(2,814)
—
—
(2,814)
A. Includes contract extensions on operating leases and repurchases.
Annual report 2024
653
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
EUR million
Of which:
Tangible assets
For leasing
Leased
Leased
out under
out under
For own use
an operating
lease
Investment
property
Total
For own use
an operating
lease
Investment
property
Total
Impairment losses
Balance at 1 January 2022
(255)
(102)
(408)
(765)
(15)
—
—
(15)
Impairment charge for the year
(95)
(33)
(29)
(157)
(2)
—
—
(2)
Releases
12
1
4
17
1
—
—
1
Disposals due to change in the scope of
consolidation
—
—
—
—
—
—
—
—
Disposals
34
76
9
119
13
13
Exchange differences and other
115
25
45
185
(11)
—
—
(11)
Balance at 31 December 2022
(189)
(33)
(379)
(601)
(14)
—
—
(14)
Impairment charge for the year
(115)
(29)
(12)
(156)
(39)
—
—
(39)
Releases
5
11
4
20
4
—
—
4
Disposals due to change in the scope of
consolidation
—
—
—
—
—
—
—
—
Disposals
36
—
4
40
5
5
Exchange differences and other
65
47
(38)
74
(1)
—
—
(1)
Balance at 31 December 2023
(198)
(4)
(421)
(623)
(45)
—
—
(45)
Impairment charge for the year
(280)
(70)
(81)
(431)
(33)
—
—
(33)
Releases
34
3
8
45
10
—
—
10
Disposals due to change in the scope of
consolidation
—
—
—
—
—
—
—
—
Disposals
53
—
—
53
19
—
—
19
Exchange differences and other
(10)
32
76
98
—
—
—
—
Balance at 31 December 2024
(401)
(39)
(418)
(858)
(49)
—
—
(49)
Tangible assets, net
Balances at 31 December 2022
13,489
19,555
1,029
34,073
2,413
—
—
2,413
Balances at 31 December 2023
13,408
19,518
956
33,882
2,183
—
—
2,183
Balances at 31 December 2024
12,636
18,576
875
32,087
1,918
—
—
1,918
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
b) Tangible assets - For own use
The detail, by class of asset, of 'Property, plant and equipment'
which is owned by the Group in the consolidated balance sheets is
as follows:
EUR million
Tangible assets for own use
Cost
Accumulated
depreciation
Impairment
losses
Carrying
amount
Of which:
for leasing
Land and buildings
14,623
(4,467)
(175)
9,981
2,349
IT equipment and fixtures
5,285
(3,984)
—
1,301
53
Furniture and vehicles
6,445
(4,389)
—
2,056
11
Construction in progress and other items
217
(52)
(14)
151
—
Balances at 31 December 2022
26,570
(12,892)
(189)
13,489
2,413
Land and buildings
14,973
(5,010)
(154)
9,809
2,104
IT equipment and fixtures
5,614
(4,154)
—
1,460
60
Furniture and vehicles
5,412
(3,424)
—
1,988
19
Construction in progress and other items
244
(49)
(44)
151
—
Balances at 31 December 2023
26,243
(12,637)
(198)
13,408
2,183
Land and buildings
15,113
(5,516)
(353)
9,244
1,882
IT equipment and fixtures
5,283
(3,926)
—
1,357
23
Furniture and vehicles
4,963
(3,130)
—
1,833
13
Construction in progress and other items
297
(47)
(48)
202
—
Balances at 31 December 2024
25,656
(12,619)
(401)
12,636
1,918
The carrying amount at 31 December 2024 in the foregoing table
includes the following approximate amounts EUR 6,531 million
(EUR 7,119 million at 31 December 2023 and EUR 7,083 million at
31 December 2022) relating to property, plant and equipment
owned by group entities and branches located abroad.
c) Tangible assets - Leased out under an
operating lease
Grupo Santander has assets leased out under operating leases
where the company is the lessor and do not meet the accounting
requirements to be classified as finance leases. The net cost of
these leases is recorded as an asset and depreciated on a straight
line basis over the contractual term of the lease to the expected
residual value.
The expected residual value and, consequently, the monthly
depreciation expense may change during the term of the lease. The
Group estimates expected residual values using independent data
sources and internal statistical models. It also assesses the
estimate of the residual value of these leases and adjusts the
depreciation rate in line with the change in the expected value of
the asset at the end of the lease.
Grupo Santander periodically assesses its investment in operating
leases for impairment in certain circumstances, such as a systemic
and material decrease in the values of used vehicles. If assets
leased out under operating leases are deemed to be impaired,
impairment is measured as the amount by which the carrying
amount of the assets exceeds the fair value as estimated by
discounted cash flows.
Of the 18,576 EUR million that the Group had assigned to
operating leases at 31 December 2024 (19,518 EUR and 19,555
EUR at 31 December 2023 and 2022, respectively), EUR 11,336
million (EUR 12,525 and EUR 13,389 at 31 December 2023 and
2022, respectively) relate to vehicles of Santander US Auto's
business. The variable lease payments of various items of this
business are not significant.
In addition, the maturity analysis of the assets leased out under
operating leases from Santander US Auto, is as follows:
EUR million
Maturity Analysis
2024
2025
3,524
2026
5,246
2027
4,481
2028
351
d) Tangible assets - Investment property
The fair value of investment property at 31 December 2024, 2023,
2022 amounted to EUR 1,041, 1,163 and 1,153 million,
respectively. A comparison of the fair value of investment property
at 31 December 2024, 2023 and 2022 with the net book value
shows gross unrealised gains of EUR 166, 207 and 124 million,
respectively, attributed completely to the group.
Annual report 2024
655
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The rental income earned from investment property and the direct
costs related both to investment properties that generated rental
income in 2024, 2023 and 2022 and to investment properties that
did not generate rental income in those years are not material in
the context of the consolidated financial statements.
17. Intangible assets – Goodwill
The detail of goodwill, based on the cash-generating units giving
rise thereto, is as follows:
EUR million
2024
2023
2022
Banco Santander (Brasil)
3,079
3,679
3,503
SAM Investment Holdings Limited
1,444
1,444
1,444
Santander Consumer Germany
1,304
1,304
1,304
Santander Bank Polska
1,178
1,159
1,075
Santander Portugal
1,040
1,040
1,040
Santander US Auto
1,068
1,003
1,039
Santander España
998
998
998
Santander Holding USA (ex. Auto)
865
814
844
Santander UK
641
612
599
Banco Santander - Chile
482
516
548
Grupo Financiero Santander (México)
453
523
469
Ebury Partners
340
350
298
Santander Consumer Nordics
211
206
215
Other companies
335
369
365
Total Goodwill
13,438 14,017 13,741
The changes in goodwill were as follows:
EUR million
2024
2023
2022
Balance at beginning of year
14,017
13,741
12,713
Additions (note 3)
30
56
534
Of which:
Ebury Partners
—
45
316
Santander Holding USA (ex. Auto)
A
—
—
158
Impairment losses
(4)
(20)
—
Disposals or changes in scope of
consolidation
—
—
—
Exchange differences and other items
(605)
240
494
Balance at end of year
13,438
14,017
13,741
A. Acquisition of Santander US Capital Markets LLC (previously Amherst Pierpont
Securities LLC) (see note 3).
Grupo Santander has goodwill generated by cash-generating units
located in non-euro currency countries (mainly Brazil, Poland, the
United States, the United Kingdom, Chile, Mexico, Norway and
Sweden) and, therefore, this gives rise to exchange differences on
the translation to euros, at closing rates, of the amounts of
goodwill denominated in foreign currencies. Accordingly, in 2024
there was a decrease of EUR 605 million (an increase of EUR 240
million in 2023 and EUR 494 million in 2022), due to exchange
differences and other items which, pursuant to current standards,
were recognised with a change to 'Other comprehensive income -
Items that may be reclassified to profit or loss - Exchange
differences in other comprehensive income in the consolidated
statement of recognised income and expense' (see note 29.d).
At least once per year (or whenever there is any indication of
impairment), Grupo Santander performs an analysis of the
potential impairment of its recorded goodwill with respect to its
recoverable amount. The first step that must be taken in order to
perform this analysis is the identification of the cash-generating
units, which are the Group's smallest identifiable groups of assets
that generate cash inflows that are largely independent of the cash
flows of other assets or groups of assets.
The amount to be recovered of each cash-generating unit is
determined taking into consideration the carrying amount
(including any fair value adjustment arising on the business
combination) of all the assets and liabilities of all the independent
legal entities composing the cash-generating unit, together with
the related goodwill.
The amount to be recovered of the cash-generating unit is
compared with its recoverable amount in order to determine
whether there is any impairment.
Grupo Santander's directors assess the existence of any indication
that might be considered to be evidence of impairment of the cash
generating unit by reviewing information including the following
(i) certain macroeconomic variables that might affect its
investments (population data, political situation, economic
situation —including banking concentration level—, among others)
and (ii) various microeconomic variables comparing the
investments of the Group with the financial services industry of the
country in which the cash-generating unit carries on most of its
business activities (balance sheet composition, total funds under
management, results, efficiency ratio, capital adequacy ratio,
return on equity, among others).
Regardless of whether there is any indication of impairment,
every year the Group calculates the recoverable amount of each
cash-generating unit to which goodwill, has been allocated and, to
this end, it uses price quotations, market references (multiples),
internal estimates and valuations performed by internal and
external experts.
Firstly, the Group determines the recoverable amount by
calculating the fair value of each cash-generating unit on the basis
of the quoted price of the cash-generating units, if available.
Annual report 2024
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Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
In addition, the Group performs estimates of the recoverable
amounts of certain cash-generating units by calculating their value
in use using discounted cash flow projections. The main
assumptions used in this calculation are (i) earnings projections
based on the financial budgets approved by the Group’s directors
which cover between three and five year periods (unless a longer
time horizon can be justified), (ii) discount rates determined as the
cost of capital taking into account the risk-free rate of return plus a
risk premium in line with the market and the business in which the
units operate and (iii) constant growth rates used in order to
extrapolate earnings in perpetuity which do not exceed the long
term average growth rate for the market in which the cash
generating unit in question operates.
The cash flow projections used by Group management to obtain
the values in use are based on the financial budgets approved by
both local management of the related local units and the Group’s
directors. The Group’s budgetary estimation process is common for
all the cash-generating units. The local management teams
prepare their budgets using the following key assumptions:
a) Microeconomic variables of the cash-generating unit:
management takes into consideration the current balance sheet
structure, the product mix and the business decisions taken by
local management in this regard.
b) Macroeconomic variables: growth is estimated on the basis of
the changing environment, taking into consideration expected
GDP growth in the unit’s geographical location and forecast
trends in interest and exchange rates. These data, which are
based on external information sources, are provided by the
Group’s economic research service.
c) Past performance variables: in addition, management takes into
consideration in the projection the difference (both positive and
negative) between the cash-generating unit’s past performance
and budgets.
During 2024, the Group has recognised impairment losses of EUR
4 million of immaterial goodwill that has been recorded under the
heading 'Impairment or reversal of the impairment of non-financial
assets - Intangible assets' (EUR 20 million and EUR 0 million in
2023 and 2022, respectively). Goodwill is deducted from CET1 for
regulatory purposes, so an impairment of goodwill has no impact
on the Group's capital ratios.
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Following is a detail of the main assumptions taken into account in
determining the recoverable amount, at 2024 year-end, of the
most significant cash-generating units which were valued using
the discounted cash flow method:
2024
Nominal
Projected period
Discount rate
A
perpetual
growth rate
Santander UK
5 years
11.8%
2.5%
Santander Bank Polska
5 years
12.9%
5.0%
Santander US Auto
3 years
12.2%
3.0%
Santander Holding USA (ex. Auto)
B
5 years
13.4%
3.5%
Santander Consumer Germany
5 years
9.1%
2.0%
SAM Investment Holdings, Limited
5 years
11.6%
2.5%
Santander Portugal
5 years
10.2%
2.5%
A. Post-tax discount rate.
B. Weighted information of the main assumptions of the segments to which goodwill has been allocated.
The discount and nominal perpetual growth rates taken into
account in 2023 and 2022 are presented below for comparison
purposes:
Nominal
Discount rate
A
perpetual
growth rate
2023
2022
2023
2022
Santander UK
11.9%
11.1%
2.5%
2.5%
Santander Bank Polska
13.2%
15.6%
5.0%
4.8%
Santander US Auto
12.8%
12.2%
3.0%
2.8%
Santander Holding USA (ex. Auto)
B
13.4%
12.6%
3.5%
3.5%
Santander Consumer Germany
9.7%
9.4%
2.3%
2.3%
SAM Investment Holdings, Limited
11.6%
12.2%
2.5%
2.5%
Santander Portugal
11.2%
11.1%
2.5%
2.3%
A. Post-tax discount rate.
B. Weighted information of the main assumptions of the segments to which goodwill has been allocated.
The variations reflected in the assumptions used in 2024 are
mainly a consequence of the current macroeconomic scenario, as
well as the level of inflation.
Given the degree of uncertainty of the above key assumptions on
which the recoverable amount of the cash-generating units is
based, the Group performs a sensitivity analysis which consisted of
adjusting +/- 50 basis points the discount rate, adjusting +/- 50
basis points the growth rate in perpetuity and reducing the cash
flow projections by 5%. These changes in the key assumptions in
isolation mean that the recoverable amount of all the cash
generating units continues to exceed their amount to be recovered
and have been considered by the Group as reasonably possible
changes in the business operations of the cash-generating units
are not contemplated.
The recoverable amount of Banco Santander - Chile and Banco
Santander (Brasil) was calculated as the fair values of the
aforementioned cash-generating units obtained from the quoted
market prices of their shares at year-end. This value exceeded the
amount to be recovered. A significant reduction in the quoted
market prices of these cash generating unit could result in an
indication of impairment which in turn may lead to a goodwill
impairment charge in the future.
Annual report 2024
658
IT developments
3-10 years
12,867
2,104
(8)
(1,169)
(472)
13,322
Other
1,866
—
—
—
41
1,907
Accumulated amortisation
—
6
(1,683)
1,062
231
(9,235)
(1,169)
(439)
15,261
40
—
—
—
(8)
32
(8,851)
Estimated
useful life
31/12/2023
Net
additions
and
disposals
Change in
scope of
consolidation
Amortization
and
impairment
Application of
amortization
and
impairment
Exchange
differences
and other 31/12/2024
Cost
14,773
2,104
(8)
Brand names
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
18. Intangible assets -
Other intangible assets
The detail of Intangible assets - Other intangible assets in the
consolidated balance sheets and of the changes therein in 2024,
2023, and 2022 is as follows:
EUR million
Development
(8,078)
—
6
(1,546)
1,062
244
(8,312)
Other
(773)
—
—
(137)
—
(13)
(923)
Impairment losses
(68)
—
—
(227)
107
(17)
(205)
5,854
2,104
(2)
(1,910)
—
(225)
5,821
Of which addition
(227)
Of which Liberation
—
EUR million
Estimated
useful life 31/12/2022
Net
additions
and
disposals
Change in
scope of
consolidation
Amortization
and
impairment
Application of
amortization
and
impairment
Exchange
differences
and other 31/12/2023
Cost
12,502
2,197
176
(230)
128
14,773
Brand names
33
—
8
(2)
1
40
IT developments
3-10 years
10,721
2,197
18
(196)
127
12,867
Other
1,748
—
150
(32)
—
1,866
Accumulated amortisation
(7,554)
—
5
(1,429)
209
(82)
(8,851)
Development
(6,866)
—
—
(1,294)
177
(95)
(8,078)
Other
(688)
—
5
(135)
32
13
(773)
Impairment losses
(44)
—
—
(53)
21
8
(68)
Of which addition
(53)
Of which Liberation
—
4,904
2,197
181
(1,482)
—
54
5,854
Annual report 2024
659
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
EUR million
Estimated
useful life 31/12/2021
Net
additions
and
disposals
Change in
scope of
consolidation
Amortization
and
impairment
Application of
amortization
and
impairment
Exchange
differences
and other 31/12/2022
Cost
10,712
1,757
381
(511)
163
12,502
Brand names
4
—
27
—
2
33
IT developments
3-10 years
9,189
1,748
153
(497)
128
10,721
Other
1,519
9
201
(14)
33
1,748
Accumulated amortisation
(6,707)
—
—
(1,151)
412
(108)
(7,554)
Development
(6,149)
—
—
(1,024)
403
(96)
(6,866)
Other
(558)
—
—
(127)
9
(12)
(688)
Impairment losses
(134)
—
—
(75)
99
66
(44)
Of which addition
(75)
Of which Liberation
—
3,871
1,757
381
(1,226)
—
121
4,904
In 2024, 2023 and 2022, impairment losses of EUR 227 million,
EUR 53 million and EUR 75 million, respectively, were recognised
under Impairment or reversal of impairment on non-financial
assets, net – intangible assets. This impairment losses are related
mainly to the decline in or loss of the recoverable value of certain
computer systems and applications as a result of the processes
initiated by the Group to transform or integrate businesses and to
adapt to the various regulatory changes.
19. Other assets
The detail of 'Other assets' is as follows:
EUR million
2024
2023
2022
Transactions in transit
469
246
83
Net pension plan assets (note 25)
677
1,001
1,345
Prepayments and accrued income
3,016
2,911
3,003
Other (note 2.m)
4,310
4,598
5,536
8,472
8,756
9,967
Annual report 2024
660
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
20. Deposits from central banks and
credit institutions
The detail, by classification, counterparty, type and currency, of
Deposits from central banks and 'Deposits from credit institutions'
in the consolidated balance sheets is as follows:
EUR million
2024
2023
2022
CENTRAL BANKS
Classification
Financial liabilities held for trading
13,300
7,808
5,757
Financial liabilities designated at fair
value through profit or loss
1,774
1,209
1,740
Financial liabilities at amortized cost
24,882
48,782
76,952
39,956
57,799
84,449
Type
Deposits on demand
405
117
—
Time deposits
18,488
43,853
72,320
Reverse repurchase agreements
21,063
13,829
12,129
39,956
57,799
84,449
CREDIT INSTITUTIONS
Classification
Financial liabilities held for trading
26,284
17,862
9,796
Financial liabilities designated at fair
value through profit or loss
1,625
1,735
1,958
Financial liabilities at amortized cost
90,012
81,246
68,582
117,921 100,843
80,336
Type
Deposits on demand
6,657
5,468
6,808
Time deposits
54,716
54,402
49,221
Reverse repurchase agreements
56,273
40,689
24,245
Subordinated deposits
275
284
62
117,921 100,843
80,336
Currency
Euro
53,779
53,921
65,133
Pound sterling
21,853
27,697
35,357
US dollar
57,992
49,447
30,924
Brazilian real
7,459
7,997
14,195
Other currencies
16,794
19,580
19,176
TOTAL
157,877 158,642 164,785
At 31 December 2024, no conditional long-term financing of the
European Central Bank (TLTRO- Targeted Long-Term Refinancing
Operation-) is outstanding. As of 2023 and 2022, the balance of
such financing amounted to EUR 11,583 million and EUR 33,536
million, respectively, all corresponding to the TLTRO III financing
program.
At 31 December 2024, the expense recognized in the consolidated
income statement corresponding to TLTRO III amounts to EUR 158
million (expense of EUR 659 million and income EUR 489 million at
31 December 2023 and 2022, respectively), as a result of the
conditions of the financing program.
Note 51 contains a detail of the residual maturity periods of
financial liabilities at amortised cost.
21. Customer deposits
The detail, by classification, geographical area and type, of
Customer deposits is as follows:
EUR million
2024
Classification
Financial liabilities held for trading
18,984
19,837
12,226
Financial liabilities designated at
fair value through profit or loss
25,407
32,052
31,143
Financial liabilities
at amortized cost
1,011,545
995,280
966,353
1,055,936 1,047,169 1,009,722
Geographical area
Spain
395,479
388,736
386,826
European Union (excluding Spain)
133,056
120,540
111,930
United Kingdom
233,192
235,698
232,364
United States
88,712
83,555
87,497
Rest of America
194,689
208,713
181,782
Rest of the world
10,808
9,927
9,323
1,055,936 1,047,169 1,009,722
Type
Demand deposits-
677,818
661,262
710,232
Time deposits-
298,276
305,296
235,598
Deposits redeemable at notice
1,525
1,789
501
Repurchase agreements
78,317
78,822
63,391
1,055,936 1,047,169 1,009,722
Note 51 contains a detail of the residual maturity periods of
financial liabilities at amortised cost.
Annual report 2024
661
2023
2022
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
22. Marketable debt securities
a) Breakdown
The detail, by classification and type, of Marketable debt securities
is as follows:
EUR million
2024
2023
2022
Classification
Financial liabilities
held for trading
—
—
—
Financial liabilities designated
at fair value through profit or loss
7,554
5,371
5,427
Financial liabilities
at amortized cost
317,967
303,208
274,912
325,521
308,579
280,339
Type
Bonds and debentures outstanding
252,765
231,880
211,597
Subordinated
35,461
30,529
25,717
Notes and other securities
37,295
46,170
43,025
325,521
308,579
280,339
The distribution of the book value of debt securities issued by
contractual maturity at 31 December 2024 is shown below:
EUR million
Within 3
3 to 12
1 to 3
3 to 5
More than 5
months
months
years
years
years
Total
Subordinated debt
1,572
1,857
3,928
2,192
25,912
35,461
Senior unsecured debt
9,586
17,494
50,084
37,748
36,994
151,906
Senior secured debt
6,389
11,337
48,824
21,616
12,693
100,859
Promissory notes and other securities
18,866
18,429
—
—
—
37,295
Debt securities issued
36,413
49,117
102,836
61,556
75,599
325,521
The distribution by contractual maturity of the notional amounts of
these debt securities issued at 31 December 2024 is as follows:
EUR million
Within 3
3 to 12
1 to 3
3 to 5
More than 5
months
months
years
years
years
Total
Subordinated debt
1,542
1,836
3,809
2,165
25,370
34,722
Senior unsecured debt
9,533
17,398
49,808
37,540
36,790
151,069
Senior secured debt
6,372
11,307
48,689
21,555
12,657
100,580
Promissory notes and other securities
18,868
18,432
—
—
—
37,300
Debt securities issued
36,315
48,973
102,306
61,260
74,817
323,671
Annual report 2024
662
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
b) Bonds and debentures outstanding
The detail, by currency of issue, of 'Bonds and debentures
outstanding' is as follows:
EUR million
2024
Currency of issue
2024
2023
2022
Outstanding issue
amount in foreign
currency (Million)
Annual
interest rate
(%)
Euro
110,973
101,657
87,295
110,973
2.78%
US dollar
79,740
70,229
75,798
82,846
4.86%
Pound sterling
23,961
20,520
15,883
19,872
4.18%
Brazilian real
18,683
21,861
18,024
120,084
12.24%
Chilean peso
4,579
4,921
4,653
4,728,094
3.38%
Other currencies
14,829
12,692
9,944
Balance at end of year
252,765
231,880
211,597
Annual report 2024
663
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The changes in 'Bonds and debentures outstanding' were as follows:
EUR million
2024
2023
2022
Balance at beginning of year
231,880
211,597
194,362
Net inclusion of entities in the Group
(1,224)
(1,467)
—
Of which:
SPIRE SA Compartment 2023-374
(1,224)
—
—
Auto ABS UK Loans PLC
—
(841)
—
PSA Bank Deutschland GmbH
—
(626)
—
Issues
77,921
68,568
66,033
Of which:
Banco Santander, S.A.
20,559
19,706
19,243
Santander UK Group Holdings plc
9,884
6,002
10,178
Santander Consumer USA Holdings Inc.
8,949
7,309
13,315
Banco Santander (Brasil) S.A.
8,039
12,781
11,233
Santander Bank, National Association
4,133
1,346
1,222
Santander Holdings USA, Inc.
3,004
1,850
2,315
Santander International Products, Plc.
2,752
1,054
599
Santander Consumer Finance, S.A.
2,271
2,557
1,293
Stellantis Financial Services Italia S.p.A.
2,021
761
—
SC Germany S.A., Compartment Consumer 2024-1
1,500
—
—
Santander Consumo 6, F.T.
1,230
—
—
Santander Consumo 7, F.T.
1,218
—
—
Banco Santander - Chile
1,171
814
1,486
Banco Santander Totta, S.A.
1,129
1,734
113
Santander Bank Polska S.A.
1,002
1,102
—
Santander Consumer Bank S.p.A.
1,001
1,460
—
SC Germany S.A., Compartment Consumer 2024-2
1,000
—
—
Banque Stellantis France
897
1,145
60
Santander Consumer Bank AG
180
1,256
—
Redemptions and repurchases
(57,676)
(48,825)
(49,903)
Of which:
Banco Santander, S.A.
(15,888)
(7,889)
(9,297)
Santander Consumer USA Holdings Inc.
(10,806)
(14,466)
(15,252)
Santander Group UK
(7,764)
(6,185)
(5,267)
Banco Santander (Brasil) S.A.
(6,919)
(10,542)
(2,721)
Santander Consumer Finance, S.A.
(2,900)
(1,800)
(3,357)
Banco Santander - Chile
(1,486)
(575)
(1,452)
Santander Bank, National Association
(1,440)
(567)
(287)
Santander Holdings USA, Inc.
(1,387)
—
(3,153)
Banco Santander Totta, S.A.
(1,055)
(108)
(62)
Banque Stellantis France
(565)
(813)
(1,165)
Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México
(122)
(140)
(1,316)
Exchange differences and other movements
1,864
2,007
1,105
Balance at year-end
252,765
231,880
211,597
Annual report 2024
664
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
c) Notes and other securities
The notes of the Group (see Note 22.a) were issued basically by
Santander Consumer Finance, S.A., Santander UK plc, Banco
Santander (México), S.A. Institución de Banca Múltiple, Grupo
Financiero Santander México, Banco Santander, S.A., Santander
Consumer Bank AG, Banque Stellantis France, Banco Santander
Chile and Banco Santander S.A. - Uruguay.
d) Guarantees
Set forth below is information on the liabilities secured by assets:
EUR million
2024
2023
2022
Asset-backed securities
49,723
37,717
40,138
Of which, mortgage-backed
securities
4,377
3,019
1,549
Other mortgage securities
50,141
49,478
43,650
Of which: mortgage-backed bonds
22,631
24,619
22,049
Covered bonds (non mortgage and
export financing)
995
764
352
100,859
87,959
84,140
The main characteristics of the assets securing the aforementioned
financial liabilities are as follows:
1. Asset-backed securities
a. Mortgage-backed securities- these securities are secured by
mortgage assets (see Note 10.e) with average maturities of
more than ten years that must: be a first mortgage for
acquisition of principal or second residence, be current in
payments, have a loan-to-value ratio below 80% and have a
liability insurance policy in force covering at least the appraisal
value. The value of the financial liabilities broken down in the
foregoing table is lower than the balance of the assets securing
them —securitised assets retained on the balance sheet—
mainly because the Group repurchases a portion of the bonds
issued, and in such cases they are not recognised on the liability
side of the consolidated balance sheet.
b. Other asset - backed securities: includes asset-backed
securities, notes issued by securitization funds collateralized
mainly by mortgage loans that do not meet the above
requirements and other loans (mainly personal loans with an
average maturity of five years and loans to SMEs with average
maturities of seven years) and private issues of Santander
Consumer USA Holdings Inc. collateralized by vehicles assigned
under operating leases.
2. Other mortgage securities include mainly:
a. Mortgage-backed bonds with average maturities of more than
ten years that are secured by a portfolio of mortgage loans and
credits (included in secured loans —see note 10.b—) which
must: not be classified as of procedural stage; have available
appraisals performed by specialised entities; have a loan-to
value (LTV) ratio below 80% in the case of home loans and
below 60% for loans for other assets and have sufficient
liability insurance.
b. Other debt securities issued as part of the Group’s liquidity
strategy in the UK, mainly covered bonds in the UK secured by
mortgage loans and other assets.
Grupo Santander has a balance corresponding to mortgage bonds
at 31 December 2024 of EUR 22,631 million (all of them issued in
euros), which correspond to issues of Banco Santander, S.A. (with
an outstanding face value of EUR 22,368 million).
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.
Additionally, Banco Santander, S.A. 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.
The fair value of the guarantees received by the Group (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 Consolidated financial
statements as a whole.
Annual report 2024
665
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
23. Subordinated liabilities
a) Breakdown
The detail, by currency of issue, of Subordinated liabilities, deposits
and marketable debt securities, in the consolidated balance sheets
is as follows:
Outstanding issue
amount in foreign
Annual interest
EUR million
2024
Currency of issue
2024
2023
2022
currency (million)
rate (%)
Euro
14,999
13,684
12,940
14,999
4.11%
US dollar
13,425
11,300
8,438
13,948
6.27%
Pound sterling
1,409
1,353
1,358
1,169
4.30%
Brazilian real
3,600
2,518
1,127
23,139
14.01%
Other currencies
2,380
2,057
2,063
Balance at end of year
35,813
30,912
25,926
Note 51 contains a detail of the residual maturity periods of
subordinated liabilities at each year-end.
b) Changes
The movement in the balance of subordinated liabilities in the last
three years were as follows:
EUR million
2024
2023
2022
Balance at beginning of year
30,912
25,926 26,196
Net inclusion of entities in the Group
—
(40)
—
Issuances
A
7,001
7,007
119
Of which:
Banco Santander, S.A.
5,625
5,610
—
Banco Santander (Brasil) S.A.
1,338
1,112
—
Banque Stellantis France
25
150
—
Banco Santander - Chile
—
—
113
Redemptions and repurchases
A
(2,572) (1,781) (1,040)
Of which:
Banco Santander, S.A.
(2,433) (1,000)
(889)
Santander Bank Polska S.A.
(100)
—
—
Santander UK plc
—
(702)
(98)
Banque Stellantis France
—
(78)
—
Banco Santander México, S.A.,
Institución de Banca Múltiple, Grupo
Financiero Santander México
—
—
(52)
Exchange differences and other
movements
472
(200)
651
Balance at end of year
35,813
30,912 25,926
A. The balance relating to issuances, redemptions and repurchases (EUR 4,429
million), together with the interest paid in remuneration of these issuances
including PPCC (EUR 1,524 million), is included in the cash flow from financing
activities.
c) Other disclosures
This caption includes contingent convertible or redeemable
preferred participations, as well as other subordinated financial
instruments issued by consolidated companies, 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
except for the issues of Santander UK plc, the rest 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.
Annual report 2024
666
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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 first ten 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.
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 1,054 million at the
exchange rate on the day of issue) and USD 1,350 million (EUR
1,235 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 of 160 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.
Annual report 2024
667
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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.
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.
Issues by Banco Santander - Chile
In January 2022, Banco Santander - Chile carried out an issuance, in
the local market, of subordinated obligations with a term of 6
years, for an amount of UF 3.3 million (equivalent to USD
105 million), which accrues an annual interest of 1.25%.
In June 2020, Banco Santander - Chile issued subordinated
debentures for a term of fifteen years, in the amount of UF
5 million (equivalent to USD 185 million). The issue bears annual
interest at 3.5%.
In April 2020, Banco Santander - Chile issued two subordinated
debentures, the first for a term of fourteen years, for an amount of
UF 3 million (equivalent to USD 100 million), bearing annual
interest at 3%, and the second for a term of nineteen years, for an
amount of UF 3 million (equivalent to USD 100 million), bearing
annual interest at 3.15%.
Issues Banco Santander (Brasil) S.A.
At September 2024, Brazil issued AT1 Financial Notes (PerpNC5) in
its local market for an amount of BRL 7,600 million at CDI + 140%
(equivalent to UST +222 bps).
At the beginning of October 2023, Banco Santander (Brasil) S.A.
carried out an issue of Subordinated Financial Bills (TIER II) in its
local market for a 10-year term, with a repurchase option as of the
fifth anniversary of the issue date, in the amount of BRL
6,000 million. The issue price was CDI +1.6% per annum, payable
at maturity.
At the end of November 2021, Banco Santander (Brasil) S.A. carried
out an issue of Subordinated Financial Bills (TIER II) in its local
market for a 10-year term, with a repurchase option as of the fifth
anniversary of the issue date, in the amount of BRL 5,500 million.
The issue price was CDI 2% per annum, payable at maturity.
Issues by Banco Santander México, S.A., Institución de Banca
Múltiple, Grupo Financiero Santander México
In January 2022, Banco Santander México, S.A. Multiple Institution,
Grupo Financiero Santander México proceeded to redeem early a
perpetual issue carried out at 30 December 2016 for a nominal
amount of USD 500 million, of which 88.2% of the issue had been
acquired by the Group.
At 1 October 2018, a ten-year subordinated debenture issue was
made by Banco Santander México, S.A. Institución de Banca
Múltiple, Grupo Financiero Santander México for a nominal
amount of USD 1,300 million and at an interest rate of 5.95%, with
the group having acquired 75% of the issue.
Annual report 2024
668
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Issues by Santander Bank Polska S.A.
At 28 November 2024, Santander Bank Polska S.A proceeded to
repay subordinated debt ISIN XS0531310182 for EUR 100 million.
The debt was originally fully subscribed by the EBRD at 5 August
2010.
At 20 April 2018, Santander Bank Polska S.A. carried out a ten-year
subordinated debenture issue with a redemption option on the
fifth anniversary of the issue date in the amount of PLN
1,000 million. The issue bears floating interest at Wibor (6M) + 160
basis points payable semi-annually.
The accrued interests from the subordinated liabilities during 2024
amounted to EUR 1,397 million (EUR 1,049 million and EUR 992
million during 2023 and 2022, respectively).
In addition, interests from the PPCC and PPCA during 2023
amounted to EUR 620 million (EUR 492 million and EUR 529
million in 2023 and 2022, respectively).
24. Other financial liabilities
The detail of Other financial liabilities in the consolidated balance
sheets is as follows:
EUR million
2024
2023
2022
Trade payables
1,452
1,783
1,563
Clearing houses
776
1,269
1,200
Tax collection accounts:
Public Institutions
6,156
4,986
5,796
Factoring accounts payable
226
272
262
Unsettled financial transactions
7,421
6,412
5,429
Lease liabilities (note 2.k)
2,202
2,400
2,622
Other financial liabilities
21,683
23,065
20,187
39,916
40,187
37,059
Note 51 contains a detail of the residual maturity periods of other
financial liabilities at each year-end.
Lease liabilities
The cash outflow of leases in 2024 was EUR 684 million (EUR 738
million and EUR 710 in 2023 and 2022, respectively).
The analysis of the maturities of lease liabilities at 31 December
2024, 2023 and 2022 is shown below:
EUR million
2024
2023
2022
Maturity Analysis - Discounted
payments
Within 1 year
526
586
707
Between 1 and 3 years
868
918
1,005
Between 3 and 5 years
405
480
454
Later than 5 years
403
416
456
Total discounted payments at the end
of the year
2,202
2,400
2,622
During 2024, 2023 and 2022 there were no significant variable
lease payments not included in the valuation of lease liabilities.
Annual report 2024
669
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
25. Provisions
a) Breakdown
The detail of Provisions in the consolidated balance sheets is as
follows:
EUR million
2024
2023
2022
Provision for pensions and other
obligations post-employments
1,731
2,225
2,392
Other long term employee
benefits
915
880
950
Provisions for taxes and other
legal contingencies
2,717
2,715
2,074
Contingent liabilities and
commitments (note 2.o)
710
702
734
Other provisions
2,334
1,919
1,999
Provisions
8,407
8,441
8,149
b) Changes
The changes in 'Provisions' in the last three years were as follows:
EUR million
2024
Post
employment
plans
Long term
employee
benefits
Contingent
liabilities and
commitments
Other
provisions
Total
Balances at beginning of year
2,225
880
702
4,634
8,441
Incorporation of Group companies, net
—
—
—
—
—
Additions charged to income
96
368
41
3,530
4,035
Interest expense (note 39)
77
29
—
—
106
Staff costs (note 46)
35
11
—
—
46
Provisions or reversion of provisions
(16)
328
41
3,530
3,883
Addition
5
335
502
4,931
5,773
Release
(21)
(7)
(461)
(1,401)
(1,890)
Other additions arising from insurance contracts linked to
pensions
(2)
—
—
—
(2)
Changes in value recognised in equity
643
—
—
—
643
Payments to pensioners and pre-retirees with a charge to
internal provisions
(153)
(331)
—
—
(484)
Insurance premiums paid
—
—
—
—
—
Payments to external funds
(708)
—
—
—
(708)
Amounts used
—
—
—
(2,490)
(2,490)
Transfer, exchange differences and other changes
(370)
(2)
(33)
(623)
(1,028)
Balances at end of year
1,731
915
710
5,051
8,407
Annual report 2024
670
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
EUR million
2023
2022
Post
employmen
t plans
Long term
employee
benefits
Contingent
liabilities and
commitments
Other
provisions
Total
Post
employment
plans
Long term
employee
benefits
Contingent
liabilities and
commitments
Other
provisions
Total
Balances at beginning of year
2,392
950
734
4,073
8,149
3,185
1,242
733
4,423
9,583
Incorporation of Group
companies, net
(4)
—
—
—
(4)
—
—
—
—
—
Additions charged to income
93
244
(24)
2,501
2,814
128
69
(27)
1,876
2,046
Interest expense (note 39)
60
34
—
—
94
73
27
—
—
100
Staff costs (note 46)
33
9
—
—
42
57
8
—
—
65
Provisions or reversion of
provisions
—
201
(24)
2,501
2,678
(2)
34
(27)
1,876
1,881
Addition
3
204
392
4,013
4,612
10
105
618
3,484
4,217
Release
(3)
(3)
(416)
(1,512) (1,934)
(12)
(71)
(645)
(1,608) (2,336)
Other additions arising from
insurance contracts linked to
pensions
—
—
—
—
—
(33)
—
—
—
(33)
Changes in value recognised in
equity
944
—
—
—
944
242
—
—
—
242
Payments to pensioners and pre
retirees with a charge to internal
provisions
(182)
(316)
—
—
(498)
(229)
(363)
—
—
(592)
Insurance premiums paid
—
—
—
—
—
(3)
—
—
—
(3)
Payments to external funds
(750)
—
—
—
(750)
(451)
—
—
—
(451)
Amounts used
—
—
(1)
(2,087) (2,088)
—
—
—
(2,817) (2,817)
Transfer, exchange differences
and other changes
(268)
2
(7)
147
(126)
(447)
2
28
591
174
Balances at end of year
2,225
880
702
4,634
8,441
2,392
950
734
4,073
8,149
c) Provision for pensions and other obligations
post –employments and Other long term
employee benefits
The detail of Provisions for pensions and similar obligations is as
follows:
EUR million
2024
2023
2022
Provisions for post-employment plans
- Spanish entities
674
770
1,245
Provisions for other similar obligations
- Spanish entities
852
817
895
Of which pre-retirements
839
805
884
Provisions for post-employment plans
- United Kingdom
28
76
29
Provisions for post-employment plans
- Other subsidiaries
1,029
1,379
1,118
Provisions for other similar obligations
- Other subsidiaries
63
63
55
Provision for pensions and other
obligations post -employments and
Other long term employee benefits
2,646
3,105
3,342
Of which defined benefits
2,638
3,097
3,335
i. Spanish entities - Post-employment plans and other
similar obligations
At 31 December 2024, 2023 and 2022, the Spanish entities had
post-employment benefit obligations under defined contribution
and defined benefit plans. In addition, in various years some of the
consolidated entities offered certain of their employees the
possibility of taking pre-retirement and, therefore, provisions are
recognised each year for the obligations to employees taking pre
retirement -in terms of salaries and other employee benefit costs
from the date of their pre-retirement to the agreed end date.
In 2022, the provisions made to cover the commitments with 446
employees covered by early retirement and incentivized dismissals
plan amounted to EUR 92 million.
In 2023, the provisions made to cover the commitments with 502
employees covered by early retirements and incentivized
dismissals amounted to EUR 160 million.
In 2024, the provisions made to cover the commitments with 826
employees covered by early retirements and incentivized
dismissals amounted to EUR 303 million.
The expenses incurred by the Spanish companies in 2024, 2023
and 2022 in respect of contributions to defined contribution plans
amounted to EUR 126 million, EUR 116 million and EUR 101
million, respectively.
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:
Annual report 2024
671
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Post-employment plans
Other similar obligations
2024
2023
2022
2024
2023
2022
Annual discount rate
3.00%
3.35%
3.80%
3.00%
3.35%
3.80%
Mortality tables
PER2020 M/F
Col. Orden 1
PER2020 M/F
Col. Orden 1
PER2020 M/F
Col. Orden 1
PER2020 M/F Col.
Orden 1
PER2020 M/F Col.
Orden 1
PER2020 M/F Col.
Orden 1
Cumulative annual CPI growth
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
Annual salary increase rate
1.25%
A
1.25%
A
1.25%
A
N/A
N/A
N/A
Annual social security pension
increase rate
2.12%
2.12%
2.00%
N/A
N/A
N/A
Annual benefit increase rate
N/A
N/A
N/A
0%
0%
0 %
A. Corresponds to the group’s defined-benefit obligations.
The discount rate used for the flows was determined by reference
to high-quality corporate bonds (at least AA in euros) matching the
durations of the commitments. From the bond portfolio
considered, callable, putable and sinkable bonds, which could
distort the rates, are excluded.
Any changes in the main assumptions could affect the calculation
of the obligations. At 31 December 2024, if the discount rate used
had been decreased or increased by 50 basis points (bp), there
would have been an increase or decrease in the present value of
the post-employment obligations of 4.18% (-50 bp) to -3.88%
(+50 bp),respectively, and an increase or decrease in the present
value of the long-term obligations of 1.11% (-50 bp) to -1.08%
(+50 bp), respectively.
Annual report 2024
672
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
These changes would be offset in part by increases or decreases in
the fair value of the assets and insurance contracts linked to
pensions.
3. 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.
The fair value of insurance contracts was determined as the
present value of the related payment obligations, taking into
account the following assumptions:
Post-employment plans
2024
2023
2022
Other similar obligations
2024
2023
2022
Expected rate of return on plan assets
3.00%
3.35%
3.80%
3.00%
3.35%
3.80%
Expected rate of return on reimbursement rights
3.00%
3.35%
3.80%
N/A
N/A
N/A
The funding status of the defined benefit obligations in 2024 and
the two preceding years is as follows:
EUR million
Post-employment plans
Other similar obligations
2024
2023
2022
2024
2023
2022
Present value of the obligations
To current employees
18
21
25
—
—
—
Vested obligations to retired employees
1,829
1,917
2,005
—
—
—
To pre-retirees employees
—
—
—
844
812
892
Long-service bonuses and other benefits
—
—
—
13
12
11
Other
52
49
46
—
—
—
1,899
1,987
2,076
857
824
903
Less - Fair value of plan assets
1,234
1,235
861
5
7
8
Provisions - Provisions for pensions
665
752
1,215
852
817
895
Of which:
Internal provisions for pensions
593
677
1,141
852
817
895
Net pension assets
(6)
(14)
(24)
—
—
—
Insurance contracts linked to pensions (note 14)
81
93
104
—
—
—
Unrecognised net assets for pensions
(3)
(4)
(6)
—
—
—
Annual report 2024
673
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The amounts recognised in the consolidated income statements in
relation to the aforementioned defined benefit obligations are as
follows:
EUR million
Post-employment plans
2024
2023
2022
Other similar obligations
2024
2023
2022
Current service cost
3
2
3
1
1
1
Interest cost (net)
Expected return on insurance contracts linked to pensions
Provisions or reversion of provisions
Actuarial (gains)/losses recognised in the year
Past service cost
28
(3)
—
3
42
(4)
—
2
48
(4)
—
2
25
—
—
—
30
—
7
13
25
—
(67)
—
Pre-retirement cost
Other
A
—
(10)
21
—
(1)
41
—
(8)
41
303
(4)
325
160
(1)
210
92
—
51
A. Including reduction/settlement effect
In addition, in 2024 'Other comprehensive income – Items not
reclassified to profit or loss – Actuarial gains or (-) losses on
defined benefit pension plans' has decreased by EUR 21 million
with respect to defined benefit obligations (decrease of EUR 10 and
increase of EUR 295 million in 2023 and 2022, respectively).
The changes in the present value of the accrued defined benefit
obligations were as follows:
EUR million
Post-employment plans
2024
2023
2022
Other similar obligations
2024
2023
2022
Present value of the obligations at beginning of year
1,987
2,076
2,891
824
903
1,198
Incorporation of Group companies, net
—
—
—
—
—
—
Current service cost
3
2
3
1
1
1
Interest cost
71
82
78
25
30
25
Pre-retirement cost
—
—
—
303
160
92
Effect of curtailment/settlement
(10)
(1)
(8)
(4)
(1)
—
Benefits paid
(203)
(210)
(258)
(292)
(290)
(346)
Benefits paid due to settlements
(2)
—
—
—
—
—
Past service cost
3
2
2
—
13
—
Actuarial (gains)/losses
45
37
(631)
—
7
(68)
Demographic actuarial (gains)/losses
—
(2)
2
(1)
—
(5)
Financial actuarial (gains)/losses
45
39
(633)
1
7
(63)
Exchange differences and other items
5
(1)
(1)
—
1
1
Present value of the obligations at end of year
1,899
1,987
2,076
857
824
903
Annual report 2024
674
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The changes in the fair value of plan assets and of insurance
contracts linked to pensions were as follows:
Plan Assets
EUR million
Post-employment plans
Other similar obligations
2024
2023
2022
2024
2023
2022
Fair value of plan assets at beginning of year
Incorporation of Group companies, net
Expected return on plan assets
Gains/(losses) on settlements
Benefits paid
Contributions/(surrenders)
Actuarial gains/(losses)
Exchange differences and other items
Fair value of plan assets at end of year
1,235
—
43
—
(124)
58
27
(5)
1,234
861
—
40
—
(89)
409
25
(11)
1,235
1,217
—
30
—
(78)
2
(303)
(7)
861
7
—
—
—
(2)
—
—
—
5
8
—
—
—
(2)
—
—
1
7
10
—
—
—
(2)
—
(1)
1
8
Insurance Contracts linked to pensions
EUR million
Post-employment plans
2024
2023
2022
Other similar obligations
2024
2023
2022
Fair value of insurance contracts linked to
pensions at beginning of year
93
104
149
—
—
—
Incorporation of Group companies, net
—
—
—
—
—
—
Expected return on insurance contracts linked to
pensions
3
4
4
—
—
—
Benefits paid
(13)
(15)
(16)
—
—
—
Paid premiums
—
—
—
—
—
—
Actuarial gains/(losses)
(2)
—
(33)
—
—
—
Fair value of insurance contracts linked to
pensions at end of year
81
93
104
—
—
—
In view of the conversion of the defined-benefit obligations to
defined-contribution obligations, the Group will not make material
current contributions in Spain in 2025 to fund its defined-benefit
pension obligations.
The plan assets and the insurance contracts linked to pensions are
instrumented mainly through insurance policies.
The following table shows the estimated benefits payable at 31
December 2024 for the next ten years:
EUR million
2025
446
2026
393
2027
332
2028
277
2029
227
2030 to 2034
726
Annual report 2024
675
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
ii. United Kingdom
At the end of each of the last three years, the businesses in the
United Kingdom had post-employment benefit obligations under
defined contribution and defined benefit plans. The expenses
incurred in respect of contributions to defined contribution plans
amounted to EUR 98 million in 2024 (EUR 87 million in 2023 and
EUR 77 million in 2022).
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:
2024
2023
2022
Annual
discount rate
5.54%
4.63%
4.88%
Mortality
The S3 Middle
The S3 Middle
tables
The S3 Middle tables weighted
tables weighted
tables weighted
at 84% of the
at 84% of the
at 84% of the
CMI_2022
CMI_2021
CMI_2023
projection with
projection with
projection with
an initial an initial addition
an initial addition
addition of
of 0.25%,
of 0.25%,
0.25%,
smoothing
smoothing
smoothing
parameter 7 and
parameter 7 and parameter 7 and
improving
improving
improving
1.25%.
1.25%.
1.25%.
Cumulative
annual CPI
growth
3.11%
3.02%
3.11%
Annual salary
increase rate
1.00%
1.00%
1.00%
Annual
pension
increase rate
3.04%
2.96%
2.98%
The discount rate used for the flows was determined by reference
to high-quality corporate bonds (at least AA in pounds sterling)
that coincide with the terms of the obligations.
Any changes in the main assumptions could affect the calculation
of the obligations. At 31 December 2024, if the discount rate used
had been decreased or increased by 50 basis points, there would
have been an increase or decrease in the present value of the
obligations of 6.20% (-50 bp) and -5.60% (+50 bp), respectively. If
the inflation assumption had been increased or decreased by 50
basis points, there would have been an increase or decrease in the
present value of the obligations of 4.28% (+50 bp) and -4.16% (-50
bp), respectively. These changes would be offset in part by
increases or decreases in the fair value of the assets.
The funding status of the defined benefit obligations in 2024 and
the two preceding years is as follows:
EUR million
2024
2023
2022
Present value of the obligations
8,898
9,451
8,982
Less-
Fair value of plan assets
9,400
10,208
10,152
Provisions - Provisions for pensions
(502)
(757)
(1,170)
Of which:
Internal provisions for pensions
28
76
29
Net assets for pensions
(530)
(833)
(1,199)
The amounts recognised in the consolidated income statements in
relation to the aforementioned defined benefit obligations are as
follows:
EUR million
2024
2023
2022
Current service cost
13
14
30
Interest cost (net)
(40)
(62)
(37)
Provisions or reversal of provisions, net
Cost of services provided
—
—
—
Others
—
—
—
(27)
(48)
(7)
In addition, in 2024 'Other comprehensive income – Items not
reclassified to profit or loss – Actuarial gains or (-) losses on
defined benefit pension plans has decreased by EUR 475 million
with respect to defined benefit obligations ( decrease of EUR 687
and of EUR 857 million in 2023 and 2022, respectively).
The changes in the present value of the accrued defined benefit
obligations were as follows:
EUR million
2024
2023
2022
Present value of the obligations at
beginning of year
9,451
8,982 15,392
Net incorporation of companies into the
Group
—
(28)
—
Current service cost
13
14
30
Interest cost
438
436
283
Benefits paid
(465)
(428)
(487)
Benefits paid by settlements
—
(9)
—
Contributions made by employees
7
6
9
Past service cost
—
—
—
Actuarial (gains)/losses
(965)
281 (5,660)
Demographic actuarial (gains)/losses
(133)
(59)
(144)
Financial actuarial (gains)/losses
(832)
340 (5,516)
Exchange differences and other items
419
197
(585)
Present value of the obligations at end
of year
8,898
9,451
8,982
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The changes in the fair value of the plan assets were as follows:
EUR million
2024
2023
2022
Fair value of plan assets at beginning of
year
10,208 10,152 17,244
Net incorporation of companies into the
Group
—
(41)
—
Expected return on plan assets
478
498
320
Benefits paid
(465)
(434)
(487)
Contributions
182
225
262
Actuarial gains/(losses)
(1,440)
(406) (6,517)
Exchange differences and other items
437
214
(670)
Fair value of plan assets at end of year
9,400 10,208 10,152
In 2025 the Group expects to make current contributions to fund
these obligations for amounts similar to those made in 2024.
The main categories of plan assets as a percentage of total plan
assets are as follows:
2024
2023
2022
Equity instruments
—
—
—
Debt instruments
66%
62%
51%
Properties
14%
12%
13%
Other
20%
26%
36%
The following table shows the estimated benefits payable at 31
December 2024 for the next ten years:
EUR million
2025
577
2026
489
2027
511
2028
535
2029
558
2030 to 2034
2,939
iii. Other foreign subsidiaries
Certain of the consolidated foreign entities have acquired
commitments to their employees similar to post-employment
benefits.
At 31 December 2024, 2023 and 2022, these entities had defined
contribution and defined-benefit post-employment benefit
obligations. The expenses incurred in respect of contributions to
defined contribution plans amounted to EUR 133 million in 2024
(EUR 107 million at 31 December 2023 and EUR 118 million at 31
December 2022).
The actuarial assumptions used by these entities (discount rates,
mortality tables and cumulative annual CPI growth) are consistent
with the economic and social conditions prevailing in the countries
in which they are located.
Specifically, the discount rate used for the flows was determined
by reference to high-quality corporate bonds, except in the case of
Brazil where there is no extensive corporate bond market and,
accordingly the discount rate was determined by reference to the
series B bonds issued by the Brazilian National Treasury Secretariat
for a term coinciding with that of the obligations. In Brazil the
discount rate used was between 10.50% and 10.58%, the CPI
3.00% and the mortality table the AT-2000, AT-2000 Basic y
AT-2000 S10.
Any changes in the main assumptions could affect the calculation
of the obligations. At 31 December 2024, if the discount rate used
had been decreased or increased by 50 basis points, there would
have been an increase or decrease in the present value of the
obligations of 3.96% (-50 bp) and -3.71% (+50 bp), respectively.
These changes would be offset in part by increases or decreases in
the fair value of the assets.
Annual report 2024
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Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
The funding status of the obligations similar to post-employment
benefits and other long-term benefits in 2024 and the two
preceding years is as follows:
EUR million
2024
Of which
business in
Brazil
2023
2022
Present value of the obligations
Less
6,903
4,465
8,485
7,578
Of which: with a charge to the participants
Fair value of plan assets
Provisions - Provisions for pensions
Of which:
157
6,502
244
157
4,849
(541)
114
7,787
584
107
7,321
150
Internal provisions for pensions
Net assets for pensions
Unrecognised net assets for pensions
1,084
(141)
(699)
211
(53)
(699)
1,434
(154)
(696)
1,166
(122)
(894)
The amounts recognised in the consolidated income statements in
relation to these obligations are as follows:
The changes in the present value of the accrued obligations were
as follows:
EUR million
EUR million
2024
2023
2022
2024
2023
2022
Current service cost
Interest cost (net)
Provisions or reversion of provisions
(Actuarial gains)/losses recognised in the
year
Past service cost
29
93
28
2
25
84
23
1
31
64
8
8
Present value of the obligations at
beginning of year
Incorporation of Group companies, net
Current service cost
Interest cost
Pre-retirement cost
8,485
—
29
579
—
7,578
(20)
25
600
—
8,018
—
31
546
—
Pre-retirement cost
—
—
—
Other
(10)
(3)
(3)
142
130
108
In addition, in 2024 'Other comprehensive income – Items not
reclassified to profit or loss – Actuarial gains or (-) losses on
defined benefit pension plans' has decreased by EUR 147 million
with respect to defined benefit obligations (decrease of EUR 247
million and increase of EUR 320 million in 2023 and 2022,
respectively).
Effect of curtailment/settlement
Benefits paid
Benefits paid due to settlements
Contributions made by employees
Past service cost
Actuarial (gains)/losses
Demographic actuarial (gains)/losses
Financial actuarial (gains)/losses
Exchange differences and other items
Present value of the obligations
at end of year
(10)
(1,113)
(20)
4
2
(191)
(1)
(190)
(862)
6,903
(2)
(730)
(2)
3
1
697
40
657
335
8,485
(3)
(653)
(179)
5
8
(876)
5
(881)
681
7,578
The changes in the fair value of the plan assets were as follows:
EUR million
2024
2023
2022
Fair value of plan assets at beginning
of year
Incorporation of Group companies, net
Expected return on plan assets
Benefits paid
Contributions
7,787
—
551
(1,022)
477
7,321
(16)
588
(644)
124
7,167
—
570
(766)
198
Actuarial gains/(losses)
Exchange differences and other items
Fair value of plan assets at end of year
(304)
(987)
6,502
110
304
7,787
(498)
650
7,321
In 2025 the Group expects to make contributions to fund these
obligations for amounts similar to those made in 2024.
Annual report 2024
678
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The main categories of plan assets as a percentage of total plan
assets are as follows:
2024
2023
2022
Equity instruments
13%
11%
11%
Debt instruments
79%
83%
83%
Properties
1%
1%
1%
Other
7%
5%
5%
The following table shows the estimated benefits payable at 31
December 2024 for the next ten years:
EUR million
2025
614
2026
604
2027
594
2028
600
2029
611
2030 to 2034
3,067
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 Group 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.
The detail, by geographical area, of Provisions for taxes and other
legal contingencies and Other provisions is as follows:
EUR million
2024
2023
2022
Recognised by Spanish companies
1,924
1,921
1,768
Recognised by other EU companies
694
433
328
Recognised by other companies
2,433
2,280
1,977
Of which:
Brazil
1,445
1,618
1,243
United Kingdom
A
654
373
345
5,051
4,634
4,073
A. Of which GBP 293 million (EUR 353.3 million) correspond to the Financial
Conduct Authority (FCA) review of the Vehicle Finance Market as detailed in
note 25.e.ii.
Set forth below is the detail, by type of provision, of the balance at
31 December 2024, 2023 and 2022 of Provisions for taxes and
other legal contingencies and Other provisions.
The types of provision were determined by grouping together
items of a similar nature:
EUR million
2024
2023
2022
Provisions for taxes
727
745
679
Provisions for employment-related
proceedings (Brazil)
458
611
301
Provisions for other legal proceedings
1,532
1,359
1,094
Provision for customer remediation
1,001
454
349
Provision for restructuring
589
596
641
Other
744
869
1,009
5,051
4,634
4,073
Relevant information is set forth below in relation to each type of
provision shown in the preceding table.
The provisions for taxes include provisions for tax-related
proceedings.
The provisions for employment-related proceedings (Brazil) relate
to claims filed by trade unions, associations, the prosecutor’s office
and ex-employees claiming employment rights to which, in their
view, they are entitled, particularly the payment of overtime and
other employment rights, including litigation concerning
retirement benefits. The number and nature of these proceedings,
which are common for banks in Brazil, justify the classification of
these provisions in a separate category or as a separate type from
the rest. The Group calculates the provisions associated with these
claims in accordance with past experience of payments made in
relation to claims for similar items. When claims do not fall within
these categories, a case-by-case assessment is performed and the
amount of the provision is calculated in accordance with the status
of each proceeding and the risk assessment carried out by the legal
advisers.
The provisions for other legal proceedings include provisions for
court, arbitration or administrative proceedings (other than those
included in other categories or types of provisions disclosed
separately) brought against Grupo Santander companies.
The provisions for customer remediation include mainly the
estimated cost of payments to remedy errors relating to the sale of
certain products in the UK, the CHF mortgage portfolio of Poland,
as well as the estimated amount related to the floor clauses of
Banco Popular Español, S.A.U in Spain. To calculate the provision
for customer remediation, the best estimate of the provision made
by management is used, which is based on the estimated number
of claims to be received and, of these, the number that will be
accepted, as well as the estimated average payment per case.
The provisions for restructuring include only the costs arising from
restructuring processes carried out by the various Group
companies.
Lastly, the Other heading contains very atomized and individually
insignificant provisions, such as the provisions to cover the
operational risk of the different offices of the Group.
Qualitative information on the main litigation is provided in
Note 25 e to the consolidated financial statements.
Annual report 2024
679
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The Group's 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. Grupo 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 Group 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.
Regarding their variations in fiscal year 2024, in provisions for labor
processes and others of a legal nature, EUR 404 million and EUR
327 million were recorded in Brazil in 2024, making payments of
EUR 463 million and EUR 205 million, respectively.
e) Litigation and other matters
i. Tax-related litigation
At 31 December 2024 the main tax-related proceedings concerning
the Group 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.
• 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.
Annual report 2024
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Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
• 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. In May and October
2024, the appeal related to period 2009 to 2012 was finally
rejected by the CARF and the resolution was appealed at the
Federal Justice. 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.
• 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 consolidated 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 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. The Santander Entities strongly refute the claim. 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.
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• 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
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) as of December 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).
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.
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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 2,742.15 million (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
2,440.51 million (~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 for 5 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 51.29 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.
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.
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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.
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 the 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.
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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 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.
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.
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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.
• 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.
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financial statements
• 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.
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 Group 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 Group. 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 Group’s
business, financial position, or results of operations.
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26. Other liabilities
The detail of Other liabilities in the consolidated balance sheets is
as follows:
EUR million
2024
2023
2022
Transactions in transit
910
767
457
Accrued expenses and deferred income
9,003
9,136
8,445
Other
6,431
7,695
5,707
16,344 17,598 14,609
27. 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).
The other Group companies file income tax returns in accordance
with the tax regulations applicable to them.
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, 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 to
2015). 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 Group’s
consolidated financial statements.
c) Reconciliation
The reconciliation of the income tax expense calculated at the tax
rate applicable in Spain (30%) to the income tax expense
recognised and the detail of the effective tax rate are as follows:
EUR million
2024
2023
2022
Consolidated profit (loss) before tax:
From continuing operations
19,027
16,459
15,250
From discontinued operations
—
—
—
19,027
16,459
15,250
Income tax at tax rate applicable in
Spain (30%)
5,708
4,938
4,575
By the effect of application of the
various tax rates applicable in each
A
country
115
(100)
61
Of which:
Brazil
413
198
472
United Kingdom
(53)
(51)
(161)
United States
(25)
(28)
(99)
Chile
(33)
(28)
(30)
Poland
(183)
(164)
(101)
Effect of profit or loss of associates
and joint ventures
(213)
(184)
(210)
USA electric vehicle leasing
incentives
(258)
(259)
—
Global minimum tax Pillar Two
14
—
—
Effect of reassessment of deferred
taxes
68
—
—
Permanent differences
and other
(151)
(119)
60
Income tax
5,283
4,276
4,486
Effective tax rate
27.77%
25.98%
29.42%
Of which:
Continuing operations
5,283
4,276
4,486
Of which:
Current taxes
4,855
5,568
4,272
Deferred taxes
428
(1,292)
214
Income tax (receipts)/payments
5,880
5,214
5,498
A. Calculated by applying the difference between the tax rate applicable in Spain
and the tax rate applicable in each jurisdiction to the profit or loss contributed to
the Group by the entities which operate in each jurisdiction.
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d) Tax recognised in equity
In addition to the income tax recognised in the consolidated
income statement, the Group recognised the following amounts in
consolidated equity in 2024, 2023 and 2022:
EUR million
2024
2023
2022
Other comprehensive income
Items not reclassified to profit or loss
85
358
49
Actuarial gains or (-) losses on defined
benefit pension plans
172
302
96
Changes in the fair value of equity
instruments measured at fair value
through other comprehensive income
(4)
20
(19)
Financial liabilities at fair value with
changes in results attributable to
changes in credit risk
(83)
36
(26)
Other recognised income and expense
of investments in subsidiaries, joint
ventures and associates
—
—
(2)
Items that may be reclassified to profit
or loss
54
(919)
1,522
Cash flow hedges
(205)
(732)
912
Changes in the fair value of debt
instruments through other
comprehensive income
261
(214)
661
Other recognised income and expense
of investments in subsidiaries, joint
ventures and associates
(2)
27
(51)
Total
139
(561)
1,571
e) Deferred taxes
'Tax assets' in the consolidated balance sheets includes debit
balances with the Public Treasury relating to deferred tax assets.
'Tax liabilities' includes the liability for the Group’s various deferred
tax liabilities.
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.
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The detail of deferred tax assets, by classification as monetizable
or non-monetizable assets, and of deferred tax liabilities at 31
December 2024, 2023 and 2022 is as follows:
EUR million
2024
2023
2022
Monetizable
A
Other
Monetizable
A
Other
Monetizable
A
Other
Tax assets
10,309
8,861
11,099
9,668
10,660
10,127
Tax losses and tax credits
—
2,367
—
2,393
—
1,778
Temporary differences
10,309
6,494
11,099
7,275
10,660
8,349
Of which:
Non-deductible provisions
—
1,784
—
1,965
—
2,182
Valuation of financial instruments
—
1,486
—
1,543
—
1,535
Loan losses
7,880
1,103
8,248
1,577
7,696
1,232
Pensions
2,429
423
2,851
665
2,964
560
Valuation of tangible and intangible
assets
—
885
—
1,060
—
1,270
Tax liabilities
—
6,276
—
6,086
—
6,428
Temporary differences
—
6,276
—
6,086
—
6,428
Of which:
Valuation of financial instruments
—
2,412
—
2,059
—
1,792
Valuation of tangible and intangible
assets
—
2,797
—
2,594
—
3,169
Investments in Group companies
—
403
—
378
—
359
A.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.
Grupo Santander only recognises deferred tax assets for temporary
differences or tax loss and tax credit carryforwards where it is
considered probable that consolidated entities that generated
them will have sufficient future taxable profits against which they
can be utilised.
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 such deferred tax assets,
among which we can find, (i) the results generated by the different
entities in previous years, (ii) the projections of results of each
entity or fiscal group, (iii) the estimation of the reversal of the
different temporary differences according to their nature and (iv)
the period and limits established under the applicable legislation of
each country for the recovery of the different deferred tax assets,
thus concluding on the ability of each entity or fiscal group to
recover the deferred tax assets registered.
The projections of results used in this analysis are based on the
financial planning approved by both the local directions of the
corresponding units and by the Group's directors. The Group's
budget estimation process is common for all units. The Group's
management prepares its financial planning based on the
following key assumptions:
a) Microeconomic variables of the entities that make up the fiscal
group in each location: the existing balance structure, the mix of
products offered and the commercial strategy at each moment
defined by local directions are taken into account, based on the
competition, regulatory and market environment.
b) Macroeconomic variables: estimated growths are based on the
evolution of the economic environment considering the
expected evolution in the gross domestic product of each
location, and the forecasts of interest rates, inflation and
exchange rates fluctuations. These data are provided by the
Group’s Studies Service, 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.
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Finally, and given the degree of uncertainty of these assumptions
on the referred variables, the Group 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
entity or fiscal group and the estimation of the reversal of the
different temporary differences are based.
In relation to Spain, the sensitivity analysis has consisted of making
reasonable changes to the key assumptions, including adjusting 50
basis points for growth (gross domestic product) and adjusting 50
basis points for inflation.
Relevant information is set forth below for the main countries
which have recognised deferred tax assets:
Spain
The deferred tax assets recognised at the Consolidated Tax Group
total EUR 7,338 million, of which EUR 5,246 million were for
monetizable temporary differences with the right to conversion
into a credit against the tax administration as explained before,
EUR 1,411 million for other temporary differences and EUR 681
million for tax losses and credits.
Brazil
The deferred tax assets recognised in Brazil total EUR
7,198 million, of which EUR 4,979 million were for monetizable
temporary differences, EUR 1,363 million for other temporary
differences and EUR 856 million for tax losses and credits.
Mexico
The deferred tax assets recognized in Mexico total EUR
1,262 million, which are temporary differences.
United States
The deferred tax assets recognised in the United States total EUR
1,173 million, of which EUR 387 million were for temporary
differences and EUR 786 million for tax losses and credits.
The Group estimates that the recognised deferred tax assets for
temporary differences, tax losses and credits in the different
jurisdictions could be recovered in a maximum period of 15 years.
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The changes in Tax assets - Deferred and Tax liabilities - Deferred
in the last three years were as follows:
EUR million
Foreign
Balances at 31
December 2023
(Charge)/
Credit to
income
currency
balance
translation
differences and
other items
(Charge)/Credit
to asset and
liability valuation
adjustments
Acquisition
for the year
(net)
Balances at 31
December
2024
Deferred tax assets
20,767
119
(1,670)
(41)
(5)
19,170
Tax losses and tax credits
2,393
114
(139)
—
(1)
2,367
Temporary differences
18,374
5
(1,531)
(41)
(4)
16,803
Of which monetizable
11,099
147
(937)
—
—
10,309
Deferred tax liabilities
(6,086)
(547)
142
215
—
(6,276)
Temporary differences
(6,086)
(547)
142
215
—
(6,276)
14,681
(428)
(1,528)
174
(5)
12,894
EUR million
Foreign
Balance at 31
December 2022
(Charge)/
Credit to
income
currency
balance
translation
differences and
other items
(Charge)/Credit
to asset and
liability valuation
adjustments
Acquisition
for the year
(net)
Balance at 31
December
2023
Deferred tax assets
20,787
629
(130)
(422)
(97)
20,767
Tax losses and tax credits
1,778
392
224
—
(1)
2,393
Temporary differences
19,009
237
(354)
(422)
(96)
18,374
Of which monetizable
10,660
1,232
(787)
—
(6)
11,099
Deferred tax liabilities
(6,428)
663
3
(338)
14
(6,086)
Temporary differences
(6,428)
663
3
(338)
14
(6,086)
14,359
1,292
(127)
(760)
(83)
14,681
EUR million
Foreign
Balances at 31
December 2021
(Charge)/
Credit to
income
currency
balance
translation
differences and
other items
(Charge)/Credit to
asset and liability
valuation
adjustments
Acquisition
for the year
(net)
Balance at 31
December
2022
Deferred tax assets
19,440
273
376
697
1
20,787
Tax losses and tax credits
1,250
211
317
—
—
1,778
Temporary differences
18,190
62
59
697
1
19,009
Of which monetizable
10,473
507
(320)
—
—
10,660
Deferred tax liabilities
(6,462)
(487)
(149)
684
(14)
(6,428)
Temporary differences
(6,462)
(487)
(149)
684
(14)
(6,428)
12,978
(214)
227
1,381
(13)
14,359
Also, the Group did not recognise deferred tax assets amounting to
approximately EUR 11,200 million of which EUR 6,660 million
relate to tax losses, EUR 3,500 million to tax credits, and EUR
1,040 million to other concepts.
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f) Global Minimum Tax Pillar Two
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 EUR 10 million and profit
before tax is less than EUR 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 the Group 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) Tax reforms
The following significant tax reforms were approved in 2024 and
previous years:
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 224 million in 2023 and
334 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
entity 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 consolidated 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 on 18 January 2024 by the Spanish
Constitutional Court, on the offsetting of monetizable deferred tax
assets and tax losses (from 70% to 25%) and double taxation
deductions ( 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.
In the United Kingdom, the Budget Act for 2021 increased the main
corporate income tax rate from 19% to 25% with effect from 1
April 2023. In addition, and also with effect from 1 April 2023, the
Bank Surcharge tax rate was reduced from 8% to 3%, so the
corporate tax rate for banks is set at 28%.
In Brazil, in 2022 Law 14,446, established for this year an increase
in the rate of contribution on net income (CSLL) of banks, from 20%
to 21%, and for other financial institutions, from 15% to 16%. In
addition, Law 14,467, with effect from 2025, amends the rules on
the tax deductibility of credit provisions in financial institutions,
bringing those rules closer to the accounting recognition criterion.
In 2024, Law 15,078 has been published, which allows the
recovery of the accumulated balance of provisions of non
deductible loans at the end of 2024 within a period of 7 years from
January 2026 (with option of 10 years).
Annual report 2024
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Contents
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Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
In the tax on financial operations (IOF), Decree 10,997/2022
established the reduction to 0% of the IOF applicable to foreign
financing and lending transactions, and a gradual reduction in the
rates applicable to foreign exchange transactions until their
reduction to 0%, as from 2 January 2029.
In December 2023, Congress approved Constitutional Amendment
132/2023 on indirect taxation reform, that has been developed
through PLP No. 68/2024 approved in December 2024. This reform
replaces the various existing indirect taxes in Brazil, -applicable at
the federal, regional and municipal levels-, with two taxes
administered at federal level (contribution on goods and services
and selective tax) and other administered at regional and municipal
levels (tax on goods and services). The new system will be
gradually implemented over a transitional period of 8 years (from
2026 to 2033).
Additionally, Law 14,973/2024 has partially extended the payroll
tax until 31 December 2027, establishing an optional regime of
employees social contributions applicable to certain sectors of
activity, which allows calculating these social contributions as a
percentage of gross income (between 1% and 4.5%, depending on
sector), instead of the general regime consisting of a percentage
(20%) of the payroll paid to employees.
In Argentina, since 23 December 2024, Tax for an Inclusive and
Solidarity Argentina (PAIS) was eliminated, which imposed certain
foreign currency purchasing operations in order to make payments
abroad. Likewise, General Resolution (AFIP) No. 5,554 cancels,
with effect 1 September 2024, the obligation to practice
withholding for VAT and income tax on electronic payments.
In Chile, Law 27,713 on the Compliance of Tax Obligations was
published in October 2024, which amends, among other rules, the
Tax Code, the Income Tax Law and the VAT Law. In addition, in July
2024, Law 21,681 was published, which, among other measures,
establishes a new Substitute Tax of Final Tax, which allows tax
profits to be distributed up to 31 January 2025 with a fixed rate of
12%, reducing the tax cost of its distribution.
In the United States, during 2022, Inflation Reduction Act (IRA) was
approved, which, among other measures, imposed a minimum
taxation on the accounting results of certain large companies,
through the introduction of a new Alternative Minimum Tax (AMT)
from 2023, as well as relevant tax credits related with investments
in clean energies.
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.
Also Santander UK is a member of the HMRC’s (His Majesty's
Revenue and Customs) Code of Practice on Taxation in the United
Kingdom and Santander Portugal has adhered to the Code of Good
Tax Practices in Portugal, actively participating in the cooperative
compliance programs being developed by these Tax
Administrations.
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
28. Non-controlling interests
b) Changes
Non-controlling interests include the net amount of the equity of
The changes in Non-controlling interests are summarised as
subsidiaries attributable to equity instruments that do not belong,
follows:
directly or indirectly, to the Bank, including the portion attributed
EUR million
to them of profit for the year.
2023
2022
2021
a) Breakdown
Balance at beginning of year
8,818
8,481
10,123
Other comprehensive income
(461)
297
248
The detail, by Group company, of 'Equity - Non-controlling
Other
369
40
(1,890)
interests' is as follows:
Profit attributable to non-controlling
interests
1,170
1,107
1,159
EUR million
Modification of participation rates
A
395
(258)
(1,811)
2024
2023
2022
Change of perimeter
(8)
(364)
31
Santander Bank Polska S.A.
2,320
1,934
1,603
Dividends paid to minority
Grupo PSA
1,725
1,590
1,728
shareholders
(660)
(748)
(500)
Banco Santander - Chile
1,364
1,379
1,317
Changes in capital and other concepts
B
(528)
303
(769)
Banco Santander (Brasil) S.A.
1,257
1,493
1,210
Balance at end of year
8,726
8,818
8,481
Banco Santander México, S.A. Institución
A. Include the effects of the accelerated placement of 5.2% of the share capital of
de Banca Múltiple, Grupo Financiero
Santander Bank Polska S.A. in 2024, the public offer for the acquisition of shares
Santander México
3
4
251
of Banco Santander México, S.A., Institución de Banca Múltiple, Grupo
Other companies
A
887
1,311
1,213
Financiero Santander México that occurred in 2023 and the purchase of shares
of Santander Holdings USA, Inc. on Santander Consumer USA Holdings Inc.
7,556
7,711
7,322
occurred in 2022 (see note 3.b).
B. Includes the effects of the amortization of AT1 UK by EUR 590 million and EUR
756 million at closing of fiscal years 2024 and 2022, respectively.
Profit/(Loss) for the year attributable to
non-controlling interests
1,170
1,107
1,159
The foregoing changes are shown in the consolidated statement of
changes in total equity.
Of which:
Grupo PSA
217
285
323
Banco Santander - Chile
271
235
280
Banco Santander (Brasil) S.A.
233
182
259
Santander Bank Polska S.A.
413
347
196
Banco Santander México, S.A.
Institución de Banca Múltiple, Grupo
Financiero Santander México
—
13
42
Other companies
36
45
59
TOTAL
8,726
8,818
8,481
A. Includes perpetual Santander UK plc equity instruments convertible at the
option of Santander UK plc into preferred shares of the entity itself (EUR 576
million and EUR 564 million in 2023 and 2022, respectively). During 2024, the
last outstanding issuance held by third parties was redeemed in advance for an
amount of GBP 500 million (EUR 590 million at the transaction rate).
c) Other information
The financial information on the subsidiaries with significant non
controlling interests at 31 December 2024 is summarised below:
EUR million
A
Santander Bank Polska
Banco Santander (Brasil)
S.A.
S.A.
Banco Santander - Chile
Grupo PSA
Total assets
68,269
205,510
70,434
45,373
Total liabilities
61,439
190,020
64,983
41,458
Net assets
6,830
15,490
5,451
3,915
Total income
3,555
13,536
2,592
1,053
Total profit
1,219
2,665
899
431
A.Information prepared using corporate management criteria, which may not coincide with those published individually by each entity.
Annual report 2024
695
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
29. 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 consolidated
statement of recognised income and expense. The amounts arising
from subsidiaries are presented, on a line by line basis, in the
appropriate items according to their nature.
Respect to items that may be reclassified to profit or loss, the
consolidated 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.
Annual report 2024
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Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
a) Breakdown of Other comprehensive income -
Items that will not be reclassified in results and
Items that can be classified in results
EUR million
A
2024
2023
2022
Other comprehensive income
(36,595)
(35,020)
(35,628)
Items that will not be reclassified to profit or loss
(4,757)
(5,212)
(4,635)
Actuarial gains and losses on defined benefit pension plans
(4,404)
(4,324)
(3,945)
Non-current assets held for sale
—
—
—
Share in other income and expenses recognised in investments, joint ventures and associates
(1)
1
10
Other valuation adjustments
—
—
—
Changes in the fair value of equity instruments measured at fair value with changes in other
comprehensive income
(432)
(776)
(672)
Inefficiency 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)
284
264
293
Changes in the fair value of equity instruments measured at fair value with changes in other
comprehensive income (hedging instrument)
(284)
(264)
(293)
Changes in the fair value of financial liabilities measured at fair value through profit or loss
attributable to changes in credit risk
80
(113)
(28)
Items that may be reclassified to profit or loss
(31,838)
(29,808)
(30,993)
Hedges of net investments in foreign operations (Effective portion)
(8,002)
(8,684)
(6,750)
Exchange differences
(22,375)
(19,510)
(20,420)
Hedging derivatives. Cash flow hedges (Effective portion)
(298)
(740)
(2,437)
Changes in the fair value of debt instruments measured at fair value with changes in other
comprehensive income
(736)
(555)
(1,002)
Hedging instruments (items not designated)
—
—
—
Non-current assets classified as held for sale
—
—
—
Share in other income and expenses recognised in investments, joint ventures and associates
(427)
(319)
(384)
A. Net amount of taxes and minorities
b) Other 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.
In 2024, the amount of actuarial losses (net of actuarial gains)
recognized in the consolidated statement of recognised income
was EUR 584 million, which corresponds to:
• In first place, due to the addition against equity of 2024
amounting to EUR 643 million - see note 25.b -, with the
following breakdown:
• Increase of EUR 475 million in the cumulative actuarial losses
relating to the Group´s businesses in the UK, mainly due to the
evolution of the asset portfolio. These losses have been
partially offset by the evolution experienced in the discount
rate- increase from 4.63% to 5.54%.
• Increase of EUR 160 million in accumulated actuarial losses
corresponding to the Group’s business in Brazil, mainly due to
the collective experience and the evolution of the asset
portfolio. These losses have been partially offset by the
evolution experienced by the discount rate -increase from
8.65% to 10.58% in the main pension benefits and 8.70% to
10.50% in medical benefits.
• Increase of EUR 21 million in the accumulates actuarial losses
relating to the Group´s entities in Spain, mainly due to the
evolution experienced by the discount rate -reduction from
3.35% to 3.00%-.
• Decrease of EUR 13 million in the accumulated actuarial losses
corresponding to the Group's businesses in other geographical
areas.
• In second place, due to the evolution of exchange rates, a EUR 59
million decrease.
Annual report 2024
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Auditor's
Consolidated
Notes to the consolidated
Appendix
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financial statements
financial statements
c) Other 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
Since the entry into force of IFRS 9, no impairment analysis is
performed of equity instruments recognised under 'Other
comprehensive income'. IFRS 9 eliminates the need to carry out the
impairment estimate on this class of equity instruments and the
reclassification to profit and loss on the disposal of these assets,
being recognised at fair value with changes in equity.
The following is a breakdown of the composition of the balance as
of 31 December 2024, 2023 and 2022 under '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 global result' depending on the
geographical origin of the issuer:
EUR million
2024
Capital gains by
valuation
Capital losses by
valuation
Net gains/losses by
valuation
Fair Value
Equity instruments
Domestic
Spain
39
(1328)
(1,289)
117
International
Rest of Europe
131
(71)
60
299
United States
22
—
22
24
Latin America and rest
775
—
775
1,753
967
(1,399)
(432)
2,193
Of which:
Publicly listed
779
(51)
728
1,780
Non publicly listed
188
(1,348)
(1,160)
413
EUR million
2023
Capital gains by
valuation
Capital losses by
valuation
Net gains/losses by
valuation
Fair Value
Equity instruments
Domestic
Spain
32
(1,173)
(1,141)
252
International
Rest of Europe
117
(71)
46
267
United States
16
—
16
19
Latin America and rest
370
(67)
303
1,223
535
(1,311)
(776)
1,761
Of which:
Publicly listed
316
(118)
198
1,225
Non publicly listed
219
(1,193)
(974)
536
Annual report 2024
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Auditor's
Consolidated
Notes to the consolidated
Appendix
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financial statements
financial statements
EUR million
2022
Capital gains by
valuation
Capital losses by
valuation
Net gains/losses by
valuation
Fair Value
Equity instruments
Domestic
Spain
30
(926)
(896)
500
International
Rest of Europe
84
(60)
24
225
United States
15
—
15
29
Latin America and rest
244
(59)
185
1,187
373
(1,045)
(672)
1,941
Of which:
Publicly listed
246
(113)
133
1,200
Non publicly listed
127
(932)
(805)
741
d) Other comprehensive income - Items that
may be reclassified to profit or loss - Hedge of
net investments in foreign operations (effective
portion) and exchange differences
The change in 2024 reflects the positive effect of the appreciation
of pound sterling, the US dollar and Polish zloty and the negative
effect of the depreciation of the Brazilian real, Argentine peso,
Mexican peso and Chilean peso, whereas the change in 2023
reflected positive effect of the appreciation of the Brazilian real,
the US dollar and the Mexican peso and the negative effect of the
depreciation of the pound sterling. The change in 2022 reflected
the positive effect of the generalized appreciation of the main
currencies, especially the Brazilian real, the pound sterling, the US
dollar and the Mexican peso.
Of the change in the balance in these years, a loss of EUR 568
million, a profit of EUR 249 million and a profit of EUR 494 million
in 2024, 2023 and 2022, respectively relate to the measurement of
goodwill.
The detail, by country is as follows:
EUR million
2024
2023
2022
Net balance at end of year
(30,377)
(28,194)
(27,170)
Of which:
Brazilian real
(19,293)
(16,340)
(16,735)
Pound sterling
(3,444)
(3,964)
(4,219)
Mexican peso
(3,995)
(2,942)
(3,010)
Argentine peso
(2,090)
(2,655)
(1,755)
Chilean peso
(2,857)
(2,531)
(2,081)
US dollar
2,923
1,819
2,384
Polish zloty
(709)
(786)
(999)
Other
(912)
(795)
(755)
Annual report 2024
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Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The breakdown of translation differences by currency is as follows:
EUR million
2024
Of which:
Balance at the Balance at the end
Currency
beginning of the year
of the year
Movement
From goodwill
From results
A
From net assets
Brazilian real
(13,287)
(16,664)
(3,377)
(631)
(206)
(2,540)
Pound sterling
(4,064)
(3,300)
764
39
22
703
Mexican peso
(64)
(1,437)
(1,373)
(82)
(136)
(1,155)
Argentine peso
(2,658)
(2,090)
568
—
—
568
Chilean peso
(1,890)
(2,180)
(290)
(34)
(7)
(249)
US dollar
3,433
4,462
1,029
116
35
878
Polish zloty
(325)
(202)
123
34
5
84
Other
(655)
(964)
(309)
(10)
(8)
(291)
Total Group
(19,510)
(22,375)
(2,865)
(568)
(295)
(2,002)
A. Profit and loss items are translated into euros at the average exchange rate for the year as described in note 2 a) ii.
EUR million
2023
Of which:
Balance at the Balance at the end
Currency
beginning of the year
of the year
Movement
From goodwill
From results
A
From net assets
Brazilian real
(14,199)
(13,287)
912
191
11
710
Pound sterling
(4,446)
(4,064)
382
20
4
358
Mexican peso
(1,132)
(64)
1,068
62
41
965
Argentine peso
(1,754)
(2,658)
(904)
(4)
—
(900)
Chilean peso
(1,605)
(1,890)
(285)
(32)
(34)
(219)
US dollar
4,062
3,433
(629)
(64)
(16)
(549)
Polish zloty
(776)
(325)
451
87
32
332
Other
(570)
(655)
(85)
(11)
(1)
(73)
Total Group
(20,420)
(19,510)
910
249
37
624
A. Profit and loss items are translated into euros at the average exchange rate for the year as described in note 2 a) ii.
EUR million
2022
Of which:
Balance at the Balance at the end
Currency
beginning of the year
of the year
Movement
From goodwill
From results
A
From net assets
Brazilian real
(15,913)
(14,199)
1,714
376
(98)
1,436
Pound sterling
(3,504)
(4,446)
(942)
(51)
(67)
(824)
Mexican peso
(2,012)
(1,132)
880
56
18
806
Argentine peso
(2,109)
(1,754)
355
—
—
355
Chilean peso
(1,852)
(1,605)
247
31
5
211
US dollar
2,775
4,062
1,287
102
(24)
1,209
Polish zloty
(678)
(776)
(98)
(21)
—
(77)
Other
(594)
(570)
24
3
(7)
28
Total Group
(23,887)
(20,420)
3,467
496
(173)
3,144
A. Profit and loss items are translated into euros at the average exchange rate for the year as described in note 2 a) ii.
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
e) Other 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 recognised in the consolidated income statement in the periods
in which the hedged items affect it.
f) Other 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 unrealised changes in the fair value of
assets classified as Changes in the fair value of debt instruments
measured at fair value with changes in other comprehensive
income (see note 7).
The breakdown, by type of instrument and geographical origin of
the issuer, of 'Other 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' at 31 December 2024, 2023 and 2022 is as
follows:
EUR million
31 December 2024
Net revaluation
Revaluation gains
Revaluation losses
gains/ (losses)
Fair value
Debt instruments
Issued by Public-sector
Spain
103
—
103
13,764
Rest of Europe
268
(70)
198
15,413
Latin America and rest of the world
76
(944)
(868)
38,784
Issued by Private-sector
Spain
96
(23)
73
6,019
Rest of Europe
25
(18)
7
7,478
Latin America and rest of the world
16
(265)
(249)
6,247
584
(1,320)
(736)
87,705
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Consolidated
Notes to the consolidated
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financial statements
financial statements
EUR million
31 December 2023
Net revaluation
Revaluation gains
Revaluation losses
gains/ (losses)
Fair value
Debt instruments
Issued by Public-sector
Spain
17
—
17
9,867
Rest of Europe
333
(96)
237
18,258
Latin America and rest of the world
194
(820)
(626)
38,169
Issued by Private-sector
Spain
98
(9)
89
5,129
Rest of Europe
19
(30)
(11)
5,018
Latin America and rest of the world
6
(267)
(261)
5,106
667
(1,222)
(555)
81,547
EUR million
31 December 2022
Net revaluation
Revaluation gains
Revaluation losses
gains/ (losses)
Fair value
Debt instruments
Issued by Public-sector
Spain
26
(1)
25
9,312
Rest of Europe
268
(199)
69
17,593
Latin America and rest of the world
196
(937)
(741)
40,873
Issued by Private-sector
Spain
—
(24)
(24)
5,727
Rest of Europe
11
(68)
(57)
5,203
Latin America and rest of the world
16
(290)
(274)
4,590
517
(1,519)
(1,002)
83,298
Since the entry into force of IFRS 9, the Group estimates the
expected losses on debt instruments measured at fair value with
changes in other comprehensive income. These losses are recorded
with a charge to the consolidated income statement for the period.
At the end of the years 2023 and 2022, the Group recorded under
'Impairment or reversal of impairment on financial assets not
measured at fair value through profit or loss', net due to
modification of the consolidated income statement, in the line of
financial assets at fair value with changes in other comprehensive
income a provision of EUR 44 million and EUR 7 million,
respectively.
At the end of the year 2024, the Group did not record any provision
in this regard.
g) Other comprehensive income - Items that
may be reclassified to profit or loss and Items
not reclassified to profit or loss - Other
recognised income and expense of investments
in subsidiaries, joint ventures and associates
At 31 December 2024, the heading includes a negative amount of
EUR 428 million (EUR 318 million and EUR 374 million in 2023 and
2022, respectively). Of the variation in the balance of said years, a
gain of EUR 45 million and EUR 44 million has been transferred to
results, and a loss of EUR 15 million in the years 2024 2023 and
2022, respectively.
30. Shareholders' equity
The changes in Shareholders' equity are presented in the
consolidated statement of changes in total equity. Significant
information on certain items of Shareholders' equity and the
changes during the year are set forth below.
Annual report 2024
702
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
31. Issued capital
a) Changes
At 31 December 2021, Banco Santander's share capital consisted
of EUR 8,670 million, represented by 17,340,641,302 shares of
EUR 0.50 of nominal value each and all of them of a unique class
and series.
On 1 April 2022, there was a capital reduction amounting to EUR
129,965,136.50 through the redemption of 259,930,273 shares,
corresponding to the share buyback program carried out in 2021.
Likewise, on 28 June 2022, Banco Santander decreased its capital
by an amount of EUR 143,154,722.50 through the redemption of
286,309,445 shares, corresponding to the share buyback program
carried out during the first half of 2022.
Therefore, at 31 December 2022, Banco Santander's share capital
consisted of EUR 8,397 million, represented by 16,794,401,584
shares of EUR 0.50 of nominal value each and all of them of a
unique class and series. It includes 220,942,806 shares
corresponding to the first 2022 share buyback program.
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 (see note 1.g.).
On 5 February 2024, a capital reduction of EUR179,283,743.50
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.
Aforementioned operations have not entailed the return of
contributions to the shareholders as Banco Santander was the
owner of the redeemed shares.
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.
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%) and
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 markets: 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 and 50 million shares, representing 0.22% and 0.30%
of the share capital in 2023 and 2022, respectively). 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).
At 31 December 2024 the capital increases in progress at Group
companies and the additional capital authorised by their
shareholders at the respective general meetings were not material
at Group level (see appendix V)
Annual report 2024
703
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
32. 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 31.a).
The decreased produced in 2022 by an amount of EUR
1,433 million was the consequence of the difference between the
purchase value of the redeemed shares (EUR 1,706 million) and the
par value of said shares (EUR 273 million) as a consequence of the
capital decreases described in note 31.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 consolidated
statements of changes in total equity) as a consequence of the
capital decreases described in note 31.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 31.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).
33. 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 consolidated
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
consolidated income statement.
b) Breakdown
The detail of Accumulated retained earnings and Reserves of
entities accounted for using the equity method is as follows:
EUR million
2024
2023
2022
Restricted reserves
3,084
2,899
2,798
Legal reserve
A
1,515
1,618
1,734
Own shares
421
649
737
Revaluation reserve Royal Decree-Law
7/1996
43
43
43
Reserve for retired capital
1,105
589
284
Unrestricted reserves
24,186 16,033
7,701
Voluntary reserves
B
20,362 14,284
7,917
Consolidation reserves attributable to the
Bank
3,824
1,749
(216)
Reserves of subsidiaries
47,249 47,669 49,196
Reserves of entities accounted for using
the equity method
1,831
1,762
1,553
76,350 68,363
61,248
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.
B. In accordance with the commercial regulations in force in Spain.
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.
Consequently, once again, after the capital increases described in
note 31 had been carried out, the balance of the legal reserve met
the percentage of 20% of the share capital, and at 31 December
2024 the Legal reserve was at the stipulated level.
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
ii. Reserve for treasury 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.
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. Reserves of subsidiaries
The detail, by company, of Reserves of subsidiaries, based on the
companies’ contribution to the Group (considering the effect of
consolidation adjustments) is as follows:
EUR million
2024
2023
2022
Banco Santander (Brasil) S.A.
(Consolidated Group)
15,107 14,512 14,663
Santander UK Group
8,576
8,700
8,358
Banco Santander México, S.A.,
Institución de Banca Múltiple, Grupo
Financiero Santander México
5,248
5,684
5,437
Santander Consumer Finance Group
4,729
4,344
3,858
Banco Santander - Chile
4,250
4,112
3,875
Banco Santander Argentina S.A.
2,892
2,813
2,527
Banco Santander Totta, S.A.
(Consolidated Group)
2,766
2,626
3,297
Santander Bank Polska S.A.
2,890
2,535
2,140
Grupo Santander Holdings USA
187
1,893
4,324
Santander Investment, S.A.
1,217
1,215
1,316
Santander Seguros y Reaseguros,
Compañía Aseguradora, S.A.
836
1,044
1,050
Banco Santander International SA
(former Banco Santander (Suisse)
S.A)
397
346
310
Other companies and consolidation
adjustments
(1,846) (2,155) (1,959)
47,249 47,669 49,196
Of which, restricted
4,175
3,870
3,614
34. 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 8 September 2017, Banco Santander, S.A. issued contingent
redeemable perpetual bonds (the fidelity bonds) amounting to EUR
981 million nominal value EUR - 686 million fair value -.
On 15 December 2024, Banco Santander, S.A., proceeded to
redeem in advance voluntarily all of said bonds in circulation.
Additionally, at 31 December 2024 the Group had other equity
instruments amounting to EUR 217 million.
b) Own shares
'Shareholders’ equity - Own shares' includes the amount of own
equity instruments held by all the Group entities.
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.
At 31 December 2022, the number of treasury shares held by the
Group was 243,689,025 (1.45% of the issued share capital).
During 2023, 911,293,677 shares of the Bank were acquired at an
average price of EUR 3.41 per share, of which 389,312,719 relate
to the Share Buyback Program carried out during the first half of
2023, and 286,842,316 relate to the Share Buyback Program
started on September. Likewise, 610,255,525 shares were
amortised (note 31) and 246,911,504 shares at an average price of
EUR 3.34 per share were transferred, of which 6,617,008 shares
correspond to the donation made by Banco Santander to Fundación
Banco Santander with extraordinary character.
At 31 December 2023, the number of treasury shares held by the
Group was 297,815,673 (1.84% of the issued share capital).
During 2024, 930,610,636 shares of the Bank were acquired at an
average price of EUR 4.34 per share, of which 403,030,171 relate
to the Share Buyback Program carried out during the first half of
2024, and 341,781,250 relate to the new Share Buyback Program
started on September. Likewise, 1,031,653,737 shares were
amortised (note 31) and 181,243,113 shares at an average price of
EUR 4.22 per share have been transferred, of which 22,167,105
shares correspond to the donation made by Banco Santander to
Fundación Banco Santander with extraordinary character.
At 31 December 2024, the Group holds 15,529,459 shares of the
Bank's issued share capital (0.10%).
The effect on equity, net of tax, arising from the purchase and sale
of Bank shares is of EUR 8 million profit in 2024 (EUR 13 million
and EUR 7 million profit in 2023 and 2022, respectively).
Annual report 2024
705
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
35. Memorandum items
Memorandum items relates 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 performed by the consolidated entities
although they may not impinge on their net assets.
a) Guarantees and contingent commitments
granted
Contingent liabilities includes 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 contracts. The detail is as follows:
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) Memorandum items
i. Off-balance-sheet funds under management
The detail of off-balance-sheet funds managed by the Group and
by joint ventures is as follows:
EUR million
2024
2023
2022
Investment funds
178,840
165,174
142,189
Pension funds
15,646
14,831
14,021
2024
2023
2022
Assets under management
35,999
29,732
25,670
Loans commitment granted
302,861
279,589
274,075
Of which impaired
511
406
653
Financial guarantees granted
16,901
15,435
12,856
Of which impaired
217
578
521
Financial guarantees
16,887
15,400
12,813
Credit derivatives sold
14
35
43
Other commitments granted
134,493
113,273
92,672
Of which impaired
793
542
608
Technical guarantees
61,551
57,363
50,508
Other
72,942
55,910
42,164
The breakdown as at 31 December 2024 of the exposures and the
provision fund out of balance sheet by impairment stage is EUR
435,147 million and EUR 305 million (EUR 398,243 million and
EUR 302 million in 2023 and EUR 370,729 million and EUR
331 million in 2022) in stage 1, EUR 17,587 million and EUR
192 million (EUR 8,528 million and EUR 174 million in 2023 and
EUR 7,092 million and EUR 191 million in 2022) in stage 2 and EUR
1,521 million and EUR 213 million (EUR 1,526 million and EUR 226
million in 2023 and EUR 1,782 million and EUR 212 million in
2022) in stage 3, respectively.
Income from guarantee instruments is recognised under 'Fee and
commission income' in the consolidated 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
Loan commitments granted: firm commitments of grating of credit
under predefined terms and conditions, except for those that
comply with the definition of derivatives as these can be settled in
cash or through the delivery of issuance of another financial
instrument. They include stand-by credit lines and long-term
deposits.
ii. Financial guarantees granted
Financial guarantees includes, inter alia, financial guarantee
contracts such as financial bank guarantees, credit derivatives sold,
and risks arising from derivatives arranged for the account of third
parties.
230,485
209,737
181,880
ii. Non-managed marketed funds
Additionally, at 31 December 2024 there are non-managed
marketed funds totalling EUR 62,002 million (EUR 50,036 million
and EUR 48,379 million at 31 December 2023 and 2022,
respectively).
c) Third-party securities held in custody
At 31 December 2024 the Group held in custody debt securities
and equity instruments totalling EUR 292,216 million (EUR
268,338 million and EUR 231,263 million at 31 December 2023
and 2022, respectively) entrusted to it by third parties.
36. Hedging derivatives
Grupo 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, Grupo 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 Group.
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The following tables contains the detail of the hedging
derivatives according to the type of hedging, the hedge risk and
the main products used as of 31 December 2024, 2023 and
2022:
EUR million
2024
Carrying amount
Nominal
value
Assets
Liabilities
Changes in fair value used
for calculating hedge
ineffectiveness
Balance sheet line items
Fair value hedges
308,897
2,584
2,964
483
Interest rate risk
290,152
2,070
2,319
373
Hedging derivatives
Of which:
Interest rate swap
108,435
1,185
2,074
(165)
Call money swap
168,280
393
8
321
Exchange rate risk
4,411
13
59
101
Hedging derivatives
Of which:
Fx forward
2,240
8
39
(2)
Future interest rate
2,059
—
—
91
Interest rate and exchange rate risk
13,739
501
586
8
Hedging derivatives
Of which:
Interest rate swap
882
5
65
17
Call money swap
1,838
10
—
29
Currency swap
11,019
486
520
(38)
Base risk
500
—
—
—
Hedging derivatives
Interest rate swap
500
—
—
—
Equity risk
95
—
—
1
Hedging derivatives
Equity swap
95
—
—
1
Cash flow hedges
179,271
2,415
1,519
558
Interest rate risk
134,503
1,060
1,089
144
Of which:
Future interest rate
6,621
—
—
225
Interest rate swap
43,081
485
241
231
Call money swap
63,582
303
237
(361)
Exchange rate risk
30,653
738
258
459
Hedging derivatives
Of which:
FX forward
9,286
362
51
408
Currency swap
19,957
323
189
114
Interest rate and exchange rate risk
11,724
539
172
26
Hedging derivatives
Interest rate swap
3,092
(6)
46
75
Currency swap
8,632
545
126
(49)
Inflation risk
2,316
58
—
(69)
Hedging derivatives
Of which:
Inflation swap
2,163
57
—
82
Equity risk
75
20
—
(2)
Hedging derivatives
Equity swap
75
20
—
(2)
Hedges of net investments in foreign
operations
23,559
673
269
420
Exchange rate risk
23,559
673
269
420
Hedging derivatives
FX forward
23,559
673
269
420
511,727
5,672
4,752
1,461
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
EUR million
2023
Carrying amount
Nominal
value
Assets
Liabilities
Changes in fair value used
for calculating hedge
ineffectiveness
Balance sheet line items
Fair value hedges
241,792
2,661
4,231
(1,869)
Interest rate risk
225,377
2,280
3,644
(1,684)
Hedging derivatives
Of which:
Interest rate swap
92,491
1,671
2,236
(47)
Call money swap
122,891
344
1,226
(1,824)
Exchange rate risk
4,331
15
24
(98)
Hedging derivatives
FX forward
1,913
15
24
(11)
Future interest rate
2,418
—
—
(87)
Interest rate and exchange rate risk
12,084
366
563
(87)
Hedging derivatives
Future interest rate
1,218
6
82
59
Currency swap
9,773
357
384
(107)
Call money swap
1,093
3
97
(39)
Cash flow hedges
157,796
2,575
2,889
1,828
Interest rate risk
97,780
913
1,246
2,181
Hedging derivatives
Of which:
Future interest rate
3,020
—
—
6
Interest rate swap
37,864
403
948
1,188
Call money swap
53,705
469
266
1,000
Exchange rate risk
34,823
1,001
663
(498)
Hedging derivatives
Of which:
FX forward
11,160
502
241
43
Currency swap
20,043
446
397
(537)
Interest rate and exchange rate risk
12,217
484
74
(98)
Hedging derivatives
Interest rate swap
2,847
—
(45)
227
Currency swap
9,370
484
119
(325)
Inflation risk
12,908
155
906
234
Hedging derivatives
Of which:
Currency swap
12,495
153
906
240
Equity risk
68
22
—
9
Hedging derivatives
Option
68
22
—
9
Hedges of net investments in foreign
operations
18,706
61
536
(1,888)
Exchange rate risk
18,706
61
536
(1,888)
Hedging derivatives
FX forward
18,706
61
536
(1,888)
418,294
5,297
7,656
(1,929)
Annual report 2024
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Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
EUR million
2022
Carrying amount
Nominal
value
Assets
Liabilities
Changes in fair value used
for calculating hedge
ineffectiveness
Balance sheet line items
Fair value hedges
214,473
5,095
4,630
3,351
Interest rate risk
190,513
4,405
4,239
2,554
Hedging derivatives
Of which:
Interest rate swap
87,477
2,950
3,203
(716)
Call money swap
88,059
1,367
623
3,468
Exchange rate risk
4,492
147
25
(9)
Hedging derivatives
FX forward
3,745
147
25
(36)
Future interest rate
747
—
—
27
Interest rate and exchange rate risk
19,412
543
366
805
Hedging derivatives
Of which:
Currency swap
9,522
266
286
(61)
Interest rate swap
905
4
80
(79)
Future interest rate
8,679
261
—
922
Credit risk
56
—
—
1
Hedging derivatives
CDS
56
—
—
1
Cash flow hedges
149,756
2,730
3,767
(519)
Interest rate risk
81,626
137
1,325
(2,461)
Hedging derivatives
Of which:
Future interest rate
2,027
—
—
51
Interest rate swap
55,886
59
1,494
(1,439)
Call money swap
20,784
49
(184)
(1,151)
Exchange rate risk
34,973
1,358
746
1,760
Hedging derivatives
Of which:
FX forward
10,754
267
172
773
Currency swap
20,005
951
455
982
Interest rate and exchange rate risk
16,175
1,046
292
(80)
Hedging derivatives
Interest rate swap
3,361
—
161
(333)
Currency swap
12,814
1,046
131
249
Inflation risk
16,924
180
1,403
261
Hedging derivatives
Of which:
Currency swap
14,096
179
1,364
241
Equity risk
58
9
1
—
Hedging derivatives
Option
58
9
1
—
Hedges of net investments in foreign
operations
22,614
244
831
(2,467)
Exchange rate risk
22,614
244
831
(2,467)
Hedging derivatives
FX forward
22,614
244
831
(2,467)
386,843
8,069
9,228
364
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Considering the main entities or groups within the Group by the
weight of their hedging, the main types of hedging that are being
carried out in Santander UK Group Holdings plc group and Banco
Santander, S.A.
Santander UK Group Holdings plc group enters into fair value and
cash flow hedging derivatives depending on the exposure of the
underlying. Only designated risks are hedged and therefore other
risks, such as credit risk, are managed but not hedged.
Within fair value hedges, Santander UK Group Holdings plc group
has portfolios of assets and liabilities at fixed rate that are exposed
to changes in fair value due to changes in market interest rates.
These positions are managed by contracting mainly interest rate
swaps. Effectiveness is assessed by comparing the changes in the
fair value of these portfolios generated by the hedged risk with the
changes in the fair value of the derivatives contracted.
Santander UK Group Holdings plc group also has access to
international markets to obtain financing by issuing fixed-rate debt
or investing in fixed rate debt of other issuers, in its functional
currency and other currencies. As such, they are exposed to
changes in interest rates and exchange rates, mainly in EUR and
USD. This risk is mitigated with cross currency swaps e interest rate
swaps in which they pay a fixed rate and receive a variable rate.
Effectiveness is evaluated using linear regression techniques to
compare changes in the fair value of the debt at interest and
exchange rates with changes in the fair value of interest rate swaps
or cross currency swaps.
Within the cash flow hedges, Santander UK Group Holdings plc
group has portfolios of assets and liabilities at variable rates,
normally at SONIA or BoE base rate. To mitigate this market rate
variability risk, it contracts interest rate swaps.
As Santander UK Group Holdings plc group obtains financing in the
international markets, it assumes a significant exposure to
currency risk mainly USD and EUR. In addition, it also holds debt
securities for liquidity purposes which assume exposure mainly in
JPY and CHF. To manage this exchange rate risk, Spot, Forward y
Cross Currency Swap are contracted to match the cash flow profile
and the maturity of the estimated interest and principal
repayments of the hedged item.
Effectiveness is assessed by comparing changes in the fair value of
the derivatives with changes in the fair value of the hedged item
attributable to the hedged risk by applying a hypothetical
derivative method using linear regression techniques.
It also has inflation risk hedges, which arise from UK bonds linked
to UK inflation and are hedged using inflation swaps.
Effectiveness is assessed by comparing changes in the fair value of
the inflation swap with the changes in the fair value of the hedged
item attributable to the hedged risk, applying the hypothetical
derivative method using linear regression techniques.
In addition, within the hedges that cover equity risk, Santander UK
Group Holdings plc group offers employees the opportunity to
purchase shares of the Bank at a discount under the Sharesave
Scheme, exposing the Bank to share price risk. As such, options are
purchased allowing them to purchase shares at a pre-set price.
Banco Santander, S.A. 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 value. These issues are covered
through interest rate swaps and cross currency swaps.
The methodology used by Banco Santander, S.A. 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.
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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. and Santander Consumer
Finance Group. 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, CAD, 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.
Annual report 2024
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Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
The following table sets out the maturity profile of the hedging
instruments used in Grupo Santander non-dynamic hedging
strategies:
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
9,791
15,953
88,519
163,086
31,548
308,897
Interest rate risk
8,725
14,680
85,981
154,440
26,326
290,152
Of which:
Interest rate swap
2,877
4,261
19,788
61,440
20,069
108,435
Call money swap
5,033
7,652
64,102
87,473
4,020
168,280
Exchange rate risk
1,054
717
469
112
2,059
4,411
Of which:
Fx forward
1,054
717
469
—
—
2,240
Future interest rate
—
—
—
—
2,059
2,059
Interest rate and exchange rate risk
12
511
2,019
8,034
3,163
13,739
Of which:
Interest rate swap
—
43
—
491
348
882
Call Money Swap
—
106
104
1,052
576
1,838
Currency swap
12
361
1,915
6,491
2,240
11,019
Base risk
—
—
—
500
—
500
Interest rate swap
—
—
—
500
—
500
Equity risk
—
45
50
—
—
95
Equity swap
—
45
50
—
—
95
Cash flow hedges
19,696
10,088
43,111
94,030
12,346
179,271
Interest rate risk
14,628
7,932
30,390
75,459
6,094
134,503
Of which:
Future interest rate
6,621
—
—
—
—
6,621
Interest rate swap
1,816
1,666
5,950
32,654
995
43,081
Call money swap
5,330
4,190
14,896
34,841
4,325
63,582
Exchange rate risk
2,982
1,377
8,765
14,703
2,826
30,653
Of which:
FX forward
2,594
1,310
5,382
—
—
9,286
Currency swap
133
66
3,383
14,704
1,671
19,957
Interest rate and exchange rate risk
2,086
778
3,785
3,813
1,262
11,724
Of which:
Interest rate swap
997
—
395
1,260
440
3,092
Currency swap
1,090
778
3,389
2,553
822
8,632
Inflation risk
—
—
153
—
2,163
2,316
Of which:
Inflation swap
—
—
—
—
2,163
2,163
Equity risk
—
1
18
55
1
75
Option
—
1
18
55
1
75
Hedges of net investments in foreign operations:
3,918
5,644
13,997
—
—
23,559
Exchange rate risk
3,918
5,644
13,997
—
—
23,559
FX forward
3,918
5,644
13,997
—
—
23,559
33,405
31,685
145,627
257,116
43,894
511,727
Annual report 2024
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Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
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
6,862
14,535
59,170
139,486
21,739
241,792
Interest rate risk
6,266
13,749
56,860
131,323
17,179
225,377
Of which:
Interest rate swap
2,013
2,104
16,045
59,952
12,377
92,491
Call money swap
4,163
11,421
39,873
65,453
1,981
122,891
Exchange rate risk
566
678
619
50
2,418
4,331
Fx forward
566
678
619
50
—
1,913
Future interest rate
—
—
—
—
2,418
2,418
Interest rate and exchange rate risk
30
108
1,691
8,113
2,142
12,084
Currency swap
30
87
1,370
6,605
1,681
9,773
Interest rate swap
—
—
321
535
362
1,218
Call Money Swap
—
21
—
973
99
1,093
Cash flow hedges
7,873
16,149
43,913
83,291
6,570
157,796
Interest rate risk
4,467
6,859
30,846
53,038
2,570
97,780
Of which:
Future interest rate
—
—
—
3,020
—
3,020
Interest rate swap
3,191
2,876
14,108
16,793
896
37,864
Call money swap
1,050
3,553
15,755
31,942
1,405
53,705
Exchange rate risk
2,655
7,087
6,607
16,711
1,763
34,823
Of which:
FX forward
2,013
2,344
4,617
2,186
—
11,160
Currency swap
642
2,209
1,990
14,525
677
20,043
Interest rate and exchange rate risk
407
1,547
2,270
7,187
806
12,217
Of which:
Interest rate swap
—
80
—
2,575
192
2,847
Currency swap
407
1,467
2,270
4,612
614
9,370
Inflation risk
344
656
4,182
6,296
1,430
12,908
Of which:
Currency swap
318
618
3,833
6,296
1,430
12,495
Equity risk
—
—
8
59
1
68
Option
—
—
8
59
1
68
Hedges of net investments in foreign operations:
4,303
4,940
9,463
—
—
18,706
Exchange rate risk
4,303
4,940
9,463
—
—
18,706
FX forward
4,303
4,940
9,463
—
—
18,706
19,038
35,624
112,546
222,777
28,309
418,294
Annual report 2024
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Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
EUR million
31 December 2022
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
6,588
9,811
37,723
136,223
24,128
214,473
Interest rate risk
5,120
8,822
34,074
120,829
21,668
190,513
Of which:
Interest rate swap
2,535
3,005
8,854
56,868
16,215
87,477
Call money swap
2,492
5,039
23,511
54,786
2,231
88,059
Exchange rate risk
556
741
2,448
—
747
4,492
Future interest rate
—
—
—
—
747
747
Fx forward
556
741
2,448
—
—
3,745
Interest rate and exchange rate risk
912
238
1,193
15,356
1,713
19,412
Of which:
Interest rate swap
—
—
405
192
308
905
Currency swap
912
238
788
6,188
1,396
9,522
Future interest rate
—
—
—
8,679
—
8,679
Credit risk
—
10
8
38
—
56
CDS
—
10
8
38
—
56
Cash flow hedges
10,182
15,202
41,514
75,653
7,205
149,756
Interest rate risk
5,546
7,424
30,568
36,501
1,587
81,626
Of which:
Future interest rate
2,027
—
—
—
—
2,027
Interest rate swap
2,292
4,877
28,103
20,568
46
55,886
Call money swap
1,175
2,471
1,196
14,728
1,214
20,784
Exchange rate risk
3,777
4,295
4,452
19,940
2,509
34,973
Of which:
FX forward
1,996
2,487
1,982
4,289
—
10,754
Currency swap
1,313
1,809
2,470
13,028
1,385
20,005
Interest rate and exchange rate risk
182
509
3,982
10,294
1,208
16,175
Interest rate swap
—
—
659
2,468
234
3,361
Currency swap
182
509
3,323
7,826
974
12,814
Inflation risk
677
2,974
2,505
8,870
1,898
16,924
Of which:
Currency swap
483
951
1,895
8,869
1,898
14,096
Equity risk
—
—
7
48
3
58
Option
—
—
7
48
3
58
Hedges of net investments in foreign operations
2,249
5,393
14,972
—
—
22,614
Exchange rate risk
2,249
5,393
14,972
—
—
22,614
FX forward
2,249
5,393
14,972
—
—
22,614
19,019
30,406
94,209
211,876
31,333
386,843
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Additionally, for Santander UK Group Holdings plc and Banco
Santander, S.A., both the maturity profile, the average interest and
exchange rate of hedging instruments by maturity buckets are
shown:
Santander UK Group Holdings plc group
31 December 2024
EUR million
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
Interest rate risk
Interest rate instruments
Nominal
5,033
7,598
64,755
93,176
4,110
174,672
Average fixed interest rate (%) GBP
3.749
4.293
4.496
3.868
3.653
Average fixed interest rate (%) EUR
0.200
(0.346)
(0.446)
0.585
4.370
Average fixed interest rate (%) USD
1.677
1.534
1.531
5.756
0.449
Interest rate and foreign exchange rate risk
Exchange and interest rate instruments
Nominal
—
212
258
2,280
1,152
3,902
Average GBP/EUR exchange rate
—
1.136
1.158
1.162
1.176
Average GBP/USD exchange rate
—
—
—
1.318
1.281
Average fixed interest rate (%) EUR
—
—
1.350
3.304
2.940
Average fixed interest rate (%) USD
—
—
—
4.831
4.375
Cash flow hedges
Interest rate risk
Interest rate instruments
Nominal
5,330
4,190
14,896
34,841
4,325
63,582
Average fixed interest rate (%) GBP
4.592
4.075
4.761
3.707
4.352
Foreign exchange risk
Exchange and interest rate instruments
Nominal
311
954
5,941
13,235
2,730
23,171
Average GBP/JPY exchange rate
178.368
179.995
187.640
—
—
Average GBP/CHF exchange rate
—
—
1.086
1.115
—
Average GBP/EUR exchange rate
—
1.203
1.188
1.177
1.162
Average GBP/USD exchange rate
—
—
1.238
1.297
1.388
Average GBP/CAD exchange rate
—
—
1.758
—
—
Equity risk
Equity instruments
Nominal
—
—
19
55
1
75
Interest rate and foreign exchange rate risk
Exchange and interest rate instruments
Nominal
1,993
476
1,039
2,294
707
6,509
Average GBP/EUR exchange rate
1.124
1.370
1.161
1.213
1.179
Average GBP/USD exchange rate
—
—
1.538
1.319
1.537
Average fixed interest rate (%) GBP
1.480
2.760
3.203
2.771
4.885
Inflation risk
Interest rate instruments
Nominal
—
—
—
—
2,163
2,163
Average fixed interest rate (%) GBP
—
—
—
—
4.983
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
31 December 2023
EUR million
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
Interest rate risk
Interest rate instruments
Nominal
4,163
8,230
37,158
70,075
3,467
123,093
Average fixed interest rate (%) GBP
2.380
3.190
3.420
3.890
3.990
Average fixed interest rate (%) EUR
1.140
0.180
0.450
0.210
3.920
Average fixed interest rate (%) USD
2.600
2.460
4.230
1.360
4.910
Interest rate and foreign exchange rate risk
Exchange and interest rate instruments
Nominal
—
41
—
2,172
198
2,411
Average GBP/EUR exchange rate
—
1.113
—
1.156
1.148
Average GBP/USD exchange rate
—
—
—
1.318
—
Average fixed interest rate (%) EUR
—
—
—
2.770
3.480
Average fixed interest rate (%) USD
—
—
—
4.830
—
Cash flow hedges
Interest rate risk
Interest rate instruments
Nominal
1,050
3,553
15,756
31,941
1,405
53,705
Average fixed interest rate (%) GBP
5.060
3.050
5.380
3.840
3.450
Foreign exchange risk
Exchange and interest rate instruments
Nominal
1,068
6,266
3,104
10,888
1,763
23,089
Average GBP/JPY exchange rate
154.135
153.954
167.846
—
—
Average GBP/CHF exchange rate
1.092
1.093
1.089
1.121
1.121
Average GBP/EUR exchange rate
—
1.197
1.167
1.179
—
Average GBP/USD exchange rate
—
1.392
—
1.277
1.388
Equity risk
Equity instruments
Nominal
—
—
8
58
2
68
Interest rate and foreign exchange rate risk
Exchange and interest rate instruments
Nominal
100
905
576
5,614
719
7,914
Average GBP/EUR exchange rate
1,183
—
1.254
1.198
1.189
Average GBP/USD exchange rate
—
1,663
—
1.383
1.537
Average fixed interest rate (%) GBP
2.570
2.540
2.960
2.420
4.810
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Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
31 December 2022
EUR million
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
Interest rate risk
Interest rate instruments
Nominal
2,492
5,039
24,447
51,257
4,294
87,529
Average fixed interest rate (%) GBP
2.580
0.880
0.560
2.070
3.780
Average fixed interest rate (%) EUR
1.770
1.600
0.770
0.280
3.090
Average fixed interest rate (%) USD
1.350
3.470
3.510
2.000
4.920
Interest rate and foreign exchange rate risk
Exchange and interest rate instruments
Nominal
—
—
74
821
16
911
Average GBP/EUR exchange rate
—
—
1.212
1.157
1.100
Average GBP/USD exchange rate
—
—
—
1.186
—
Average fixed interest rate (%) EUR
—
—
3.420
2.060
—
Average fixed interest rate (%) USD
—
—
—
4.630
—
Cash flow hedges
Interest rate risk
Interest rate instruments
Nominal
1,175
2,471
2,188
14,728
1,213
21,775
Average fixed interest rate (%) GBP
1.770
2.290
1.980
2.350
1.840
Foreign exchange risk
Exchange rate instruments
Nominal
3,063
3,536
2,685
14,583
2,436
26,303
Average GBP/JPY exchange rate
—
157.450
160.039
—
—
Average GBP/CHF exchange ratio
—
1.131
—
—
—
Average GBP/EUR exchange rate
—
—
1.123
1.181
1.165
Average GBP/USD exchange rate
1.224
1.253
1.171
1.314
1.388
Equity risk
Equity instruments
Nominal
—
—
7
48
2
57
Interest rate and foreign exchange rate risk
Exchange and interest rate instruments
Nominal
—
—
1,983
7,621
968
10,572
Average GBP/EUR exchange rate
—
—
1.185
1.210
1.196
Average GBP/USD exchange rate
—
—
1.604
1.503
1.537
Average fixed interest rate (%) GBP
—
—
3.270
2.580
4.590
Annual report 2024
717
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Banco Santander, S.A.
31 December 2024
EUR million
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
Interest rate risk
Interest rate instruments
Nominal
1,431
4,446
6,878
33,324
15,991
62,070
Average fixed interest rate (%) GBP
—
0.020
3.120
2.640
5.370
Average fixed interest rate (%) EUR
1.340
0.010
2.000
3.460
3.170
Average fixed interest rate (%) CHF
—
—
—
—
—
Average fixed interest rate (%) USD
0.010
3.500
2.740
4.460
4.720
Average fixed interest rate (%) CZK
—
—
—
2.000
—
Average fixed interest rate (%) NOK
—
—
—
—
2.400
Average fixed interest rate (%) AUD
—
—
—
—
3.820
Average fixed interest rate (%) JPY
—
—
—
—
—
Average fixed interest rate (%) RON
—
3.610
—
4.200
—
Average fixed interest rate (%) HKD
—
—
—
1.960
—
Average fixed interest rate (%) NZD
—
—
—
—
3.250
Foreign exchange risk
Exchange and interest rate instruments
Nominal
473
405
287
—
—
1,165
Average GBP/EUR exchange rate
—
—
—
—
—
Average USD/EUR exchange rate
—
—
—
—
—
Average COP/USD exchange rate
—
—
—
—
—
Average PEN/USD exchange rate
—
—
—
—
—
Average AUD/EUR exchange rate
—
—
—
—
—
Average SAR/EUR exchange rate
—
—
—
—
—
Average CNY/EUR exchange rate
7,710
7,710
7,710
—
—
Average JPY/USD exchange rate
—
—
—
—
—
Average MXN/EUR exchange rate
2,178
—
—
—
—
Average MAD/EUR exchange rate
—
—
—
—
—
Average PEN/EUR exchange rate
—
—
—
—
—
Interest rate and foreign exchange rate risk
Exchange and interest rate instruments
Nominal
12
148
1,355
4,859
1,669
8,043
Average fixed interest rate (%) AUD/EUR
—
—
—
5.690
6.100
Average fixed interest rate (%) EUR/USD
—
—
—
—
—
Average fixed interest rate (%) CZK/EUR
—
—
—
4.190
—
Average fixed interest rate (%) EUR/COP
—
—
—
—
—
Average fixed interest rate (%) RON/EUR
—
—
—
—
6.970
Average fixed interest rate (%) HKD/EUR
—
—
—
4.620
—
Average fixed interest rate (%) JPY/EUR
—
—
—
1.300
1.410
Average fixed interest rate (%) NOK/EUR
—
—
—
3.440
4.500
Average fixed interest rate (%) CHF/EUR
—
—
—
2.030
2.250
Average fixed interest rate (%) USD/CLP
—
—
—
—
—
Average fixed interest rate (%) USD/COP
—
12.750
10.580
10.540
7.760
Average fixed interest rate (%) EUR/GBP
6.690
—
—
—
—
Annual report 2024
718
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
31 December 2024
EUR million
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 (%) NZD/EUR
—
—
—
—
—
Average fixed interest rate (%) USD/MXN
—
—
11.300
—
—
Average AUD/EUR exchange rate
—
—
—
1.599
1.584
Average NZD/EUR exchange rate
—
—
—
—
1.666
Average CZK/EUR exchange rate
—
—
26.030
25.634
—
Average EUR/GBP exchange rate
1.189
—
—
—
—
Average EUR/COP exchange rate
—
—
—
—
—
Average EUR/USD exchange rate
—
—
0.982
0.943
—
Average HKD/EUR exchange rate
—
—
—
8.488
—
Average JPY/EUR exchange rate
—
—
—
134.151
129.229
Average MXN/EUR exchange rate
—
—
—
19.083
—
Average NOK/EUR exchange rate
—
—
—
9.519
10.429
Average RON/EUR exchange rate
—
4.810
—
4.940
4.980
Average CHF/EUR exchange rate
—
—
—
1.019
0.932
Average USD/CLP exchange rate
—
—
—
—
—
Average USD/COP exchange rate
—
—
—
—
—
Average USD/MXN exchange rate
—
—
0.052
—
—
Credit risk
Credit risk instruments
Nominal
—
—
—
—
—
Basis Risk
Basis risk instruments
Nominal
—
—
—
500
—
500
Cash flow hedges
Interest rate and foreign exchange rate risk
Interest rate and foreign exchange rate
instruments
Nominal
—
—
—
1,055
84
1,139
Average fixed interest rate (%) EUR/PEN
—
—
—
—
—
Average fixed interest rate (%) AUD/EUR
—
—
—
3.520
—
Average fixed interest rate (%) USD/COP
—
—
—
—
—
Average fixed interest rate (%) EUR/AUD
—
—
—
—
—
Average fixed interest rate (%) CHF/EUR
—
—
—
3.110
—
Average EUR/PEN exchange rate
—
—
—
—
—
Average EUR/USD exchange rate
—
—
—
—
—
Average AUD/EUR exchange rate
—
—
—
1.580
1.560
Average RON/EUR exchange rate
—
—
—
4.940
—
Average JPY/EUR exchange rate
—
—
—
—
—
Average CHF/EUR exchange rate
—
—
—
1.000
—
Average EUR/GBP exchange rate
—
—
—
—
—
Average NOK/EUR exchange rate
—
—
—
—
—
Average CZK/EUR exchange rate
—
—
—
—
—
Average EUR/AUD exchange rate
—
—
—
—
—
Interest rate risk
Bond Forward instruments
Nominal
—
—
6,200
5,820
—
12,020
Average fixed interest rate (%) EUR
—
—
—
2.910
—
Average fixed interest rate (%) USD
—
—
—
—
—
Average fixed interest rate (%) AUD
—
—
—
—
—
Annual report 2024
719
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
31 December 2024
EUR million
Up to one
month
One to three
months
Three months
to one year
One year to
five years
More than five
years
Total
Exchange rate risk
Exchange instruments
Nominal
14
83
125
—
—
222
Average exchange rate GBP/EUR
1.200
1.170
1.190
—
—
Hedges of net investments in foreign operations
Exchange rate risk
Exchange and interest rate instruments
Nominal
3,240
5,070
12,821
—
—
21,131
Average BRL/EUR exchange rate
5.990
6.120
6.270
—
—
Average CLP/EUR exchange rate
1,052.780
1,066.580
1,045.090
—
—
Average COP/EUR exchange rate
—
4,703
—
—
—
Average GBP/EUR exchange rate
0.860
0.850
0.850
—
—
Average MXN/EUR exchange rate
20.280
19.830
21.970
—
—
Average USD/EUR exchange rate
1.090
1.080
1.090
—
—
Average PLN/EUR exchange rate
4.370
4.410
4.410
—
—
Average CAD/EUR exchange rate
—
1.500
—
—
—
Average CHF/EUR exchange rate
—
0.940
—
—
—
Average UYU/EUR exchange rate
45.820
45.160
48.290
—
—
Annual report 2024
720
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
31 December 2023
EUR million
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
Interest rate risk
Interest rate instruments
Nominal
1,532
194
7,880
22,714
8,775
41,095
Average fixed interest rate (%) GBP
—
—
1.375
4.479
2.036
Average fixed interest rate (%) EUR
0.096
0.014
2.085
2.422
3.421
Average fixed interest rate (%) CHF
—
—
1.010
—
—
Average fixed interest rate (%) USD
0.015
3.688
2.603
3.801
4.446
Foreign exchange risk
Exchange and interest rate instruments
Nominal
278
634
524
50
—
1,486
Average PEN/USD exchange rate
3.784
3.751
—
—
—
Average CNY/EUR exchange rate
—
7.323
7.732
7.716
—
Average AUD/EUR exchange rate
1.648
1.665
—
—
—
Average MXN/EUR exchange rate
—
19.363
—
—
—
Average COP/USD exchange rate
4,159.190
3,998.060
—
—
—
Average MAD/EUR exchange rate
10.929
11.057
—
—
—
Average PEN/EUR exchange rate
4.095
4.110
—
—
—
Interest rate and foreign exchange rate risk
Exchange and interest rate instruments
Nominal
30
66
1,450
4,321
1,150
7,017
Average fixed interest rate (%) AUD/EUR
—
—
—
4.800
3.615
Average fixed interest rate (%) CZK/EUR
—
—
—
2.000
—
Average fixed interest rate (%) RON/EUR
5.130
—
—
3.967
—
Average fixed interest rate (%) HKD/EUR
—
—
2.580
5.270
—
Average fixed interest rate (%) JPY/EUR
—
—
0.465
1.298
1.407
Average fixed interest rate (%) NOK/EUR
—
—
—
3.441
4.501
Average fixed interest rate (%) CHF/EUR
—
—
—
1.243
—
Average fixed interest rate (%) USD/MXN
—
—
14.250
—
—
Average fixed interest rate (%) USD/COP
—
17.980
6.152
13.207
7.149
Average fixed interest rate (%) EUR/USD
—
—
(0.140)
—
—
Average fixed interest rate (%) USD/CLP
—
—
3.450
—
—
Average AUD/EUR exchange rate
—
—
—
1.499
1.545
Average CZK/EUR exchange rate
—
—
—
25.831
—
Average EUR/USD exchange rate
—
—
0.891
0.961
—
Average HKD/EUR exchange rate
—
—
8.782
8.666
—
Average JPY/EUR exchange rate
—
—
120.568
134.151
129.229
Average NOK/EUR exchange rate
—
—
—
9.519
10.429
Average RON/EUR exchange rate
4.711
—
—
4.887
—
Average CHF/EUR exchange rate
—
—
—
1.104
—
Average MXN/EUR exchange rate
—
—
—
—
19.083
Average USD/CLP exchange rate
—
—
0.001
—
—
Average NZD/EUR exchange rate
—
—
—
—
1.666
Average USD/MXN exchange rate
—
—
0.058
—
—
Annual report 2024
721
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
31 December 2023
EUR million
Up to one
month
One to three
months
Three months
to one year
One year to
five years
More than five
years
Total
Cash flow hedges
Interest rate and foreign exchange rate risk
Interest rate and foreign exchange rate
instruments
Nominal
—
—
414
1,075
86
1,575
Average fixed interest rate (%) CHF/EUR
—
—
—
3.106
—
Average fixed interest rate (%) AUD/EUR
—
—
—
3.521
—
Average EUR/GBP exchange rate
—
—
1.173
—
—
Average AUD/EUR exchange rate
—
—
1.625
1.584
1.562
Average RON/EUR exchange rate
—
—
—
4.940
—
Average CHF/EUR exchange rate
—
—
—
1.002
—
Interest rate risk
Bond Forward instruments
Nominal
750
1,500
7,750
0
0
10,000
Average fixed interest rate (%) EUR
(0.124)
(0.889)
0.016
—
—
Exchange rate risk
Exchange instruments
Nominal
13
25
111
—
—
Average exchange rate GBP/EUR
1.148
1.146
1.138
—
—
Hedges of net investments in foreign operations
Exchange rate risk
Exchange and interest rate instruments
Nominal
3,593
4,870
8,034
—
—
16,497
Average BRL/EUR exchange rate
5.569
5.505
5.481
—
—
Average CLP/EUR exchange rate
916.724
936.166
987.202
—
—
Average COP/EUR exchange rate
—
4,525.656
—
—
—
Average GBP/EUR exchange rate
0.866
0.867
0.876
—
—
Average MXN/EUR exchange rate
20.078
20.589
20.210
—
—
Average USD/EUR exchange rate
—
1.129
1.081
—
—
Average PLN/EUR exchange rate
4.664
4.752
4.580
—
—
Average CAD/EUR exchange rate
—
1.461
—
—
—
Average CHF/EUR exchange rate
—
0.940
—
—
—
Average UYU/EUR exchange rate
43.235
43.521
44.400
—
—
Annual report 2024
722
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
31 December 2022
EUR million
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
Interest rate risk
Interest rate instruments
Nominal
1,032
1,248
2,348
24,115
8,809
37,552
Average fixed interest rate (%) GBP
—
2.036
2.036
1.856
2.036
Average fixed interest rate (%) EUR
0.569
(0.406)
0.278
2.396
1.674
Average fixed interest rate (%) CHF
—
—
—
0.530
—
Average fixed interest rate (%) JPY
—
—
—
0.465
—
Average fixed interest rate (%) CZK
—
—
—
1.650
—
Average fixed interest rate (%) NOK
—
—
—
—
2.327
Average fixed interest rate (%) AUD
—
1.073
—
—
—
Average fixed interest rate (%) USD
2.892
3.123
3.835
3.181
3.374
Average fixed interest rate (%) RON
—
—
—
3.610
—
Foreign exchange risk
Exchange and interest rate instruments
Nominal
250
899
2,064
—
—
3,213
Average GBP/EUR exchange rate
—
—
0.877
—
—
Average USD/EUR exchange rate
1.040
—
0.992
—
—
Average CNY/EUR exchange rate
7.172
7.252
7.159
—
—
Average AUD/EUR exchange rate
—
1.587
—
—
—
Average MXN/EUR exchange rate
—
21.529
—
—
—
Average JPY/EUR exchange rate
—
—
—
—
—
Interest rate and foreign exchange rate risk
Exchange and interest rate instruments
Nominal
912
38
1,101
3,767
988
6,806
Average fixed interest rate (%) AUD/EUR
4.000
—
—
4.800
3.824
Average fixed interest rate (%) CZK/EUR
—
—
0.860
—
—
Average fixed interest rate (%) RON/EUR
—
4.520
—
5.130
—
Average fixed interest rate (%) HKD/EUR
—
—
—
2.580
—
Average fixed interest rate (%) JPY/EUR
0.568
—
—
1.442
1.360
Average fixed interest rate (%) NOK/EUR
—
—
—
3.010
3.762
Average fixed interest rate (%) CHF/EUR
—
—
—
1.243
—
Average fixed interest rate (%) EUR/GBP
—
5.170
—
—
—
Average fixed interest rate (%) NZD/EUR
—
—
—
—
—
Average fixed interest rate (%) USD/MXN
—
—
12.982
—
—
Average fixed interest rate (%) USD/COP
—
—
15.452
13.614
7.150
Average fixed interest rate (%) EUR/USD
—
—
—
(0.140)
—
Average fixed interest rate (%) USD/CLP
—
—
—
3.450
—
Average AUD/EUR exchange rate
1.499
—
—
1.499
1.545
Average CZK/EUR exchange rate
—
—
25.407
25.677
—
Average EUR/GBP exchange rate
—
1.162
—
—
—
Average EUR/USD exchange rate
—
—
—
0.945
—
Average HKD/EUR exchange rate
—
—
—
8.851
—
Average JPY/EUR exchange rate
133.840
—
—
130.227
118.180
Average NOK/EUR exchange rate
—
—
—
9.492
9.685
Average RON/EUR exchange rate
—
4.746
—
4.842
4.927
Average CHF/EUR exchange rate
—
—
1.092
1.105
—
Annual report 2024
723
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
31 December 2022
EUR million
Up to one
month
One to three
months
Three months
to one year
One year to
five years
More than five
years
Total
Average USD/CLP exchange rate
—
—
—
0.001
—
Average NZD/EUR exchange rate
—
—
—
—
1.666
Average USD/MXN exchange rate
—
—
0.051
—
—
Credit risk
Credit risk instruments
Nominal
—
9
8
38
—
55
Cash flow hedges
Interest rate and foreign exchange rate risk
Interest rate and foreign exchange rate
instruments
Nominal
—
3
597
1,451
184
2,235
Average fixed interest rate (%) EUR/PEN
—
—
6.496
—
—
Average fixed rate (%) USD/COP
—
15.398
—
—
Average fixed interest rate (%) EUR/AUD
—
3.207
—
—
—
Average fixed interest rate (%) AUD/EUR
—
—
—
0.305
—
Average EUR/GBP exchange rate
—
—
1.084
1.173
—
Average AUD/EUR exchange rate
—
—
—
1.604
1.562
Average RON/EUR exchange rate
—
—
—
4.885
—
Average JPY/EUR exchange rate
—
—
—
120.568
—
Average CHF/EUR exchange rate
—
—
—
1.102
—
Average NOK/EUR exchange rate
—
—
—
—
10.242
Average CZK/EUR exchange rate
—
—
—
26.131
—
Average EUR/PEN exchange rate
—
—
0.252
—
—
Average EUR/AUD exchange rate
—
0.654
—
—
—
Interest rate risk
Bond Forward instruments
Nominal
2,250
4,500
11,453
10,000
—
28,203
Average fixed interest rate (%) EUR
(0.431)
(0.404)
(0.348)
(0.010)
—
Inflation risk
Bond Forward instruments
Nominal
—
—
700
—
—
700
Average fixed interest rate (%) EUR
—
—
0.322
—
—
Exchange rate risk
Exchange rate instruments
Nominal
11
22
99
0
0
132
Average GBP/EUR exchange rate
1.156
1.153
1.142
—
—
Hedges of net investments in foreign operations
Exchange rate risk
Exchange and interest rate instruments
Nominal
2,020
4,711
13,839
—
—
20,570
Average BRL/EUR exchange rate
6.554
5.797
5.866
—
—
Average CLP/EUR exchange rate
953.549
955.790
944.113
—
—
Average COP/EUR exchange rate
—
4,935.121
—
—
—
Average GBP/EUR exchange rate
0.869
0.873
0.876
—
—
Average MXN/EUR exchange rate
25.130
23.968
22.156
—
—
Average PLN/EUR exchange rate
—
—
1.158
—
—
Average USD/EUR exchange rate
4.832
4.837
4.991
—
—
Annual report 2024
724
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Other geographies
Consumer Group entities mainly have loans portfolios at fixed
interest rates and are therefore, exposed to changes in fair value
due to movements in market interest rates. The entities manage
this risk by contracting interest rate swaps in which they pay a
fixed rate and receive a variable rate. Interest rate risk is the only
one hedged and, therefore, other risks, such as credit risk, are
managed but not hedged by the entities. The interest rate risk
component is determined as the change in fair value of fixed rate
loans arising solely from changes in a reference rate. This strategy
is designated as a fair value hedge and its effectiveness is assessed
by comparing changes in the fair value of loans attributable to
changes in reference interest rates with changes in the fair value of
interest rate swaps.
In addition, in order to access international markets with the aim of
obtaining sources of financing, some Consumer Group´s entities
issue fixed rate debt in their own currency and in other currencies
that differ from their functional currency. Therefore, they are
exposed to changes in both interest rates and exchange rates,
which they mitigate with derivatives (interest rate swaps, fx
forward and cross currency swaps) in which they receive a fixed
interest rate and pay a variable interest rate, implemented with a
fair value hedge.
The cash flow hedges of the Grupo Santander´s entities hedge the
foreign currency risk of loans and financing.
Finally, it has hedges of net investments abroad to hedge the
foreign exchange risk of the shareholding in NOK, CNY, PLN, CAD
and CHF currencies.
Banco Santander México, S.A., Institución de Banca Múltiple, Grupo
Financiero Santander México has mainly long-term loan portfolios
at fixed interest rates, portfolios of short-term deposits in local
currency, portfolios of Mexican Government bonds and corporate
bonds in currencies other than the local currency and are therefore
exposed to changes in fair value due to movements in market
interest rates, as well as these latter portfolios also to variations in
exchange rates. The entity manages this risk by contracting
derivatives (interest rate swaps or cross currency swaps) in which
they pay a fixed rate and receive a variable rate. Only the interest
rate and exchange rate risk is hedged, if applicable, and therefore
other risks, such as credit risk, are managed but not hedged by the
entity.
The interest rate risk component is determined as the change in the
fair value of fixed rate loans arising solely from changes in a
reference rate. This strategy is designated as a fair value hedge and
its effectiveness is assessed by comparing changes in the fair value
of loans attributable to changes in benchmark interest rates with
changes in the fair value of interest rate swaps.
Regarding cash flow hedges, Banco Santander México, S.A.,
Institución de Banca Múltiple, Grupo Financiero Santander México
has a portfolio of unsecured bonds issued at a variable rate in its
local currency, which it manages with an interest rate swap in
which it receives a variable rate and pays a fixed rate. On the other
hand, it also has different items in currencies other than the local
currency: unsecured fixed rate bonds, commercial bank loans at
variable rates, fixed rate issues, Mexican and Brazilian government
bonds at fixed rates. In all these portfolios, the Bank is exposed to
exchange rate variations, which it mitigates by contracting cross
currency swaps or fx forward.
Banco Santander (Brasil) S.A. has, on the one hand, fair value
hedges to protect both assets and liabilities from fluctuations in
market rates. The market risk coverage management methodology
adopted by the Bank segregates transactions by risk factor (BRL/
USD exchange rate risk, pre-set interest rate risk in BRL, USD
interest rate risk, inflation….). The entity manages this risk by
contracting derivatives (interest rate swaps or interest rate futures)
to hedge assets or liabilities at a fixed rate.
Brasil has corporate loans in different currencies than the local one
and is therefore exposed to changes in fair value due to exchange
rates. This risk is mitigated by contracting cross currency swaps or
futures.
It also holds a portfolio of long-term corporate bonds with
inflation-indexed rates, thus exposed to changes in market value
due to changes in market inflation rates. In order to achieve its
mitigation, they contract futures in which they pay the indexed
inflation and receive variable interest rates.
In the hedge of cash flows, Banco Santander (Brasil) S.A. has
portfolios of loans and government bonds in different currency
than the entity's functional currency and, therefore, it is subject to
the risk of changes in currency rates. This exposure will be
mitigated by hiring Cross Currency Swaps and futures.
Finally, they have a portfolio of variable rate government bonds, so
they are exposed to changes in the value due to changes in interest
rates. In order to mitigate these changes, a future is hired in which
a variable rate is paid and a fixed rate is received.
Additionally, Banco Santander - Chile uses fair value hedges with
cross currency swaps, interest rate swaps and call money swaps to
hedge its exposure to changes in the fair value of the hedged item
attributable to interest rates. The aforementioned hedging
instruments modify the effective cost of long-term issues, from a
fixed interest rate to a variable interest rate.
In addition, it also makes cash flow hedges in which it uses cross
currency swaps to cover the risk of variability of flows attributable
to changes in the interest rate of bonds and interbank loans issued
at variable rates, as well as to cover the variation of foreign
currency, mainly in United States dollars. To hedge the inflation
risk present in certain items, it uses both forwards and cross
currency swaps.
At Santander Bank, National Association, Interest Rate Swaps are
used to leave commercial loans at a fixed rate at a variable rate in
USD indexed to 1-month Libor or SOFR, under cash flow hedges.
Annual report 2024
725
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Regarding the hedged items, the following table shows the detail
of the type of hedging, the risk that is hedged and which products
are being hedged at 31 December 2024, 2023 and 2022. The
products that are being hedged are mainly borrowed deposits,
financial deposits, loans, government bonds as assets and financial
bonds as liabilities:
EUR million
31 December 2024
Accumulated amount
of fair value
Carrying amount of
hedged items
Assets Liabilities
adjustments on the
hedged item
Assets
Liabilities
Balance sheet line item
Change in fair value
of hedged item for
ineffectiveness
assessment
Cash flow reserves or
conversion reserves
Continuing
Discontinued
hedges
hedges
Fair value hedges
138,906
32,642
(1,412)
(1,200)
Loans and advances / Deposits
and Debt securities / Debt
securities issued
(461)
—
—
Interest rate risk
133,149
23,780
(1,345)
(1,176)
(343)
—
—
Exchange rate risk
2,017
1,562
1
3
(118)
—
—
Interest and Exchange rate
risk
3,238
7,205
(68)
(27)
1
—
—
Inflation risk
—
—
—
—
—
—
—
Credit risk
—
—
—
—
—
—
—
Base risk
502
—
—
—
—
—
—
Equity risk
—
95
—
—
(1)
—
—
Cash flow hedges
(564)
(478)
50
Interest rate risk
(156)
(794)
83
Exchange rate risk
(439)
213
19
Interest and Exchange rate
risk
(40)
11
—
Inflation risk
69
82
(52)
Equity risk
2
10
—
Net foreign investments
hedges
23,559
—
(420)
(8,002)
—
Exchange rate risk
23,559
—
(420)
(8,002)
—
162,465
32,642
(1,412)
(1,200)
(1,445)
(8,480)
Annual report 2024
50
726
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
EUR million
31 December 2023
Accumulated amount
of fair value
Carrying amount of
hedged items
Assets Liabilities
adjustments on the
hedged item
Assets
Liabilities
Balance sheet line item
Change in fair value
of hedged item for
ineffectiveness
assessment
Cash flow reserves or
conversion reserves
Continuing
Discontinued
hedges
hedges
Fair value hedges
134,095
26,946
(1,798)
(1,652)
Loans and advances / Deposits
and Debt securities / Debt
securities issued
1,928
—
Interest rate risk
130,672
19,176
(1,682)
(1,546)
1,757
—
—
Exchange rate risk
637
1,365
(1)
(3)
60
—
—
Interest and Exchange rate
risk
2,786
6,405
(115)
(103)
111
—
—
Inflation risk
—
—
—
—
—
—
—
Credit risk
—
—
—
—
—
—
—
Cash flow hedges
(1,824)
(813)
(173)
Interest rate risk
(2,182)
(797)
(77)
Exchange rate risk
500
(80)
—
Interest and Exchange rate
risk
100
(144)
—
Inflation risk
(233)
196
(96)
Equity risk
(9)
12
—
Net foreign investments
hedges
18,706
—
1,888
(8,684)
—
Exchange rate risk
18,706
—
1,888
(8,684)
—
152,801
26,946
(1,798)
(1,652)
1,992
(9,497)
(173)
Annual report 2024
727
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
EUR million
31 December 2022
Accumulated amount
Carrying amount of
hedged items
of fair value
adjustments on the
hedged item
Change in fair
value of hedged
item for
Cash flow reserves or
conversion reserves
Assets Liabilities
Assets
Liabilities
Balance sheet line item
ineffectiveness
assessment
Continuing
hedges
Discontinued
hedges
Fair value hedges
126,665
59,837
(5,487)
(3,581)
Loans and advances / Deposits
and Debt securities / Debt
securities issued
(3,232)
—
—
Interest rate risk
121,605
53,239
(5,069)
(3,428)
(2,397)
—
—
Exchange rate risk
2,792
1,040
(284)
—
(7)
—
—
Interest and Exchange rate
risk
2,126
5,558
(134)
(153)
(826)
—
—
Inflation risk
—
—
—
—
—
—
—
Credit risk
142
—
—
—
(2)
—
—
Cash flow hedges
475
(3,353)
(225)
Interest rate risk
2,458
(2,973)
(75)
Exchange rate risk
(1,764)
(88)
(2)
Interest and Exchange rate
risk
39
(309)
1
Inflation risk
(258)
14
(149)
Equity risk
—
3
—
Net foreign investments
hedges
22,614
—
2,467
(6,750)
—
Exchange rate risk
22,614
—
2,467
(6,750)
—
149,279
59,837
(5,487)
(3,581)
(290)
(10,103)
(225)
Annual report 2024
728
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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 775 losses (EUR 1,006 million losses and
EUR 756 million profits in 2023 and 2022, respectively).
The net impact of the hedges are shown in the following table:
EUR million
31 December 2024
Earnings/
(losses)
recognised in
another
Ineffective
recognised
in the
Line of the income
statement that includes the
Reclassified amount of reserves to the income
statement due to:
Line of the income
Cover transaction
statement that
cumulative
overall result
income
statement
ineffectiveness of cash
flows
affecting the income
statement
includes reclassified
items
Fair value hedges
22
Gains or losses financial
assets/liabilities
Interest rate risk
30
—
Exchange rate risk
(17)
—
Interest rate and exchange rate risk
9
—
Cash flow hedges
Interest rate risk
Exchange rate risk
Interest rate and exchange rate risk
Inflation risk
Equity risk
558
163
312
155
(70)
(2)
(6)
(12)
20
(14)
—
—
—
—
—
—
—
—
(1,256)
(1,166)
319
(340)
(69)
0
Interest margin/Gains
or losses financial
assets/liabilities
Net foreign investments hedges
Exchange rate risk
420
420
978
—
—
16
—
—
—
(1,256)
EUR million
31 December 2023
Earnings/
(losses)
recognised in
another
cumulative
overall result
Ineffective
coverage
recognised
in the
income
statement
Line of the income
statement that includes the
ineffectiveness of cash
flows
Reclassified amount of reserves to the income
statement due to:
Line of the income
Cover transaction
statement that
affecting the income
includes reclassified
statement
items
Fair value hedges
59
Gains or losses financial
assets/liabilities
Interest rate risk
72
Exchange rate risk
(38)
Interest rate and exchange rate risk
25
Interest margin/Gains
Gains or losses financial
or losses financial
Cash flow hedges
2,592
4
assets/liabilities
(2,622)
assets/liabilities
Interest rate risk
2,179
2
(1,647)
Exchange rate risk
7
(1)
(416)
Interest rate and exchange rate risk
164
2
(431)
Inflation risk
233
1
(128)
Equity risk
9
—
0
Net foreign investments hedges
hedges
(1,888)
—
—
Exchange rate risk
(1,888)
—
—
704
63
(2,622)
Annual report 2024
729
(2,458)
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
EUR million
31 December 2022
Earnings/
(losses)
recognised
in another
cumulative
overall
result
Reclassified amount of reserves to the income
statement due to:
Ineffective
coverage
recognised
in the
income
statement
Line of the income
statement that includes the
ineffectiveness of cash
flows
Line of the income
statement that
includes reclassified
items
Cover transaction
affecting the income
statement
Fair value hedges
119
Gains or losses financial
assets/liabilities
Interest rate risk
155
Risk of Exchange rate
(16)
Risk of interest rate and exchange rate
(20)
Credit risk
Cash flow hedges
Interest rate risk
Exchange rate risk
Interest rate and exchange rate risk
Inflation risk
Equity risk
(3,016)
(178)
(638)
258
0
(45)
1
(10)
(39)
3
—
Gains or losses financial
assets/liabilities
Interest margin/Gains
or losses financial
assets/liabilities
1,254
(370)
2,130
587
(1,093)
—
Net foreign investments
hedges
Exchange rate risk
(2,467)
(2,467)
(5,483)
—
—
74
—
—
1,254
Annual report 2024
730
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The following table shows the movement in the impact of equity
38. Interest income
for the year:
Interest and similar income in the consolidated income statement
EUR million
comprises the interest accruing in the year on all financial assets
with an implicit or explicit return, calculated by applying the
2023
2022
effective interest method, irrespective of measurement at fair
2024
163
1,166
(1,003)
312
(319)
631
155
340
(185)
(70)
69
(139)
(2)
—
(2)
Balance at beginning of year
(9,424) (9,187) (4,559)
value; and the rectifications of income as a result of hedge
Cash flow hedges
accounting. Interest is recognised gross, without deducting any tax
Interest rate risk
2,179 (2,458)
withheld at source.
Amounts transferred to income
statements
1,647
370
The detail of the main interest and similar income items earned in
Gain or loss in value CFE - recognized in
2024, 2023 and 2022 is as follows:
equity
532 (2,828)
Exchange rate risk
7
(178)
EUR million
Amounts transferred to income
2023
2022
statements
416 (2,130)
Loans and advances, central banks
1,959
1,606
Gain or loss in value CFE - recognized in
equity
(409) 1,952
2024
1,728
6,620
16,120
77,781
10,486
112,735 105,252
Loans and advances, credit institutions
5,361
2,186
164
(638)
Debt instruments
14,501
10,416
Interest rate and exchange rate risk
Loans and advances, customers
70,619
54,110
Amounts transferred to income
statements
431
(587)
Other interest
A
12,812
3,112
Gain or loss in value CFE - recognized in
71,430
equity
(267)
(51)
233
258
A. Mainly include the rectification of income originating from accounting hedges
as well as interest on balances in central banks and on demand credit
Inflation risk
Amounts transferred to income
institutions.
statements
128
1,093
Most of the interest and similar income was generated by the
Gain or loss in value CFE - recognized in
equity
105
(835)
Group’s financial assets that are measured either at amortised cost
Equity risk
9
0
or at fair value through other comprehensive income.
Amounts transferred to income
statements
—
—
Gain or loss in value CFE - recognized in
equity
9
—
39. Interest expense
Net foreign investments hedges
Interest expense and similar charges in the consolidated income
statement 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, 2023 and 2022 is as follows:
EUR million
2024
2023
2022
37. Discontinued operations
Central banks deposits
1,745
2,178
706
No operations were discontinued in 2024, 2023 or 2022.
Credit institution deposits
7,638
7,172
2,784
Customer deposits
36,465
33,238
16,994
Debt securities issued and subordinated
liabilities
14,774
12,751
8,464
Marketable debt securities
13,377
11,702
7,472
Subordinated liabilities (note 23)
1,397
1,049
992
Provisions for pensions (note 25)
106
94
100
Lease Liabilities
126
130
116
Other interest expense
5,213
6,428
3,647
66,067
61,991
32,811
Most of the interest expense and similar charges was generated by
the Group’s financial liabilities that are measured at amortised
cost.
Exchange rate risk
420 (1,888) (2,467)
Amounts transferred to income
statements
—
—
—
Gain or loss in value CFE - recognized in
equity
420 (1,888) (2,467)
Minorities, taxes and others
146
(941)
855
Balance at end of year
(8,300) (9,424) (9,187)
Annual report 2024
731
40. Dividend income
42. Commission expense
Dividend income includes the dividends and payments on equity
Commission expense shows the amount of all fees and
instruments out of profits generated by investees after the
commissions paid or payable by the Group in the year, except those
acquisition of the equity interest.
that form an integral part of the effective interest rate on financial
instruments.
The detail of income from dividends as follows:
The detail of commission expense is as follows:
EUR million
2024
2023
2022
EUR million
2024
2023
2022
Dividend income classified as:
Financial assets held for trading
522
415
366
Commissions assigned to third parties
2,686
2,644
2,554
Cards
1,854
1,891
1,872
mandatorily at fair value through
Non-trading financial assets
By collection and return of effects
30
24
18
profit or loss
71
68
35
Other fees assigned
802
729
664
Financial assets at fair value through
other comprehensive income
121
88
87
Other commissions paid
1,906
1,620
1,523
714
571
488
Brokerage fees on lending and deposit
transactions
84
105
77
Sales of insurance and pension funds
459
358
340
Other fees and commissions
1,363
1,157
1,106
41. Commission income
4,592
4,264
4,077
Commission income comprises the amount of all fees and
commissions accruing in favour of the Group in the year, except
those that form an integral part of the effective interest rate on
43. Gains or losses on financial assets
financial instruments.
and liabilities
The detail of fee and commission income is as follows:
The following information is presented below regarding the gains
or losses recorded for financial assets or liabilities:
EUR million
Coming from collection and payment
services
The detail, by origin, of Gains/losses on financial assets and
Bills
220
232
245
liabilities:
Demand accounts
1,504
1,457
1,526
EUR million
Cards
4,207
4,278
4,012
2024
2023
2022
Orders
704
698
625
Gains or losses on financial assets and
Cheques and other
138
128
172
liabilities not measured at fair value
6,773
6,793
6,580
through profit or loss, net
(114)
96
149
Coming from non-banking financial
Financial assets at amortized cost
(190)
(3)
34
products
Other financial assets and liabilities
76
99
115
Investment funds
1,462
1,092
1,017
Of which debt instruments
53
51
122
Pension funds
194
178
167
Gains or losses on financial assets and
Insurance
2,923
2,715
2,743
liabilities held for trading, net
A
1,459
2,322
842
4,579
3,985
3,927
Gains or losses on non-trading
financial assets and liabilities
Coming from Securities services
mandatory at fair value through profit
Securities underwriting and placement
598
511
438
or loss
495
204
162
Securities trading
472
348
339
Gains or losses on financial assets and
liabilities measured at fair value
Administration and custody
370
354
321
through profit or loss, net
A
691
(93)
968
Asset management
254
341
446
Gains or losses from hedge accounting,
1,694
1,554
1,544
net
16
63
74
Other
2,547
2,592
2,195
Foreign exchange
907
846
822
A. Includes the net result obtained by transactions with debt securities, equity
Financial guarantees
562
486
433
instruments, derivatives and short positions included in this portfolio when the
Group jointly manages its risk in these instruments.
Commitment fees
542
549
506
Other fees and commissions
2,545
2,108
2,055
4,556
3,989
3,816
17,602
16,321
15,867
2024
2023
2022
a) Breakdown
Annual report 2024
732
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
As explained in note 44, the above breakdown should be analysed
in conjunction with the 'Exchange differences, net':
EUR million
2024
2023
2022
Exchange differences, net
(274)
41
(542)
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
2022
Loans and receivables:
72,931
51,072
44,962
Central banks
12,966
17,717
11,595
Credit institutions
27,722
14,520
17,175
Customers
32,243
18,835
16,192
Debt instruments
85,990
66,079
45,079
Equity instruments
21,277
19,125
13,777
Derivatives
64,100
56,328
67,002
244,298 192,604 170,820
Grupo Santander mitigates and reduces this exposure as follows:
• With respect to derivatives, the Group 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.
At 31 December 2024 the exposure to credit risk of the
derivatives presented in the balance sheet is not significant
because they are subject to netting and collateral agreements
(see note 2.f).
• Loans and advances to credit institutions and Loans and advances
includes reverse repos amounting to EUR 65,253 million at 31
December 2024.
Also, mortgage-backed assets totalled EUR 1,703 million.
• Debt instruments include EUR 68,506 million of Spanish and
foreign government securities.
At 31 December 2024 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
2022
Deposits
87,374
80,503
62,620
Central banks
15,074
9,017
7,497
Credit institutions
27,909
19,597
11,754
Customer
44,391
51,889
43,369
Marketable debt securities
7,554
5,371
5,427
Short positions
35,830
26,174
22,515
Derivatives
57,753
50,589
64,891
Other financial liabilities
—
—
—
188,511
162,637
155,453
At 31 December 2024, 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.
In relation to liabilities designated at fair value through profit or
loss where it has been determined at initial recognition that the
credit risk is recorded in accumulated 'Other comprehensive
income' (see 'Statement of recognised income and expense') the
amount that the Group would be contractually obliged to pay on
maturity of these liabilities at 31 December 2024 is EUR 1,851
million higher than their carrying amount (EUR 866 million higher
at 31 December 2023 and EUR 1,044 million higher at 31
December 2022), no significant impact on results as its fair value is
covered by hedging operations.
Within Deposits, there are repurchase agreements amounting to
EUR 58,569 million at 31 December 2024.
44. Exchange differences, net
Exchange differences shows basically the gains or losses on
currency dealings, the differences that arise on translations of
monetary items in foreign currencies to the functional currency.
Grupo 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 analysed
together with those recognised under 'Gains/losses on financial
assets and liabilities' (see note 43).
Annual report 2024
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Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
45. Other operating income and
46. Staff costs
expenses
a) Breakdown
Other operating income and Other operating expenses in the
The detail of Staff costs is as follows:
consolidated income statements include:
EUR million
EUR million
2024
2023
2022
2024
2023
2022
Wages and salaries
10,923 10,351
9,563
Other operating income
803
1,104
1,510
Social Security costs
1,714
1,637
1,441
Non- financial services
654
752
770
Other operating income
149
352
740
Other operating expense
(2,324)
(2,827)
(2,803)
Non-financial services
(498)
(674)
(661)
Other operating expense:
(1,826)
(2,153)
(2,142)
Of which, credit institutions deposit
guarantee fund and single resolution
fund
(536)
(1,119)
(1,258)
(1,521)
(1,723)
(1,293)
In the 2024 financial year, it has been decided that there will be no
contribution in Spain to the Single Resolution Fund, as well as a
decrease in the contribution to the Deposit Guarantee Fund, by the
Single Resolution Board (SRB) and the Deposit Guarantee Fund
Management Committee, respectively.
The amount of the Group recognises in relation to income from
sub-leases of rights of use is not material.
Additions to provisions for defined benefit
pension plans (note 25)
46
42
65
Contributions to defined contribution
pension funds
357
310
296
Other Staff costs
1,288
1,386
1,182
14,328 13,726 12,547
b) Headcount
The number of employees of Grupo Santander at 31 December
2024, 2023 and 2022 is 206,753, 212,764 and 206,462,
respectively. For the years 2024, 2023 and 2022 the average
number of employees of the Group is 209,371, 211,135 and
201,516 , respectively, being the average number of employees of
Banco Santander, S.A. 23,839, 24,061 and 23,410, of which 15, 16
and 17 are executive directors and Senior management,
respectively.
Annual report 2024
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Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The functional breakdown (final employment), by gender, at 31
December 2024 is as follows:
Functional breakdown by gender
Senior executives
A
Other executives
B
Other employees
Not
Not
Not
Men
Women
Others
declared
Men
Women
Others
declared
Men Women
Others
declared
Europe
959
443
—
1
8,850
5,096
1
6
32,654
39,201
3
37
North America
198
72
—
—
3,881
2,622
—
3
15,047
19,571
2
3
South America
299
146
—
—
3,982
2,996
—
1
32,507
38,172
—
—
1,456
661
—
1
16,713
10,714
1
10
80,208
96,944
5
40
A. Senior Executives includes employees with job profiles under the following harmonized management levels: Senior Executive VP. Executive VP and VP.
B. Other Executives includes Directors, Mangers, Experts and Branch Managers.
The same information, expressed in percentage terms at 31
December 2024 is as follows:
Functional breakdown by gender
Senior executives
A
Not
Men Women
Others declared
Men
Other executives
B
Women
Not
Others declared
Men
Other employees
Women
Others
Not
declared
Europe
68%
32%
0%
0%
63%
37%
0%
0%
45%
55%
0%
0%
North America
73%
27%
0%
0%
60%
40%
0%
0%
43%
57%
0%
0%
South America
67%
33%
0%
0%
57%
43%
0%
0%
46%
54%
0%
0%
69%
31%
0%
0%
61%
39%
0%
0%
45%
55%
0%
0%
A. Senior Executives includes employees with job profiles under the following harmonized management levels: Senior Executive VP. Executive VP and VP.
B. Other Executives includes Directors, Mangers, Experts and Branch Managers.
The labour relations between employees and the various Group
companies are governed by the related collective agreements or
similar regulations.
The number of employees in the Group with disabilities,
distributed by professional categories, at 31 December 2024, is as
follows:
Number of employees
A
2024
Senior executives
16
Other executives
267
Other employees
4,545
4,828
A. An employee with disabilities is considered to be a person who is recognised by
the State or the company in each jurisdiction where the Group operates and that
entitles them to receive direct monetary assistance, or other types of aid such
as, for example, reduction of their taxes. In the case of Spain, employees with
disabilities have been considered to be those with a degree of disabilities
greater than or equal to 33%.
The number of Group employees with disabilities at 2023 and
2022, was 4,701 and 4,114, respectively.
Likewise, the average number of employees of Banco Santander,
S.A. with disabilities, equal to or greater than 33%, during 2024
was 435 (428 and 331 employees during 2023 and 2022). At the
end of fiscal year 2024, there were 432 employees (436 and 444
employees at 31 December, 2023 and 2022, respectively).
c) Share-based payments
The main share-based payments granted by the Group in force at
31 December, 2024, 2023 and 2022 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.
Annual report 2024
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Notes to the consolidated
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financial statements
financial statements
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, 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 .
Annual report 2024
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Notes to the consolidated
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report
financial statements
financial statements
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), 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.
Annual report 2024
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Auditor's
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Notes to the consolidated
Appendix
report
financial statements
financial statements
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 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 (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).
Annual report 2024
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Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
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%.
Deferred
variable
remuneration
systems
Description and plan beneficiaries
Conditions
Calculation base
(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%.
Deferred
variable
remuneration
systems
Description and plan beneficiaries
Conditions
Calculation base
(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 whose
roles are considered key to PagoNxt’s
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%.
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.
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
ii. Santander UK plc
The long-term incentive plans on shares of the Bank granted by
management of Santander UK plc to its employees are as follows:
Exercise
price in
pounds
sterling
A
Date of
commencement
of exercise
period
Date of
expiry of
exercise
period
Number of
shares (in
thousand)
Year
granted
Employee
group
Number
of
persons
B
Plans outstanding at 01/01/2022
25,936
Options granted (sharesave)
13,068
1.89
2022
Employees
4,362
01/11/22
01/11/25
01/11/22
01/11/27
Options exercised
(242)
1.69
Options cancelled (net) or not exercised
(8,774)
2.59
Plans outstanding at 31/12/2022
29,988
Options granted (sharesave)
7,175
2.78
2023
Employees
4,752
01/11/23
01/11/26
01/11/23
01/11/28
Options exercised
(5,980)
1.7
Options cancelled (net) or not exercised
(4,044)
2.53
Plans outstanding at 31/12/2023
27,139
Options granted (sharesave)
4,991
3.36
2024
Employees
4,107
01/11/24
01/11/27
01/11/24
01/11/29
Options exercised
(4,004)
2.29
Options cancelled (net) or not exercised
(2,437)
2.37
Plans outstanding at 31/12/2024
25,689
A. At 31 December, 2024, 2023 and 2022, the euro/pound sterling exchange rate was 1.2099, 1.1525 and 1.1277 , respectively.
B. Number of accounts/contracts. A single employee may have more than one account/contract.
In 2008 the Group launched a voluntary savings scheme for
Santander UK employees (Sharesave Scheme) whereby employees
who join the scheme see deducted between GBP 5 and GBP 500
from their net monthly pay over a period of three or five years. At
the end of the chosen period, the employee may choose between
collecting the amount contributed, the interest accrued and a
bonus (tax-exempt in the United Kingdom) or exercising options on
shares of the Bank in an amount equal to the sum of such three
amounts at a fixed price. The exercise price will be the result of
reducing by up to 20% the average purchase and sale prices of the
Bank shares in the three trading sessions prior to the approval of
the scheme by the UK tax authorities (HMRC). This approval must
be received within 21 to 41 days following the publication of the
Group’s results for the first half of the year. This scheme was
approved by the Board of Directors, at the proposal of the
appointments and remuneration committee, and, since it involved
the delivery of Bank shares, its application was authorized by the
Annual General Meeting held on June 21, 2008. Also, the scheme
was authorized by the UK tax authorities (HMRC) and commenced
in September 2008. In subsequent years, at the Annual General
Meetings held on June 19, 2009, June 11, 2010, June 17, 2011,
March 30, 2012, March 22, 2013, March 28, 2014, March 27, 2015,
March 18, 2016, April 7, 2017, March 23, 2018, April 12, 2019,
April 3, 2020 and March 26, 2021, respectively, the shareholders
approved the application of schemes previously approved by the
board and with similar features to the scheme approved in 2008.
iii. Fair value
The fair value of the performance share plans was calculated as
follows:
a) Deferred variable compensation plan linked to multi
year objectives 2022, 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 2022, 2023
and 2024 and the levels of achievement of similar plans in
comparable entities, it has been considered that the fair value is
70%.
b) Santander UK sharesave plans:
The fair value of each option at the date of grant is estimated using
an analytical model that also reflects the correlation between EUR
and GBP. This model uses assumptions on the share price, the EUR/
GBP FX rate, the EUR/GBP risk-free interest rate, dividend yields,
the expected volatilities of both the underlying shares and EUR/
GBP for the expected lives of options granted. The weighted
average grant-date fair value of options granted during the year
was GBP 0.23 (GBP 0.33 and GBP 0.23 reported in 2023 and 2022,
respectively).
Annual report 2024
740
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
47. Other general administrative
expenses
a) Breakdown
The detail of Other general administrative expenses is as follows:
EUR million
2024
2023
2022
Technology and systems
2,622
2,471
2,473
Property, fixtures and supplies
(note 2.k)
846
818
804
Technical reports
737
809
785
Advertising
540
603
559
Taxes other than income tax
556
570
559
Communications
404
414
410
Surveillance and cash courier services
345
337
336
Per diems and travel expenses
239
218
163
Insurance premiums
102
95
108
Other administrative expenses
2,021
2,180
2,174
8,412
8,515
8,371
The payments associated with short-term leases (leases less than
or equal to 12 months) and leases of low-value assets, that the
Group recognises as an expense in the income statement is not
material.
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
2024
2023
2022
Audit
120.1
117.5
115.4
Audit-related services
13.6
8.6
6.4
Tax services
0.9
1.6
0.5
All other
7.4
5.9
4.8
Total
142.0
133.6
127.1
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 and EUR 185.5 million in 2023 and 2022,
respectively).
c) Number of branches
The number of offices according to their geographical location at
31 December 2024, 2023 and 2022 is as follows:
Number of branches
Group
2024
2023
2022
Spain
1,877
1,924
1,966
Group
6,134
6,594
7,053
8,011
8,518
9,019
Annual report 2024
741
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Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
48. Gains or losses on non financial
assets, net
The detail of Gains/ (losses) on disposal of assets not classified as
non-current assets held for sale is as follows:
EUR million
2024
2023
2022
Gains
Tangible and intangible assets
47
53
56
Investments
360
285
5
407
338
61
Losses
Tangible and intangible assets
(36)
(25)
(49)
Investments
(4)
—
—
(40)
(25)
(49)
367
313
12
49. 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 is as follows:
EUR million
Net balance
2024
2023
2022
Tangible assets
(24)
(20)
7
Impairment (note 12)
(92)
(51)
(94)
Gain (loss) on sale (note 12)
68
31
101
Other gains and other losses
(3)
—
—
(27)
(20)
7
50. Fair value of financial instruments
a) Details
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 Group to determine their fair value:
EUR million
2024
2023
2022
Published
Published
Published
price
quotations
in active
Internal
Models
price
quotations
in active
Internal
Models
price
quotations
in active
Internal
Models
markets
(level 1)
(level 2
and 3)
Total
markets
(level 1)
(level 2
and 3)
Total
markets
(level 1)
(level 2
and 3)
Total
Financial assets held for trading
88,147 142,106 230,253
67,842 109,079 176,921
45,014 111,104 156,118
Non-trading financial assets mandatorily at
fair value through profit or loss
2,037
4,093
6,130
1,765
4,145
5,910
1,800
3,913
5,713
Financial assets designated at fair value
through profit or loss
2,744
5,171
7,915
2,746
7,027
9,773
1,976
7,013
8,989
Financial assets at fair value through other
comprehensive income
67,680
22,218
89,898
64,631
18,677
83,308
64,216
21,023
85,239
Hedging derivatives (assets)
—
5,672
5,672
—
5,297
5,297
—
8,069
8,069
Financial liabilities held for trading
29,974 122,177 152,151
20,298 101,972 122,270
16,237
98,948 115,185
Financial liabilities designated at fair value
through profit or loss
—
36,360
36,360
25
40,342
40,367
212
40,056
40,268
Hedging derivatives (liabilities)
—
4,752
4,752
—
7,656
7,656
—
9,228
9,228
Liabilities under insurance contracts
—
17,829
17,829
—
17,799
17,799
—
16,426
16,426
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 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:
Annual report 2024
742
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Interest rate 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.
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.
• 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
Group’s own risk assumed by its counterparties in OTC derivatives.
Annual report 2024
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Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The CVA at 31 December 2024 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 2021). These decreases are
mainly due to movements in credit markets whose spread levels
have reduced moderately compared to those of December 2022,
partially offset by the upward movement in interest rates.
The CVA at 31 December 2022 amounted to EUR 351 million
(increase of 48% compared to 31 December 2021) and DVA
amounted EUR 364 million (increase of 125% compared to 31
December 2021). The increase is mainly due to movements in
credit markets whose spread levels have increased substantially
compared to those at the end of 2021.
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, 2023 and
2022.
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.
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 calculates and applies 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.
• 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.
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
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financial statements
financial statements
Set forth below are the financial instruments at fair value whose
measurement was based on internal models (levels 2 and 3) at 31
December 2024, 2023 and 2022:
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 banks
B
12,966
—
Present value method
Yield curves, FX market prices
Credit institutions
B
26,546
769
Present value method
Yield curves, FX market prices
Customers
B
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
Copula
C
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 forwards
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
Customers
C
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
Annual report 2024
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Auditor's
Consolidated
Notes to the consolidated
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financial statements
financial statements
EUR million
Fair values calculated
using internal models at
2024
A
Level 2
Valuation techniques
Main assumptions
LIABILITIES
179,766
Financial liabilities held for trading
121,243
1,352
934
Level 3
Central banks
B
13,300
—
Present value method
FX market prices, Yield curves
Credit institutions
B
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
Copula
C
Yield curves, FX market prices,
Basis, Liquidity, HPI
Interest rate options
2,295
79
Black's Model, multifactorial
advanced models interest rate
Yield curves, Volatility surfaces,
FX market prices, Liquidity
Exchange rate options
1,057
—
Black-Scholes Model
Yield curves, Volatility surfaces,
FX market prices, Liquidity
Index and securities options
1,160
294
Black's Model, multifactorial
advanced models interest rate
Yield curves, Volatility surfaces,
FX & EQ market prices, Dividends,
Liquidity
Forwards 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 loss
D
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.
Annual report 2024
746
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
EUR million
Fair values calculated
using internal models at
Fair values calculated
using internal models at
2023
A
2022
A
Level 2
Level 3
Level 2
Level 3
Valuation techniques
ASSETS
133,874
10,351
142,832
8,290
Financial assets held for trading
106,993
2,086
110,721
383
Central banks
B
17,717
—
11,595
—
Present value method
Credit institutions
B
14,061
—
16,502
—
Present Value method
Customers
B
11,418
24
9,550
—
Present Value method
Debt and equity instruments
8,683
915
6,537
43
Present Value method
Derivatives
55,114
1,147
66,537
340
Swaps
44,987
577
54,367
139
Present Value method, Gaussian Copula
Exchange rate options
836
9
916
4
Black-Scholes Model
Black's Model, advanced multifactor
Interest rate options
2,210
153
2,681
39
interest rate models
Interest rate forwards
33
—
113
—
Present Value method
Black's Model, advanced multifactor
Index and securities options
126
235
354
48
interest rate models
Present Value method, Advanced
Other
6,922
173
8,106
110
stochastic volatility models and other
Hedging derivatives
5,297
—
8,069
—
Swaps
4,665
—
6,687
—
Present Value method
Interest rate options
2
—
2
—
Black’s Model
Present Value method, Advanced
Other
630
—
1,380
—
stochastic volatility models and other
Non-trading financial assets mandatorily at
fair value through profit or loss
2,050
2,095
2,080
1,833
Equity instruments
815
1,495
643
1,269
Present Value method
Debt securities issued
539
313
809
325
Present Value method
Loans and receivables
696
287
628
239
Present Value method, swap asset model
& CDS
Financial assets designated at fair value
through profit or loss
6,846
181
6,586
427
Credit institutions
459
—
673
—
Present Value method
Customers
C
6,189
31
5,769
5
Present Value method
Debt securities
198
150
144
422
Present Value method
Financial assets at fair value through other
comprehensive income
12,688
5,989
15,376
5,647
Equity instruments
5
492
9
700
Present Value method
Debt securities
9,638
559
11,869
229
Present Value method
Loans and receivables
3,045
4,938
3,498
4,718
Present Value method
Annual report 2024
747
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
EUR million
Fair values calculated
Fair values calculated
using internal models at
using internal models at
2023
A
2022
A
Level 2
Level 3
Level 2
Level 3
Valuation techniques
LIABILITIES
166,542
1,227
163,733
925
Financial liabilities held for trading
101,103
869
98,533
415
Central banks
B
7,808
—
5,759
—
Present Value method
Credit institutions
B
17,862
—
9,796
—
Present Value method
Customers
19,837
—
12,226
—
Present Value method
Derivatives
49,380
869
64,147
415
Swaps
39,395
388
51,191
235
Present Value method, Gaussian Copula
Interest rate options
2,207
139
3,268
19
Black's Model, advanced multifactor
interest rate models
Exchange rate options
549
8
769
0
Black-Scholes Model
Index and securities options
466
187
591
42
Black's Model, advanced multifactor
interest rate models
Forwards on interest rate and variable
income
101
—
807
—
Present Value method
Other
Present Value method, Advanced
6,662
147
7,521
119
stochastic volatility models and other
Short positions
6,216
—
6,605
—
Present Value method
Hedging derivatives
7,650
6
9,214
14
Swaps
6,866
6
8,142
14
Present Value method
Interest rate options
1
—
0
—
Black’s Model
Other
Present Value method, Advanced
783
—
1,072
—
stochastic volatility models and other
Financial liabilities designated at fair value
through profit or loss
D
40,313
29
39,905
151
Present Value method
Liabilities under insurance contracts
Present Value method with actuarial
17,476
323
16,081
345
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.
Annual report 2024
748
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
b) Financial Instruments (level 3)
Set forth below are the Group’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 Bank’s directors consider that the fair
value of the financial assets and liabilities recognised in the
consolidated balance sheet and the gains and losses arising from
these financial instruments are reasonable.
The net amount recognised in profit and loss in 2024 arising from
models whose significant inputs are unobservable market data
(level 3) amounted to EUR 523 profit (EUR 404 million profit in
2023 and EUR 90 million loss in 2022, respectively).
Annual report 2024
749
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
1. Valuation techniques
The table below shows the effect, at 31 December 2024, 2023 and
2022 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:
2024
Portfolio/Instrument
Impacts (EUR million)
(Level 3)
Valuation technique
Main unobservable inputs
Range
Weighted
average
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.
(0.05)
—
Debt securities
Corporate debt
Discounted Cash Flows
Credit spread
0% - 10%
5.06%
(4.50)
4.61
Government debt
Discounted Cash Flows
Discount curve
0% - 8%
3.99%
(8.07)
8.02
Others
Discounted Cash Flows
Credit spread
10% - 90%
54.05%
(1.18)
1.45
Derivatives
Cap&Floor
Forward estimation
Interest rate
(2)bps - 2bps
0.00bps
—
—
CCS
Discounted Cash Flows
Credit spread
158% - 165%
161.50%
(0.01)
0.01
CDS
Price
Credit spread
100% - 250%
178.83%
(0.09)
0.10
EQ Options
EQ option pricing model
Volatility
0% - 70%
41.25%
(0.48)
0.69
EQ Options
Local volatility
Volatility
10% - 90%
50.00%
(21.54)
21.54
FX Forward
Forward estimation
Swap Rate
0% - 15%
8.08%
(0.06)
0.07
FX Options
FX option pricing model
Volatility
0% - 40%
20.10%
(0.65)
0.66
Inflation Derivatives
Asset Swap model
Inflation Swap Rate
2% - 8%
4.78%
(0.21)
0.18
IR Options
IR option pricing model
Volatility
0% - 30%
17.34%
(0.16)
0.22
IRS
Others
Others
5% - n.a.
n.a.
(4.09)
—
IRS
Discounted Cash Flows
Credit spread
47.8% - 273.4%
155.36%
(1.91)
1.74
IRS
Discounted Cash Flows
Swap rate
1% - 99%
49.58%
(2.45)
2.41
Others
Forward estimation
Price
60bps - 300bps
181.50bps
(3.00)
3.08
Property derivatives
Option pricing model
Growth rate
(5)% - 5%
0.00%
(3.39)
3.39
Securitisation Swap
Discounted Cash Flows
Constant prepayment rates
10% - 90%
50.00%
(0.63)
0.63
Financial assets designated at
fair value through profit or loss
Loans and advances to
customers
Loans
Discounted Cash Flows
Credit spreads
0.1% - 2.0%
1.05%
(0.15)
0.15
Mortgage portfolio
Black Scholes model
Growth rate
(5)% - 5%
0.00%
(0.24)
0.24
Debt securities
Other debt securities
Others
Inflation Swap Rate
0% - 8%
3.96%
(3.63)
3.55
Annual report 2024
750
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
2024
Portfolio/Instrument
Impacts (EUR million)
(Level 3)
Valuation technique
Main unobservable inputs
Range
Weighted
average
Unfavourable
scenario
Favourable
scenario
Non-trading financial assets
mandatorily at fair value
through profit or loss
Debt securities
Property securities
Probability weighting
Growth rate
(5)% - 5%
0.00%
(0.24)
0.24
Equity instruments
Equities
Price Based
Price
90% - 110%
100.00%
(183.98)
183.98
Financial assets at fair value
through other comprehensive
income
Loans and advances to
customers
Loans
Discounted Cash Flows
Credit spread
n.a.
n.a.
(18.61)
—
Loans
Discounted Cash Flows
Interest rate curve
3.4% - 6.5%
4.95%
(0.17)
0.17
Loans
Discounted Cash Flows
Margin of a reference portfolio
(1)bps - 1bps
0bp
(30.36)
30.36
Loans
Forward estimation
Credit spread
150bps - 232bps
150bps
(1.96)
—
Loans
Market price
Market price
(5)% - 20%
0.01%
(4.91)
1.23
Debt securities
Corporate debt
Discounted Cash Flows
Margin of a reference portfolio
(0.01)% - 0.01%
0.00%
(0.09)
0.09
Mortgage Letters
Discounted Cash Flows
Mortgage Letters
1.6% - 5.2%
3.40%
—
—
Equity instruments
Equities
Price Based
Price
90% - 110%
100.00%
(37.56)
37.56
Financial liabilities held for
trading
Derivatives
Cap&Floor
Volatility option model
Volatility
10% - 90%
42.20%
(0.11)
0.07
FX Options
Volatility option model
Volatility
10% - 90%
45.30%
(0.03)
0.02
IRS
Discounted Cash Flows
Inflation Swap Rate
1% - 99%
47.12%
(4.77)
4.24
IRS
Discounted Cash Flows
Credit spread
34bps - 68bps
44bps
(4.09)
1.65
A. 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.
B. The breakdown of impacts is shown by type of instrument and unobservable inputs.
C. 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.
D.Zero impacts from fully hedged or back-to-back transactions have not been included in this exercise.
Annual report 2024
751
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
2023
Portfolio/Instrument
Impacts (EUR million)
(Level 3)
Valuation technique
Main unobservable inputs
Range
Weighted
average
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
0.40bps
(0.90)
1.03
CDS
Credit default models
Illiquid credit default spread curves 100bps - 200bps
149.14bps
(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
0.09bps
(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%
0.00%
(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%
0.00%
(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
Annual report 2024
752
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
2023
Portfolio/Instrument
Impacts (EUR million)
(Level 3)
Valuation technique
Main unobservable inputs
Range
Weighted
average
Unfavourable
scenario
Favourable
scenario
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
Financial assets at fair value
through other comprehensive
income
Loans and advances to
customers
Loans
Discounted Cash Flows
Credit spread
n.a.
n.a.
(20.8)
—
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
(20.3)
20.30
Loans
Forward estimation
Credit spread
167.7bps - 365.8bps
167.74bps
(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
A. 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.
B. The breakdown of impacts is shown by type of instrument and unobservable inputs.
C. 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.
D.Zero impacts from fully hedged or back-to-back transactions have not been included in this exercise.
Annual report 2024
753
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
2022
Portfolio/Instrument
Impacts (EUR million)
(Level 3)
Valuation technique
Main unobservable inputs
Range
Weighted
average
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%
(0.79)
0.79
Debt securities
Other debt securities
Others
Inflation Swap Rate
0% - 10%
4.74%
(4.25)
3.83
Non-trading financial assets
mandatorily at fair value through
profit or loss
Debt securities
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
Annual report 2024
754
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
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)
—
A. 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.
B. The breakdown of impacts is shown by type of instrument and unobservable inputs.
C. 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.
D.Zero impacts from fully hedged or back-to-back transactions have not been included in this exercise.
Annual report 2024
755
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
2. Movement of financial instruments classified as Level 3
Lastly, the changes in the financial instruments classified as Level 3
in 2024, 2023 and 2022 were as follows:
01/01/2024
Changes
31/12/2024
Fair value
Fair value
EUR million
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
calculated
using
internal
models
(level 3)
Financial assets held for trading
2,086
3,205
(813)
302
—
(715)
(135)
3,930
Credit entities
—
770
—
(1)
—
—
—
769
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
Hedging derivatives (Assets)
—
—
—
15
—
(1)
6
20
Swaps
—
—
—
15
—
(1)
6
20
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
Liabilities under insurance
contracts
323
—
—
(26)
—
—
(51)
246
TOTAL LIABILITIES
1,227
513
(205)
(120)
—
(172)
109
1,352
Annual report 2024
756
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
01/01/2023
Changes
31/12/2023
Fair value
Fair value
EUR million
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
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)
—
0
0
29
Liabilities under insurance
contracts
345
0
0
0
(40)
0
18
323
TOTAL LIABILITIES
925
308
(318)
(124)
(40)
471
5
1,227
Annual report 2024
757
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
01/01/2022
Changes
31/12/2022
Fair value
Fair value
EUR million
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
calculated
using
internal
models
(level 3)
Financial assets held for trading
537
91
(99)
(116)
—
(15)
(15)
383
Debt securities
22
2
(2)
15
—
2
3
42
Equity instruments
2
—
—
—
—
(1)
—
1
Trading derivatives
513
89
(97)
(131)
—
(16)
(18)
340
Swaps
224
1
(47)
(20)
—
4
(23)
139
Exchange rate options
12
—
(9)
2
—
—
(1)
4
Interest rate options
182
—
—
(142)
—
(1)
—
39
Index and securities options
41
27
(28)
29
—
(26)
5
48
Other
54
61
(13)
—
—
7
1
110
Financial assets at fair value
through profit or loss
418
—
(9)
(31)
—
—
49
427
Credit entities
—
—
—
—
—
—
—
—
Loans and advances to customers
18
—
(9)
(5)
—
—
1
5
Debt securities
400
—
—
(26)
—
—
48
422
Non-trading financial assets
mandatorily at fair value through
profit or loss
1,865
521
(579)
98
—
(22)
(50)
1,833
Customers
268
276
(280)
(25)
—
—
—
239
Debt securities
366
51
(33)
(31)
—
(27)
(1)
325
Equity instruments
1,231
194
(266)
154
—
5
(49)
1,269
Financial assets at fair value
through other comprehensive
income
4,847
8,564
(8,029)
—
(172)
417
20
5,647
Loans and advances
3,880
8,471
(7,988)
—
1
349
5
4,718
Debt securities
146
91
(23)
—
—
—
15
229
Equity instruments
821
2
(18)
—
(173)
68
—
700
TOTAL ASSETS
7,667
9,176
(8,716)
(49)
(172)
380
4
8,290
Financial liabilities held for
trading
160
328
(97)
35
—
(2)
(9)
415
Trading derivatives
160
328
(97)
35
—
(2)
(9)
415
Swaps
44
32
(16)
189
—
9
(23)
235
Exchange rate options
7
6
(14)
1
—
—
—
—
Interest rate options
26
56
(44)
(19)
—
—
—
19
Index and securities options
67
23
(19)
(32)
—
(11)
14
42
Securities and interest rate
futures
—
—
—
—
—
—
—
—
Others
16
211
(4)
(104)
—
—
—
119
Financial liabilities designated at
fair value through profit or loss
151
—
(3)
3
—
—
—
151
Liabilities under insurance
contracts
318
—
—
(11)
—
—
38
345
TOTAL LIABILITIES
629
328
(100)
41
—
(2)
29
925
Annual report 2024
758
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
51. Other disclosures
a) Residual maturity periods
The detail, by maturity, of the balances of certain items in the
consolidated balance sheet at 31 December 2024, 2023 and 2022
is presented below:
31 December 2024
EUR million
Within 3
3 to 12
More than 5
On demand
months
months 1 to 3 years 3 to 5 years
years
Total
Assets
Cash, cash balances at Central Banks and other
deposits on demand
192,208
—
—
—
—
—
192,208
Financial assets at fair value through other
comprehensive income
—
13,401
9,153
23,902
8,905
32,344
87,705
Debt securities
—
11,072
8,449
22,137
7,623
27,277
76,558
Loans and advances
—
2,329
704
1,765
1,282
5,067
11,147
Credits institutions
—
36
—
98
6
223
363
Customers
—
2,293
704
1,667
1,276
4,844
10,784
Financial assets
at amortized cost
41,652
208,565
167,974
220,871
176,710
387,935
1,203,707
Debt securities
—
9,628
14,041
17,071
22,705
57,504
120,949
Loans and advances
41,652
198,937
153,933
203,800
154,005
330,431
1,082,758
Central banks
—
15,067
—
—
—
1,112
16,179
Credits institutions
6,208
23,550
4,166
5,760
1,843
14,010
55,537
Customers
35,444
160,320
149,767
198,040
152,162
315,309
1,011,042
233,860
221,966
177,127
244,773
185,615
420,279
1,483,620
Liabilities
Financial liabilities at amortized cost
720,659
256,651
171,362
155,620
89,229
90,801
1,484,322
Deposits
707,418
213,220
121,914
46,431
21,510
15,946
1,126,439
Central banks
17
9,063
11,022
4,772
—
8
24,882
Credit institutions
13,948
27,149
19,300
15,655
6,477
7,483
90,012
Customer deposits
693,453
177,008
91,592
26,004
15,033
8,455
1,011,545
Marketable debt securities
A
—
35,570
47,977
100,451
60,128
73,841
317,967
Other financial liabilities
13,241
7,861
1,471
8,738
7,591
1,014
39,916
720,659
256,651
171,362
155,620
89,229
90,801
1,484,322
Difference (assets less liabilities)
(486,799)
(34,685)
5,765
89,153
96,386
329,478
(702)
A. Includes promissory notes, certificates of deposit and other short-term debt issues.
See breakdown by type of debt (subordinated debt, senior unsecured debt, senior secured debt, notes and other securities) (see note 22).
Annual report 2024
759
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
31 December 2023
EUR million
Within 3
3 to 12
More than
On demand
months
months 1 to 3 years 3 to 5 years
5 years
Total
Assets
Cash, cash balances at Central Banks and other
deposits on demand
220,342
—
—
—
—
—
220,342
Financial assets at fair value through other
comprehensive income
—
13,544
9,234
19,372
14,162
25,235
81,547
Debt securities
—
13,078
8,433
18,432
12,764
20,858
73,565
Loans and advances
—
466
801
940
1,398
4,377
7,982
Credits institutions
—
—
—
—
313
—
313
Customers
—
466
801
940
1,085
4,377
7,669
Financial assets
at amortized cost
40,687
202,066
171,494
232,190
158,556
386,410
1,191,403
Debt securities
—
12,281
14,114
18,608
11,281
47,275
103,559
Loans and advances
40,687
189,785
157,380
213,582
147,275
339,135
1,087,844
Central banks
—
18,730
—
—
—
1,352
20,082
Credits institutions
6,783
26,671
6,313
7,151
1,521
9,478
57,917
Customers
33,904
144,384
151,067
206,431
145,754
328,305
1,009,845
261,029
215,610
180,728
251,562
172,718
411,645
1,493,292
Liabilities
Financial liabilities
at amortized cost
711,093
246,898
182,516
161,784
88,527
77,885
1,468,703
Deposits
697,339
210,538
118,035
61,332
22,161
15,903
1,125,308
Central banks
168
20,224
6,941
16,846
4,581
22
48,782
Credit institutions
6,572
25,990
21,390
13,434
5,963
7,897
81,246
Customer deposits
690,599
164,324
89,704
31,052
11,617
7,984
995,280
Marketable debt
securities
A
—
28,371
63,440
92,554
57,639
61,204
303,208
Other financial liabilities
13,754
7,989
1,041
7,898
8,727
778
40,187
711,093
246,898
182,516
161,784
88,527
77,885
1,468,703
Difference (assets less liabilities)
(450,064)
(31,288)
(1,788)
89,778
84,191
333,760
24,589
A. Includes promissory notes, certificates of deposit and other short-term debt issues.
Annual report 2024
760
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
31 December 2022
EUR million
Within 3
3 to 12
More than
On demand
months
months 1 to 3 years 3 to 5 years
5 years
Total
Assets
Cash, cash balances at Central Banks and other
deposits on demand
223,073
—
—
—
—
—
223,073
Financial assets at fair value through other
comprehensive income
—
19,215
5,425
15,377
17,693
25,588
83,298
Debt securities
—
19,011
4,528
13,884
16,631
21,029
75,083
Loans and advances
—
204
897
1,493
1,062
4,559
8,215
Customers
—
204
897
1,493
1,062
4,559
8,215
Financial assets
at amortized cost
45,322
194,757
137,632
196,939
135,156
437,238
1,147,044
Debt securities
—
7,956
7,417
21,459
6,715
30,007
73,554
Loans and advances
45,322
186,801
130,215
175,480
128,441
407,231
1,073,490
Central banks
—
14,139
—
—
—
1,236
15,375
Credit institutions
7,565
22,578
2,756
3,580
139
9,900
46,518
Customers
37,757
150,084
127,459
171,900
128,302
396,095
1,011,597
268,395
213,972
143,057
212,316
152,849
462,826
1,453,415
Liabilities
Financial liabilities
at amortized cost
731,837
236,565
144,666
168,984
81,808
59,998
1,423,858
Deposits
718,366
193,092
96,667
82,663
19,343
1,756
1,111,887
Central banks
117
6,991
18,311
47,018
4,506
9
76,952
Credit institutions
7,172
30,557
15,901
9,670
3,925
1,357
68,582
Customer deposits
711,077
155,544
62,455
25,975
10,912
390
966,353
Marketable debt
securities
A
—
34,408
46,480
81,051
55,359
57,614
274,912
Other financial liabilities
13,471
9,065
1,519
5,270
7,106
628
37,059
731,837
236,565
144,666
168,984
81,808
59,998
1,423,858
Difference (assets less liabilities)
(463,442)
(22,593)
(1,609)
43,332
71,041
402,828
29,557
A. Includes promissory notes, certificates of deposit and other short-term debt issues.
Annual report 2024
761
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The detail of the remaining contractual maturities of the existing
financial liabilities at amortised cost at 31 December 2024, 2023
and 2022 is as follows:
31 December 2024
EUR million
Within 3
3 to 12
More than 5
On demand
months
months
1 to 3 years
3 to 5 years
years
Total
Financial liabilities at amortized cost
Deposits
699,007
207,554
117,431
43,090
19,248
15,796
1,102,126
Central banks
17
9,082
11,026
4,772
—
7
24,904
Credit institutions
13,634
27,170
19,258
15,674
6,482
7,462
89,680
Customer
685,356
171,302
87,147
22,644
12,766
8,327
987,542
Marketable debt securities
—
36,315
48,973
102,306
61,260
74,817
323,671
Other financial liabilities
13,241
7,861
1,471
8,738
7,591
1,014
39,916
712,248
251,730
167,875
154,134
88,099
91,627
1,465,713
31 December 2023
EUR million
Within 3
3 to 12
More than 5
On demand
months
months
1 to 3 years
3 to 5 years
years
Total
Financial liabilities at amortized cost
Deposits
698,595
204,001
109,311
51,191
20,761
15,585
1,099,444
Central banks
168
20,334
6,853
16,846
4,581
35
48,817
Credit institutions
6,884
25,642
21,334
13,079
5,924
7,685
80,548
Customer
691,543
158,025
81,124
21,266
10,256
7,865
970,079
Marketable debt securities
—
28,258
62,935
91,492
56,944
60,166
299,795
Other financial liabilities
13,666
8,078
1,041
7,898
8,727
777
40,187
712,261
240,337
173,287
150,581
86,432
76,528
1,439,426
.
31 December 2022
EUR million
Within 3
3 to 12
More than 5
On demand
months
months
1 to 3 years
3 to 5 years
years
Total
Financial liabilities at amortized cost
Deposits
718,366
192,609
96,482
82,618
19,354
1,595
1,111,024
Central banks
117
7,003
18,210
46,933
4,506
9
76,778
Credit institutions
7,172
30,548
15,808
9,722
3,924
1,190
68,364
Customer
711,077
155,058
62,464
25,963
10,924
396
965,882
Marketable debt securities
—
34,312
46,396
81,059
55,357
57,576
274,700
Other financial liabilities
13,471
9,065
1,519
5,270
7,106
626
37,057
731,837
235,986
144,397
168,947
81,817
59,797
1,422,781
Annual report 2024
762
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Below is a breakdown of contractual maturities for the rest of
financial assets and liabilities as of 31 December 2024, 2023 and
2022:
31 December 2024
EUR million
Within 3
3 to 12
1 to 3
3 to 5
More than 5
months
months
years
years
years
Total
FINANCIAL ASSETS
Financial assets held for trading
64,300
56,571
33,945
24,504
50,933
230,253
Derivatives
14,231
14,504
16,676
12,384
6,305
64,100
Equity instruments
—
—
—
—
16,636
16,636
Debt securities
6,930
21,305
15,319
11,944
27,148
82,646
Loans and advances
43,139
20,762
1,950
176
844
66,871
Central banks
1,241
11,725
—
—
—
12,966
Credits institutions
21,840
4,088
1,287
—
99
27,314
Customers
20,058
4,949
663
176
745
26,591
Financial assets designated at fair value through
profit or loss
152
750
2,421
1,075
3,517
7,915
Debt securities
95
342
1,254
680
526
2,897
Loans and advances
57
408
1,167
395
2,991
5,018
Credit institutions
16
—
5
34
353
408
Customers
41
408
1,162
361
2,638
4,610
Non-trading financial assets mandatorily at fair
value through profit or loss
794
8
29
102
5,197
6,130
Equity instruments
—
—
—
—
4,641
4,641
Debt securities
39
2
3
10
393
447
Loans and advances
755
6
26
92
163
1,042
Central banks
—
—
—
—
—
—
Credits institutions
—
—
—
—
—
—
Customers
755
6
26
92
163
1,042
Financial assets at fair value through other
comprehensive income
—
—
—
—
2,193
2,193
Equity instruments
—
—
—
—
2,193
2,193
Hedging derivatives
1,786
1,423
957
800
706
5,672
Changes in the fair value of hedged items in
portfolio hedges of interest rate risk
(61)
18
(569)
(50)
(42)
(704)
TOTAL FINANCIAL ASSETS
66,971
58,770
36,783
26,431
62,504
251,459
Annual report 2024
763
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
31 December 2024
EUR million
Within 3
3 to 12
1 to 3
3 to 5
More than 5
months
months
years
years
years
Total
FINANCIAL LIABILITIES
Financial liabilities held for trading
100,071
16,537
14,244
12,530
8,769
152,151
Derivatives
14,364
13,296
11,946
12,335
5,812
57,753
Shorts positions
28,548
2,931
1,199
195
2,957
35,830
Deposits
57,159
310
1,099
—
—
58,568
Central banks
13,300
—
—
—
—
13,300
Credits institutions
24,875
310
1,099
—
—
26,284
Customers
18,984
—
—
—
—
18,984
Financial liabilities designated at fair value
through profit or loss
16,036
6,000
6,422
1,918
5,984
36,360
Deposits
15,193
4,860
4,037
490
4,226
28,806
Central banks
1,774
—
—
—
—
1,774
Credits institutions
1,035
133
15
49
393
1,625
Customers
12,384
4,727
4,022
441
3,833
25,407
Marketable debt securities
A
843
1,140
2,385
1,428
1,758
7,554
Hedging derivatives
832
668
826
814
1,612
4,752
Changes in the fair value of hedged items in
portfolio hedges of interest rate risk
—
(5)
13
47
(64)
(9)
TOTAL FINANCIAL LIABILITIES
116,939
23,200
21,505
15,309
16,301
193,254
A. See breakdown by type of debt (subordinated debt, senior unsecured debt, senior secured debt, promissory notes and other securities) (see note 22).
31 December 2024
EUR million
Within 3
3 to 12
1 to 3
3 to 5
More than 5
months
months
years
years
years
Total
Memorandum items
Loans commitment granted
133,084
35,747
57,157
57,285
19,588
302,861
Financial guarantees granted
5,103
6,803
3,691
796
508
16,901
Other commitments granted
92,172
20,681
13,197
5,032
3,411
134,493
MEMORANDUM ITEMS
230,359
63,231
74,045
63,113
23,507
454,255
In the Group’s experience, no outflows of cash or other financial
assets take place prior to the contractual maturity date that might
affect the information broken down above.
Annual report 2024
764
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
31 December 2023
EUR million
Within 3
3 to 12
1 to 3
3 to 5
More than 5
months
months
years
years
years
Total
FINANCIAL ASSETS
Financial assets held for trading
36,120
49,668
30,602
17,912
42,619
176,921
Derivatives
8,777
10,551
17,775
9,532
9,693
56,328
Equity instruments
—
—
—
—
15,057
15,057
Debt securities
7,598
18,315
10,274
8,137
17,800
62,124
Loans and advances
19,745
20,802
2,553
243
69
43,412
Central banks
1,146
16,571
—
—
—
17,717
Credits institutions
10,861
2,076
1,079
45
—
14,061
Customers
7,738
2,155
1,474
198
69
11,634
Financial assets designated at fair value through
profit or loss
1,657
557
2,529
1,350
3,680
9,773
Debt securities
252
77
1,269
690
807
3,095
Loans and advances
1,405
480
1,260
660
2,873
6,678
Central banks
—
—
—
—
—
—
Credit institutions
26
22
3
15
393
459
Customers
1,379
458
1,257
645
2,480
6,219
Non-trading financial assets mandatorily at fair
value through profit or loss
591
153
71
80
5,015
5,910
Equity instruments
—
—
—
—
4,068
4,068
Debt instruments
41
—
57
3
759
860
Loans and advances
550
153
14
77
188
982
Central banks
—
—
—
—
—
—
Credits institutions
—
—
—
—
—
—
Customers
550
153
14
77
188
982
Financial assets at fair value through other
comprehensive income
—
—
—
—
1,761
1,761
Equity instruments
—
—
—
—
1,761
1,761
Hedging derivatives
1,188
412
1,535
937
1,225
5,297
Changes in the fair value of hedged items in
portfolio hedges of interest rate risk
(237)
(225)
156
(402)
(80)
(788)
TOTAL FINANCIAL ASSETS
39,319
50,565
34,893
19,877
54,220
198,874
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
31 December 2023
EUR million
Within 3
3 to 12
1 to 3
3 to 5
More than 5
months
months
years
years
years
Total
FINANCIAL LIABILITIES
Financial liabilities held for trading
73,257
12,127
19,180
10,591
7,115
122,270
Derivatives
8,147
9,486
17,990
10,060
4,906
50,589
Shorts positions
21,381
1,288
765
531
2,209
26,174
Deposits
43,729
1,353
425
—
—
45,507
Central banks
7,808
—
—
—
—
7,808
Credits institutions
17,228
209
425
—
—
17,862
Customers
18,693
1,144
—
—
—
19,837
Financial liabilities designated at fair value
through profit or loss
23,190
7,583
4,863
1,359
3,372
40,367
Deposits
22,688
6,459
3,223
338
2,288
34,996
Central banks
1,158
51
—
—
—
1,209
Credits institutions
1,161
57
84
61
372
1,735
Customers
20,369
6,351
3,139
277
1,916
32,052
Marketable debt securities
A
502
1,124
1,640
1,021
1,084
5,371
Hedging derivatives
1,525
2,064
1,577
878
1,612
7,656
Changes in the fair value of hedged items in
portfolio hedges of interest rate risk
(1)
(4)
36
(5)
29
55
TOTAL FINANCIAL LIABILITIES
97,971
21,770
25,656
12,823
12,128
170,348
A. See breakdown by type of debt (subordinated debt, senior unsecured debt, senior secured debt, promissory notes and other securities) (see note 22).
31 December 2023
EUR million
Within 3
3 to 12
1 to 3
3 to 5
More than 5
months
months
years
years
years
Total
Memorandum items
Loans commitment granted
125,083
31,658
55,344
47,204
20,300
279,589
Financial guarantees granted
7,870
4,734
1,654
686
491
15,435
Other commitments granted
81,146
17,448
9,699
3,386
1,594
113,273
MEMORANDUM ITEMS
214,099
53,840
66,697
51,276
22,385
408,297
Annual report 2024
766
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
31 December 2022
EUR million
Within 3
3 to 12
1 to 3
3 to 5
More than 5
months
months
years
years
years
Total
FINANCIAL ASSETS
Financial assets held for trading
44,770
27,562
29,753
20,177
33,856
156,118
Derivatives
7,631
9,983
23,156
15,533
10,699
67,002
Equity instruments
—
—
—
—
10,066
10,066
Debt securities
5,160
13,357
5,667
4,193
13,026
41,403
Loans and advances
31,979
4,222
930
451
65
37,647
Central banks
11,595
—
—
—
—
11,595
Credits institutions
13,650
2,852
—
—
—
16,502
Customers
6,734
1,370
930
451
65
9,550
Financial assets designated at fair value through
profit or loss
236
756
2,732
1,691
3,574
8,989
Debt securities
68
77
1,026
599
772
2,542
Loans and advances
168
679
1,706
1,092
2,802
6,447
Credit institutions
6
181
23
4
459
673
Customers
162
498
1,683
1,088
2,343
5,774
Non-trading financial assets mandatorily at fair
value through profit or loss
164
214
265
70
5,000
5,713
Equity instruments
—
—
—
—
3,711
3,711
Debt instruments
6
52
52
—
1,024
1,134
Loans and advances
158
162
213
70
265
868
Customers
158
162
213
70
265
868
Financial assets at fair value through other
comprehensive income
—
—
—
—
1,941
1,941
Equity instruments
—
—
—
—
1,941
1,941
Hedging derivatives
2,200
1,076
1,356
1,451
1,986
8,069
Changes in the fair value of hedged items in
portfolio hedges of interest rate risk
(734)
(498)
(1,178)
(1,036)
(303)
(3,749)
TOTAL FINANCIAL ASSETS
46,636
29,110
32,928
22,353
46,054
177,081
Annual report 2024
767
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
31 December 2022
EUR million
Within 3
3 to 12
1 to 3
3 to 5
More than 5
months
months
years
years
years
Total
FINANCIAL LIABILITIES
Financial liabilities held for trading
51,621
12,012
23,669
18,273
9,610
115,185
Derivatives
7,749
9,671
22,479
16,955
8,037
64,891
Shorts positions
17,952
888
1,031
1,071
1,573
22,515
Deposits
25,920
1,453
159
247
—
27,779
Central banks
5,757
—
—
—
—
5,757
Credits institutions
7,963
1,435
151
247
—
9,796
Customers
12,200
18
8
—
—
12,226
Financial liabilities designated at fair value
through profit or loss
25,180
3,984
4,389
1,796
4,918
40,268
Deposits
25,017
3,183
3,278
699
2,663
34,841
Central banks
1,702
38
—
—
—
1,740
Credits institutions
1,284
129
54
87
404
1,958
Customers
22,031
3,016
3,224
612
2,259
31,143
Marketable debt securities
A
163
801
1,111
1,097
2,255
5,427
Hedging derivatives
947
1,469
3,650
1,159
2,003
9,228
Changes in the fair value of hedged items in
portfolio hedges of interest rate risk
11
(52)
(140)
20
44
(117)
TOTAL FINANCIAL LIABILITIES
77,759
17,413
31,568
21,248
16,575
164,564
A. See breakdown by type of debt (subordinated debt, senior unsecured debt, senior secured debt, promissory notes and other securities) (see note 22).
31 December 2022
EUR million
Within 3
3 to 12
1 to 3
3 to 5
More than 5
months
months
years
years
years
Total
Memorandum items
Loans commitment granted
120,962
32,538
50,875
54,033
15,667
274,075
Financial guarantees granted
7,023
3,586
1,427
441
379
12,856
Other commitments granted
66,716
16,152
7,119
1,517
1,168
92,672
MEMORANDUM ITEMS
194,701
52,276
59,421
55,991
17,214
379,603
Annual report 2024
768
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
b) Equivalent euro value of assets and liabilities
The detail of the main foreign currency balances in the
consolidated balance sheet, based on the nature of the related
items, is as follows:
Equivalent value in EUR million
2024
2023
2022
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
Cash, cash balances at central banks and other deposits
on demand
Financial assets/liabilities held for trading
Non-trading financial assets mandatorily at fair value
through profit or loss
Other financial assets/liabilities at fair value through
profit or loss
Financial assets at fair value through other
comprehensive income
Financial assets at amortized cost
Investments
Tangible assets
Intangible assets
Financial liabilities at amortized cost
Liabilities under insurance contracts
109,932
130,076
3,208
793
60,861
777,226
2,103
18,812
12,282
—
—
—
76,216
—
13,844
—
—
—
—
—
938,844
261
114,410
106,011
3,291
1,721
60,516
773,504
1,689
20,797
12,772
—
—
—
60,581
—
12,699
—
—
—
—
—
937,917
330
122,391
94,256
3,210
1,085
62,046
747,138
1,296
21,834
11,881
—
—
—
60,105
—
19,929
—
—
—
—
—
893,531
349
Other
25,891
1,141,184
22,385
1,051,550
26,236
1,120,947
25,740
1,037,267
23,886
1,089,023
24,372
998,286
c) Fair value of financial assets and liabilities
not measured at fair value
The fair value at year-end of the financial instruments (certain
portfolios of loans and advances and debt securities, on the asset
side, and deposits and debt securities, on the liability side)
registered in the consolidated balance sheet at amortized cost is
presented below:
i) Financial assets measured at other than fair value
EUR million
2024
2023
2022
Assets
Carrying
amount Fair value
Level 1
Level 2
Level 3
Carrying
amount
Fair
value
Level 1
Level 2
Level 3
Carrying
amount
Fair
value
Level 1
Level 2
Level 3
Loans and
advances
Debt
securities
1,082,758
120,949
1,203,707
1,073,530
119,539
1,193,069
— 104,582
87,170
13,149
87,170 117,731
968,948
19,220
988,168
1,087,844 1,077,543
103,559
102,888
1,191,403 1,180,431
—
103,414
67,951
11,057
67,951
114,471
974,129
23,880
998,009
1,073,490 1,053,703
73,554
70,373
1,147,044 1,124,076
—
64,968
37,805
19,254
37,805
84,222
988,735
13,314
1,002,049
ii) Financial liabilities measured at other than fair value
EUR million
2024
2023
2022
Liabilities
A
Carrying
amount Fair value
Level 1
Level 2
Level 3
Carrying
amount Fair value
Level 1
Level 2
Level 3
Carrying
amount
Fair
value
Level 1
Level 2
Level 3
Deposits
Debt
securities
1,126,439
317,967
1,444,406
1,125,532
—
250,440
317,912 170,118 112,365
1,443,444 170,118 362,805
875,092
35,429
910,521
1,125,308 1,124,373
303,208
298,792
1,428,516 1,423,165
—
263,428
136,109 125,575
136,109 389,003
860,945
37,108
898,053
1,111,887 1,108,918
— 258,701
274,912
263,191 106,169 124,939
1,386,799 1,372,109 106,169 383,640
850,217
32,083
882,300
A. At 31 December 2024, Grupo Santander had other financial liabilities that amounted to EUR 39,916 million, EUR 40,187 million in 2023 and EUR 37,059 million in 2022.
Annual report 2024
769
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The main valuation methods and inputs used in the estimates at
31 December 2024 of the fair values of the financial assets and
liabilities in the foregoing table were as follows:
• Financial assets at amortised cost: the fair value was estimated
using the present value method. The estimates were made
considering factors such as the expected maturity of the
portfolio, market interest rates, spreads on newly approved
transactions or market spreads -when available-.
• Financial liabilities at amortised cost:
i) Deposits: the fair value of short term and on demand deposits
was taken to be their carrying amount. Factors such as the
expected maturity of the transactions and the Group’s current
cost of funding in similar transactions are consider for the
estimation of long term deposits fair value. It had been used also
current rates offered for deposits of similar remaining
maturities.
ii) Marketable debt securities and subordinated liabilities: the fair
value was calculated based on market prices for these
instruments -when available- or by the present value method
using market interest rates and spreads, as well as using any
significant input which is not observable with market data if
applicable.
iii) The fair value of cash, cash balances at central banks and other
deposits on demand was taken to be their carrying amount since
they are mainly short-term balances.
Annual report 2024
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Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
d) Offsetting of financial instruments
Following is the detail of financial assets and liabilities that were
offset in the consolidated balance sheets as of 31 December 2024,
2023 and 2022:
31 December 2024
31 December 2024
EUR million
EUR million
Net amount
Net amount
Gross amount
of financial
Gross amount
of financial
Gross amount
of financial
assets
Gross amount
of financial
liabilities
of
financial
assets
offset in the
presented in
the balance
of
financial
liabilities
offset in the
presented in
the balance
Assets
assets
balance sheet
sheet
Liabilities
liabilities
balance sheet
sheet
Derivatives
152,331
(82,559)
69,772
Derivatives
145,064
(82,559)
62,505
Reverse
Reverse
repurchase
agreements
189,034
(67,488)
121,546
repurchase
agreements
223,141
(67,488)
155,653
Total
341,365
(150,047)
191,318
Total
368,205
(150,047)
218,158
31 December 2023
31 December 2023
EUR million
EUR million
Net amount
Net amount
Gross amount
of financial
Gross amount
of financial
Gross amount
of financial
assets
Gross amount
of financial
liabilities
of
financial
assets
offset in the
presented in
the balance
of
financial
liabilities
offset in the
presented in
the balance
Assets
assets
balance sheet
sheet
Liabilities
liabilities
balance sheet
sheet
Derivatives
149,508
(87,883)
61,625
Derivatives
146,128
(87,883)
58,245
Reverse
Reverse
repurchase
agreements
179,580
(79,500)
100,080
repurchase
agreements
212,840
(79,500)
133,340
Total
329,088
(167,383)
161,705
Total
358,968
(167,383)
191,585
31 December 2022
31 December 2022
EUR million
EUR million
Net amount
Net amount
Gross amount
of financial
Gross amount
of financial
Gross amount
of financial
assets
Gross amount
of financial
liabilities
of
financial
assets
offset in the
presented in
the balance
of
financial
liabilities
offset in the
presented in
the balance
Assets
assets
balance sheet
sheet
Liabilities
liabilities
balance sheet
sheet
Derivatives
176,814
(101,743)
75,071
Derivatives
175,862
(101,743)
74,119
Reverse
Reverse
repurchase
agreements
127,561
(48,949)
78,612
repurchase
agreements
148,715
(48,949)
99,766
Total
304,375
(150,692)
153,683
Total
324,577
(150,692)
173,885
At 31 December 2024, Grupo Santander has offset other items
amounting to EUR 811 million (EUR 910 million and EUR 1,024
million at 31 December 2023 and 2022, respectively).
At 31 December 2024 the balance sheet shows the amounts
EUR 176,198 million (EUR 151,044 million and EUR 141,529
million at 31 December 2023 and 2022) on derivatives and repos
as assets and EUR 209,121 million (EUR 180,539 million and EUR
157,572 million at 31 December 2023 and 2022, respectively) on
derivatives and repos as liabilities that are subject to netting and
collateral arrangements.
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
52. Primary and secondary segments
reporting
Grupo Santander bases segment reporting on financial information
presented to the chief operating decision maker, which excludes
certain statutory results items that distort year-on-year
comparisons and are not considered for management reporting.
This financial information (underlying basis) is computed by
adjusting reported results for the effects of certain gains and losses
(e.g. capital gains, write-downs, impairment of goodwill, etc.).
These gains and losses are items that management and investors
ordinarily identify and consider separately to better understand the
underlying trends in the business.
Grupo Santander has aligned the information in this note with the
underlying information used internally for management reporting
and with that presented in Grupo Santander's other public
documents.
Grupo Santander executive committee has been determined to be
its chief operating decision maker. Grupo Santander's operating
segments reflect its organizational and managerial structures.
Grupo Santander 's executive committee reviews internal reporting
based on these segments to assess performance and allocate
resources.
The segments are split by type of business and the geographic area
in which profits are earned. Santander prepares the information by
aggregating the figures for Grupo Santander’s various geographic
areas and business units, relating it to both the accounting data of
the units integrated in each segment and that provided by
management information systems. The same general principles as
those used in Grupo Santander are applied.
On September 18, 2023, Grupo Santander announced a change in
the reportable segments to align the disclosed financial
information to the new report structure, from the first 2024 three
months period onwards.
The main changes, which have been applied to management
information for all periods included in the annual accounts, relate
to the following:
1. The totality of the Bank's businesses in every market has been
consolidated into five global areas: Retail & Commercial Bank,
Digital Consumer Bank, Corporate & Investment Banking,
Wealth Management & Insurance and Payments, which became
the new primary segments.
2. The changes made in financial information are as follows:
a. The former Retail Banking is divided into the new Retail &
Commercial Banking and Digital Consumer Bank segments,
while the country-based card business becomes part of the
new Payments segment.
b. The results of activities primarily related to financial
management, which are located in the countries, are fully
allocated to the global business based on the segment
generating the financial position in each unit.
c. Local corporate centres are allocated to the different global
businesses.
d. The criteria for the distribution of revenues among the global
businesses have been revised to better reflect the
contribution of each of them to the Group.
3. The former core segments (Europe, North America, South
America and Digital Consumer Bank, which is now called DCB
Europe) became the new secondary segments. The published
financial information for 2023 and 2022 regarding the regions,
countries and Corporate Centre remain unchanged.
Grupo Santander recasted the corresponding information of earlier
periods considering the changes included in this section to
facilitate a homogeneous comparison.
The above-mentioned changes have no impact on the Group’s
reported consolidated financial statements.
a) Primary segments
This primary level of segmentation, which is based on the Group’s
management structure, comprises six reportable segments: five
operating areas plus the Corporate Centre. The operating areas are:
• Retail & Commercial Banking (Retail): new area that integrates
the retail banking business (individuals) and commercial banking
(SMEs and corporates), except for business originated in the
consumer finance and the cards businesses.
• Digital Consumer Bank (Consumer): comprises all business
originated in the consumer finance companies, plus Openbank,
Open Digital Services (ODS) and SBNA Consumer.
• Corporate & Investment Banking (CIB): this business, which
includes Global Transactional Banking, Global Banking (Global
Debt Finance and Corporate Finance) and Markets, offers
products and services on a global scale to corporate and
institutional customers, and collaborates with other global
businesses to better serve our broad customer base.
• Wealth Management & Insurance (Wealth): includes the
corporate unit of Private Banking and International Private
Banking in Miami and Switzerland (Santander Private Banking),
the asset management business (Santander Asset Management)
and the insurance business (Santander Insurance).
• Payments: digital payments solutions, providing global
technology solutions for our banks and new customers in the
open market. It is structured in two businesses: PagoNxt (Getnet,
Ebury and PagoNxt Payments) and Cards (cards platform and
business in the countries).
In addition to these operating units, both primary and secondary,
Grupo Santander continues to maintain the area of Corporate
Centre, that includes the centralized activities relating to equity
stakes in financial companies, financial management of the
structural exchange rate position, assumed within the sphere of
Grupo Santander’s assets and liabilities committee, as well as
management of liquidity and of shareholders’ equity via issuances.
As Grupo Santander’s holding entity, this area manages all capital
and reserves and allocations of capital and liquidity with the rest of
businesses. It also incorporates amortization of goodwill but not
the costs related to the Grupo Santander’s central services
(charged to the areas), except for corporate and institutional
expenses related to the Grupo Santander’s functioning.
There are no customers located in any of the areas that generate
income exceeding 10% of Total income.
Annual report 2024
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Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The main masses of the balance sheets of the different segments,
summarized, are indicated below:
EUR million
2024
Balance sheet (condensed)
Retail &
Commercial
Banking
Digital
Consumer
Bank
Corporate &
Investment
Banking
Wealth
Management
& Insurance Payments
Corporate
Centre
Total
Loans and advances to customers
608,945
207,104
184,923
24,479
22,840
5,778
1,054,069
Customer deposits
661,152
128,975
202,355
60,986
1,038
1,430
1,055,936
Memorandum items
Gross loans and advances to
A
customers
609,490
215,160
136,818
24,611
24,614
5,853
1,016,546
Customers funds
747,567
137,122
152,450
171,866
1,038
1,299
1,211,342
Customer deposits
B
649,619
128,933
136,672
60,058
1,038
1,299
977,620
Investment funds
97,948
8,189
15,777
111,807
—
—
233,722
EUR million
2023
Balance sheet (condensed)
Retail &
Commercial
Banking
Digital
Consumer
Bank
Corporate &
Investment
Banking
Wealth
Management
& Insurance Payments
Corporate
Centre
Total
Loans and advances to customers
618,113
199,158
168,960
22,509
22,045
5,565
1,036,349
Customer deposits
666,578
115,446
203,713
58,507
1,418
1,508
1,047,169
Memorandum items
Gross loans and advances to
A
customers
618,773
206,649
137,578
22,603
23,709
5,640
1,014,951
Customers funds
725,971
120,996
169,839
157,142
1,418
1,508
1,176,874
Customer deposits
B
638,169
114,334
155,274
57,643
1,418
1,508
968,346
Investment funds
87,802
6,662
14,565
99,499
—
—
208,528
EUR million
2022
Balance sheet (condensed)
Retail &
Commercial
Banking
Digital
Consumer
Bank
Corporate &
Investment
Banking
Wealth
Management
& Insurance Payments
Corporate
Centre
Total
Loans and advances to customers
622,933
189,623
173,397
22,127
22,140
5,785
1,036,004
Customer deposits
616,601
103,021
230,194
58,324
688
895
1,009,722
Memorandum items
Gross loans and advances to
A
customers
629,478
196,878
142,646
22,247
22,161
5,779
1,019,188
Customers funds
675,028
108,824
195,814
149,135
688
895
1,130,385
Customer deposits
B
598,110
102,946
186,678
57,014
688
895
946,331
Investment funds
76,918
5,878
9,136
92,121
—
—
184,053
A. Excluding reverse repos.
B. Excluding repos.
Annual report 2024
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Contents
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Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The condensed income statements for the primary segments are as
follows:
EUR million
2024
Underlying income statement (condensed)
Net interest income
A
Net fee income
Retail &
Commercial
Banking
27,942
4,681
Digital
Consumer
Bank
10,777
1,508
Corporate &
Investment
Banking
4,020
2,548
Wealth
Management
& Insurance
1,627
1,489
Payments
2,609
2,793
Corporate
Centre
(308)
(11)
Total
46,668
13,010
Gains (losses) on financial transactions
B
812
(4)
1,619
213
41
(408)
2,273
Other operating income
C
(974)
635
156
332
61
50
260
Total income
32,461
12,916
8,343
3,661
5,505
(676)
62,211
Administrative expenses, depreciation and
amortisation
(12,877)
(5,183)
(3,807)
(1,313)
(2,475)
(379)
(26,034)
Net operating income
D
19,584
7,733
4,537
2,348
3,030
(1,055)
36,177
Net loan-loss provisions
E
(5,845)
(4,562)
(174)
(41)
(1,714)
3
(12,333)
Other gains (losses) and provisions
F
(2,865)
(939)
(353)
(48)
(347)
(265)
(4,817)
Operating profit/(loss) before tax
10,874
2,232
4,009
2,259
969
(1,317)
19,027
Tax on profit
(3,091)
(295)
(1,065)
(531)
(464)
162
(5,283)
Profit from continuing operations
7,783
1,938
2,944
1,728
505
(1,155)
13,744
Net profit from discontinued operations
—
—
—
—
—
—
—
Consolidated profit
7,783
1,938
2,944
1,728
505
(1,155)
13,744
Non-controlling interests
(520)
(275)
(204)
(79)
(92)
1
(1,170)
Attributable profit to the parent
7,263
1,663
2,740
1,650
413
(1,154)
12,574
A. Net interest income includes the net amount of the profit and loss account items 'Interest income' and 'Interest expense'. It is presented this way because it is how it is
presented to the main operational decision maker.
B. Gains (losses) on financial transactions includes the following line items in the statutory income statement, which are presented net for internal reporting and
management reporting purposes: Gain or losses on financial assets and liabilities not measured at fair value through profit or loss, net, Gain or losses on financial assets
and liabilities held for trading, net, Gains or losses on non-trading financial assets and liabilities mandatorily at fair value through profit or loss, net, Gain or losses on
financial assets and liabilities measured at fair value through profit or loss, net, Gain or losses from hedge accounting, net and Exchange differences, net.
C. Other operating income includes the following line items in the statutory income statement, which are presented net for internal reporting and management reporting
purposes: Dividend income; Income from companies accounted for using the equity method, Other operating income, Other operating expenses, Income from assets
under insurance or reinsurance contracts and Expenses from liabilities under insurance or reinsurance contracts.
D.Net Operating Income is used for the Group’s internal reporting and management reporting purposes but is not a line item in the statutory consolidated income
statement.
E. Net loan-loss provisions refers to Impairment or reversal of impairment at financial assets not measured at fair value through profit or loss and net gains and losses from
changes line item in the statutory income statement. Additionally, includes an addition of EUR 41 million mainly corresponding to the results by commitments and
contingent risks includes in the line of the statutory income statement of provisions or reversal of provisions.
F. Other gains (losses) and provisions includes the following line items in the statutory income statement, which are presented net for internal reporting and management
reporting purposes: Provisions or reversal of provisions except an addition EUR 41 million mainly corresponding to the results by commitments and contingent risks;
Impairment of investments in joint ventures and associates, net; Impairment on non-financial assets, net; Gains or losses on non-financial assets, net; Negative goodwill
recognised in results and Gains or losses on non-current assets held for sale not classified as discontinued operations.
Annual report 2024
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Consolidated
Notes to the consolidated
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report
financial statements
financial statements
EUR million
2023
Underlying income statement (condensed)
Net interest income
A
Net fee income
Gains (losses) on financial transactions
B
Retail &
Commercial
Banking
25,550
4,497
854
Digital
Consumer
Bank
10,221
1,229
116
Corporate &
Investment
Banking
3,594
2,131
1,795
Wealth
Management
& Insurance
1,513
1,262
170
Payments
2,424
2,952
1
Corporate
Centre
(41)
(13)
(302)
Total
43,261
12,057
2,633
Other operating income
C
(1,146)
730
7
266
(79)
(83)
(304)
Total income
29,754
12,296
7,527
3,210
5,298
(439)
57,647
Administrative expenses, depreciation and
amortisation
(12,825)
(5,263)
(3,387)
(1,216)
(2,344)
(391)
(25,425)
Net operating income
D
16,930
7,033
4,140
1,994
2,954
(829)
32,222
Net loan-loss provisions
E
(6,540)
(4,106)
(165)
17
(1,666)
2
(12,458)
Other gains (losses) and provisions
F
(2,401)
(250)
(181)
(18)
(84)
(134)
(3,066)
Operating profit/(loss) before tax
7,989
2,677
3,795
1,994
1,205
(961)
16,698
Tax on profit
(1,927)
(426)
(1,137)
(454)
(509)
(36)
(4,489)
Profit from continuing operations
6,062
2,251
2,658
1,540
696
(998)
12,209
Net profit from discontinued operations
—
—
—
—
—
—
—
Consolidated profit
6,062
2,251
2,658
1,540
696
(998)
12,209
Non-controlling interests
(403)
(350)
(219)
(73)
(89)
—
(1,133)
Attributable profit to the parent
5,659
1,901
2,440
1,467
607
(998)
11,076
A. Net interest income includes the net amount of the profit and loss account items 'Interest income' and 'Interest expense'. It is presented this way because it is how it is
presented to the main operational decision maker.
B. Gains (losses) on financial transactions includes the following line items in the statutory income statement, which are presented net for internal reporting and
management reporting purposes: Gain or losses on financial assets and liabilities not measured at fair value through profit or loss, net, Gain or losses on financial assets
and liabilities held for trading, net, Gains or losses on non-trading financial assets and liabilities mandatorily at fair value through profit or loss, net, Gain or losses on
financial assets and liabilities measured at fair value through profit or loss, net, Gain or losses from hedge accounting, net and Exchange differences, net.
C. Other operating income includes the following line items in the statutory income statement, which are presented net for internal reporting and management reporting
purposes: Dividend income; Income from companies accounted for using the equity method, Other operating income, Other operating expenses, Income from assets
under insurance or reinsurance contracts and Expenses from liabilities under insurance or reinsurance contracts.
D.'Net Operating Income is used for the Group’s internal reporting and management reporting purposes but is not a line item in the statutory consolidated income
statement.
E. 'Net Loan loss provisions' refers to Impairment or reversal of impairment at financial assets not measured at fair value through profit or loss and net gains and losses from
changes line item in the statutory income statement. Additionally, includes a release of EUR 24 million mainly corresponding to the results by commitments and
contingent risks includes in the line of the statutory income statement of provisions or reversal of provisions.
F. Other gains (losses) and provisions includes the following line items in the statutory income statement, which are presented net for internal reporting and management
reporting purposes: Provisions or reversal of provisions except a release of EUR 24 million mainly corresponding to the results by commitments and contingent risks;
Impairment of investments in joint ventures and associates, net; Impairment on non-financial assets, net; Gains or losses on non-financial assets, net; Negative goodwill
recognised in results and Gains or losses on non-current assets held for sale not classified as discontinued operations.
Annual report 2024
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Contents
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Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
EUR million
2022
Underlying income statement (condensed)
Net interest income
A
Net fee income
Gains (losses) on financial transactions
B
Retail &
Commercial
Banking
22,093
4,672
1,141
Digital
Consumer
Bank
10,121
1,269
144
Corporate &
Investment
Banking
3,816
1,922
962
Wealth
Management
& Insurance
883
1,293
108
Payments
2,359
2,653
20
Corporate
Centre
(652)
(19)
(723)
Total
38,619
11,790
1,653
Other operating income
C
(913)
856
3
394
(158)
(91)
92
Total income
26,994
12,391
6,703
2,678
4,874
(1,485)
52,154
Administrative expenses, depreciation and
amortisation
(12,059)
(5,197)
(2,901)
(1,104)
(2,271)
(372)
(23,903)
Net operating income
D
14,935
7,194
3,802
1,574
2,604
(1,857)
28,251
Net loan-loss provisions
E
(5,887)
(3,222)
(257)
(21)
(1,132)
10
(10,509)
Other gains (losses) and provisions
F
(1,950)
(91)
(166)
(37)
(74)
(174)
(2,492)
Operating profit/(loss) before tax
7,099
3,880
3,379
1,516
1,398
(2,021)
15,250
Tax on profit
(1,676)
(881)
(955)
(346)
(603)
(27)
(4,486)
Profit from continuing operations
5,423
3,000
2,424
1,170
795
(2,048)
10,764
Net profit from discontinued operations
—
—
—
—
—
—
—
Consolidated profit
5,423
3,000
2,424
1,170
795
(2,048)
10,764
Non-controlling interests
(406)
(389)
(191)
(69)
(103)
1
(1,159)
Attributable profit to the parent
5,017
2,610
2,233
1,101
693
(2,049)
9,605
A. Net interest income includes the net amount of the profit and loss account items 'Interest income' and 'Interest expense'. It is presented this way because it is how it is
presented to the main operational decision maker.
B. Gains (losses) on financial transactions includes the following line items in the statutory income statement, which are presented net for internal reporting and
management reporting purposes: Gain or losses on financial assets and liabilities not measured at fair value through profit or loss, net, Gain or losses on financial assets
and liabilities held for trading, net, Gains or losses on non-trading financial assets and liabilities mandatorily at fair value through profit or loss, net, Gain or losses on
financial assets and liabilities measured at fair value through profit or loss, net, Gain or losses from hedge accounting, net and Exchange differences, net.
C. Other operating income includes the following line items in the statutory income statement, which are presented net for internal reporting and management reporting
purposes: Dividend income; Income from companies accounted for using the equity method, Other operating income, Other operating expenses, Income from assets
under insurance or reinsurance contracts and Expenses from liabilities under insurance or reinsurance contracts.
D.Net Operating Income is used for the Group’s internal reporting and management reporting purposes but is not a line item in the statutory consolidated income
statement.
E. Net loan-loss provisions refers to Impairment or reversal of impairment at financial assets not measured at fair value through profit or loss and net gains and losses from
changes line item in the statutory income statement. Additionally, includes a release of EUR 27 million mainly corresponding to the results by commitments and
contingent risks includes in the line of the statutory income statement of provisions or reversal of provisions.
F. Other gains (losses) and provisions includes the following line items in the statutory income statement, which are presented net for internal reporting and management
reporting purposes: Provisions or reversal of provisions except a release of EUR 27 million mainly corresponding to the results by commitments and contingent risks;
Impairment of investments in joint ventures and associates, net; Impairment on non-financial assets, net; Gains or losses on non-financial assets, net; Negative goodwill
recognised in results and Gains or losses on non-current assets held for sale not classified as discontinued operations.
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Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
b) Secondary segments
At this secondary level, Grupo Santander is structured into Europe,
DCB Europe, North America and South America:
• Europe: which comprises all business activity carried out in the
region, except that included in Digital Consumer Bank.
• DCB Europe: includes Santander Consumer Finance, which
incorporates the entire consumer finance business in Europe,
Openbank and ODS.
• North America: which comprises all the business activities carried
out in Mexico and the US, which includes the holding company
(SHUSA) and the businesses of Santander Bank (SBNA),
Santander Consumer USA (SC USA), the specialized business unit
Banco Santander International, Santander's New York branch and
Santander US Capital Markets (SanCap).
• South America: includes all the financial activities carried out by
Grupo Santander through its banks and subsidiary banks in the
region.
With regard to the balance sheet, due to the required segregation
of the various business units (included in a single consolidated
balance sheet), the amounts lent and borrowed between the units
are shown as increases in the assets and liabilities of each
business. These amounts relating to intra-Group liquidity are
eliminated and are shown in the Intra-Group eliminations column
in the table below in order to reconcile the amounts contributed by
each business unit to the consolidated Grupo Santander's balance
sheet.
There are no customers located in a place different from the
location of the Group's assets that generate revenues in excess of
10% of ordinary revenues.
Annual report 2024
777
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The condensed balance sheets of the different secondary segments
are indicated below:
EUR million
2024
Balance sheet (condensed)
Europe North America
South
America
Digital
Consumer
Bank Europe
Corporate
centre
Intra-group
eliminations
Total
Total assets
984,151
307,801
311,218
173,775
240,948
(180,815)
1,837,081
Total liabilities
940,831
283,200
285,790
160,264
151,585
(91,916)
1,729,754
Total equity
43,320
24,601
25,428
13,512
89,363
(88,899)
107,327
Other customer funds under
management
129,784
21,613
77,846
1,243
—
—
230,485
Other non-managed marketed
customer funds
34,610
21,331
1,165
4,896
—
—
62,002
EUR million
2023
Balance sheet (condensed)
Europe North America
South
America
Digital
Consumer
Bank Europe
Corporate
centre
Intra-group
eliminations
Total
Total assets
955,344
294,827
325,049
166,796
254,705
(199,660)
1,797,062
Total liabilities
911,173
271,183
299,155
153,355
166,809
(108,854)
1,692,821
Total equity
44,171
23,644
25,894
13,441
87,896
(90,806)
104,241
Other customer funds under
management
111,933
18,733
78,076
996
—
—
209,737
Other non-managed marketed
customer funds
26,390
18,503
1,087
4,057
—
—
50,036
EUR million
2022
Balance sheet (condensed)
Europe North America
South
America
Digital
Consumer
Bank Europe
Corporate
centre
Intra-group
eliminations
Total
Total assets
958,207
288,595
292,925
151,015
262,218
(218,301)
1,734,659
Total liabilities
915,167
262,931
268,417
137,986
178,651
(126,078)
1,637,074
Total equity
43,040
25,664
24,508
13,029
83,567
(92,223)
97,585
Other customer funds under
management
100,178
15,571
65,251
880
—
—
181,880
Other non-managed marketed
customer funds
23,305
20,908
1,077
3,089
—
—
48,379
Annual report 2024
778
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
The condensed income statements are as follows:
EUR million
2024
Underlying
(condensed)
income
statement
Europe
North America
South America
DCB Europe
Corporate
Centre
Total
Net interest income
A
16,720
10,330
15,566
4,361
(308)
46,668
Net fee income
4,659
2,594
4,864
902
(11)
13,010
Gains (losses) on financial
transactions
B
1,357
747
601
(24)
(408)
2,273
Other operating income
C
774
243
(1,247)
440
50
260
Total income
23,510
13,915
19,783
5,679
(676)
62,211
Administrative expenses, depreciation
and amortisation
(9,407)
(6,701)
(6,943)
(2,604)
(379)
(26,034)
Net operating income
D
14,102
7,214
12,841
3,075
(1,055)
36,177
Net loan-loss provisions
E
(1,862)
(3,786)
(5,478)
(1,209)
3
(12,333)
Other gains (losses) and provisions
F
(2,111)
(336)
(1,369)
(735)
(265)
(4,817)
Operating profit/(loss) before tax
10,129
3,091
5,993
1,131
(1,317)
19,027
Tax on profit
(3,065)
(509)
(1,617)
(255)
162
(5,283)
Profit/(loss) from continuing
operations
7,064
2,582
4,376
876
(1,155)
13,744
Net profit/(loss) from discontinued
operations
—
—
—
—
—
—
Consolidated profit/(loss)
7,064
2,582
4,376
876
(1,155)
13,744
Non-controlling interests
(420)
(3)
(513)
(234)
1
(1,170)
Attributable profit/(loss) to the
parent
6,644
2,579
3,863
642
(1,154)
12,574
A. Net interest income includes the net amount of the profit and loss account items 'Interest income' and 'Interest expense'. It is presented this way because it is how it is
presented to the main operational decision maker.
B. Gains (losses) on financial transactions includes the following line items in the statutory income statement, which are presented net for internal reporting and
management reporting purposes: Gain or losses on financial assets and liabilities not measured at fair value through profit or loss, net, Gain or losses on financial assets
and liabilities held for trading, net, Gains or losses on non-trading financial assets and liabilities mandatorily at fair value through profit or loss, net, Gain or losses on
financial assets and liabilities measured at fair value through profit or loss, net, Gain or losses from hedge accounting, net and Exchange differences, net.
C. Other operating income includes the following line items in the statutory income statement, which are presented net for internal reporting and management reporting
purposes: Dividend income; Income from companies accounted for using the equity method, Other operating income, Other operating expenses, Income from assets
under insurance or reinsurance contracts and Expenses from liabilities under insurance or reinsurance contracts.
D.Net Operating Income is used for the Group’s internal reporting and management reporting purposes but is not a line item in the statutory consolidated income
statement.
E. Net loan-loss provisions refers to Impairment or reversal of impairment at financial assets not measured at fair value through profit or loss and net gains and losses from
changes line item in the statutory income statement. Additionally, includes an addition of EUR 41 million mainly corresponding to the results by commitments and
contingent risks included in the line provisions or reversal of provisions, net of the statutory income statement.
F. Other gains (losses) and provisions includes the following line items in the statutory income statement, which are presented net for internal reporting and management
reporting purposes: Provisions or reversal of provisions except an addition of EUR 41 million mainly corresponding to the results by commitments and contingent risks;
Impairment of investments in joint ventures and associates, net; Impairment on non-financial assets, net; Gains or losses on non-financial assets, net; Negative goodwill
recognized in results and Gains or losses on non-current assets held for sale not classified as discontinued operations.
Annual report 2024
779
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
EUR million
2023
Underlying
(condensed)
income
statement
Europe
North America
South America
DCB Europe
Corporate
Centre
Total
Net interest income
A
15,910
10,159
13,040
4,193
(41)
43,261
Net fee income
4,399
2,192
4,684
796
(13)
12,057
Gains (losses) on financial
transactions
B
1,033
505
1,280
117
(302)
2,633
Other operating income
C
97
318
(1,033)
396
(83)
(304)
Total income
21,439
13,174
17,971
5,502
(439)
57,647
Administrative expenses, depreciation
and amortisation
(9,030)
(6,465)
(6,920)
(2,618)
(391)
(25,425)
Net operating income
D
12,409
6,708
11,050
2,884
(829)
32,222
Net loan-loss provisions
E
(2,533)
(3,733)
(5,401)
(792)
2
(12,458)
Other gains (losses) and provisions
F
(1,681)
(138)
(1,041)
(72)
(134)
(3,066)
Operating profit/(loss) before tax
8,195
2,837
4,608
2,019
(961)
16,698
Tax on profit
(2,371)
(468)
(1,121)
(493)
(36)
(4,489)
Profit/(loss) from continuing
operations
5,824
2,369
3,487
1,526
(998)
12,209
Net profit/(loss) from discontinued
operations
—
—
—
—
—
—
Consolidated profit/(loss)
5,824
2,369
3,487
1,526
(998)
12,209
Non-controlling interests
(342)
(15)
(449)
(327)
—
(1,133)
Attributable profit/(loss) to the
parent
5,482
2,354
3,038
1,199
(998)
11,076
A. Net interest income includes the net amount of the profit and loss account items 'Interest income' and 'Interest expense'. It is presented this way because it is how it is
presented to the main operational decision maker.
B. Gains (losses) on financial transactions includes the following line items in the statutory income statement, which are presented net for internal reporting and
management reporting purposes: Gain or losses on financial assets and liabilities not measured at fair value through profit or loss, net, Gain or losses on financial assets
and liabilities held for trading, net, Gains or losses on non-trading financial assets and liabilities mandatorily at fair value through profit or loss, net, Gain or losses on
financial assets and liabilities measured at fair value through profit or loss, net, Gain or losses from hedge accounting, net and Exchange differences, net.
C. Other operating income includes the following line items in the statutory income statement, which are presented net for internal reporting and management reporting
purposes: Dividend income; Income from companies accounted for using the equity method, Other operating income, Other operating expenses, Income from assets
under insurance or reinsurance contracts and Expenses from liabilities under insurance or reinsurance contracts.
D.Net Operating Income is used for the Group’s internal reporting and management reporting purposes but is not a line item in the statutory consolidated income
statement.
E. Net loan-loss provisions refers to Impairment or reversal of impairment at financial assets not measured at fair value through profit or loss and net gains and losses from
changes line item in the statutory income statement. Additionally, includes a release of EUR 24 million mainly corresponding to the results by commitments and
contingent risks included in the line provisions or reversal of provisions, net of the statutory income statement.
F. Other gains (losses) and provisions includes the following line items in the statutory income statement, which are presented net for internal reporting and management
reporting purposes: Provisions or reversal of provisions except a release of EUR 24 million mainly corresponding to the results by commitments and contingent risks;
Impairment of investments in joint ventures and associates, net; Impairment on non-financial assets, net; Gains or losses on non-financial assets, net; Negative goodwill
recognized in results and Gains or losses on non-current assets held for sale not classified as discontinued operations.
Annual report 2024
780
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
EUR million
2022
Underlying
income
(condensed)
Net interest income
A
Net fee income
Gains (losses) on financial
transactions
B
statement
Europe
12,565
4,493
821
North America
9,705
1,958
204
South America
12,979
4,515
1,291
DCB Europe
4,022
843
60
Corporate
Centre
(652)
(19)
(723)
Total
38,619
11,790
1,653
Other operating income
C
151
449
(761)
344
(91)
92
Total income
18,030
12,316
18,024
5,269
(1,485)
52,154
Administrative expenses, depreciation
and amortisation
(8,523)
(5,871)
(6,675)
(2,462)
(372)
(23,903)
Net operating income
D
9,507
6,445
11,349
2,807
(1,857)
28,251
Net loan-loss provisions
E
(2,396)
(2,538)
(5,041)
(544)
10
(10,509)
Other gains (losses) and provisions
F
(1,629)
(118)
(544)
(27)
(174)
(2,492)
Operating profit/(loss) before tax
5,482
3,789
5,764
2,236
(2,021)
15,250
Tax on profit
(1,492)
(869)
(1,549)
(549)
(27)
(4,486)
Profit/(loss) from continuing
operations
3,990
2,920
4,215
1,687
(2,048)
10,764
Net profit/(loss) from discontinued
operations
—
—
—
—
—
—
Consolidated profit/(loss)
3,990
2,920
4,215
1,687
(2,048)
10,764
Non-controlling interests
(179)
(43)
(557)
(379)
1
(1,159)
Attributable profit/(loss) to the
parent
3,811
2,877
3,658
1,308
(2,049)
9,605
A. Net interest income includes the net amount of the profit and loss account items 'Interest income' and 'Interest expense'. It is presented this way because it is how it is
presented to the main operational decision maker.
B. Gains (losses) on financial transactions includes the following line items in the statutory income statement, which are presented net for internal reporting and
management reporting purposes: Gain or losses on financial assets and liabilities not measured at fair value through profit or loss, net, Gain or losses on financial assets
and liabilities held for trading, net, Gains or losses on non-trading financial assets and liabilities mandatorily at fair value through profit or loss, net, Gain or losses on
financial assets and liabilities measured at fair value through profit or loss, net, Gain or losses from hedge accounting, net and Exchange differences, net.
C. Other operating income includes the following line items in the statutory income statement, which are presented net for internal reporting and management reporting
purposes: Dividend income; Income from companies accounted for using the equity method, Other operating income, Other operating expenses, Income from assets
under insurance or reinsurance contracts and Expenses from liabilities under insurance or reinsurance contracts.
D.Net Operating Income is used for the Group’s internal reporting and management reporting purposes but is not a line item in the statutory consolidated income
statement.
E. Net loan-loss provisions refers to Impairment or reversal of impairment at financial assets not measured at fair value through profit or loss and net gains and losses from
changes line item in the statutory income statement. Additionally, includes a release of EUR 27 million mainly corresponding to the results by commitments and
contingent risks included in the line provisions or reversal of provisions, net of the statutory income statement.
F. Other gains (losses) and provisions includes the following line items in the statutory income statement, which are presented net for internal reporting and management
reporting purposes: Provisions or reversal of provisions except a release of EUR 27 million mainly corresponding to the results by commitments and contingent risks;
Impairment of investments in joint ventures and associates, net; Impairment on non-financial assets, net; Gains or losses on non-financial assets, net; Negative goodwill
recognized in results and Gains or losses on non-current assets held for sale not classified as discontinued operations.
Annual report 2024
781
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
c) Reconciliations of reportable segment results
The tables below reconcile the statutory basis results to the
underlying results for each of the periods presented as required by
IFRS 8. For the purposes of these reconciliations, all material
reconciling items are separately identified and described.
Grupo Santander assets and liabilities for management reporting
purposes do not differ from the statutory reported figures and
therefore are not reconciled.
EUR million
2024
Reconciliation of statutory results to underlying results
Statutory
results
Adjustments
Underlying
results
Net interest income
A
46,668
—
46,668
Net fee income
13,010
—
13,010
Gains (losses) on financial transactions
B
2,273
—
2,273
Other operating income
C
(75)
335
260
Total income
61,876
335
62,211
Administrative expenses, depreciation and amortisation
(26,034)
—
(26,034)
Net operating income
D
35,842
335
36,177
Net loan-loss provisions
E
(12,685)
352
(12,333)
Other gains (losses) and provisions
F
(4,130)
(687)
(4,817)
Operating profit/(loss) before tax
19,027
—
19,027
Tax on profit
(5,283)
—
(5,283)
Adjusted profit for the year from continuing operations
13,744
—
13,744
Profit from discontinued operations (net)
—
—
—
Consolidated profit/(loss)
13,744
—
13,744
Non-controlling interests
(1,170)
—
(1,170)
Attributable profit/(loss) to the parent
12,574
—
12,574
A. Net interest income includes the net amount of the profit and loss account items 'Interest income' and 'Interest expense'. It is presented this way because it is how it is
presented to the main operational decision maker.
B. Gains (losses) on financial transactions includes the following line items in the statutory income statement, which are presented net for internal reporting and
management reporting purposes: Gain or losses on financial assets and liabilities not measured at fair value through profit or loss, net, Gain or losses on financial assets
and liabilities held for trading, net, Gains or losses on non-trading financial assets and liabilities mandatorily at fair value through profit or loss, net, Gain or losses on
financial assets and liabilities measured at fair value through profit or loss, net, Gain or losses from hedge accounting, net and Exchange differences, net.
C. Other operating income includes the following line items in the statutory income statement, which are presented net for internal reporting and management reporting
purposes: Dividend income; Income from companies accounted for using the equity method, Other operating income, Other operating expenses, Income from assets
under insurance or reinsurance contracts and Expenses from liabilities under insurance or reinsurance contracts.
D.Net Operating Income is used for the Group’s internal reporting and management reporting purposes but is not a line item in the statutory consolidated income
statement.
E. Net loan-loss provisions refers to Impairment or reversal of impairment at financial assets not measured at fair value through profit or loss and net gains and losses from
changes line item in the statutory income statement. Additionally, includes an addition of EUR 41 mainly corresponding to the results by commitments and contingent
risks includes in the line of the statutory income statement of provisions or reversal of provisions.
F. Other gains (losses) and provisions includes the following line items in the statutory income statement, which are presented net for internal reporting and management
reporting purposes: Provisions or reversal of provisions except for an addition of EUR 41 mainly corresponding to results from commitments and contingent risks;
Impairment of investments in joint ventures and associates, net; Impairment on non-financial assets, net; Gains or losses on non-financial assets, net; Negative goodwill
recognized in results and Gains or losses on non-current assets held for sale not classified as discontinued operations.
Explanation of adjustments:
• Temporary levy on revenue in Spain in the first quarter, totalling
EUR 335 million, which was moved from total income to other
gains (losses) and provisions.
• Provisions which strengthen the balance sheet in Brazil of EUR
352 million in the second quarter (EUR 174 million net of tax and
minority interests).
Annual report 2024
782
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
EUR million
2023
Reconciliation of statutory results to underlying results
Statutory
results
Adjustments
Underlying
results
Net interest income
A
43,261
—
43,261
Net fee income
12,057
—
12,057
Gains (losses) on financial transactions
B
2,633
—
2,633
Other operating income
C
(528)
224
(304)
Total income
57,423
224
57,647
Administrative expenses, depreciation and amortisation
(25,425)
—
(25,425)
Net operating income
D
31,998
224
32,222
Net loan-loss provisions
E
(12,932)
474
(12,458)
Other gains (losses) and provisions
F
(2,607)
(459)
(3,066)
Operating profit/(loss) before tax
16,459
239
16,698
Tax on profit
(4,276)
(213)
(4,489)
Adjusted profit for the year from continuing operations
12,183
26
12,209
Profit from discontinued operations (net)
—
—
—
Consolidated profit/(loss)
12,183
26
12,209
Non-controlling interests
(1,107)
(26)
(1,133)
Attributable profit/(loss) to the parent
11,076
—
11,076
A. Net interest income includes the net amount of the profit and loss account items 'Interest income' and 'Interest expense'. It is presented this way because it is how it is
presented to the main operational decision maker.
B. Gains (losses) on financial transactions includes the following line items in the statutory income statement, which are presented net for internal reporting and
management reporting purposes: Gain or losses on financial assets and liabilities not measured at fair value through profit or loss, net, Gain or losses on financial assets
and liabilities held for trading, net, Gains or losses on non-trading financial assets and liabilities mandatorily at fair value through profit or loss, net, Gain or losses on
financial assets and liabilities measured at fair value through profit or loss, net, Gain or losses from hedge accounting, net and Exchange differences, net.
C. Other operating income includes the following line items in the statutory income statement, which are presented net for internal reporting and management reporting
purposes: Dividend income; Income from companies accounted for using the equity method, Other operating income, Other operating expenses, Income from assets
under insurance or reinsurance contracts and Expenses from liabilities under insurance or reinsurance contracts.
D.Net Operating Income is used for the Group’s internal reporting and management reporting purposes but is not a line item in the statutory consolidated income
statement.
E. Net loan-loss provisions refers to Impairment or reversal of impairment at financial assets not measured at fair value through profit or loss and net gains and losses from
changes line item in the statutory income statement. Additionally, includes a release of EUR 24 mainly corresponding to the results by commitments and contingent risks
includes in the line of the statutory income statement of provisions or reversal of provisions.
F. Other gains (losses) and provisions includes the following line items in the statutory income statement, which are presented net for internal reporting and management
reporting purposes: Provisions or reversal of provisions except for a release of EUR 24 mainly corresponding to results from commitments and contingent risks;
Impairment of investments in joint ventures and associates, net; Impairment on non-financial assets, net; Gains or losses on non-financial assets, net; Negative goodwill
recognized in results and Gains or losses on non-current assets held for sale not classified as discontinued operations
Explanation of adjustments:
• Temporary levy on revenue in Spain in the first quarter, totalling
EUR 224 million, which was moved from total income to other
gains (losses) and provisions.
• Additional provisions for specific cases in the wholesale portfolio
of Brazil for an amount of EUR 235 million, net of tax and non
controlling interests (EUR 474 million recorded in net loan-loss
provisions, EUR 213 million positive impact in tax and EUR
26 million in non-controlling interests).
Annual report 2024
783
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
EUR million
2022
Reconciliation of statutory results to underlying results
Statutory
results
Adjustments
Underlying
results
Net interest income
A
38,619
—
38,619
Net fee income
11,790
—
11,790
Gains (losses) on financial transactions
B
1,653
—
1,653
Other operating income
C
55
37
92
Total income
52,117
37
52,154
Administrative expenses, depreciation and amortisation
(23,903)
—
(23,903)
Net operating income
D
28,214
37
28,251
Net loan-loss provisions
E
(10,836)
327
(10,509)
Other gains (losses) and provisions
F
(2,128)
(364)
(2,492)
Operating profit/(loss) before tax
15,250
0
15,250
Tax on profit
(4,486)
—
(4,486)
Adjusted profit for the year from continuing operations
10,764
0
10,764
Profit from discontinued operations (net)
—
—
—
Consolidated profit/(loss)
10,764
0
10,764
Non-controlling interests
(1,159)
—
(1,159)
Attributable profit/(loss) to the parent
9,605
0
9,605
A. Net interest income includes the net amount of the profit and loss account items 'Interest income' and 'Interest expense'. It is presented this way because it is how it is
presented to the main operational decision maker.
B. Gains (losses) on financial transactions includes the following line items in the statutory income statement, which are presented net for internal reporting and
management reporting purposes: Gain or losses on financial assets and liabilities not measured at fair value through profit or loss, net, Gain or losses on financial assets
and liabilities held for trading, net, Gains or losses on non-trading financial assets and liabilities mandatorily at fair value through profit or loss, net, Gain or losses on
financial assets and liabilities measured at fair value through profit or loss, net, Gain or losses from hedge accounting, net and Exchange differences, net.
C. Other operating income includes the following line items in the statutory income statement, which are presented net for internal reporting and management reporting
purposes: Dividend income; Income from companies accounted for using the equity method, Other operating income, Other operating expenses, Income from assets
under insurance or reinsurance contracts and Expenses from liabilities under insurance or reinsurance contracts.
D.Net Operating Income is used for the Group’s internal reporting and management reporting purposes but is not a line item in the statutory consolidated income
statement.
E. Net loan-loss provisions refers to Impairment or reversal of impairment at financial assets not measured at fair value through profit or loss and net gains and losses from
changes line item in the statutory income statement. Additionally, includes a release of EUR 27 mainly corresponding to the results by commitments and contingent risks
includes in the line of the statutory income statement of provisions or reversal of provisions.
F. Other gains (losses) and provisions includes the following line items in the statutory income statement, which are presented net for internal reporting and management
reporting purposes: Provisions or reversal of provisions except a release of EUR 27 mainly corresponding to results from commitments and contingent risks; Impairment
of investments in joint ventures and associates, net; Impairment on non-financial assets, net; Gains or losses on non-financial assets, net; Negative goodwill recognized in
results and Gains or losses on non-current assets held for sale not classified as discontinued operations.
Explanation of adjustments:
• Mainly, payment holidays in Poland.
Annual report 2024
784
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
53. Related parties
The parties related to the Group are deemed to include, in addition
to its associates and joint ventures, the Bank'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 below is the balance sheet balances and amounts of the
Group's income statement corresponding to operations with the
parties related to it, distinguishing between associates and joint
ventures, members of the Bank's board of directors, the Bank's
senior management, 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
Associates and joint
ventures
Members of the
board of directors
Senior Management
Other related parties
Assets
10,783
—
14
226
Cash, cash balances at central banks and other
deposits on demand
163
—
—
—
Loans and advances: credit institutions
407
—
—
—
Loans and advances: customers
9,750
—
14
221
Debt securities
229
—
—
5
Others
234
—
—
—
Liabilities
3,243
9
7
292
Financial liabilities: credit institutions
228
—
—
—
Financial liabilities: customers
2,810
9
7
292
Marketable debt securities
—
—
—
—
Others
205
—
—
—
Income statement
1,776
—
—
4
Interest income
508
—
—
9
Interest expense
(153)
—
—
(5)
Gains/losses on financial assets and liabilities
and others
(11)
—
—
—
Commission income
1,535
—
—
1
Commission expense
(103)
—
—
(1)
Other
4,712
4
3
216
Financial guarantees granted and Others
18
3
2
64
Loan commitments and Other commitments
granted
317
1
1
20
Derivative financial instruments
4,377
—
—
132
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EUR million
2023
Associates and joint
ventures
Members of the
board of directors
Senior Management
Other related parties
Assets
10,497
—
12
186
Cash, cash balances at central banks and other
deposits on demand
154
—
—
—
Loans and advances: credit institutions
405
—
—
—
Loans and advances: customers
9,275
—
12
185
Debt securities
391
—
—
1
Others
272
—
—
—
Liabilities
2,480
14
5
150
Financial liabilities: credit institutions
463
—
—
—
Financial liabilities: customers
1,727
14
5
150
Marketable debt securities
—
—
—
—
Others
290
—
—
—
Income statement
1,698
—
—
11
Interest income
427
—
—
9
Interest expense
(149)
—
—
(1)
Gains/losses on financial assets and liabilities
and others
43
—
—
—
Commission income
1,499
—
—
3
Commission expense
(122)
—
—
—
Other
4,189
3
2
1,094
Financial guarantees granted and Others
10
2
1
861
Loan commitments and Other commitments
granted
274
1
1
9
Derivative financial instruments
3,905
—
—
224
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EUR million
2022
Associates and joint
ventures
Members of the
board of directors
Senior Management
Other related parties
Assets
10,257
—
13
455
Cash, cash balances at central banks and other
deposits on demand
227
—
—
—
Loans and advances: credit institutions
489
—
—
—
Loans and advances: customers
8,822
—
13
455
Debt securities
463
—
—
—
Others
256
—
—
—
Liabilities
3,611
11
11
109
Financial liabilities: credit institutions
938
—
—
—
Financial liabilities: customers
2,301
11
11
109
Marketable debt securities
—
—
—
—
Others
372
—
—
—
Income statement
1,357
—
—
2
Interest income
189
—
—
1
Interest expense
(60)
—
—
—
Gains/losses on financial assets and liabilities
and others
(225)
—
—
—
Commission income
1,541
—
—
1
Commission expense
(88)
—
—
—
Other
3,535
2
2
79
Financial guarantees granted and Others
11
1
1
23
Loan commitments and Other commitments
granted
201
1
1
13
Derivative financial instruments
3,323
—
—
43
The remaining required information is detailed in notes 5 and 46.c.
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54. Risk management
a) Risk principles and culture
The principles on which Grupo 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 Group’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
Santander.
4. Grupo Santander takes 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. Effective information management to identify, assess, manage
and disclose risks at appropriate levels.
1. Key risk types
Grupo 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 Santander has 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 Santander also takes 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 has 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 loan loss reserves.
Additionally, Grupo Santander has 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.
In the aforementioned exercise, the EBA points out the importance
to include climate risks in risk management. In this sense, the
Group continues 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 our sustainability strategy. For more information, see
the Sustainability Statement in this report.
Therefore, based on the best information available at the time
these consolidated annual financial statements were prepared, the
Group sees no additional environmental or climate change risk
having a substantial impact on its equity, financial situation and
results in 2024.
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Still, this matter is constantly changing, and, like other banks, the
Group is working on developing more methodologies to better
measure potential loan loss considering the idiosyncrasies of each
of the regions in which the Group is present regarding
management, best industry practices and regulatory/supervisory
requirements. In particular, we 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 Santander robust risk and compliance governance structure
allows us to conduct effective oversight in line with our risk
appetite. It stands 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 Santander 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'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.
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 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 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.
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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 Santander has 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 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 every year. In a
cascading down process, each subsidiary's board also sets its
own risk appetite.
• Comprehensiveness and forward-looking approach. Our
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 shares 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. Grupo
Santander verifies 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 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 won't compromise the
Group’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 Santander takes 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 Santander identify and classify
external and internal risk in each business to adopt any corrective
or mitigating measures through:
1.1. Planning
Grupo 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 Santander's
credit portfolios. They determine commercial strategies, risk
policies, resources and infrastructure, ensuring a holistic view of
the portfolios.
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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 Grupo Santander'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 Santander reviews 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 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.
Grupo Santander then uses 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 Santander's parameter estimation models, based on
econometric models of past defaults and losses, calculate
economic and regulatory capital as well as IFRS 9 provisions for
each portfolio or customer.
Grupo 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.
This allows Grupo Santander to align credit portfolios management
and control with Group´s credit risk appetite and its target risk
profile. Grupo Santander uses SCPs to define limits for each
portfolio, counterparty and for new originations up to a level
deemed acceptable.
Grupo Santander´s limits, pre-classifications and pre-approvals
processes, which are highly automated and digitalized, determine
the risk Grupo 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. Santander also uses risk-based pricing tools to make sure
portfolio growth is sustainable.
Grupo Santander applies 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
Santander is 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 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
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 Santander tracks customers requiring
closer monitoring and review their ratings based on relevant
indicators.
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• 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 Santander defines 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 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 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.
In general, guarantees are to reinforce a credit transaction and
mitigate a loss if the borrower defaults. Our 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). Santander
groups 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 always seeks 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 will interrupt negotiations and legal proceedings to recover
debt. .
In markets where the real estate risk exposure is high, Grupo
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.
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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 customers
A
December data
Credit risk with customers
(EUR million)
B
2024
2023
2022
Credit impaired
(EUR million)
2024
2023
2022
2024
NPL ratio
(%)
2023
2022
Europe
640,094
624,696
639,996
13,774
14,495
15,186
2.15%
2.32%
2.37%
Spain
285,883
278,569
293,197
7,672
8,529
9,598
2.68%
3.06%
3.27%
UK
248,061
247,360
253,455
3,299
3,518
3,059
1.33%
1.42%
1.21%
Portugal
41,418
39,503
41,755
993
1,024
1,247
2.40%
2.59%
2.99%
Poland
44,704
39,329
33,350
1,636
1,397
1,268
3.66%
3.55%
3.80%
North America
198,607
190,720
185,614
8,375
7,805
5,629
4.22%
4.09%
3.03%
US
148,643
137,893
140,452
7,012
6,303
4,571
4.72%
4.57%
3.25%
Mexico
49,927
52,785
45,107
1,352
1,489
1,047
2.71%
2.82%
2.32%
South America
171,301
177,380
167,348
9,287
10,142
10,381
5.42%
5.72%
6.20%
Brazil
104,519
113,937
101,801
6,418
7,479
7,705
6.14%
6.56%
7.57%
Chile
44,590
46,565
47,811
2,394
2,332
2,384
5.37%
5.01%
4.99%
Argentina
8,411
3,903
5,844
173
78
122
2.06%
1.99%
2.08%
DCB Europe
141,312
135,608
125,339
3,527
2,877
2,583
2.50%
2.12%
2.06%
Corporate Centre
5,959
5,494
5,824
301
301
894
5.06%
5.48%
15.35%
Total Group
1,157,274
1,133,898
1,124,121
35,265
35,620
34,673
3.05%
3.14%
3.08%
NPL coverage ratio
(%)
Net loan-loss provisions
C
(EUR million)
Cost of risk
(%/risk)
D
2024
2023
2022
2024
2023
2022
2024
2023
2022
Europe
50%
49%
52%
1,862
2,533
2,396
0.32%
0.44%
0.39%
Spain
53%
49%
51%
1,259
1,522
1,618
0.50%
0.62%
0.61%
UK
29%
30%
34%
64
247
316
0.03%
0.10%
0.12%
Portugal
79%
83%
79%
11
77
17
0.03%
0.20%
0.04%
Poland
62%
73%
74%
511
674
440
1.38%
2.08%
1.43%
North America
70%
74%
93%
3,786
3,733
2,538
2.04%
2.05%
1.49%
US
64%
68%
90%
2,507
2,593
1,744
1.82%
1.92%
1.35%
Mexico
100%
100%
107%
1,277
1,135
788
2.64%
2.43%
1.95%
South America
77%
78%
76%
5,478
5,401
5,041
3.50%
3.36%
3.32%
Brazil
83%
85%
80%
4,487
4,701
4,417
4.51%
4.77%
4.79%
Chile
50%
53%
56%
497
365
399
1.19%
0.80%
0.93%
Argentina
177%
166%
180%
284
150
132
4.59%
6.64%
2.91%
DCB Europe
83%
88%
93%
1,209
792
544
0.88%
0.62%
0.45%
Corporate Centre
25%
33%
2%
(3)
(2)
(10)
(0.05%)
(0.04%)
(0.14%)
Total Group
65%
66%
68%
12,333
12,458
10,509
1.15%
1.18%
0.99%
A. Management perimeter according to the reported segments.
B. Includes gross loans and advances to customers, guarantees and documentary credits.
C. Loan-loss provisions net of 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.
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Key figures by geographic region are described below at 31
December 2024:
• Europe: the NPL ratio fell 17 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 IFRS 9 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 IFRS 9 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 IFRS 9 stages is
carried out in accordance with the guidelines through the risk
management policies of the subsidiaries, which are consistent with
the Group's policies.
Estimation of expected loss
Grupo Santander calculates 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
assesses 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 Group 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 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).
• Application of IFRS 9: the approach must take into consideration
IFRS 9 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.
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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, Santander considers:
• Quantitative criteria: Grupo 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: Santander incorporated the new definition
to provisions calculation according to the EBA’s guidelines; the
Group 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.
Grupo Santander applies 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.
• Expected life of financial instruments: Santander estimates 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), Santander estimates its
expected life based on the total exposure period and effective
management practices to mitigate exposure.
1. Forward-looking vision
To estimate expected losses, Grupo Santander requires a great
deal of expert analysis as well as past, present and future data.
Santander quantifies 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).
Santander uses forward-looking information in internal
management and regulatory processes under several scenarios.
The Group's guidelines and governance seek synergy and
consistency between these different processes.
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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 Santander has
evaluated in each of the geographical areas the evolution of the
credit quality of its customers, for the purposes of classifying them
into stages and consequently calculating expected loss.
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% of the total Group's provisions. The
table below shows the loan-loss reserves associated with each
stage as of 31 December 2024, 2023 and 2022. In addition,
depending on the transactions credit quality, the exposure is
divided into four categories according to Standard & Poor's rating
scale:
Exposure and loan-loss reserves by stage
EUR million
2024
Credit quality
A
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
Loan-losses
C
reserves
3,276
4,715
13,669
21,661
Exposure and loan-loss reserves by stage
EUR million
2023
Credit quality
A
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 exposure
B
843,297
76,784
33,838
953,919
Loan-losses
C
reserves
3,592
5,055
14,131
22,778
Exposure and loan-loss reserves by stage
EUR million
2022
Credit quality
A
Stage 1
Stage 2
Stage 3
Total
From AAA to AA
172,440
1,506
—
173,946
From A+ to BB
394,084
10,601
—
404,685
From BB- to B
272,456
32,653
—
305,109
CCC and below
11,799
21,436
32,608
65,843
Total exposure
B
850,779
66,196
32,608
949,583
Loan-losses
C
reserves
3,807
5,195
13,852
22,854
A. Detail of credit quality ratings calculated for Group management purposes.
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).
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. In 2022, EUR 123,796 million in stage 1;
EUR 2,902 million in stage 2, and EUR 2,064 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 (in 2023, EUR
199 million, EUR 73 million and EUR 161 million and in 2022, EUR
147 million, EUR 123 million and EUR 294 million in stage 1, stage
2 and stage 3, respectively).
The remaining exposure, including all financial instruments not
included before, amounts to EUR 665,476 million (EUR
598,385 million in 2023 and EUR 538,364 million in 2022), 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 and EUR 322 million at 31 December
2023 and 2022, respectively) of purchased credit-impaired assets,
which relate mainly to the business combinations carried out by
the Group.
Regarding the evolution of credit risk provisions, the Group, 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.
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Additionally, based on consistent macroeconomic scenarios, the
Group also performs 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.Detail of the main geographical areas
Following is the risk information related to the most relevant
geographies in exposure and credit 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. United Kingdom
Portfolio overview
Credit risk with customers in the UK (excluding Santander
Consumer UK and Santander London Branch) remained stable in
EUR 248,061 million. This credit risk represents 21% of
Santander’s loan portfolio.
At 1.33%, the NPL ratio decreased 9 bps in comparison to the year
end of 2023, due to the good performance in the mortgage
portfolio.
Mortgage portfolio
Because of its size, Grupo Santander closely monitor Santander
UK’s mortgage portfolio for the entity itself and the Group.
As of 31 December 2024, the mortgage portfolio of Santander UK
decreased by 4.6% in local currency to EUR 199,788 million. It
comprises residential mortgages granted to new and existing
customers which are first lien mortgages. There are no second or
more liens on mortgaged properties.
Originations have increased in 2024 compared to 2023, a sign of a
more active housing market due to lower interest rates and less
pressure on households’ purchasing power. The housing market
returned to growth in 2024, with a higher level of transactions and
price increases compared to 2023.
Customer payment increases are softening compared to 2023 and
are below the conservative assessments of customers’ ability to
pay when approving them for a mortgage. We implemented
measures to help customers, including those under the UK
Government’s 'Mortgage Charter'. Its demand has been reduced,
which also reflects the high credit quality of this portfolio.
Under Santander's risk management principles, a property must be
appraised independently before we can approve a new mortgage.
In line with market practices and the law, we get updated values of
properties used as mortgage collateral from an independent
agency's automatic appraisal system.
Santander UK's wide range of mortgages include:
• Interest-only loans (22%): Customers pay interest every month
and repay the principal at maturity. These mortgages, which are
common in the UK, require borrowers to have an appropriate
repayment vehicle, such as a pension plan or an investment fund.
To mitigate inherent risk, Santander UK has restrictive approval
requirements, such a maximum loan-to-value (LTV) ratio of 50%
and an assessment of the ability to pay both interest and capital.
• Flexible loans (3%): Loan agreements allow borrowers to modify
monthly payments or draw down additional funds up to a set
limit under various conditions.
• Buy-to-let (9%): Buy-to-let mortgages account for a small
portion of the total portfolio and are subject to strict risk
approval policies.
Despite the challenging economic environment, the NPL ratio
reflects the strength of the mortgage portfolio, which reduces to
1.07% at the end of December 2024 (-9 bps YoY).
At 31 December 2024, 84% of the mortgage portfolio had an LTV
lower than 70%.
Information on the estimation of impairment losses
The detail of Santander's UK exposure and loan-loss reserves
associated with each of the stages at 31 December, 2024, 2023
and 2022, 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 loan-loss reserves by stage
EUR million
2024
Credit quality
A
Stage 1
Stage 2
Stage 3
Total
From AAA to AA
32,012
1,184
—
33,196
From A+ to BB
159,970
10,916
—
170,886
From BB- to B
17,594
11,175
—
28,769
CCC and below
12
695
3,292
3,999
Total exposure
B
209,588
23,969
3,292
236,849
Loan-loss reserves
C
166
401
400
967
Exposure and loan-loss reserves by stage
EUR million
2023
Credit quality
A
Stage 1
Stage 2
Stage 3
Total
From AAA to AA
46,236
1,273
—
47,509
From A+ to BB
145,884
10,850
—
156,734
From BB- to B
13,588
13,995
—
27,583
CCC and below
—
—
3,518
3,518
Total exposure
B
205,708
26,118
3,518
235,344
Loan-loss reserves
C
172
498
396
1,066
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Exposure and loan-loss reserves by stage
EUR million
2022
Credit quality
A
Stage 1
Stage 2
Stage 3
Total
From AAA to AA
85,930
827
—
86,757
From A+ to BB
118,585
7,547
—
126,132
From BB- to B
16,831
11,093
—
27,924
CCC and below
220
978
3,059
4,257
Total exposure
B
221,566
20,445
3,059
245,070
Loan-loss reserves
C
166
529
337
1,032
A. Detail of credit quality ratings calculated for Group management purposes.
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).
For the estimation of expected losses, prospective information is
taken into account. Specifically, Santander UK considers four
macroeconomic scenarios, which are updated periodically. The
evolution forecasted in 2024 for the next five years of the main
macroeconomic indicators used by Santander UK to estimate
expected losses is presented below:
2025 - 2029
Variables
Pessimistic
scenario 2
Pessimistic
scenario 1
Base
scenario
Optimistic
scenario
Interest rate
2.5%
3.5%
3.5%
3.1%
Unemployment
rate
7.4%
5.4%
4.2%
4.1%
Housing price
change
-3.0%
0.1%
3.1%
4.6%
GDP growth
0.5%
0.6%
1.4%
2.4%
Each of the macroeconomic scenarios is associated with a given
weight. In terms of allocation, Santander UK associates the highest
weighting to the base scenario, while it associates the lowest
weightings to the most extreme or severe scenarios. In addition, at
31 December 2024, 2023 and 2022, the weights used by
Santander UK reflect the future prospects of the British economy in
relation to its current political and economic position so that higher
weights are assigned for negative scenarios:
2024
2023
2022
Pessimistic scenario 3
20%
20%
Pessimistic scenario 2
10%
10%
10%
Pessimistic scenario 1
25%
10%
15%
Base scenario
50%
50%
50%
Optimistic scenario
15%
10%
5%
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, as of December 2024, is as
follows:
Change in Provision
Mortgages
Corporates
GDP Growth
-100 bp
10.8%
3.4%
100 bp
-4.8%
-1.7%
Housing price change
-100 bp
6.6%
5.4%
100 bp
-3.7%
-2.2%
Unemployment rate
-100 bp
-9.5%
-3.4%
100 bp
22.5%
7.4%
With regards to the determination of classification in stage 2, the
quantitative criteria applied by Santander UK are based on
identifying whether any increase in PD for the expected life of the
transaction is greater than both an absolute and a relative
threshold (the PD used in that assessment are adjusted to the
transaction's remaining term and also annualised in order to
facilitate that the thresholds defined cover the whole range of the
transactions maturity dates). The relative threshold established is
common to all portfolios and a transaction is considered to exceed
this threshold when the PD for the entire life of the transaction
increases by 100% with respect to the PD at the time of initial
recognition. The absolute threshold, on the other hand, is different
for each portfolio depending on the characteristics of the
transactions, ranging between 340 bps and 30 bps.
In addition, for each portfolio, a series of specific qualitative criteria
is defined to indicate that the exposure has experienced a
significant increase in credit risk, regardless of the evolution of its
PD since the time of initial recognition. Santander UK, among other
criteria, considers that an operation presents a significant increase
in credit risk when it presents irregular positions for more than 30
days. It also has implemented early warning indicator system for
classifying operations in stage 2. These criteria depend on the risk
management practices of each portfolio.
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3.2. 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 million and EUR 63,688 million in 2023 and 2022,
respectively), 99.65% of which have a mortgage guarantee
(99.65%and 99.55% in 2023 and 2022, respectively).
2024
EUR Million
Gross amount
Of which:
impaired
Home purchase loans to families
59,316
789
Without mortgage collateral
208
11
With mortgage collateral
59,108
778
2023
EUR Million
Gross amount
Of which:
impaired
Home purchase loans to families
61,097
924
Without mortgage collateral
215
16
With mortgage collateral
60,882
908
2022
EUR Million
Gross amount
Of which:
impaired
Home purchase loans to families
63,688
1,088
Without mortgage collateral
288
24
With mortgage collateral
63,400
1,064
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% and 26% in
2023 and 2022, respectively).
• 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.
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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):
2024
Loan to value ratio
EUR Million
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
Gross amount
17,205
20,085
17,955
2,925
938
59,108
Of which impaired
114
167
189
130
178
778
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.
Santander Spain 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.
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
2022
Balance at beginning of
year
2,433
2,327
2,625
Foreclosed assets
—
(1)
—
Net variation
112
115
(295)
Written-off assets
—
(8)
(3)
Balance at end of year
2,545
2,433
2,327
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The NPL ratio of this portfolio (considering only the on balance
amount) ended the year at 2.28% (compared with 3.04% and
4.04% at December 2023 and 2022, respectively) . 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 35.11% in 2023 and 2022, respectively).
2024
EUR Million
Excess of gross
exposure over
maximum
recoverable
amount of
effective
Gross amount
collateral
Specific
allowance
Financing for
construction and
property
development
(including land)
(business in
Spain)
Of which
impaired
Memorandum
items written-off
assets
2,545
278
58
6
338
28
21
Memorandum items: Data from the public
consolidated balance sheet
2024
EUR Million
Carrying amount
Total loans and advances to customers excluding
the Public sector (business in Spain) (Book value)
235,824
Total consolidated assets (Total business) (Book
value)
1,837,081
Impairment losses and credit risk allowances.
Coverage for unimpaired assets (business in
Spain)
1,132
At year-end, the distribution of this portfolio was as follows:
2024
EUR Million
Loans: gross amount
1. Without mortgage guarantee
13
2. With mortgage guarantee
2,532
2.1 Completed buildings
934
2.1.1 Residential
634
2.1.2 Other
300
2.2 Buildings and other constructions under
1,580
construction
2.2.1 Residential
1,534
2.2.2 Other
46
2.3 Land
18
2.3.1 Developed consolidated land
13
2.3.2 Other land
5
Total
2,545
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Foreclosed properties
At 31 December 2024, the net balance of these assets amounted to
EUR 2,131 million (EUR 2,448 million and EUR 2,971 million at 31
December 2023 and 2022, respectively), gross amount of EUR
4,823 million (EUR 5,506 million and EUR 6,422 million at 31
December 2023 and 2022, respectively); recognised allowance of
EUR 2,692 million (EUR 3,058 million and EUR 3,451 million at 31
December 2023 and 2022, respectively).
The following table shows the detail of the assets foreclosed by
the businesses in Spain at the end of 2024:
2024
Of which
impairment
losses on
assets since
EUR Million
Gross carrying
amount
Valuation
adjustments
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
—
—
—
—
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
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 has considered foreclosure to be an
option to resolve cases of default instead of legal proceedings. The
Group initially recognises 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):
EUR Billion
2024
2023
2022
Gross additions
0.1
0.3
0.2
Disposals
(0.8)
(1.2)
(1.3)
Difference
(0.7)
(0.9)
(1.1)
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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, 2023
and 2022, 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 loan-loss reserves by stage
EUR million
2024
Credit quality
A
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 exposure
B
179,041
13,277
6,618
198,936
Loan-loss reserves
C
340
570
2,953
3,863
Exposure and loan-loss reserves by stage
EUR million
2023
Credit quality
A
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 exposure
B
183,324
15,134
7,536
205,994
Loan-loss reserves
C
300
663
2,959
3,922
Exposure and loan-loss reserves by stage
EUR million
2022
Credit quality
A
Stage 1
Stage 2
Stage 3
Total
From AAA to AA
37,133
447
—
37,580
From A+ to BB
107,667
282
—
107,949
From BB- to B
46,296
6,388
—
52,684
CCC and below
336
5,008
13,762
19,106
Total exposure
B
191,349
12,351
8,893
212,593
Loan-loss reserves
C
507
666
3,472
4,645
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).
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%
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
2022
Pessimistic scenario
30%
30%
30%
Base scenario
40%
40%
40%
Optimistic scenario 1
30%
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.
Annual report 2024
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Notes to the consolidated
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financial statements
3.3. United States
Portfolio overview
Santander US’s credit risk increased to EUR 148,643 million at the
end of December 2024. It makes up 12.8% of Grupo Santander's
total credit risk.
As of December 2024, Santander US credit risk dropped 7.8%
compared to 2023, mainly due to the activity of the New York
branch.
The NPL ratio grew to 4.72% (+15 bps in the year) due to a higher
stock of delinquencies and lower portfolio growth, and the cost of
risk down to 1.82% (-10 bp in the year).
Santander US includes the following business units:
Santander Bank, National Association (SBNA)
In 2024 lending amounted 53,520 million euros (representing 5%
of the Group's credit risk) and presents a reduction of 9.0% in
2024, mainly due to the transfer of the CIB portfolio to the New
York branch.
Once the fiscal support and stimulus programs were withdrawn,
the NPL ratio increased to 2.22% (+58 bp in the year) as of
December 2024, but the cost of risk decreased to 0.91% (-7 bp in
the year) due to Consumer Finance portfolio.
The retail segment focuses on auto lending and leasing, consumer
loans and credit cards. To maximize profitability and growth
opportunities, we discontinued the origination of home equity lines
of credit and home equity loans (HELOCs and HELOANs).
The corporate portfolio continued its downward trend, owing to
our sharper focus on profitability and lower origination in
commercial real estate. The interest rate hikes that began in 2022
and the US office market situation led to an increase in NPLs in this
portfolio.
Information on the estimation of impairment losses
The detail of Santander Bank, National Association exposure and
loan-loss reserves associated with each of the stages at 31
December, 2024, 2023 and 2022 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 loan-loss reserves by stage
EUR million
2024
Credit quality
A
Stage 1
Stage 2
Stage 3
Total
From AAA to AA
4,215
277
—
4,492
From A+ to BB
21,422
930
—
22,352
From BB- to B
21,899
3,855
—
25,754
CCC and below
33
482
1,130
1,645
Total exposure
B
47,569
5,544
1,130
54,243
Loan-loss reserves
C
292
364
182
838
Exposure and loan-loss reserves by stage
EUR million
2023
Credit quality
A
Stage 1
Stage 2
Stage 3
Total
From AAA to AA
4,834
76
—
4,910
From A+ to BB
20,468
459
—
20,926
From BB- to B
25,312
3,439
—
28,751
CCC and below
52
450
894
1,396
Total exposure
B
50,665
4,424
894
55,983
Loan-loss reserves
C
409
335
141
885
Exposure and loan-loss reserves by stage
EUR million
2022
Credit quality
A
Stage 1
Stage 2
Stage 3
Total
From AAA to AA
6,884
145
—
7,029
From A+ to BB
20,768
366
—
21,134
From BB- to B
30,359
2,225
—
32,584
CCC and below
308
558
459
1,325
Total exposure
B
58,319
3,294
459
62,072
Loan-loss reserves
C
392
241
74
707
A. Detail of credit quality ratings calculated for Group management purposes.
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).
For the estimation of expected losses, prospective information is
taken into account. Specifically, Santander Bank, National
Association considers four macroeconomic scenarios, which are
updated periodically. The evolution projected in 2024 for a period
of five years of the main macroeconomic indicators used Santander
Bank, National Association to estimate expected losses is
presented below:
2025 - 2029
Variables
Pessimistic Pessimistic
scenario 2
scenario 1
Base Optimistic
scenario
scenario
Interest rate (annual
averaged)
1.9%
2.7%
3.4%
3.2%
Unemployment rate
6.3%
4.8%
4.2%
3.3%
House price change
-0.1%
0.4%
1.1%
1.9%
GDP growth
1.7%
2.0%
2.0%
2.6%
Manheim growth
A
-1.2%
-0.5%
-0.3%
0.2%
A. US used vehicle price car index.
Each of the macroeconomic scenarios is associated with a given
weight. As for its allocation, Santander Bank, National Association
associates the highest weighting to the Base scenario, while
associates the lowest weightings to the most extreme scenarios:
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2024
2023
2022
Pessimistic scenario 2
17.5%
17.5%
17.5%
Pessimistic scenario 1
20.0%
20.0%
20.0%
Base scenario
32.5%
32.5%
32.5%
Optimistic scenario
30.0%
30.0%
30.0%
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 as of 2024 is as follows:
Change in Provision
Mortgages
Corporates
Auto
GDP Growth
-100 bp
13.5%
8.3%
2.3%
100 bp
-10.5%
-6.2%
-1.8%
Housing price change
-100 bp
24.9%
12.5%
3.3%
100 bp
-11.0%
-6.1%
-1.8%
Unemployment rate
-100 bp
-43.1%
-20.7%
-5.8%
100 bp
54.3%
28.6%
9.0%
Manheim index
-100 bp
—
—
1.4%
100 bp
—
—
-1.1%
In relation to the Stage 2 classification determination, the
quantitative criteria applied at SBNA for retail portfolios uses the
FICO (Fair Isaac Corporation) score to reference their PD, at the
time of origination and its current value, establishing different
absolute threshold for each portfolio according to their
characteristics. A SICR implies changes in that score ranging from
120 bp to 20 bp.
In the case of wholesale portfolios, SBNA uses the transaction's
rating as a reference for its PD, taking into account its rating at the
time of origination and its current rating, setting absolute
thresholds for the different rating bands that depend on each
portfolio characteristics.
Additionally, for each portfolio, a series of specific qualitative
criteria are defined, which indicate that the exposure has
experienced a significant increase in credit risk, regardless of the
evolution of its PD since the initial recognition. Santander Bank,
National Association, among other criteria, considers that a
transaction presents a significant increase in credit risk when it has
arrears positions for more than 30 days or if it is determined based
on a system of early warning indicators.
Santander Consumer USA Inc.
Santander Consumer USA Inc. (SC USA) presents higher risk
indicators than other Santander US units due to the nature of its
business, which focuses on auto finance via loans and leasing.
At 31 December 2024, lending amounted to EUR 30,669 million
(representing 3% of the Group) and presents an increase of 6.2%.
As of December 2024, the cost of credit is following a
normalization trend, from the artificially good situation of previous
years, due to government support and stimulus programs.
Regarding the NPL ratio, it increased to 18.68% (+42 bp in the
year); and the cost of credit stood at 6.61% (+20 bp YoY).
NPL coverage ratio fell to 62% (-1 pp in the year), in line with the
percentages of transfers from default to bad debts, which are at
historically low levels.
The focus continues to be on managing the relationship between
profitability and risk, via management of prices adjusted to the
credit quality of the customer/transaction, while improving the
dealers' experience.
Information on the estimation of impairment losses
The detail of Santander Consumer USA Inc. exposure and loan-loss
reserves associated with each of the stages at 31 December 2024,
2023 and 2022, 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 loan-loss reserves by stage
EUR million
2024
Credit quality
A
Stage 1
Stage 2
Stage 3
Total
From AAA to AA
—
—
—
—
From A+ to BB
202
—
—
202
From BB- to B
12,802
451
—
13,253
CCC and below
7,259
4,226
5,729
17,214
Total exposure
B
20,263
4,677
5,729
30,669
Loan-loss reserves
C
630
1,006
1,908
3,543
Exposure and loan-loss reserves by stage
EUR million
2023
Credit quality
A
Stage 1
Stage 2
Stage 3
Total
From AAA to AA
—
—
—
—
From A+ to BB
99
—
—
99
From BB- to B
12,120
395
—
12,515
CCC and below
6,754
4,237
5,272
16,263
Total exposure
B
18,973
4,632
5,272
28,877
Loan-loss reserves
C
597
1,019
1,712
3,327
Annual report 2024
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Exposure and loan-loss reserves by stage
EUR million
2022
Credit quality
A
Stage 1
Stage 2
Stage 3
Total
From AAA to AA
—
—
—
—
From A+ to BB
171
0
—
171
From BB- to B
14,564
512
—
15,076
CCC and below
7,735
5,108
3,870
16,713
Total exposure
B
22,470
5,620
3,870
31,960
Loan-loss reserves
C
672
1,232
1,452
3,356
A. Detail of credit quality ratings calculated for Group management purposes.
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).
For the expected losses estimation, prospective information should
be taken into account. Specifically, SC USA considers four
macroeconomic scenarios, periodically updated over a 5-year time
horizon.
The evolution forecasted in 2024 for a period of five years of the
main macroeconomic indicators used by in SC USA in the
estimation of expected losses is shown below:
2025 - 2029
Variables
Pessimistic Pessimistic
scenario 2
scenario 1
Base
scenario
Optimistic
scenario
Interest rate
(annual averaged)
1.9%
2.7%
3.4%
3.2%
Unemployment rate
6.3%
4.8%
4.2%
3.3%
House price change
-0.1%
0.4%
1.1%
1.9%
GDP growth
1.7%
2.0%
2.0%
2.6%
Manheim
A index
-1.2%
-0.5%
-0.3%
0.2%
A. US used vehicle price car index.
Each of the macroeconomic scenarios is associated with a given
weight. Santander Consumer USA Inc. associates the highest
weighting to the Base scenario, whereas it associates the lowest
weightings to the most extreme or acid scenarios:
2024
2023
2022
Pessimistic scenario 2
17.5%
17.5%
17.5%
Pessimistic scenario 1
20.0%
20.0%
20.0%
Base scenario
32.5%
32.5%
32.5%
Optimistic scenario
30.0%
30.0%
30.0%
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 the end of 2024 is as follows:
Change in provision
SC Auto
Manheim index
-100 bp
0.7%
100 bp
-0.6%
Unemployment Rate
-100 bp
-3.1%
100 bp
4.5%
House Price Change
-100 bp
1.7%
100 bp
-0.9%
GDP growth
-100 bp
1.1%
100 bp
-0.9%
In relation to the stage 2 classification determination, the
quantitative criteria applied at SC USA uses the FICO (Fair Isaac
Corporation) score to reference their PD, at the time of origination
and its current value, establishing different absolute threshold for
each portfolio according to their characteristics.
Additionally, for each portfolio, a series of specific qualitative
criteria are defined, which indicate that the exposure has had a
significant increase in credit risk, regardless of the evolution of its
PD since the initial recognition. SC USA among other criteria,
considers that a transaction presents a significant increase in credit
risk when it has irregular positions for more than 30 days. These
criteria depend on the risk management practices of each portfolio.
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3.4. Banco Santander (Brasil) S.A.
Portfolio overview
Santander Brasil's credit risk amounted to EUR 104,519 million. It
decreased by 8.3% from 2023. Minus the exchange rate effect, it
grew by 9.9%. As of December 2024, Santander Brasil accounts for
9% of Grupo Santander's loan book.
The NPL ratio went from 6.56% in December 2023 to 6.14% in
December 2024, and the coverage ratio decreased from 85% to
83%.
As of 31 December 2024 loan-loss provisions reached EUR
4,487 million, a 4.5% year-on-year decrease. Cost of risk reduced
from 4.77% in 2023 to 4.51% in 2024.
Despite the challenging macroeconomic environment, Brazil’s
economy showed moderate growth in 2024, driven by industry and
services but hit by the negative impact on agriculture due to
adverse weather conditions. The job market continues to show
resilience in a landscape marked by macroeconomic challenges,
which helped sustain household consumption. Brazil’s economy
remains subject to uncertainty linked to lower GDP in 2025 and the
depreciation of the real.
The retail segment (without Consumer Finance), which accounts
38% of Santander Brazil's total portfolio, mainly comprises
mortgages and credit cards (26% and 22% of the total portfolio,
respectively). As a result of conservative measures in admission,
the credit performance of new originations in recent months (as
tracked through early irregularity indices) has improved, despite
the changing environment.
In the SME segment, which accounts for 10% of the total risk, we
kept the restrictive loan approval measures adopted in the past
few years in place, especially for poorer-performing risk profiles.
We constantly review our strategies to achieve credit quality that is
consistent with expectations, which we achieved during the year,
with new production indicators performing strongly.
In the corporate segment, the portfolio continues to grow
sustainably in line with budget, owing to consistent origination
volume. The risk profile of the stock and new production remains
stable, with the portfolio performing well within the set quality
and profitability thresholds.
Information on the estimation of impairment losses
The detail of Banco Santander (Brasil) S.A. exposure and loan-loss
reserves associated with each of the stages at 31 December 2024,
2023 and 2022, 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 loan-loss reserves
2024
EUR million
Credit quality
A
Stage 1
Stage 2
Stage 3
Total
From AAA to AA
19,557
970
—
20,527
From A+ to BB
32,824
1,637
—
34,461
From BB- to B
33,655
5,285
—
38,940
CCC and below
423
2,808
6,382
9,613
Total exposure
B
86,458
10,700
6,382
103,540
Loan-loss reserves
C
687
860
3,766
5,313
Exposure and loan-loss reserves
EUR million
2023
Credit quality
A
Stage 1
Stage 2
Stage 3
Total
From AAA to AA
20,670
468
—
21,138
From A+ to BB
38,869
751
—
39,620
From BB- to B
36,107
4,177
—
40,284
CCC and below
1,153
3,735
7,479
12,367
Total exposure
B
96,799
9,131
7,479
113,409
Loan-loss reserves
C
722
1,078
4,538
6,338
Exposure and loan-loss reserves
EUR million
2022
Credit quality
A
Stage 1
Stage 2
Stage 3
Total
From AAA to AA
18,033
41
—
18,074
From A+ to BB
35,902
342
—
36,244
From BB- to B
31,269
3,195
—
34,464
CCC and below
432
4,547
7,705
12,684
Total exposure
B
85,636
8,125
7,705
101,466
Loan-loss reserves
C
575
1,219
4,334
6,128
A. Detail of credit quality ratings calculated for Group management purposes.
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).
For the expected losses estimation, prospective information is
taken into account. Particularly, Santander Brazil considers three
macroeconomic scenarios, periodically updated. The evolution for
a period of five years of the main macroeconomic indicators used
to estimate the expected losses in Santander Brazil is as follows:
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2025-2029
4. Other credit risk aspects
Variables
Pessimistic
scenario
Base
scenario
Optimistic
scenario
Interest rate (annual
averaged)
10.3%
9.4%
7.1%
Unemployment rate
9.4%
7.4%
5.7%
House price change
-0.1%
3.4%
6.8%
GDP growth
0.3%
1.9%
3.2%
Burden income
25.6%
23.9%
21.5%
Each macroeconomic scenario is associated with a given weight.
Regarding its assignation, Brazil links the highest weight to the
base scenario whilst links the lowest weights to the most extreme
scenarios:
2024
2023
2022
Pessimistic scenario
12.5%
10%
10%
Base scenario
75.0%
80%
80%
Optimistic scenario
12.5%
10%
10%
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 is at the end of 2024 as follows:
Change in provision
Consumer
Corporate
Other
GDP growth
-100 bp
1.3%
3.7%
2.1%
100 bp
-0.6%
-2.0%
-0.9%
Unemployment rate
-100 bp
-1.8%
-4.9%
-2.6%
100 bp
3.1%
5.8%
4.7%
Interest rate (SELIC)
-100 bp
-0.5%
-1.0%
-0.9%
100 bp
1.9%
3.4%
2.9%
Regarding the stage 2 classification determination, Santander
Brazil analyses whether any increase in the PD for the expected
entire life of the operation is greater than the combination of an
absolute and a relative 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 absolute and relative thresholds depend on their
calibration, carried out periodically, as well as the type of portfolio
they affect. In addition, Santander Brazil has implemented a
backstop to the relative threshold in all portfolios. Consequently,
contracts whose current PD has increased more than twice their PD
at the time of origination will be classified as stage 2.
In addition, for every portfolio, a set of specific qualitative criteria
are defined to indicate that the exposure to credit risk has
significantly risen, regardless of the evolution of its PD since the
initial recognition. Santander Brazil, among other criteria, considers
that an operation involves a significant increase in credit risk when
it presents irregular positions for more than 30 days or if it is
determined based on a system of early warning indicators.
4.1. 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 Group.
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 know at
any moment the available exposure limit with any counterparty, in
any product and term, and across all subsidiaries.
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4.2. Concentration risk
Concentration risk control is a vital part of our management. The
Group 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 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.
EUR million
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:
2024
A
Other EU
Rest of the
Total
Spain
countries
America
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'.
4.3 Sectors identification and management
Grupo Santander conducts 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
Grupo Santander 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.
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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.
Santander continues to track and manage transactions with
sovereign risk based on available information, such as reports by
rating agencies and international organizations. Grupo Santander
monitors each country where the Group has cross-border
1 and
sovereign risk. Santander analyses 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 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 significant
2 (EUR 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 rating
A:
2024
2023
2022
AAA
21%
18%
27%
AA
18%
19%
19%
A
41%
41%
34%
BBB
11%
12%
11%
Less than BBB
9%
10%
9%
A. Internal ratings are applied.
Sovereign exposure at the end of 31 December 2024 is shown in the table below (data in million euros):
2024
2023
Portfolio
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
mandatory 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
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.
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5. Forborne loan portfolio
The 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 Santander must adapt payment obligations to
customers' current circumstances. Our forbearance policy also
defines classification criteria to ensure Grupo Santander recognizes
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.
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Current refinancing and restructuring balances
Amounts in EUR million, except number of transactions that are in units
2024
Total
Without real guarantee
With real guarantee
Maximum amount of the
actual collateral that can be
Number of
Gross
Number of
Gross
considered
Real estate
Rest of real
Impairment of accumulated
value or accumulated losses in
transactions
amount transactions
amount
guarantee
guarantees
fair value due to credit risk
Credit entities
—
—
—
—
—
—
—
Public sector
23
9
9
2
2
—
4
Other financial institutions and: individual
shareholder
946
70
605
306
199
52
93
Non-financial institutions and individual
shareholder
543,934
5,515
47,854
6,668
3,678
1,398
3,011
Of which financing for constructions and
property development
12,688
103
1,765
828
672
30
171
Other warehouses
3,308,884
4,534
483,714
10,040
4,375
3,754
4,038
Total
3,853,787
10,128
532,182
17,016
8,254
5,204
7,146
Financing classified as non-current assets and
disposable groups of items that have been
classified as held for sale
—
—
—
—
—
—
—
Current refinancing and restructuring balances
Amounts in EUR million, except number of transactions that are in units
2024
Of which, non-performing/Doubtful
Without real guarantee
With real guarantee
Maximum amount of the
actual collateral that can be
Number of
Gross
Number of
Gross
considered
Real estate
Rest of real
Impairment of accumulated
value or accumulated losses
transactions
amount
transactions
amount
guarantee
guarantees in fair value due to credit risk
Credit entities
—
—
—
—
—
—
—
Public sector
8
3
7
1
1
—
3
Other financial institutions and: individual
shareholder
574
21
512
125
70
14
85
Non-financial institutions and individual
shareholder
353,838
2,956
31,259
3,106
1,622
543
2,624
Of which financing for constructions and
property development
8,789
64
1,116
218
154
20
127
Other warehouses
2,073,312
2,623
285,857
5,850
2,188
2,299
3,285
Total
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
—
—
—
—
—
—
—
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).
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.
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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
Grupo Santander. 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
entire group. 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 Santander's commodity exposure is
minor and stems mainly from commodity derivatives.
• 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 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.
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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 Santander applies 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.
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:
Risk metric values on the consolidated balance sheet
EUR million
Main market risk metric
Balance sheet
amount
Main risk factor for
'Other' balance
VaR
Other
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
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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 factor
A
EUR million. VaR at 99% and ES at 97.5% with one day time horizon
2024
2023
2022
ES
VaR (99%)
(97.5%)
VaR
VaR
Min
Average
Max
Latest
Latest
Average
Latest
Average
Latest
Total Trading
11.6
17.1
23.0
18.7
19.6
11.7
13.5
14.1
11.6
Diversification effect
(11.0)
(19.8)
(42.1)
(27.3)
(21.8)
(14.9)
(17.1)
(14.6)
(15.5)
Interest rate
11.4
17.0
23.1
20.2
19.8
12.2
11.1
12.6
9.9
Equities
2.8
6.0
18.8
9.5
6.5
3.2
6.0
4.2
5.5
Exchange rate
2.8
5.8
11.1
5.9
7.0
5.3
4.8
4.8
3.6
Credit spread
3.6
4.9
7.0
5.3
4.9
4.3
6.1
5.4
5.8
Commodities
2.0
3.2
5.1
5.1
3.2
1.6
2.6
1.7
2.3
Total Europe
9.0
12.7
17.4
16.0
16.0
9.4
11.8
12.2
10.5
Diversification effect
(9.9)
(15.4)
(33.3)
(18.4)
(15.9)
(10.5)
(13.8)
(10.4)
(14.2)
Interest rate
8.8
12.0
17.6
14.4
15.4
9.1
8.2
10.2
10.1
Equities
3.3
5.9
16.9
8.8
6.2
2.8
5.8
3.6
5.5
Exchange rate
3.1
5.1
8.9
5.8
5.3
3.5
5.2
3.4
3.3
Credit spread
3.6
4.9
7.0
5.3
4.9
4.3
6.1
5.4
5.8
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
2.3
2.7
Diversification effect
(0.2)
(1.1)
(4.3)
(0.8)
(0.8)
(0.7)
(0.5)
(0.8)
(1.1)
Interest rate
4.7
6.9
10.0
6.6
6.9
3.7
5.0
2.2
2.7
Equities
—
0.2
1.3
0.1
0.1
0.2
—
0.1
0.1
Exchange rate
0.4
0.9
2.3
0.5
0.6
0.8
0.5
0.8
1.0
Total South America
4.4
9.0
15.0
9.5
8.0
7.3
7.0
8.0
6.2
Diversification effect
(2.5)
(6.9)
(18.1)
(5.5)
(5.2)
(6.2)
(6.6)
(5.0)
(4.2)
Interest rate
4.5
8.8
14.7
6.5
5.5
7.3
5.6
7.0
5.5
Equities
0.0
1.2
4.4
2.1
1.6
1.4
2.4
1.6
1.7
Exchange rate
0.4
2.7
8.9
1.3
3.0
3.2
3.0
2.7
0.9
Commodities
2.0
3.2
5.1
5.1
3.1
1.6
2.6
1.7
2.3
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
higher 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) 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. Grupo Santander measures the accuracy of the VaR
calculation model to make sure it is reliable. The most important
tests Grupo Santander runs 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 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.
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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 has 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
Santander’s balance sheet remained moderate in 2024 in terms of
asset, shareholders’ equity and NII volumes.
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.
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 Santander total assets and
equity is minor.
Structural VaR
EUR million. Structural VaR 99% with a temporary horizon of one day.
2023
2022
2024
Min
Average
Max
Latest
Average
Latest
Average
Latest
Structural VaR
620.7
747.7
910.0
687.5
705.0
749.5
664.0
538.5
Diversification effect
(237.2)
(386.4)
(575.5)
(268.6)
(416.6)
(444.7)
(417.1)
(422.4)
VaR Interest Rate
A
210.7
412.0
685.6
235.2
348.4
380.2
350.8
304.5
VaR Exchange Rate
526.9
571.7
629.8
594.4
580.4
642.9
493.4
461.0
VaR Equities
120.3
150.4
170.1
126.5
192.8
171.1
236.9
195.4
A. Includes credit spread VaR on ALCO portfolios.
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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.
Grupo Santander uses 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 and EUR 195 million
in 2023 and 2022, respectively).
3.2. Methodologies
Structural interest rate risk
Grupo Santander measures 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
Grupo Santander's desired risk profile (such as selling positions or
setting interest rates on products Grupo Santander markets).
The metrics Grupo Santander 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.
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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’s recurring
activity optimising maturities and costs, while avoiding taking on
undesired liquidity risks.
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.
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. The Group
objective is to maintains 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 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 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.
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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
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 Santander also uses it as
an internal short-term liquidity metric to reduce risk from
dependence on wholesale funding.
e) Asset Encumbrance metrics
Grupo Santander calculates 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).
f) Other additional liquidity indicators
In addition to traditional tools to measure short and long-term
liquidity and funding risk, Grupo Santander has 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, five standard scenarios have been defined:
i.
An idiosyncratic scenario of events detrimental only to
Santander;
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 Santander uses 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
Santander entities. External indicators relate to market-based
financial variables; internal indicators relate to our own
performance.
i) Intraday liquidity metrics
Grupo Santander follows 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
2022
Amount
Amount
Amount
weighted
weighted
weighted
applicable applicable applicable
High-quality liquid assets-HQLAs
Cash and reserves available at
central banks
188,745
217,935
127,285
Marketable assets Level 1
150,912
119,043
177,887
Marketable assets Level 2A
4,696
4,236
3,308
Marketable assets Level 2B
6,951
6,814
3,562
Total high-quality liquid assets
351,304
348,028
312,042
EUR million
2024
2023
2022
High-quality liquid assets-HQLAs
(numerator)
315,524
348,028
312,042
Total net cash outflows
(denominator)
206,889
209,892
204,759
Cash outflows
278,760
282,982
270,748
Cash inflows
71,871
73,090
65,989
Consolidated LCR ratio (%)
153%
166%
152%
Group LCR ratio (%)
168%
NSFR ratio (%)
126%
123%
121%
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.
Annual report 2024
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Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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.
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.
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
>1 month
>3 months
maturities of the
<=3
<=12
>1 year
>2 years
3 years
5 years
liabilities
Unmatured
<=1month
months
months <=2 years
<=3 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
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
Fair value of
Carrying amount of
Fair value of
encumbered assets
encumbered assets
unencumbered assets
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
Fair value of
collateral received
encumbered
or own debt
collateral received
securities issued
or own debt
available for
securities issued
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
Assets, collateral
Matching
liabilities,
received and own
debt securities
contingent
liabilities or
issued other than
covered bonds and
securities lent
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 close to 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 22.5% of the Group’s extended balance
sheet under EBA criteria (total assets plus guarantees received:
EUR 2,047,690 million), similar to December 2023.
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%.
Annual report 2024
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Consolidated
Notes to the consolidated
Appendix
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financial statements
financial statements
In 2024, the solvency target set was achieved. Santander’s CET1
The following table shows the capital coefficients and a detail of
ratio stood at 12.78%
1 at the close of the year, demonstrating its
the eligible internal resources of the Group:
organic capacity to generate capital. The key regulatory capital
figures are indicated below:
Capital coefficients
EUR million
Reconciliation of accounting capital with regulatory capital
2024
2023
2022
EUR million
Level 1 ordinary eligible capital
79,800
76,741
74,202
2024
2023
2022
(EUR million)
Subscribed capital
7,576
8,092
8,397
Level 1 additional eligible capital
10,371
9,002
8,831
(EUR million)
Share premium account
40,079
44,373
46,273
Level 2 eligible capital (EUR million)
18,418
16,497
14,359
Reserves
76,568
69,278
62,111
Risk-weighted assets (EUR million)
624,503
623,731
609,266
Treasury shares
(68)
(1,078)
(675)
Level 1 ordinary capital coefficient
Attributable profit
12,574
11,076
9,605
(CET 1)
12.78%
12.30%
12.18%
Approved dividend
C
(1,532)
(1,298)
(979)
Level 1 additional capital
1.66%
1.45%
1.45%
coefficient (AT1)
Shareholders’ equity on public
balance sheet
135,197 130,443 124,732
Level 1 capital coefficient (TIER1)
14.44%
13.75%
13.63%
Valuation adjustments
(36,596)
(35,020) (35,628)
Level 2 capital coefficient (TIER 2)
2.95%
2.64%
2.36%
Non-controlling interests
8,726
8,818
8,481
Total capital coefficient
17.39%
16.39%
15.99%
Total Equity on public balance sheet
107,327
104,241
97,585
Goodwill and intangible assets
(16,098)
(17,313)
(17,272)
Eligible capital
Eligible preference shares and
participating securities
10,371
9,002
8,831
EUR million
2024
2023
2022
Other adjustments
A
(9,817)
(8,717)
(5,169)
Eligible capital
Tier 1
B
90,170
85,742
83,033
Common Equity Tier I
79,800
76,741
74,202
Accrued dividend
C
(1,611)
(1,471)
(942)
Capital
7,576
8,092
8,397
A. Fundamentally for non-computable non-controlling interests and deductions
and reasonable filters in compliance with CRR.
(-) Treasure shares and own
(1,694)
(2,847)
(60)
B. Figures calculated by applying the transitional provisions of IFRS 9.
shares financed
C. Assumes 25% of ordinary profit, see note 4.a for proposed distribution of
Share Premium
40,079
44,373
46,273
results.
Reserves
76,608
68,721
62,246
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
Other retained earnings
(38,617)
(35,038)
(37,439)
totals in the tables presented in this note may not coincide with the arithmetic
Minority interests
8,479
6,899
7,416
sum of the concepts or items that make up the total.
Profit net of dividends
9,431
8,307
7,684
Deductions
(22,061)
(21,766)
(20,315)
Goodwill and intangible
(15,957)
(17,220)
(17,182)
assets
Others
(6,104)
(4,546)
(3,133)
Additional Tier I
10,371
9,002
8,831
Eligible instruments AT1
9,725
8,461
8,344
AT1-excesses-subsidiaries
645
541
487
Tier II
18,418
16,497
14,359
Eligible instruments T2
18,869
17,101
14,770
Excess IRB provision on PE
—
76
—
T2-excesses - subsidiaries
(450)
(680)
(411)
Total eligible capital
108,589
102,240
97,392
Note: Banco Santander, S.A. and its affiliates had not taken part in any State aid
programmes.
1 Data calculated applying the transitional provisions of IFRS 9.
Annual report 2024
822
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
2022
Leverage
Level 1 Capital
90,170
85,742
83,033
Exposure
1,885,572
1,826,922
1,750,626
Leverage Ratio
4.78%
4.69%
4.74%
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.
55. Explanation added for translation
to English
These accompanying Consolidated Financial Statements,
translation of the Consolidated Financial Statements originally
issued in Spanish, are presented on the basis of the regulatory
financial reporting framework applicable to the Group in Spain (see
note 1.b).
Annual report 2024
823
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
APPENDIX
Annual report 2024
824
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
0.00% 100.00%
100.00%
100.00% Real estate
21
1
12
Kingdom
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)
—
—
Securitization
0
0
0
Abbey Covered Bonds (LM) Limited
United
Kingdom
0.00% 100.00%
100.00%
100.00% Securitization
0
0
0
Abbey Covered Bonds LLP
United
Kingdom
—
(b)
—
—
Securitization
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
production
(90)
(35)
0
Ablasa Participaciones, S.L. Unipersonal
Spain
100.00%
0.00%
100.00%
100.00% Holding
410
400
894
company
Aduro S.A.
Uruguay
0.00% 100.00%
100.00%
100.00% Payments and
collection
2
(1)
1
services
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
1
0
0
company
Afisa S.A.
Chile
0.00% 100.00%
100.00%
100.00% Fund
4
0
4
management
company
Agro Flex Fundo de Investimento em
Direitos Creditórios
Brazil
0.00%
90.00%
100.00%
100.00% Investment
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
Allane Mobility Consulting AG
Switzerland
0.00%
46.95%
100.00%
100.00% Consulting
services
0
(1)
0
Allane Mobility Consulting B.V.
Netherlands
0.00%
46.95%
100.00%
100.00% Consulting
services
(3)
0
0
Allane Mobility Consulting GmbH
Germany
0.00%
46.95%
100.00%
100.00% Consulting
services
10
6
5
Annual report 2024
825
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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 Österreich
GmbH
Austria
0.00%
46.95%
100.00%
100.00% Consulting
services
(1)
0
0
Allane Mobility Consulting S.a.r.l
France
0.00%
46.95%
100.00%
100.00% Consulting
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% Management
of portfolios
0
0
0
Alliance & Leicester Cash Solutions
United
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
Limited (j)
Kingdom
Alliance & Leicester Commercial Bank
United
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
Limited (j)
Kingdom
Alliance & Leicester Investments
United
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
(Derivatives) Limited (j)
Kingdom
Alliance & Leicester Investments (No.2)
Limited
United
Kingdom
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
Alliance & Leicester Investments Limited
United
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
(j)
Kingdom
Alliance & Leicester Limited
United
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
Kingdom
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% Investment
fund
115
8
102
Amazonia Trade Limited
United
100.00%
0.00%
100.00%
100.00% Inactive
0
0
0
Kingdom
América Gestão Serviços em Energía S.A.
Brazil
0.00%
63.00%
70.00%
—
Electricity
production
3
(1)
1
Amherst Pierpont Commercial Mortgage
Securities LLC
United
States
0.00% 100.00%
100.00%
100.00% Securitization
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
37
0
27
company
ANITCO Limited
United
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
Kingdom
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
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
Brazil
0.00%
90.00%
100.00%
—
Investment
7
0
7
Renda Fixa Longo Prazo Crédito Privado
fund
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%
—
Investment
fund
29
0
35
Athena Corporation Limited (j)
United
Kingdom
0.00% 100.00%
100.00%
100.00% Financial
services
2
0
0
Annual report 2024
826
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
Atlantes Mortgage No. 2
Portugal
—
(b)
—
—
Securitization
0
0
0
Atlantes Mortgage No. 3
Portugal
—
(b)
—
—
Securitization
0
0
0
Atlantes Mortgage No. 4
Portugal
—
(b)
—
—
Securitization
0
0
0
Atual - Fundo de Invest Multimercado
Brazil
0.00%
90.00%
100.00%
100.00% Investment
443
80
471
Crédito Privado Investimento no Exterior
fund
Auto ABS Belgium Loans 2019 SA/NV
Belgium
—
(b)
—
—
Securitization
0
0
0
Auto ABS DFP Master Compartment
France 2013
France
—
(b)
—
—
Securitization
0
0
0
Auto ABS French Leases 2021
France
—
(b)
—
—
Securitization
0
0
0
Auto ABS French Leases 2023
France
—
(b)
—
—
Securitization
0
0
0
Auto ABS French Leases Master
Compartment 2016
France
—
(b)
—
—
Securitization
0
0
0
Auto ABS French Loans 2024
France
—
(b)
—
—
Securitization
0
0
0
Auto ABS French Loans Master
France
—
(b)
—
—
Securitization
0
0
0
Auto ABS French LT Leases Master
France
—
(b)
—
—
Securitization
0
0
0
Auto ABS Italian Balloon 2019-1 S.r.l.
Italy
—
(b)
—
—
Securitization
0
0
0
Auto ABS Italian Rainbow Loans S.r.l.
Italy
—
(b)
—
—
Securitization
0
0
0
Auto ABS Italian Stella Loans 2023-1 S.r.l. Italy
—
(b)
—
—
Securitization
0
0
0
Auto ABS Italian Stella Loans S.r.l. (series
2024-1)
Italy
—
(b)
—
—
Securitization
0
0
0
Auto ABS Italian Stella Loans S.r.l. (series
2024-2)
Italy
—
(b)
—
—
Securitization
0
0
0
Auto ABS Spanish Loans 2020-1, Fondo de
Titulización
Spain
—
(b)
—
—
Securitization
0
0
0
Auto ABS Spanish Loans 2022-1, Fondo de
Titulización
Spain
—
(b)
—
—
Securitization
0
0
0
Auto ABS Spanish Loans 2024-1, Fondo de
Titulización
Spain
—
(b)
—
—
Securitization
0
0
0
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
Brazil
0.00% 100.00%
100.00%
100.00% IT services
6
0
7
Ltda.
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
Mexico
0.00%
99.98%
100.00%
100.00% Finance
company
183
25
176
Fiduciaria del Fideicomiso 100740
Banco Santander (México), S.A.,
Institución de Banca Múltiple, Grupo
Financiero Santander México como
Mexico
0.00%
99.98%
100.00%
100.00% Finance
company
5
0
5
Fiduciaria del Fideicomiso 2002114
Annual report 2024
827
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
Banco Santander (México), S.A.,
Institución de Banca Múltiple, Grupo
Financiero Santander México como
Mexico
0.00%
99.98%
100.00%
100.00% Finance
company
10
1
11
Fiduciaria del Fideicomiso GFSSLPT
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
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)
—
—
Securitization
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
109
19
75
company
Cántabro Catalana de Inversiones, S.A.
Spain
100.00%
0.00%
100.00%
100.00% Holding
403
10
419
company
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
0
0
0
company
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
9
2
15
company
Casa de Bolsa Santander, S.A. de C.V.,
Mexico
0.00%
99.97%
99.97%
99.97% Securities
79
13
92
Grupo Financiero Santander México
company
Cater Allen Holdings Limited
United
Kingdom
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
Cater Allen International Limited
United
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
Kingdom
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% Securitization
0
0
0
Charlotte 2023 Holdings Limited
United
Kingdom
—
(b)
—
—
Securitization
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% Renewable
energies
1
0
1
CIMA Finance DAC Series 2022-1
Ireland
—
(b)
—
—
Securitization
0
0
0
Annual report 2024
828
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
CIMA Finance DAC Series 2023-1
Ireland
—
(b)
—
—
Securitization
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
management
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
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)
—
—
Securitization
0
0
0
Consumer Totta 2
Portugal
—
(b)
—
—
Securitization
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% Advertising
1
0
4
D365 Fundo de Investimento em Direitos
Brazil
0.00%
90.00%
100.00%
—
Investment
242
4
222
Creditórios
fund
Darep Designated Activity Company
Ireland
100.00%
0.00%
100.00%
100.00% Reinsurances
13
(1)
12
Decarome, S.A.P.I. de C.V.
Mexico
0.00% 100.00%
100.00%
100.00% Finance
26
5
26
company
Decarope S.A.C.
Peru
0.00% 100.00%
100.00%
100.00% Investment
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
management
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)
—
—
Securitization
157
58
0
Drive Auto Receivables Trust 2021-2
United
States
—
(b)
—
—
Securitization
51
70
0
Drive Auto Receivables Trust 2021-3
United
States
—
(b)
—
—
Securitization
(35)
52
0
Drive Auto Receivables Trust 2024-1
United
States
—
(b)
—
—
Securitization
0
(144)
0
Drive Auto Receivables Trust 2024-2
United
States
—
(b)
—
—
Securitization
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
3
0
0
company
Ebury Brasil Consultoria S.A.
Brazil
0.00%
66.43%
100.00%
100.00% Consulting
services
86
0
88
Ebury Brasil Holding Ltda.
Brazil
0.00%
66.43%
100.00%
100.00% Holding
4
0
86
company
Ebury Brasil Participações S.A.
Brazil
0.00%
66.43%
100.00%
100.00% Holding
88
0
88
company
Annual report 2024
829
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
2
0
3
company
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
3
0
7
company
Ebury Partners Chile SpA
Chile
0.00%
66.43%
100.00%
100.00% Finance
0
0
0
company
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
3
0
4
company
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
0
0
0
company
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
6
0
5
company
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
4
0
0
company
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)
—
—
Securitization
0
0
0
Elcano Renovables, S.L.
Spain
0.00 % 70.00 %
70.00 %
70.00 % Holding
0
0
0
company
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
(1)
2
1
company
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% Renewable
energies
3
0
10
Energias Renovables de Titania, S.L.
Unipersonal
Spain
0.00% 100.00%
100.00%
55.00% Renewable
energies
2
0
6
Energias Renovables Gladiateur 45, S.L.
Unipersonal
Spain
0.00% 100.00%
100.00%
55.00% Renewable
energies
19
0
25
Energias Renovables Prometeo, S.L.
Unipersonal
Spain
0.00% 100.00%
100.00%
55.00% Renewable
energies
2
0
6
Esfera Fidelidade S.A.
Brazil
0.00%
90.00%
100.00%
100.00% Services
(14)
134
108
Annual report 2024
830
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
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
248
50
140
company
Finsantusa, S.L. Unipersonal
Spain
0.00% 100.00%
100.00%
100.00% Holding
1,285
36
1,020
company
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
production
1
(3)
0
Flexliving Valdemarín, S.L.
Spain
0.00%
90.00%
90.00%
—
Real estate
12
0
12
Fondation Holding Auto ABS Belgium
Loans
Belgium
—
(b)
—
—
Securitization
0
0
0
Fondo de Titulización PYMES Santander
15
Spain
—
(b)
—
—
Securitization
0
0
0
Fondo de Titulización Santander
Financiación 1
Spain
—
(b)
—
—
Securitization
0
0
0
Fondo de Titulización, RMBS Santander 7
Spain
—
(b)
—
—
Securitization
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
management
0
0
0
company
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
0
0
0
company
Fosse (Master Issuer) Holdings Limited
United
Kingdom
—
(b)
—
—
Securitization
0
0
0
Fosse Funding (No.1) Limited
United
Kingdom
0.00% 100.00%
100.00%
100.00% Securitization
26
81
0
Fosse Master Issuer PLC
United
0.00% 100.00%
100.00%
100.00% Securitization
0
0
0
Kingdom
Fosse Trustee (UK) Limited
United
Kingdom
0.00% 100.00%
100.00%
100.00% Securitization
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% Securitization
0
0
0
Fundo de Investimento em Direitos
Brazil
0.00%
90.00%
100.00%
100.00% Investment
126
28
139
Creditórios Atacado - Não Padronizado
fund
Fundo de Investimento em Direitos
Brazil
0.00%
90.00%
100.00%
100.00% Investment
317
52
332
Creditórios Multisegmentos NPL Ipanema
VI – Não padronizado
fund
Fundo de Investimento em Direitos
Brazil
0.00%
90.00%
100.00%
100.00% Investment
0
0
0
Creditórios Tellus
fund
Gamma, Sociedade Financeira de
Titularização de Créditos, S.A.
Portugal
0.00%
99.87%
100.00%
100.00% Securitization
8
0
8
GC FTPYME Pastor 4, Fondo de
Titulización de Activos
Spain
—
(b)
—
—
Securitization
0
0
0
Generación de Energía Villahermosa,
S.A.P.I. de C.V.
Mexico
0.00% 100.00%
100.00%
—
Electricity
production
2
0
2
Gesban México Servicios Administrativos
Mexico
0.00% 100.00%
100.00%
100.00% Services
2
0
0
Globales, S.A. de C.V.
Gesban Santander Servicios Profesionales
Contables Limitada
Chile
0.00% 100.00%
100.00%
100.00% Accounting
services
1
0
0
Gesban Servicios Administrativos
Globales, S.L.
Spain
99.99%
0.01%
100.00%
100.00% Services
5
(1)
1
Annual report 2024
831
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
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
Brazil
0.00%
90.00%
100.00%
100.00% Investment
4
0
4
Direitos Creditórios
fund
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
151
50
175
services
Getnet Payments, S.L.
Spain
0.00% 100.00%
100.00%
100.00% Holding
1,149
(223)
1,094
company
Getnet Sociedade de Credito Direto S.A.
Brazil
0.00% 100.00%
100.00%
100.00% Finance
(2)
18
17
company
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% Telemarketing
4
0
4
Golden Bar (Securitisation) S.r.l.
Italy
—
(b)
—
—
Securitization
0
0
0
Golden Bar Stand Alone 2020-1
Italy
—
(b)
—
—
Securitization
0
0
0
Golden Bar Stand Alone 2020-2
Italy
—
(b)
—
—
Securitization
0
0
0
Golden Bar Stand Alone 2021-1
Italy
—
(b)
—
—
Securitization
0
0
0
Golden Bar Stand Alone 2022-1
Italy
—
(b)
—
—
Securitization
0
0
0
Golden Bar Stand Alone 2023-1
Italy
—
(b)
—
—
Securitization
0
0
0
Golden Bar Stand Alone 2023-2
Italy
—
(b)
—
—
Securitization
0
0
0
Golden Bar Stand Alone 2024-1
Italy
—
(b)
—
—
Securitization
0
0
0
Grafite New Energy, S.r.l.
Italy
0.00%
49.00%
70.00%
70.00% Renewable
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
4,920
339
2,894
company
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% Automotive
3
0
2
Hipototta No. 13
Portugal
—
(b)
—
—
Securitization
0
0
0
Hipototta No. 4 plc
Ireland
—
(b)
—
—
Securitization
(6)
6
0
Hipototta No. 5 plc
Ireland
—
(b)
—
—
Securitization
(16)
16
0
Holbah Santander, S.L. Unipersonal
Spain
0.00% 100.00%
100.00%
100.00% Holding
570
227
861
company
Holmes Funding Limited
United
Kingdom
0.00% 100.00%
100.00%
100.00% Securitization
(34)
261
0
Holmes Holdings Limited
United
Kingdom
—
(b)
—
—
Securitization
0
0
0
Holmes Master Issuer plc
United
Kingdom
0.00% 100.00%
100.00%
100.00% Securitization
1
(1)
0
Holmes Trustees Limited
United
0.00% 100.00%
100.00%
100.00% Securitization
0
0
0
Kingdom
Hyundai Capital Bank Europe GmbH
Germany
0.00%
51.00%
51.00%
51.00% Banking
1,183
(58)
608
Annual report 2024
832
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
Hyundai Fundo de Investimento em
Direitos Creditórios
Brazil
0.00%
45.00%
100.00%
—
Investment
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)
—
—
Securitization
6
0
0
Isla de los Buques, S.A.
Spain
99.98%
0.02%
100.00%
100.00% Finance
1
0
1
company
Klare Corredora de Seguros S.A.
Chile
0.00% 100.00%
100.00%
50.10% Insurance
mediation
(2)
(2)
0
Landcompany 2020, S.L. Unipersonal
Spain
100.00%
0.00%
100.00%
100.00% Real estate
1,579
(1)
1,590
management
Laparanza, S.A.
Spain
61.59%
0.00%
61.59%
61.59% Agricultural
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% Renewable
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
(1)
0
0
company
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% Agricultural
holding
0
0
0
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%
100.00%
—
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
80.00%
0.00%
80.00%
80.00% Holding
24
0
55
company
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
0
0
0
company
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
Annual report 2024
833
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
Newcomar, S.L., en liquidación (j)
Spain
40.00%
40.00%
80.00%
80.00% Real estate
0
0
0
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
Switzerland
100.00%
0.00%
100.00%
100.00% Fund
42
2
30
management
company
Optimal Multiadvisors Ireland Plc /
Optimal Strategic US Equity Ireland
Euro Fund (i) (m)
Ireland
0.00%
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%
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
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
100.00%
0.00%
100.00%
100.00% Holding
2,430
(564)
2,699
company
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.
Luxembourg
—
(b)
—
—
Securitization
0
0
0
Pony S.A., Compartment German Auto
Loans 2023-1
Luxembourg
—
(b)
—
—
Securitization
0
0
0
Pony S.A., Compartment German Auto
Loans 2024-1
Luxembourg
—
(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
Annual report 2024
834
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
Precato IV Fundo de Investimento em
Brazil
0.00%
90.00%
100.00%
100.00% Investment
23
3
24
Direitos Creditórios - Não
fund
Padronizados
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
25
13
63
company
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
Luxembourg
0.00% 100.00%
100.00%
—
Fund
0
0
0
management
company
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
2
(1)
1
management
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
0
0
0
management
company
SAM Investment Holdings, S.L.
Spain
92.37%
7.63%
100.00%
100.00% Holding
1,466
88
1,597
company
San Créditos Estruturados i Fundo de
Brazil
0.00%
90.00%
100.00%
100.00% Investment
204
24
205
Investimento em Direitos Creditórios
fund
Não Padronizados
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
Brazil
0.00%
90.00%
100.00%
100.00% Finance
0
2
1
Cobrança S.A.
company
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
23
(10)
32
company
Santander AM Global Working Capital
Fund I
Luxembourg
100.00%
0.00%
100.00%
100.00% Investment
fund
76
3
75
Santander Asesorías Financieras
Chile
0.00%
67.45%
100.00%
100.00% Financial
3
8
8
Limitada
advisory
Santander Asset Finance (December)
Limited
United
Kingdom
0.00% 100.00%
100.00%
100.00% Leasing
83
0
0
Santander Asset Finance Opportunities Luxembourg
100.00%
0.00%
100.00%
100.00% Investment
fund
85
4
87
Annual report 2024
835
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
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
6
3
12
company
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
8
17
3
company
Santander Asset Management
Luxembourg, S.A.
Luxembourg
0.00% 100.00%
100.00%
100.00% Fund
management
4
1
0
company
Santander Asset Management S.A.
Administradora General de Fondos
Chile
0.00% 100.00%
100.00%
100.00% Fund
management
2
14
132
company
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
253
69
393
company
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
100.00%
0.00%
100.00%
100.00% 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
Brazil
0.00%
90.00%
100.00%
100.00% Services
46
85
118
Consórcio Ltda.
Santander Brasil Gestão de Recursos
Brazil
0.08%
99.92%
100.00%
100.00% Securities
390
34
423
Ltda.
Investment
Santander Capital Holdings LLC
United States
0.00% 100.00%
100.00%
100.00% Holding
1,025
(29)
996
company
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
Santander Cards Limited
United
0.00% 100.00%
100.00%
100.00% Inactive
101
0
101
Kingdom
Santander Cards UK Limited
United
0.00% 100.00%
100.00%
100.00% Finance
166
3
116
Kingdom
company
Santander Chile Holding S.A.
Chile
22.11%
77.75%
99.86%
99.86% Holding
1,847
295
1,777
company
Santander Compara Holding, S.L.
Spain
99.97%
0.03%
100.00%
—
Holding
12
0
12
company
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
Annual report 2024
836
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
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 United States
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
Funding 2023-B5 LLC
Santander Consumer Auto Receivables United States
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
Funding 2023-B6 LLC
Santander Consumer Auto Receivables United States
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
Funding 2024-B1 LLC
Santander Consumer Auto Receivables United States
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
Funding 2024-B2 LLC
Santander Consumer Auto Receivables United States
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
Funding 2024-B3 LLC
Santander Consumer Auto Receivables United States
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
Funding 2024-L1 LLC
Santander Consumer Auto Receivables United States
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
Funding 2024-L2 LLC
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
112
0
171
company
Santander Consumer Finance Limitada Chile
49.00%
34.24%
100.00%
100.00% Finance
113
10
57
company
Santander Consumer Finance México,
Mexico
0.00%
99.98%
100.00%
100.00% Inactive
2
0
2
S.A. de C.V., S.O.F.O.M., E.R., Grupo
Financiero Santander México
Santander Consumer Finance Oy
Finland
0.00% 100.00%
100.00%
100.00% Finance
458
30
159
company
Santander Consumer Finance Schweiz
AG
Switzerland
0.00% 100.00%
100.00%
100.00% Leasing
75
(15)
60
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
5,564
136
6,077
company
Santander Consumer Inc.
Canada
0.00% 100.00%
100.00%
100.00% Finance
92
(8)
46
company
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.
Netherlands
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
Annual report 2024
837
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
Santander Consumer Multirent Sp. z
Poland
0.00%
77.32%
100.00%
100.00% Leasing
38
5
27
o.o.
Santander Consumer Operations
Services GmbH
Germany
0.00% 100.00%
100.00%
100.00% Services
15
1
18
Santander Consumer Receivables 10
United States
0.00% 100.00%
100.00%
100.00% Finance
959
97
0
LLC
company
Santander Consumer Receivables 11
United States
0.00% 100.00%
100.00%
100.00% Finance
673
26
0
LLC
company
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
United States
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
LLC
Santander Consumer Receivables 21
United States
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
LLC
Santander Consumer Receivables 7 LLC United States
0.00% 100.00%
100.00%
100.00% Finance
748
73
0
company
Santander Consumer Receivables
United States
0.00% 100.00%
100.00%
100.00% Finance
7
3
0
Funding LLC
company
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
15
2
16
company
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
14
(1)
6
company
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
3,304
684
5,072
company
Santander Consumer USA Inc.
United States
0.00% 100.00%
100.00%
100.00% Finance
6,036
684
6,719
company
Santander Consumo 4, F.T.
Spain
—
(b)
—
—
Securitization
0
0
0
Santander Consumo 5, F.T.
Spain
—
(b)
—
—
Securitization
0
0
0
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
Chile
0.00%
83.24%
100.00%
100.00% Securities
54
4
49
Limitada
company
Santander Corretora de Câmbio e
Brazil
0.00%
90.00%
100.00%
100.00% Securities
151
6
141
Valores Mobiliários S.A.
company
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
5
4
2
management
company
Annual report 2024
838
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
Santander Distribuidora de Títulos e
Brazil
0.00%
90.00%
100.00%
100.00% Securities
72
3
68
Valores Mobiliários S.A.
company
Santander Drive Auto Receivables LLC
United States
0.00% 100.00%
100.00%
100.00% Finance
0
0
0
company
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
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
0.00% 100.00%
100.00%
100.00% Finance
company
70
10
36
Santander España Servicios Legales,
S.L.
Spain
99.97%
0.03%
100.00%
100.00% Services
9
0
8
Santander Estates Limited
United
Kingdom
0.00% 100.00%
100.00%
100.00% Real estate
(8)
(1)
0
Santander European Hospitality
Opportunities
Luxembourg
100.00%
0.00%
100.00%
100.00% Investment
fund
30
0
26
Santander F24 S.A.
Poland
0.00%
62.20%
100.00%
100.00% Finance
2
0
2
company
Santander Facility Management
España, S.L. Unipersonal
Spain
0.00% 100.00%
100.00%
100.00% Real estate
799
(13)
785
Santander Factoring S.A.
Chile
0.00%
99.86%
100.00%
100.00% Factoring
9
0
10
Annual report 2024
839
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
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
3
0
3
services
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
33
(3)
29
company
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
329
35
366
company
Santander Fundo de Investimento
Brazil
0.00%
90.00%
100.00%
—
Investment
371
72
398
Amazonas Multimercado Crédito
fund
Privado Investimento no Exterior (o)
Santander Fundo de Investimento
Diamantina Multimercado Crédito
Brazil
0.00%
90.00%
100.00%
—
Investment
fund
1,282
278
1,404
Privado Investimento no Exterior (p)
Santander Fundo de Investimento
Brazil
0.00%
90.00%
100.00%
—
Investment
103
11
103
Guarujá Multimercado Crédito Privado
Investimento no Exterior (d)
fund
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
United
0.00% 100.00%
100.00%
100.00% Finance
8
0
8
Limited
Kingdom
company
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
91
4
91
company
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
Brazil
0.00%
90.00%
100.00%
—
Investment
859
58
825
Incentivado de Investimento em
fund
Infraestrutura Responsabilidade
Limitada
Santander Hermes Multimercado
Brazil
0.00%
90.00%
100.00%
—
Investment
335
21
321
Crédito Privado Infraestructura Fundo
fund
de Investimento (q)
Santander Hipotecario 2 Fondo de
Titulización de Activos
Spain
—
(b)
—
—
Securitization
0
0
0
Annual report 2024
840
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
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
Santander Holding Internacional, S.A.
Spain
99.95%
0.05%
100.00%
100.00% Holding
4,208
64
2,558
company
Santander Holdings USA, Inc.
United States
100.00%
0.00%
100.00%
100.00% Holding
15,976
1,037
14,855
company
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
United
100.00%
0.00%
100.00%
100.00% Wealth
48
2
48
Limited
Kingdom
management
Santander Insurance, S.L.
Spain
100.00%
0.00%
100.00%
100.00% Holding
2,541
410
2,686
company
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.
Ireland
99.99%
0.01%
100.00%
100.00% Finance
1
0
0
(l)
company
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
1,502
227
1,052
company
Santander Investment Chile Limitada
Chile
16.12%
83.88%
100.00%
100.00% Finance
282
32
321
company
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.
Luxembourg
0.00% 100.00%
100.00%
100.00% Fund
0
1
1
management
company
Santander Inwestycje Sp. z o.o.
Poland
0.00%
62.20%
100.00%
100.00% Securities
4
0
0
company
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
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
278
15
293
company
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.
Argentine
5.10%
94.90%
100.00%
100.00% Finance
1
1
2
company
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
87
14
184
management
company
Annual report 2024
841
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
Santander Pensões - Sociedade
Gestora de Fundos de Pensões, S.A.
Portugal
100.00%
0.00%
100.00%
100.00% Pension fund
management
3
0
3
company
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
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
73
13
35
company
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 Luxembourg
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
1
0
0
management
company
Santander Secretariat Services Limited United
0.00% 100.00%
100.00%
100.00% Inactive
0
0
0
Kingdom
Santander Securities LLC
United States
0.00% 100.00%
100.00%
100.00% Securities
39
2
41
company
Santander Seguros y Reaseguros,
Compañía Aseguradora, S.A.
Spain
0.00% 100.00%
100.00%
100.00% Insurance
857
157
1,152
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%
99.98%
100.00%
100.00% IT services
51
0
51
Santander Totta Seguros, Companhia
de Seguros de Vida, S.A.
Portugal
0.00% 100.00%
100.00%
100.00% Insurance
106
25
255
Santander Totta, SGPS, S.A.
Portugal
99.91%
0.00%
99.91%
99.91% Holding
3,749
885
5,652
company
Annual report 2024
842
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
Santander Towarzystwo Funduszy
Inwestycyjnych S.A.
Poland
50.00%
31.10%
100.00%
100.00% Fund
management
4
26
16
company
Santander Trade Services Limited
Hong-Kong
0.00% 100.00%
100.00%
100.00% Inactive
27
1
16
Santander Trust S.A.
Argentine
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
0.00% 100.00%
100.00%
100.00% Finance
118
1
114
Kingdom
company
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%
100.00% 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
5.10%
94.73%
100.00%
100.00% Securities
11
22
32
company
Santusa Holding, S.L.
Spain
69.76%
30.24%
100.00%
100.00% Holding
9,931
508
6,559
company
SBNA Auto Lease Funding LLC
United States
0.00% 100.00%
100.00%
100.00% Finance
(2)
(596)
0
company
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
0
2
2
company
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
1,030
89
1,119
company
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
SC Germany S.A.
Luxembourg
—
(b)
—
—
Securitization
0
0
0
SC Germany S.A., Compartment
Consumer 2020-1
Luxembourg
—
(b)
—
—
Securitization
0
0
0
SC Germany S.A., Compartment
Consumer 2021-1
Luxembourg
—
(b)
—
—
Securitization
0
0
0
SC Germany S.A., Compartment
Consumer 2022-1
Luxembourg
—
(b)
—
—
Securitization
0
0
0
SC Germany S.A., Compartment
Consumer 2023-1
Luxembourg
—
(b)
—
—
Securitization
0
0
0
SC Germany S.A., Compartment
Consumer 2024-1
Luxembourg
—
(b)
—
—
Securitization
0
0
0
SC Germany S.A., Compartment
Consumer 2024-2
Luxembourg
—
(b)
—
—
Securitization
0
0
0
SC Germany S.A., Compartment
Consumer Private 2023-1
Luxembourg
—
(b)
—
—
Securitization
0
0
0
Annual report 2024
843
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
SC Germany S.A., Compartment
Leasing 2023-1
Luxembourg
—
(b)
—
—
Securitization
0
0
0
SC Germany S.A., Compartment
Mobility 2020-1
Luxembourg
—
(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
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
0.00% 100.00%
100.00%
100.00% Real estate
0
0
0
Kingdom
management
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
(10)
146
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.
Spain
0.00%
90.00%
90.00%
— Real estate
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
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
62
15
59
company
Solution 4Fleet Consultoria
Brazil
0.00%
90.00%
100.00%
80.00% Vehicle rental
1
0
1
Empresarial S.A.
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
8,762
358
9,120
company
Sovereign Spirit Limited (n)
Bermudas
0.00% 100.00%
100.00%
100.00% Leasing
0
0
0
Annual report 2024
844
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
SSA Swiss Advisors AG
Switzerland
0.00% 100.00%
100.00%
100.00% Wealth
1
1
4
management
Stellantis Consumer Financial Services Poland
0.00%
38.66%
100.00%
100.00% Finance
4
1
0
Polska Sp. z o.o.
company
Stellantis Financial Services Belux SA
Belgium
0.00%
50.00%
100.00%
100.00% Finance
98
8
57
company
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 Netherlands
0.00%
50.00%
100.00%
100.00% Finance
69
11
39
B.V.
company
Stellantis Financial Services Polska Sp. Poland
0.00%
38.66%
50.00%
50.00% Finance
63
10
13
z o.o.
company
Stellantis Renting Italia S.p.A.
Italy
0.00%
50.00%
100.00%
100.00% Renting
13
3
3
Sterrebeeck B.V.
Netherlands
100.00%
0.00%
100.00%
100.00% Holding
5,895
478
10,877
company
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
5
1
5
management
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
199
(193)
6
company
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
Switzerland
0.00% 100.00%
100.00%
100.00% Holding
336
(16)
0
company
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
1,498
266
2,135
company
The Alliance & Leicester Corporation
Limited (j)
United
Kingdom
0.00% 100.00%
100.00%
100.00% Real estate
0
0
0
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
62
1
38
company
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
6
0
5
company
Tools Soluções e Serviços
Brazil
0.00%
90.00%
100.00%
100.00% Services
36
4
36
Compartilhados Ltda.
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
Brazil
0.00%
90.00%
100.00%
62.51% Securities
50
0
45
Mobiliários S.A.
company
Annual report 2024
845
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
Toro Investimentos S.A.
Brazil
0.00%
90.00%
100.00%
91.32% Securities
39
4
39
company
Totta (Ireland), PLC (h)
Ireland
0.00%
99.87%
100.00%
100.00% Finance
451
15
450
company
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
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
1,210
80
1,201
company
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
16
0
14
company
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
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
Annual report 2024
846
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Contents
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.
Annual report 2024
847
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
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
8
3
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
—
—
—
—
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%
—
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
Annual report 2024
848
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Societies of which Grupo Santander owns more than 5% (g) , entities associated with Grupo Santander and jointly controlled entities
% of ownership
held by Banco
Percentage of
Santander
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%
—
Renewable
energies
—
0
0
0
Apolo Vault 30, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 31, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 32, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 33, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 34, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 35, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 36, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 37, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 38, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 39, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 4, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 40, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 41, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 42, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 43, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 44, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 45, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 5, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 6, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 7, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 8, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Apolo Vault 9, S.L.
Spain
0.00%
25.00%
25.00%
—
Renewable
energies
—
0
0
0
Atitlan Agro I, S.C.R., S.A. (n) (o)
Spain
80.00%
0.00%
0.00%
—
Holding
—
—
—
—
company
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
1,997
200
37
ventures
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
Annual report 2024
849
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Societies of which Grupo Santander owns more than 5% (g) , entities associated with Grupo Santander and jointly controlled entities
% of ownership
held by Banco
Percentage of
Santander
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
—
—
—
—
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
Associated
23
14
5
services
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
Associated
433
183
88
services
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
Ireland
0.00%
49.00%
49.00%
49.00% Insurance
Associated
1,007
97
60
Designated Activity Company
CNP Santander Insurance Services
Ireland
0.00%
49.00%
49.00%
49.00% Services
Associated
15
7
1
Ireland Limited
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%
—
Real estate
Joint
47
38
0
ventures
DoRes Securitisation S.r.l
Italy
—
(h)
—
—
Securitization
Joint
0
0
0
ventures
Elaia Agro, S.L.
Spain
49.99%
0.00%
49.99%
—
Consulting
services
Associated
5
4
0
Emerald Tradeco UK Limited (o)
United
Kingdom
25.00%
0.00%
4.99%
—
Holding
company
Associated
—
—
—
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
Annual report 2024
850
0.00%
36.36%
36.36%
36.36%
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Societies of which Grupo Santander owns more than 5% (g) , entities associated with Grupo Santander and jointly controlled entities
% of ownership
held by Banco
Percentage of
Santander
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
65
0
0
ventures
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%
—
Renewable
energies
Joint
ventures
0
0
0
Forgepoint Capital International
Management Limited
United
Kingdom
50.00%
0.00%
50.00%
—
Consulting
services
Joint
ventures
1
2
(1)
Fortune Auto Finance Co., Ltd
China
0.00%
50.00%
50.00%
50.00% Finance
Joint
2,369
500
22
company
ventures
FrauDfense, S.L.
Spain
0.00%
33.33%
33.33%
33.33% IT services
Joint
3
5
(2)
ventures
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
Associated
134
85
(13)
services
Glenrowan Solar Holdings Pty Ltd
Australia
49.00%
0.00%
49.00%
49.00% Holding
Joint
136
52
1
company
ventures
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
Securities
Investment
—
0
(113)
Imperial Management S.à r.l. (b) (e) Luxembourg
0.00%
40.20%
40.20%
40.20% Holding
—
0
0
0
company
Inverlur Aguilas I, S.L.
Spain
0.00%
50.00%
50.00%
50.00% Real estate
Joint
0
0
0
ventures
Inverlur Aguilas II, S.L.
Spain
0.00%
50.00%
50.00%
50.00% Real estate
Joint
1
1
0
ventures
Annual report 2024
0
851
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Societies of which Grupo Santander owns more than 5% (g) , entities associated with Grupo Santander and jointly controlled entities
% of ownership
held by Banco
Percentage of
Santander
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
Associated
251
213
38
real estate
investment
Inversiones ZS América SpA
Chile
0.00%
49.00%
49.00%
49.00% Securities and
real estate
Associated
396
356
39
investment
LB Oprent, S.A. (b)
Spain
40.00%
0.00%
40.00%
40.00% Rental of
industrial
Associated
6
2
0
machinery
Mapfre Santander Portugal -
Companhia de Seguros, S.A.
Portugal
0.00%
49.99%
49.99%
49.99% Insurance
Associated
21
7
1
Massachusetts Business
United
0.00%
21.61%
21.61%
21.61% Finance
—
77
16
1
Development Corp. (consolidado)
(b)
States
company
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
Associated
6
5
1
company
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%
—
Services
Associated
1,282
469
71
POLFUND - Fundusz Poręczeń
Poland
0.00%
31.10%
50.00%
50.00% Investment
Associated
34
23
1
Kredytowych S.A.
management
Portland SPV S.r.l.
Italy
—
(h)
—
—
Securitization
Joint
141
0
0
ventures
Power Forest Aranda, S.L.
Unipersonal
Spain
0.00%
55.00%
55.00%
—
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
200
0
0
ventures
RMBS Green Belém No.1
Portugal
—
(h)
—
—
Securitization
Joint
139
0
0
ventures
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
Brazil
0.00%
50.00%
50.00%
50.00% Securities
Joint
254
174
30
Títulos e Valores Mobiliários S.A.
company
ventures
S3 Caceis Brasil Participações S.A.
Brazil
0.00%
50.00%
50.00%
50.00% Holding
Joint
210
177
29
company
ventures
S3 CACEIS Colombia S.A. Sociedad
Colombia
0.00%
50.00%
50.00%
50.00% Finance
Joint
10
9
0
Fiduciaria
company
ventures
San Preca Federal I Fundo de
Brazil
0.00%
45.00%
50.00%
50.00% Investment
Joint
9
8
0
Investimento em Direitos
fund
ventures
Creditórios Não-Padronizados
Annual report 2024
852
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Societies of which Grupo Santander owns more than 5% (g) , entities associated with Grupo Santander and jointly controlled entities
% of ownership
held by Banco
Percentage of
Santander
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
Associated
29
26
6
company
Servicios de Infraestructura de
Chile
0.00%
8.38%
12.48%
12.48% Services
Associated
15
14
1
Mercado OTC S.A
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
Spain
22.21%
0.00%
22.21%
22.21% Financial
services
—
15,764
(2,546)
(2,198)
Bancaria, S.A. (b)
Sociedad Interbancaria de
Chile
0.00%
19.66%
29.29%
29.29% Securities
Associated
10
8
2
Depósitos de Valores S.A.
depository
Solar Maritime Designated Activity
Company (b)
Ireland
—
(h)
—
—
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
—
—
—
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)
Tresmares Growth Fund Santander,
S.C.R., S.A. (n)
Spain
100.00%
0.00%
100.00% 100.00% Holding
company
—
108
109
(1)
Annual report 2024
853
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Societies of which Grupo Santander owns more than 5% (g) , entities associated with Grupo Santander and jointly controlled entities
% of ownership
held by Banco
Percentage of
Santander
voting power (f)
EUR million (a)
Company
Location
Direct
Indirect
Year
2024
Year
2023
Activity
Type of
company
Asset
Capital +
reserves
Net
results
U.C.I., S.A.
Spain
50.00%
0.00%
50.00%
50.00% Holding
Joint
746
407
(6)
company
ventures
UCI Greece Credit and Loan
Greece
0.00%
50.00%
50.00%
50.00% Financial
Joint
2
1
0
Receivables Servicing Company
Single Member Societe Anonyme
services
ventures
UCI Holding Brasil Ltda.
Brazil
0.00%
50.00%
50.00%
50.00% Holding
Joint
1
(1)
0
company
ventures
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
1
1
0
ventures
Venda de Veículos Fundo de
Brazil
0.00%
35.90%
39.89%
39.77% Securitization
Joint
375
342
33
Investimento em Direitos
ventures
Creditórios
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.
p.
Company over which effective control has been lost.
Annual report 2024
854
0
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Appendix III
Issuing subsidiaries of shares and preference shares
% of ownership held
by Banco Santander
EUR million (a)
Cost of
Net
Company
Location
Direct
Indirect
Activity
Capital
Reserves preferred
results
Emisora Santander España, S.A. Unipersonal
Spain
100.00%
0.00% Finance
company
2
0
0
0
Netherlands
100.00%
0.00% Finance
0
0
0
Santander Global Issuances B.V. (b)
company
United
0.00%
100.00% Finance
0
0
0
0
Santander UK (Structured Solutions) Limited
Kingdom
company
United States
0.00%
100.00% Finance
5,067
(3,440)
103
13
Sovereign Real Estate Investment Trust
company
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. Company with tax residence in Spain.
Annual report 2024
855
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Appendix IV
Notifications of acquisitions and disposals of
investments in 2024
(Art. 155 of the Corporate Enterprises Act and Art. 105 of the
Securities Market Law).
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.
Annual report 2024
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Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
Appendix V
Other information on the Group’s banks
Following is certain information on the share
capital of the Group’s main banks based on their
total assets.
1. Santander UK plc
a) Number of financial equity instruments held by the
Group.
At 31 December 2024, the Company was a subsidiary of Banco
Santander, S.A. and Santusa Holding, S.L.
On 12 November 2004 Banco Santander, S.A. acquired the then
entire issued ordinary share capital of 1,485,893,636 Ordinary
shares of 10p. each. On 12 October 2008 a further 10 billion
Ordinary shares of 10p. each were issued to Banco Santander, S.A.
and an additional 12,631,375,230 Ordinary shares of 10p. each
were issued to Banco Santander, S.A. on 9 January on 2009. On 3
August 2010, 6,934,500,000 Ordinary shares of 10p. each were
issued to Santusa Holding, S.L.. With effect from 10 January 2014,
Santander UK Group Holdings Limited, a subsidiary of Banco
Santander, S.A. and Santusa Holding, S.L., became the beneficial
owner of 31,051,768,866 Ordinary shares of 10p. each, being the
entire issued ordinary share capital of the Company, by virtue of a
share exchange agreement between Santander UK Group Holdings
Limited, Banco Santander, S.A. and Santusa Holding, S.L..
Santander UK Group Holdings Limited became the legal owner of
the entire issued Ordinary share capital of the Company on 1 April
2014 and on 25 March 2015 became a public limited company and
changed its name from Santander UK Group Holdings Limited to
Santander UK Group Holdings plc. In addition to this, there are
325,000,000 Non-Cumulative Non-Redeemable 10.375% and
8.625% Sterling Preference Shares of GBP 1.00 each. In addition to
this there were 13,780 Series A Fixed (6.222%)/Floating Rate Non-
Cumulative Callable Preference Shares of GBP 1.00 each which
were redeemed and cancelled in their entirety on 24 May 2019.
The legal and beneficial title to the entire issued Preference share
capital is held by third parties and is not held by Banco Santander,
S.A.
b) Capital increases in progress
At 31 December 2024, there were no approved capital increases.
c) Share capital authorised by the shareholders at the
general meeting
The shareholders resolved at the Annual General Meeting held on
8 April 2024, to authorise unconditionally, the company to carry
out the following repurchases of the share capital:
(1) To buy back its own 8.625% Sterling Preference shares
on the following terms:
(a) The Company may buy back up to 125,000,000 8.625% Sterling
Preference shares;
(b) The lowest price which the Company can pay for 8.625%
Sterling Preference shares is 75% of the average of the market
values of the preference shares for five business days before
the purchase is made; and
(c) The highest price (not including expenses) which the Company
can pay for each 8.625% Sterling Preference share is 125% of
the average of the market values of the preference shares for
five business days before the purchase is made.
This authority shall begin on the date of the passing of this
resolution and end on the conclusion of the next Annual General
Meeting of the Company. The Company may agree, before this
authorisation ends, to buy back its own 8.625% preference shares
even though the purchase may be completed after this
authorisation ends.
(2) To buy back its own 10.375% Sterling Preference
shares on the following terms:
(a) The Company may buy up to 200,000,000 10.375% Sterling
Preference shares;
(b) The lowest price which the Company can pay for 10.375%
Sterling Preference shares is 75% of the average of the market
values of the preference shares for five business days before
the purchase is made; and
(c) The highest price (not including expenses) which the Company
can pay for each 10.375% Sterling Preference share is 125% of
the average of the market values of the preference shares for
five business days before the purchase is made.
This authority shall begin on the date of the passing of this
resolution and end on the conclusion of the next Annual General
Meeting of the Company. The Company may agree, before this
authorisation ends, to buy back its own 10.375% preference shares
even though the purchase may be completed after this
authorisation ends.
d) Rights on founder’s shares, “rights” bonds,
convertible debentures and similar securities or rights
Not applicable.
e) Specific circumstances that restrict the availability
of reserves
Not applicable.
f) Non-Group entities which hold, directly or through
subsidiaries, 10% or more of equity
Not applicable.
g) Quoted equity instruments
The preference share capital of Santander UK plc is traded on the
London Stock Exchange under the following details:
• 10.375% Sterling Preference - ISIN: GB0000064393
• 8.625% Sterling Preference - ISIN: GB0000044221
2. Santander Financial Services plc
a) Number of financial equity instruments held by the
Group
The Group holds ordinary shares amounting to GBP 249,998,000
through Santander UK Group Holdings plc (249,998,000 ordinary
shares with a par value of GBP 1 each).
Annual report 2024
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Consolidated
Notes to the consolidated
Appendix
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financial statements
financial statements
The Group also holds 1,000 tracker shares (shares without voting
rights but with preferential dividend rights) amounting to GBP
1,000 and 1,000 B tracker shares amounting to GBP 1,000 through
Santander UK Group Holdings plc, both with a par value of GBP 1
each.
Additionally, the company issued GBP 50 million additional tier 1
(AT ) capital securities to Santander UK Group Holdings plc on 19
December 2022.
b) Capital increases in progress
No approved capital increases are in progress.
c) Capital authorised by the shareholders at the
general meeting
Not applicable.
d) Rights on founder’s shares, “rights” bonds,
convertible debentures and similar securities or
rights
Not applicable.
e) Specific circumstances that restrict the availability
of reserves
Not applicable.
f) Non-Group entities which hold, directly or through
subsidiaries, 10% or more of equity
Not applicable.
g) Quoted equity instruments
Not applicable.
3. Banco Santander (Brasil) S.A.
a) Number of financial equity instruments held by the
Group
The Group holds 3,440,170,512 ordinary shares and
3,273,507,089 preference shares through Banco Santander, S.A.
and its subsidiaries Sterrebeeck B.V. and Grupo Empresarial
Santander, S.L.
The shares composing the share capital of Banco Santander (Brasil)
S.A. have no par value and there are no pending payments. At 2024
year-end, the bank’s treasury shares consisted of 19,451,562
ordinary shares and 19,451,562 preferred shares, with a total of
38,903,124 shares.
In accordance with current bylaws (Article 5.7), the preference
shares do not confer voting rights on their holders, except under
the following circumstances:
a) In the event of transformation, merger, consolidation or spin-off
of the company.
b) In the event of approval of agreements between the company
and the shareholders, either directly, through third parties or
other companies in which the shareholders hold a stake,
provided that, due to legal or bylaw provisions, they are
submitted to a general meeting.
c) In the event of an assessment of the assets used to increase the
company’s share capital.
The General Assembly may, at any moment decide to convert the
preference shares into ordinary shares, establishing a reason for
the conversion.
However, the preference shares do have the following advantages
(Article 5.6):
a) Their dividends are 10% higher than those distributed to
ordinary shares.
b) Priority in the dividends distribution.
c) Participation, on the same terms as ordinary shares, in capital
increases resulting from the reserves and profits capitalization
and in the distribution of bonus shares arising from the
capitalization of retained earnings, reserves or any other funds.
d) Priority in the reimbursement of capital in the event company’s
dissolution.
e) In the event of a public offering due to a change in control of the
company, the holders of preferred shares are guaranteed the
right to sell the shares at the same price paid for the block of
shares transferred as part of the change of control, i.e. they are
treated the same as shareholders with voting rights.
b) Capital increases in progress
No approved capital increases are in progress.
c) Capital authorised by the shareholders at the
general meeting
The company is authorised to increase share capital, subject to
approval by the Board of Directors, up to a limit of 9,090,909,090
ordinary shares or preferred shares, and without need to maintain
any ratio between any of the different classes of shares, provided
they remain within the limits of the maximum number of preferred
shares provided in Law.
As of 31 December 2024, the share capital consists of
7,498,531,051 shares (3,818,695,031 ordinary shares and
3,679,836,020 preferred shares).
d) Rights on founder’s shares, “rights” bonds,
convertible debentures and similar securities or rights
At the general meeting held on 21 December 2016 the
shareholders approved the rules relating to the deferred
remuneration plans for the directors, management and other
employees of the company and of companies under its control.
Shares delivery is linked to achievement of certain targets.
e) Specific circumstances that restrict reserves
availability
The only restriction on the availability of Banco Santander (Brasil)
S.A.’s reserves is connected to the requirement for the legal
reserve formation (restricted reserves), which can only be used to
offset losses or to increase capital.
The legal reserve requirement is set-forth in Article 193 of the
Brazilian Corporations Law, which establishes that before
allocating profits to any other purpose, 5% of profits must be
transferred to the legal reserve, which must not exceed 20% of the
company’s share capital.
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f) Non-Group entities which hold, directly or through
subsidiaries, 10% or more of equity
Not applicable.
g) Listed capital instruments
All the shares are listed on the São Paulo Stock Exchange ( B3
Brasil, Bolsa, Balcão) and the shares deposit certificates (American
Depositary Receipts - ADR) are listed on the New York Stock
Exchange (NYSE).
4. Santander Bank, National Association
a) Number of financial equity instruments held by the
Group
At 31 December 2024, the Group held 530,391,043 ordinary
shares that carry the same voting and dividend acquisition rights
over Santander Holdings USA, Inc. (SHUSA). This holding company
and Independence Community Bank Corp. (ICBC) hold 1,237
ordinary shares with a par value of USD 1 each, which carry the
same voting rights. These shares constitute all the share capital of
Santander Bank, National Association (SBNA). SHUSA holds an
80.84% ownership interest in SBNA, and the remaining 19.16%
belongs to ICBC. ICBC is wholly owned by SHUSA. There is no
shareholders’ meeting for the ordinary shares of SBNA.
b) Capital increases in progress
At 31 December 2024 there were no approved capital increases.
c) Capital authorised by the shareholders at the
general meeting
Not applicable.
d) Rights on founder’s shares, “rights” bonds,
convertible debentures and similar securities or rights
Not applicable.
e) Specific circumstances that restrict the availability
of reserves
Not applicable.
f) Non-Group entities which hold, directly or through
subsidiaries, 10% or more of equity
Not applicable.
g) Quoted equity instruments
Not applicable.
5. Banco Santander México, S.A., Institución de
Banca Múltiple, Grupo Financiero Santander
México
a) Number of financial instruments of capital held by
the group.
Grupo Financiero Santander México, S.A. de C.V. ('Grupo
Financiero') and Gesban México Servicios Administrativos Globales,
S.A. de C.V. (México), hold 5,087,973,719 shares which represent
the 74.97% of the capital stock of Banco Santander México and
Banco Santander, S.A. holds 1,691,806,903 shares which represent
the 24.92% of such capital stock.
On November 30, 2022, an Extraordinary Shareholders' Meeting of
Banco Santander México, was held at which it was approved (a) to
cancel the registration of all of the shares representing the capital
stock of the Company in the National Securities Registry (RNV)
maintained by the National Banking and Securities Commission
and to delist them from the Mexican Stock Exchange (Bolsa
Mexicana de Valores, S.A.B. de C.V.), and (b) delist the American
Depositary Shares (each representing five series "B" shares of the
Company) from the New York Stock Exchange and delist the
Company's series "B" shares and such American Depositary Shares
from registration with the US Securities and Exchange Commission;
and (c) to conduct certain tender offers for the series "B" shares
representing the capital stock of the Company and the American
Depositary Shares.
Tender offers for the acquisition of shares were carried out from
February 7 to April 10, 2023, where Banco Santander, S.A. acquired
a total of 244,306,313 Series “B” shares.
Once the offers were finalized and in accordance with the Mexican
regulation, on May 8, 2023, a trust was established for a period of
6 months, to carry out the acquisition of shares of Banco Santander
México, including those represented by American Depositary
Shares listed on the New York Stock Exchange (which were not
owned at that time by Banco Santander, S.A. or its subsidiaries)
owned by shareholders who did not participate in the tender offers
made by Banco Santander, S.A.
On May 4 and 12, 2023, respectively, the Bank was delisted from
the New York Stock Exchange, LLC and the RNV .
On November 8, 2023, the trust ended; as a result, Banco
Santander, S.A. repurchased 9,243,880 Series “B” shares from
shareholders who did not participate in the tender offers, leaving a
total of 1,714,399 shares of the Series “B” in the hands of minority
shareholders.
On February 13, 2024, an Extraordinary Shareholders' Meeting of
Banco Santander México, S.A. was held, at which it was approved
to amend the Bylaws of the Institution to remove the obligations
established by the Securities Market Law as a public company.
b) Ongoing capital stock increases.
To this date there are not ongoing capital stock increases.
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c) Authorized Capital by the Shareholders Meeting.
On April 20, 2021, the Company held an Extraordinary General
Shareholders' Meeting, at which, among other items, it was
approved an increase in the authorized capital stock of the
Company to 6,825,447,481.00 Mexican pesos represented by
1,805,300,000 unsubscribed and unpaid shares, which are held in
treasury so that the Company may issue Capital Instruments
representing non-preferred subordinated debt, This increase was
approved by the National Banking and Securities Commission
(CNBV) through official communication number
312-3/10039041/2021 dated November 8, 2021.
As a result of said agreement, the Company requested the update
of the registration of the shares representing the capital stock of
Banco Santander Mexico, S.A. in the RNV, which was authorized by
the CNBV through official communication number 153/2800/2022
dated May 20, 2022.In the aforementioned official communication,
it was requested that the Company adjusted the amounts in pesos
corresponding to the capital stock to include cents, and therefore,
through an Extraordinary General Stockholders' Meeting held on
July 19, 2022, the corresponding adjustment was made, which was
authorized by the CNBV through official communication number
312-3/93573/2023 dated January 3, 2023.
The capital stock of the Bank is 32,485,600,109.44 Mexican pesos
represented by a total of 8,592,294,357 shares with a nominal
value of 3.780782962 Mexican pesos each one; divided in
4,385,824,012 stocks “F” Series and 4,206,470,345 shares “B”
Series. The capital stock is constituted as follows:
• Paid-in and subscribed capital of the Bank is 25,660,152,628.14
Mexican pesos represented by a total of 6,786,994,357 shares
with a nominal value of 3.780782962 Mexican pesos each one;
divided in 3,464,309,145 shares “F” Series and 3,322,685,212
shares Series.
• The authorized capital stock for the conversion of obligations into
shares of the Company is 6,825,447,481.30 Mexican pesos,
represented by a total of 1,805 ,300,000 shares with a nominal
value of 3,780782962 Mexican pesos each; divided into
921,514,867 Series “F” shares and 883,785,133 Series “B
shares ". which are kept in the treasury of the Bank.
d) Rights incorporated into parts of founder, bonds or
debt, convertible obligations and securities or similar
rights.
(i) The Board of Directors on its meeting held on October 22, 2015,
was updated regarding the situation of the debt issuance of
Banco Santander Mexico, S.A. , which had been previously
ratified in the meeting held on October 17, 2013, in order to
issue debt for the amount of 6,500 million dollars in local or
international markets, for a maximum period of 15 years, senior
or subordinated debt including debt instruments qualifying for
purposes of capital in accordance with the legislation in force,
which can be implemented individually or through several
issuance programs.
The approved debt issuance of Banco Santander México, S.A.,
Institución de Banca Múltiple, Grupo Financiero Santander México
is currently composed as follows:
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Instrument
Type
Term
Amount
Available
Issuance Program of unsecured bonds and
Revolving
04-
55,000 million Mexican pesos, or its $10,060 million Mexican
unsecured certificates of deposit
Mar-2026
equivalent in UDIs, dollars or any
pesos
other foreign currency
Private banking structured bonds Act with
No revolving
A
28-
20,000 million Mexican pesos
$0 million Mexican pesos
subsequent placements (JBSANPRIV 21-1)
Jan-2026
Private structured bonds Act with subsequent
No revolving
A
14-
20,000 million Mexican pesos
$0 million Mexican pesos
placements (JBSANPRIV 23-1)
Sept-2028
Private structured bonds Act with subsequent
No revolving
A
08-
20,000 million Mexican pesos
$0 million Mexican pesos
placements (JBSANPRIV 23-2)
Dic-2028
Public banking structured bonds Act with
No revolving
A
10-
100,000 million Mexican pesos
$84,253 million Mexican
subsequent placements (JBSANPRIV 24-1)
Oct-2029
pesos
Public banking structured bonds Act with
No revolving
A
16-
10,000 million Mexican pesos
$10,000 million Mexican
subsequent placements (JBSANPRIV 22-1)
Dic-2027
pesos
Capital Notes (Tier 2 Capital)
No revolving
A
1-Oct-2028 1,300 million American dollars
N/A
Senior notes 144.ª/RegS
No revolving
A
17-
1,750 million American dollars
N/A
Apr-2025
Subordinated Notes, perpetual and convertible
No revolving
A
perpetual
700 million American dollars
N/A
(Tier 1)
Subordinated Preferred Notes (2024)
No revolving
A
21-
900 million American dollars
N/A
Mar-2030
Senior Notes 144.ª/RegS (2024)
No revolving
A
10-
700 million American dollars
N/A
Dic-2029
A. The issuance of the structured private banking bonds isn’t revolving. Once placed the amount laid down in the corresponding brochure a new certificate will be issued on
the authorized amount.
(ii) The Board of Directors on its meeting held on January 27, 2011
approved the general conditions for the senior debt issue
among international markets up to 1,500 million American
dollars. On October 18, 2012 such senior debt issuance under
144ª Rules was approved on the amount of up to 1,000 million
American dollars, for a term of 5 to 10 years. The issuance was
approved with the purpose of obtaining resources to finance the
increase in business assets and the liquidity of the Bank.
(iii) On September 20, 2018, Banco Santander México, issued and
placed equity instruments, subordinated, preferential, and not
convertible into shares, governed by foreign law, representative of
the complementary part of the net capital of Banco Santander
Mexico (Tier 2 subordinated preferred capital notes), for the
amount of 1,300 million American dollars (the “Instruments”),
whose resources were used mainly for the acquisition of the
94.07% of the Subordinated Notes 2013.
The amount issued of 1,300 million American dollars covers in full
the sum of the repurchase of the Subordinated Notes 2013, for
1,222,907,000 American dollars.
Regarding the acquisition of the Subordinated Notes 2013: (a) the
acquired total amount was 1,222,907,000 American dollars
(nominal value), at a price of 1,010.50 American dollars and (b) the
amount acquired by Banco Santander, S.A., was a nominal
1,078,094,000 American dollars.
In connection with the issuance of the Instruments, the total
amount distributed with Banco Santander, S.A. (Spain), was 75% of
such issuance; that is, the placed amount was 975 million.
Therefore, the Bank’s General Extraordinary Shareholder´s Meeting
held on September 10, 2018, among other subjects, approved to
ratify the issuance limit for up to 6,500 million and a term of 15
years, senior or subordinate, in local and/or international markets,
instrumented individually or through issuance programs, which
was previously authorized by the Board of Directors on its meeting
held on April 26, 2018. Likewise, such meeting approved the
issuance of Tier 2 preferred subordinated debt for an amount of
1,300 million American dollars.
On January 30, 2019, Banco Santander México paid off the total
remaining due amount of the Subordinated Notes 2013.
On April 17th., 2020, Banco Santander Mexico issued an
international Senior Note, due on five years in the global market,
on the amount of 1,750 million dollars, with a rate of 5.375 per
cent, whereas the demand exceeded three times the placed
amount. The due date of such notes will be April 17th, 2025.
On June 15th., 2020, the Bank’s Shareholders' Meeting was held,
which approved to increase the debt securities issuance in order to
be settled in the amount of 10,000 million American dollars, to be
used considering the following, among others: i) issuance of debt
securities in local and international markets; ii) senior or
subordinated debt, including in both cases preferred and not
preferred securities, and debt securities classified as capital on a
regulatory point of view. The Board of Directors on its meeting held
on June 18th., 2020, ratified the 10,000 million American dollars
limit approved by the above mentioned Shareholders Meeting.
On April 20, 2021, a General Extraordinary Shareholders' Meeting
of Banco Santander México was held, where among other issues, it
was approved that the Bank may issue subordinated non
preferential perpetual and convertible capital notes, to be placed
abroad, in accordance with the Banco de Mexico authorization.
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On September 15, 2021, Banco Santander Mexico issued abroad
the “Perpetual Subordinated Non-Preferred Contingent Convertible
Additional Tier 1 Notes”, up to an amount of 700 million American
dollars. On the same date, the Bank paid the “2016 Obligations”
issued by the Bank, on a fixed initial rate of 4.625% up to an
amount of 700 million American dollars.
On January 25, 2024, the Bank’s Board of Directors approved,
among others, the issuance of preferred subordinated Notes Tier 2
abroad, up to 1,500 million American dollars. Subsequently, the
General Shareholders Meeting dated February 27, 2024, approved
the issuance of capital instruments as part of the complementary
capital (TIER 2), to be placed abroad, up to an amount of 1,030
million American dollars (900 million American dollars were
effectively placed).
On October 17, 2024, the Bank’s Board of Directors approved,
among others, the issuance of a Senior Note abroad up to an
amount of 700 million American dollars.
e) Specific circumstances restricting the availability of
reserves.
According to the Law of Financial Institutions, general dispositions
applicable to financial institutions, General Corporations law and
the bylaws, the Bank has to constitute or increase its capital
reserves to ensure the solvency to protect the payments system
and the public savings.
The Bank increases its legal reserve annually accordingly to the
results obtained in the fiscal year (benefits).
The Bank must constitute the different reserves established in the
legal provisions applicable to financial institutions, which are
determined accordingly to the qualification granted to credits and
they are released when the credit rating improves, or when it is
settled.
f) Entities outside the Group which own, directly or
through subsidiaries, a stake equal to or greater than
10% of the equity.
Not applicable.
g) Equity instruments admitted to trading.
Not applicable.
6. Banco Santander Totta, S.A
a) Number of equity instruments held by the Group
The Group holds 1,391,248,074 ordinary shares through its
subsidiaries: Santander Totta, SGPS, S.A. with 1,376,219,267
shares, Taxagest Sociedade Gestora de Participações Sociais, S.A.
with 14,593,315 shares, and Banco Santander Totta, S.A. with
435,492 treasury shares, all of which have a par value of EUR 1
each and identical voting and dividend rights and are subscribed
and paid in full.
b) Capital increases in progress
At 31 December 2024, there were no equity increases in progress.
c) Capital authorised by the shareholders at the
general meeting
Not applicable.
d) Rights on founder’s shares, “rights” bonds,
convertible debentures and similar securities or rights
Not applicable.
e) Specific circumstances that restrict the availability
of reserves
Under Article 296 of the Portuguese Companies’ Code, the legal
and merger reserves can only be used to offset losses or to
increase capital.
Non-current asset revaluation reserves are regulated by Decree-
Law 31/98, under which losses can be offset or capital increased by
the amounts for which the underlying asset is depreciated,
amortised or sold.
f) Non-Group entities which hold, directly or through
subsidiaries, 10% or more of equity
Not applicable.
g) Equity instruments
Not applicable.
7. Santander Consumer Bank AG
a) Number of financial equity instruments held by the
Group
At 31 December 2024, through Santander Consumer Holding
GmbH, the Group held 30,002 ordinary shares with a par value of
EUR 1,000 each, all of which carry the same voting rights.
b) Capital increases in progress
Not applicable.
c) Capital authorised by the shareholders at the
general meeting
Not applicable.
d) Rights on founder’s shares, “rights” bonds,
convertible debentures and similar securities or rights
Not applicable.
e) Specific circumstances that restrict the availability
of reserves
Not applicable.
f) Non-Group entities which hold, directly or through
subsidiaries, 10% or more of equity
Not applicable.
g) Quoted equity instruments
Not applicable.
8. Banco Santander - Chile
a) Number of equity instruments held by the Group
The Group holds a 67.18% ownership interest in its subsidiary in
Chile corresponding to 126,593,017,845 ordinary shares of Banco
Santander - Chile through its subsidiaries: Santander Chile Holding
S.A. with 66,822,519,695 ordinary shares, Teatinos Siglo XXI
Inversiones S.A., with 59,770,481,573 ordinary shares and
Santander Inversiones S.A. with 16,577 fully subscribed and paid
ordinary shares that carry the same voting and dividend rights.
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b) Capital increases in progress
At 31 December 2024, there were no approved capital increases.
c) Capital authorised by the shareholders at the
general meeting
Share capital at 31 December 2024 amounted to CLP
891,302,881,691.
d) Rights on founder’s shares, “rights” bonds,
convertible debentures and similar securities or rights
Not applicable.
e) Specific circumstances that restrict the availability
of reserves
Remittances to foreign investors in relation to investments made
under the Statute of Foreign Investment (Decree-Law 600/1974)
and the amendments thereto require the prior authorisation of the
foreign investment promotion agency.
f) Non-Group entities which hold, directly or through
subsidiaries, 10% or more of equity
Not applicable.
g) Quoted equity instruments
All the shares are listed on the Chilean stock exchanges and,
through American Depositary Receipts (ADRs), on the New York
Stock Exchange (NYSE).
9. Santander Bank Polska S.A.
a) Number of financial equity instruments held by the
Group
At 31 December, 2024, Banco Santander, S.A. held 63,560,774
ordinary shares with a par value of PLN 10 each, all of which carry
the same voting rights.
On 13 September 2024, Banco Santander sold 5,320,000 shares
held in Santander Bank Polska S.A. (ca. 5.2% of the in share
capital).
b) Capital increases in progress
At 31 December, 2024, there were no equity increases in progress.
c) Capital authorised by the shareholders at the
general meeting
There was no share capital increase in 2024.
d) Rights on founder’s shares, “rights” bonds,
convertible debentures and similar securities or rights
Not applicable.
e) Specific circumstances that restrict the availability
of reserves
Not applicable.
f) Non-Group entities, which hold, directly or through
subsidiaries, 10% or more of equity
Not applicable.
g) Quoted equity instruments
All the shares of Santander Bank Polska S.A. are listed on the
Warsaw Stock Exchange.
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Appendix VI
Annual banking report
Grupo Santander’s total tax contribution (taxes incurred directly
and by third parties, generated in the course of business) is around
EUR 22.5 billion, including more than EUR 10.9 billion in taxes
incurred directly (corporate income tax, non-recoverable value
added tax (VAT) and other indirect taxes, employer Social Security
contributions, payroll taxes and other taxes and levies).
This report complies with Article 89 of Directive 2013/36/EU of the
European Parliament and of the Council of 26 June 2013 on access
to the activity of credit institutions and the prudential supervision
of credit institutions and investment firms, and its transposition
into Spanish law pursuant to Article 87 of Act 10/2014 of 26 June
on the regulation, supervision and capital adequacy of credit
institutions.
The criteria used to prepare this report were:
a) Name(s), activities and location
Appendices I to III to the consolidated financial statements contain
details of the companies operating in each jurisdiction, including
their name(s), location and activities.
Santander main activity in the jurisdictions where operate is
commercial banking. The Group primarily operates in ten markets
through subsidiaries that are autonomous in capital and liquidity.
This has clear strategic and regulatory advantages, since it limits
the risk of contagion between units, imposes a double layer of
global and local oversight, and facilitates crisis management and
resolution.
b) Turnover and profit or loss before tax
Turnover in this report is Total income, and profit or loss before tax,
Operating profit/(loss) before tax, both as defined and presented in
the consolidated income statement that forms part of the
consolidated financial statements.
c) Number of full-time equivalent employees
The data on full-time equivalent employees stem from the average
headcount of each jurisdiction.
d) Tax on profit or loss
In the absence of specific criteria, we have included the amount
effectively paid (EUR 5,880 million in 2024, with an effective tax
rate of 30.9%) in respect of taxes whose effect is recognized under
Income tax in the consolidated income statement.
Taxes effectively paid by the companies in each jurisdiction include:
• Supplementary payments relating to income tax returns, usually
for prior years.
• Advances, prepayments, withholdings made or borne in respect
of tax on profit or loss for the year. We included taxes borne
abroad in the jurisdiction of the company that bore them.
• Refunds received with respect to prior years’ returns.
• Where appropriate, the amount payable from assessments and
litigation relating to these taxes.
The foregoing form part of the cash flow statement and differ from
the corporate income tax expense recognized in the consolidated
income statement (EUR 5,283 million in 2024, representing an
effective rate of 27.8%, see note 27). This is because each country’s
tax regulations establish:
• when taxes must be paid. There is often a mismatch between the
payment dates and the generation of the income bearing the tax.
• their own calculation criteria to define temporary or permanent
restrictions on expense deduction, exemptions and relief or
deferrals of certain income, generating the differences between
the accounting profit (or loss) and taxable profit (or tax loss)
which is ultimately taxed; tax loss carry forwards from prior
years, tax credits and/or relief, etc., must also be added. In
certain cases, special regimes such as the tax consolidation of
companies in the same jurisdiction are established.
e) Public subsidies
In the context of the legally-required disclosures, this was
interpreted as any aid or subsidy in line with the European
Commission’s Guidance on the notion of State aid. Grupo
Santander did not receive significant public subsidies in 2024.
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Contents
The breakdown of information is as follows:
2024
Jurisdiction
Turnover (EUR million)
Full-time equivalent
employees
Gross profit or loss before
tax (EUR million)
Tax on profit or loss (EUR
million)
Germany
1,643
5,268
126
238
Argentina
2,465
8,217
823
258
Australia
8
58
2
—
Austria
224
318
84
20
Bahamas
43
26
36
—
Belgium
108
249
49
7
Brazil1
12,725
57,191
3,016
1,213
Canada
76
296
(12)
1
Chile
2,552
9,306
1,107
326
China
36
114
4
—
Colombia
128
1,190
23
24
United Arab Emirates
7
132
(15)
—
Spain2
11,915
35,457
3,954
533
United States
7,423
11,671
838
242
Denmark
163
242
65
18
Finland
96
163
37
11
France
806
1,003
395
149
Greece
13
48
2
—
Hong Kong
87
237
17
7
India
—
78
—
—
Ireland
6
11
1
2
Isle of Man
50
93
32
3
Italy
658
1,305
221
51
Jersey
20
67
11
1
Luxembourg
630
32
616
221
Mexico
6,154
30,269
2,203
875
Norway
219
573
95
6
Netherlands
175
348
114
123
Peru
213
919
92
31
Poland
3,966
12,843
1,689
503
Portugal
2,188
5,300
1,526
590
United Kingdom
6,017
21,039
1,525
347
Romania
7
25
5
—
Singapore
41
36
21
1
Sweden
157
343
39
21
Switzerland
206
409
31
5
Uruguay
651
1,541
255
53
Consolidated Group Total
61,876
206,417
19,027
5,880
1. Including the information relating to a branch in the Cayman Islands, the profits of which are taxed in full in Brazil. The contribution of this branch profit before tax from
continuing operations is EUR 443 million.
2. Includes the Corporate Centre.
At 31 December 2024, the Group’s return on assets (ROA) was 0.76%.
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financial statements
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 consolidated financial statements (comprising the consolidated balance
sheet, income statement, statement of recognized income and expense, statement of changes in total equity, statement
of cash flows and the notes to the consolidated financial statements) and the consolidated directors’ report for the 2024
fiscal year in eXtensible HyperText Markup Language (XHTML) format and, with respect to the main consolidated
financial statements and the notes to the consolidated financial statements, with tags in the standard eXtensible
Business Reporting Language (XBRL), all of 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 consolidated 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 Banco Santander, S.A. and of the undertakings included in the consolidation taken as a
whole, and that the consolidated directors’ report includes a fair review of the development, performance and position
of the company and of the undertakings included in the consolidation taken as a whole, together with a description of
the principal risks and uncertainties that they face.
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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866
Contents
Auditor's
Consolidated
Notes to the consolidated
Appendix
report
financial statements
financial statements
MEMBERS:
HOMAIRA AKBARI
JUAN CARLOS BARRABÉS CÓNSUL
FRANCISCO JAVIER BOTÍN-SANZ DE SAUTUOLA Y
SOL DAURELLA COMADRÁN
O’SHEA
HENRIQUE MANUEL DRUMMOND BORGES
GERMÁN DE LA FUENTE ESCAMILLA
CIRNE DE CASTRO
GINA LORENZA DÍEZ BARROSO AZCÁRRAGA
LUIS ISASI FERNÁNDEZ DE BOBADILLA
BELÉN ROMANA GARCÍA
PAMELA ANN WALKDEN
ANTONIO FRANCESCO WEISS
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GENERAL
INFORMATION
Corporate information
Banco Santander, S.A. is a Spanish bank, incorporated as
sociedad anónima in Spain and is the parent company of Grupo
Santander. Banco Santander, S.A. operates under the
commercial name Santander.
The Bank’s Legal Entity Identifier (LEI) is
5493006QMFDDMYWIAM13 and its Spanish tax identification
number is A-39000013. The Bank is registered with the
Companies Registry of Cantabria, and its Bylaws have been
adapted to the Spanish Companies Act by means of the notarial
deed instrument executed in Santander on 29 July 2011 before
the notary Juan de Dios Valenzuela García, under number 1209
of his book and filed with the Companies Registry of Cantabria in
volume 1006 of the archive, folio 28, page number S-1960,
entry 2038.
The Bank is also registered in the Official registry of entities of
Bank of Spain with code number 0049.
The Bank’s registered office is at:
Paseo de Pereda, 9-12
39004 Santander
Spain
The Bank’s principal executive offices are located at:
Santander Group City
Avda. de Cantabria s/n
28660 Boadilla del Monte
Madrid
Spain
Telephone: (+34) 91 259 65 20
Corporate history
The Bank was established in the city of Santander by public deed
before the notary José Dou Martínez on 3 March 1856, which
was later ratified and amended in part by a second public deed
dated 21 March 1857 executed before the notary José María
Olarán. The Bank commenced operations upon incorporation on
20 August 1857 and, according to article 4 of the Bylaws, its
duration shall be for an indefinite period. It was transformed into
a credit corporation (sociedad anónima de crédito) by public
deed, executed before notary Ignacio Pérez, on 14 January 1875
and registered in the Companies Registry Book of the
Government’s Trade Promotion Section in the province of
Santander. The Bank amended its Bylaws to conform to the
Spanish public companies act of 1989 by means of a public deed
executed in Santander on 8 June 1992 before the notary José
María de Prada Díez and recorded in his notarial record book
under number 1316.
On 15 January 1999, the boards of directors of Santander and
Banco Central Hispanoamericano, S.A. agreed to merge Banco
Central Hispanoamericano, S.A. into Santander, and to change
Banco Santander’s name to Banco Santander Central Hispano,
S.A. The shareholders of Santander and Banco Central
Hispanoamericano, S.A. approved the merger on 6 March 1999,
at their respective general meetings and the merger became
effective in April 1999.
The Bank’s general shareholders’ meeting held on 23 June 2007
approved the proposal to change back the name of the Bank to
Banco Santander, S.A.
As indicated above, the Bank brought its Bylaws into line with
the Spanish Companies Act by means of a public deed executed
in Santander on 29 July 2011.
The Bank’s general shareholders’ meeting held on 22 March
2013 approved the merger by absorption of Banco Español de
Crédito, S.A.
On 7 June 2017, Santander acquired the entire share capital of
Banco Popular Español, S.A. 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, the Bank
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.
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Shareholder and investor relations
Santander Group City
Pereda, 2ª planta
Avda. de Cantabria, s/n
28660 Boadilla del Monte
Madrid
Spain
Telephone: (+34) 91 276 92 90
accionistas@santander.com
investor@gruposantander.com
Hard copies of the Bank’s annual report can be requested
by shareholders free of charge at the address and phone
number indicated above.
Customer service department
Apartado de Correos 35.250
28080 Madrid
santander_reclamaciones@gruposantander.es
Media enquiries
Santander Group City
Arrecife, 2ª planta
Avda. de Cantabria, s/n
28660 Boadilla del Monte
Madrid
Spain
Telephone: (+34) 91 289 52 11
comunicacion@gruposantander.com
Banking Ombudsman in Spain
(Defensor del cliente en España)
Mr José Luis Gómez-Dégano
Calle Raimundo Fernández Villaverde, 61
28003 Madrid
Telephone: (+34) 91 429 56 61
oficina@defensorcliente.es
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santander.com