Banco Santander (NYSE: SAN) posts record €14.1bn profit and plans $12.2bn Webster deal

Rhea-AI Filing Summary

Banco Santander presents its 2025 Pillar 3 disclosures showing another record year, with attributable profit of €14.1 bn, up 12%, and revenue of €62.4 bn. Return on tangible equity reached 16.3%, while the efficiency ratio improved to 41.2%.

The Common Equity Tier 1 ratio rose to an all-time high of 13.46% (CET1 capital €84.7 bn) on risk‑weighted assets of €629.4 bn. Liquidity remained strong, with a leverage ratio of 4.9%, liquidity coverage ratio of 147% and net stable funding ratio of 126%.

After year-end, Santander completed the sale of 49% of Santander Bank Polska and 50% of its Polish asset manager for about €7,000 m, generating an expected capital gain of roughly €1,900 m in 2026. It also agreed to acquire Webster Financial Corporation for approximately $12,200 m in cash and shares, with closing targeted for the second half of 2026, subject to shareholder and regulatory approvals.

Positive

• Record profitability and capital: 2025 attributable profit reached €14.1 bn (up 12%), RoTE was 16.3%, and the CET1 ratio increased to an all‑time high of 13.46% with strong organic capital generation.
• Value‑accretive portfolio actions: completion of the Polish stake sale for about €7,000 m with an expected €1,900 m capital gain in 2026 provides additional capital to support growth, shareholder remuneration and the announced Webster transaction.

Negative

• Large U.S. acquisition adds execution risk: the agreed purchase of Webster Financial Corporation for around $12,200 m in cash and shares, closing in the second half of 2026 subject to multiple approvals, increases strategic, integration and regulatory complexity for the group.

Insights

Bank capital and regulation analyst

Record profitability and stronger capital support major portfolio moves.

Santander reports attributable profit of €14.1 bn, up 12%, with RoTE at 16.3%. The CET1 ratio improved to 13.46% on risk‑weighted assets of €629.4 bn, comfortably above overall capital requirements of 14.10% total ratio and CET1 buffers.

Stronger capital and liquidity metrics (LCR 147%, NSFR 126%, leverage ratio 4.9%) sit within the new CRR3/CRD6 prudential regime. The group applies transitional CRR3 rules, with the CET1 phase‑in ratio already above its >12% fully‑loaded target cited for year‑end 2025.

Post‑closing, the €7,000 m sale of 49% of Santander Bank Polska and 50% of its Polish asset manager generates an estimated €1,900 m capital gain in 2026 and ends full consolidation. The agreed $12,200 m acquisition of Webster Financial, expected to complete in the second half of 2026 subject to approvals, will test the bank’s capital planning and integration capabilities under the CRR3 and TLAC/MREL constraints described in the report.

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of February, 2026

Commission File Number: 001-12518

Banco Santander, S.A.

(Exact name of registrant as specified in its charter)

Ciudad Grupo Santander

28660 Boadilla del Monte (Madrid) Spain

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  ☒            Form 40-F  ☐

Banco Santander, S.A.

TABLE OF CONTENTS

Item
1			2025 Pillar III Disclosures

Delivering sustainable value creation

santander.com

Index

Introduction (Ch. 1)
6			Santander overview
15			Grupo Santander Pillar 3 Report overview
18			Independent auditors’ report
22			Regulatory framework
28			Scope of consolidation
33			Financial conglomerate

Capital (Ch. 2)
34			Capital
38			Capital function
40			Capital management, adequacy and profitability
45			Regulatory capital - Pillar 1
61			Leverage ratio
66			Economic capital - Pillar 2
66			Capital planning and stress tests
67			TLAC & MREL

Risks (Ch. 3, 4, 5, 6, 7, 8, 9, 10 and 11)
73			Global risk vision
83			Credit Risk
165			Counterparty Credit Risk
179			Credit Risk - Securitisations
203			Market Risk
225			Operational Risk
235			Liquidity Risk
251			ESG Risk
305			Other Risks

Remuneration and Appendices (Ch. 12 and 13)

313

Remuneration

325

Appendices

Other appendices available on the Santander website.

Access 2025 Pillar 3 Disclosures Report available on the Santander Group website

Note: Document translated from Spanish. In the event of a discrepancy, the Spanish version prevails.

Index Introduction l Capital l Risks l Remuneration l Appendices l

4    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

			1.1. Santander overview			6
			1.2. Grupo Santander Pillar 3 report overview			15
			1.2.1. Governance: policy, review and approval			15
			1.2.2. Background information on Santander			17
			1.2.3. Disclosures by Santander subsidiaries			17
			1.3. Independent auditors’ report			18
			1.4. Regulatory framework			22
			1.4.1. Prudential framework 2025 and prudential Supervisory Priorities			22
			1.4.2. Supervision			23
			1.4.3. Sustainability			24
			1.4.4. Digital			25
			1.4.5. AML/FT			27
			1.5. Scope of consolidation			28
			1.5.1. Acquisitions and disposals			28
			1.5.2. Events subsequent to the close of the fiscal year			28
			1.5.3. Differences between the consolidation methods			28
			1.6. Financial conglomerates			33
			1. Introduction

2025 Pillar 3 Disclosures Report    5

Index Introduction l Capital l Risks l Remuneration l Appendices l

1.Introduction

1.1. Santander overview

About us

Santander is a commercial bank, founded in 1857 and headquartered in Spain. We are a global bank organised around 5 global businesses, with a meaningful presence in 10 core markets in Europe and the Americas. We are one of the largest banks in the world by market capitalization, listed on stock exchanges of Spain, Mexico, Poland, the United States and the United Kingdom.

We provide service through our 7,124 branches and online channels that offer banking products, operations and services to individuals, SMEs and corporates. We have 180 million customers, 198,403 employees and more than 3.5 million shareholders around the world.

As a responsible bank, we focus on areas where our activity can have the greatest impact and support an inclusive and sustainable growth.

Our business model

Based on 3 pillars:

Building a digital bank with branches → We continue to build a digital bank with branches, with a multichannel offering to fulfil all our customers' financial needs.

180 mn total customers

106 mn active customers

Global and in-market scale → Our global and in-market scale helps us to improve our local banks' profitability, adding value and network benefits. → Our activities are organised under five global businesses: Retail & Commercial Banking (Retail), Digital Consumer Bank (Consumer), Corporate & Investment Banking (CIB), Wealth Management & Insurance (Wealth) and Payments. → Our five global businesses support value creation based on the profitable growth and operational leverage that ONE Santander provides.

Business, geographical and balance sheet → Well-balanced diversification between businesses and markets with a solid and simple balance sheet that gives us recurrent net operating income with low volatility and more predictable results.

6    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Economic and regulatory context

In 2025, Santander operated in an environment characterized by:

			Gradual reductions in interest rates by the majority of central banks, in response to declining inflation
						Continuing geopolitical and trade tensions
									However, despite some slowdown, the world’s major economies maintained good economic growth rates
									Labour markets were resilient, with unemployment rates remaining low in more than half of the countries in which Santander operates

In 2025, the banking sector benefitted from a favourable macroeconomic environment and resilient labour markets, which enabled good profitability levels to be maintained, supported by improved business volumes and portfolio quality.

This was reflected in the market valuation of banks which once again outperformed the main stock indices, allowing a large proportion of credit institutions to return to valuations above their book value.

The soundness shown by the banking sector in the face of recent economic shocks, periods of volatility and the various stress exercises carried out by supervisors, also supports this change in market sentiment.

Lastly, recognition of the complexity of banking regulation by the authorities and the simplification processes established in the primary economic areas also contributed to the improvement in valuations.

During 2025, the regulatory agenda was shaped by renewed political momentum in the European Union (EU). Simplification and competitiveness were reaffirmed as central pillars of the EU's strategy.

With regard to capital requirements, the regulatory focus in the EU included the implementation of the Basel 3 reform. The European Banking Authority (EBA) continued to develop the technical standards required for the full application of the Capital Requirements Regulation (CRR3), while the implementation timeline of the Fundamental Review of the Trading Book (FRTB) was once again adjusted, with a revised entry-into-force schedule differentiated across jurisdictions due to the lack of international alignment and the accumulated delays in implementation in the UK and the US.

At the global level, the Basel Committee has continued to work on the prudential framework for crypto-asset exposures and made progress in reviewing the treatment of Non-Banking Financial Institutions (NBFIs), in light of the lessons learned from recent episodes of market stress.

The European Commission proposed a reform of the securitisation framework, with initiatives aimed at improving risk sensitivity, reducing unnecessary burdens and facilitating the use of securitisations (including significant risk transfer transactions) as a means to unlock funding capacity and strengthen competitiveness.

The debate on the potential review of the capital buffer framework and its interaction with Pillar 1, Pillar 2 and resolution requirements continued, in a context in which several European authorities emphasized the need to improve the usability and predictability of buffers under potential stress scenarios.

In the US, measures were proposed to amend the supervisory and regulatory frameworks, introducing significant simplifications, including fewer prudential requirements and reduced intensity of supervision. In the UK, the prudential authority put forward measures aimed at reducing capital requirements and addressing existing overlaps between different requirements.

The Basel Committee published a new voluntary framework for the disclosure of climate-related financial risks, in line with its objective of complementing Pillar 3 transparency requirements with information on environmental risk management.

2025 Pillar 3 Disclosures Report    7

Index Introduction l Capital l Risks l Remuneration l Appendices l

Priorities in regulatory policies

We have a strong commitment to our customers to conduct our business in a simple, personal and fair way. We are also committed to maintaining a constructive and transparent relationship with regulators and supervisors, both regarding the regulation and frameworks that affect our activities, as well as the interests of our customers.

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:
			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.						For European banks to be competitive and do more for their customers, businesses and society as a whole, it is necessary to continue advancing towards a single market, with the completion of the Banking Union and the Capital Markets Union.
			The introduction of a secondary supervisory objective of growth and competitiveness.						The review of existing and forthcoming level 2 and level 3 regulation, with the aim of strengthening the consistency, transparency and predictability of requirements, as well as the fundamentals behind additional capital requirements.
			The adoption of a holistic, principles-based supervisory framework, that has a global view of supervisory and regulatory requirements, which accommodates diverse business models and characteristics between entities.						To provide support so that sustainability can boost the competitiveness and growth of companies, it is important that the regulatory framework does not add capital requirements associated with sustainability risk management.

8    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

These results reflect the success of our strategy

Another record exercise resulting in double-digit profit growth in 2025

Strong operating performance and profitability on the back of ONE Transformation and customer growth

FY’25 Attributable Profit

Efficiency

€14.1 bn +12%

41.2% -62 bps

FY’25 Revenue

RoTE

€62.4 bn +0%

16.3% +85 bps

Stronger balance sheet with robust credit quality and very strong organic capital generation

Together with capital productivity and disciplined capital allocation are driving double-digit value creation

CoR

TNAVps + DPS

1.15% 0 bps

+14%   YoY

CET1

EPS

13.5% +68 bps

+17%   YoY

Note: YoY changes. In constant euros: FY'25 attributable profit +16% and 4% revenue. CET1 ratio on phased-in basis, i.e. in accordance with the transitory treatment of the CRR. YoY comparison based on published Dec-24 ratio, which was calculated on a fully-loaded basis. TNAVps + Cash DPS includes the €11.00 cent cash dividend per share paid in May 2025 and the €11.50 cent cash dividend per share paid in November 2025, both forming part of our shareholder remuneration policy.

All-time high profit, driven by our revenue performance and structural efficiency improvement from ONE Transformation

Revenue

2025 target €62 bn

2025 achievement €62.4 bn

Efficiency

Cost of risk

2025 target <42%

2025 achievement 41.2%

2025 target <1.15%

2025 achievement 1.15%

RoTE

CET1

2025 target <16.5%

2025 achievement 16.3%

2025 target 13%

2025 achievement 13.5%

2025 Pillar 3 Disclosures Report    9

Index Introduction l Capital l Risks l Remuneration l Appendices l

Executive summary

CET1 capital ratio reached an all-time record (1)

13.5%

€84.7 bn

€629.4 bn

12.8%

€79.7 bn

€624.5 bn

12.3%

€76.4 bn

€623.7 bn

12.0%

€73.4 bn

€609.3 bn

The CET1 capital ratio strengthened to 13.5%, an all-time high and well above the upper end of the bank’s operating range (12-13%). The increase was driven by strong attributable profit generation, which more than offset shareholder remuneration and other capital impacts.

(1) Data from 2022-2024 are on a fully-loaded basis.

10    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Santander’s capital levels amply exceed minimum regulatory requirements

Note: the values for the missing labels are: CCyB = 0.56% and SyRB = 0.05%.

We have delivered on all our key Investor Day targets for the period 2023-2025

13,5%			89%			16,3%			50%			14%
2025 target: >13%			2025 target: 85%			2025 target: 15-17%			2025 target: Cash dividend + SBB 50% annually			2025 target: Double digit growth through the cycle
A: Phased- in ratios are calculated in accordance with the transitory treatment of the CRR3.

Strong organic capital generation, supporting accretive capital redeployment, consistent with our capital hierarchy

Note: Dec-24 ratio on a fully-loaded basis (as published in the Q4 2024 Financial Report), excluding the transitory treatment of IFRS 9 and of CRR. Dec-25 on a phased-in basis, calculated in accordance with the transitory treatment of the CRR and it does not include any expected impacts from the recently announced inorganic transactions. (1) Capital distribution including deduction for accrual of shareholder remuneration and AT1 costs. (2) Business RWA change net of risk transfer initiatives. (3) Dec-25 pro forma CET1 ratio considering the inorganic transactions announced during 2025 and the additional share buyback.

2025 Pillar 3 Disclosures Report    11

Index Introduction l Capital l Risks l Remuneration l Appendices l

Evolution of the main capital ratios (phased-in)

%

Evolution of the capital base (phased-in)

€ million

Evolution of another key indicators:

1 Liquidity coverage ratios are calculated following the regulatory guidelines required by the ECB.

OV1 Summary
			RWA			RWA
			Dec'25			Dec'24
Total Credit Risk			505,525			534,206
Credit risk (excluding CCR)			471,745			499,560
Counterparty credit risk - CCR			14,081			18,089
Credit valuation adjustments risk - CVA risk			2,461			679
Settlement risk			555			173
Securitisation exposures in the non-trading book (after the cap)			16,683			15,705
Position, foreign exchange and commodities risks (Market risk)			21,478			17,946
Reclassifications between trading and non-trading books			0			0
Operational risk			102,427			72,351
Exposures to crypto-assets			0			0
Total			629,430			624,503

12    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

RWA distribution by type of risk			Credit risk RWAs by type of approach(A)
€bn			€bn

A Securitisation and others are excluded. For more information, see Table 9. OV1

RWA distribution by risk type

2024			2025
625 bn			629 bn

2025 Pillar 3 Disclosures Report    13

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 1.KM1 - Key metrics template
			EUR million
						a			b			c			d			e
						Dec'25			Sep'25			Jun'25			Mar'25			Dec'24
			Available own funds (amounts)
1			Common Equity Tier 1 (CET 1) capital			84,739			82,593			81,253			82,163			79,800
2			Tier 1 capital			94,385			93,222			90,830			92,169			90,170
3			Total capital			111,845			109,941			107,735			110,088			108,589
			Risk-weighted exposure amounts
4			Total risk-weighted exposure amount			629,430			630,753			625,750			639,124			624,503
4a			Total risk exposure pre-floor			629,430			630,753			625,750			639,124
			Capital ratios (as a percentage of risk-weighted exposure amount)
5			Common Equity Tier 1 ratio (%)			13.46		%	13.09		%	12.98		%	12.86		%	12.78		%
5b			Common Equity Tier 1 ratio considering unfloored TREA (%)			13.46		%	13.09		%	12.98		%	12.86		%
6			Tier 1 ratio (%)			15.00		%	14.78		%	14.52		%	14.42		%	14.44		%
6b			Tier 1 ratio considering unfloored TREA (%)			15.00		%	14.78		%	14.52		%	14.42		%
7			Total capital ratio (%)			17.77		%	17.43		%	17.22		%	17.22		%	17.39		%
7b			Total capital ratio considering unfloored TREA (%)			17.77		%	17.43		%	17.22		%	17.22		%
			Additional own funds requirements to address risks other than the risk of excessive leverage (as a percentage of risk-weighted exposure amount)
EU 7d			Additional own funds requirements to address risks other than the risk of excessive leverage (%)			1.74		%	1.74		%	1.74		%	1.74		%	1.74		%
EU 7e			of which: to be made up of CET1 capital (percentage points)			0.98		%	0.98		%	0.98		%	0.98		%	0.98		%
EU 7f			of which: to be made up of Tier 1 capital (percentage points)			1.31		%	1.31		%	1.31		%	1.31		%	1.31		%
EU 7g			Total SREP own funds requirements (%)			9.74		%	9.74		%	9.74		%	9.74		%	9.74		%
			Combined buffer requirement (as a percentage of risk-weighted exposure amount)
8			Capital conservation buffer (%)			2.50		%	2.50		%	2.50		%	2.50		%	2.50		%
EU 8a			Conservation buffer due to macro-prudential or systemic risk identified at the level of a Member State (%)			—		%	—		%	—		%	—		%	—		%
9			Institution specific countercyclical capital buffer (%)			0.56		%	0.43		%	0.38		%	0.38		%	0.39		%
EU 9a			Systemic risk buffer (%)			0.05		%	0.06		%	0.04		%	0.03		%	0.03		%
10			Global Systemically Important Institution buffer (%)			1.00		%	1.00		%	1.00		%	1.00		%	1.00		%
EU 10a			Other Systemically Important Institution buffer			1.25		%	1.25		%	1.25		%	1.25		%	1.25		%
11			Combined buffer requirement (%)			4.36		%	4.24		%	4.17		%	4.16		%	4.17		%
EU 11a			Overall capital requirements (%)			14.10		%	13.98		%	13.91		%	13.90		%	13.91		%
12			CET1 available after meeting the total SREP own funds requirements (%)			7.69		%	7.47		%	7.21		%	7.12		%	7.13		%
			Leverage ratio
13			Total exposure measure			1,924,349			1,893,052			1,850,859			1,904,412			1,885,572
14			Leverage ratio (%)			4.90		%	4.92		%	4.91		%	4.84		%	4.78		%
			Additional own funds requirements to address risks of excessive leverage (as a percentage of leverage ratio total exposure amount)
EU 14a			Additional own funds requirements to address the risk of excessive leverage (%)			—		%	—		%	—		%	—		%	—		%
EU 14b			of which: to be made up of CET1 capital (percentage points)			—		%	—		%	—		%	—		%	—		%
EU 14c			Total SREP leverage ratio requirements (%)			3.00		%	3.00		%	3.00		%	3.00		%	3.00		%
			Leverage ratio buffer and overall leverage ratio requirement (as a percentage of total exposure measure)
EU 14d			Leverage ratio buffer requirement (%)			0.50		%	0.50		%	0.50		%	0.50		%	0.50		%
EU 14e			Overall leverage ratio requirements (%)			3.50		%	3.50		%	3.50		%	3.50		%	3.50		%
			Liquidity Coverage Ratio
15			Total high-quality liquid assets (HQLA) (Weighted value - average)			299,005			302,056			304,520			309,137			330,492
EU 16a			Cash outflows - Total weighted value			281,191			279,316			276,687			274,574			275,509
EU 16b			Cash inflows - Total weighted value			77,400			76,058			75,919			75,148			73,682
16			Total net cash outflows (adjusted value)			203,792			203,259			200,769			199,426			201,827
17			Liquidity coverage ratio (%)*			147		%	149		%	152		%	155		%	158		%
			Net Stable Funding Ratio
18			Total available stable funding			1,217,021			1,196,676			1,195,643			1,206,050			1,198,180
19			Total required stable funding			968,518			956,664			950,340			961,050			954,260
20			NSFR ratio (%)			126		%	125		%	126		%	125		%	126		%
			* Liquidity coverage ratios are the average of 12 months and are calculated following the regulatory guidelines required by the ECB.

14    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

1.2. GRUPO SANTANDER PILLAR 3 REPORT OVERVIEW

This section looks at general aspects applicable to Grupo Santander and describes the governance for approval and publication of the Pillar 3 report, in addition to the disclosure criteria used in the report.

è This section covers the requirements of Articles 432, 433, 433bis, 434, 436a and 437bis of the CRR on the requirements and scope of disclosure of information by the Group.

The Basel framework consists of 3 pillars:

•Minimum Capital requirements (Pillar 1)

•Supervisory review (Pillar 2)

•Market discipline (Pillar 3).

The Santander Pillar 3 Disclosure report is a public document that is published on the Group's corporate website in order to fulfil the regulatory requirements within the scope of Basel. Specifically, the reporting standards are set by Part Eight of the Capital Requirements Regulation (CRR) 575/2013 and complementary European Banking Authority (EBA) Guidelines. In addition, the report considers the Regulation (CRR3) 2024/1623 amending Regulation 575/2013.

The Pillar 3 report includes a set of disclosure requirements which are intended to provide analysts, investors, shareholders and other market agents with KPIs and risk information to improve their ability of assessing the bank´s risk profile and capital adequacy.

The timely publication of this information is considered to promote transparency within financial institutions and contributes to the adequate functioning of financial markets. This document should be read in conjunction with the Annexes of Pillar 3 and the annual report, which have been published on the website (santander.com).

On 27 June 2023, an agreement was reached between the Council of the European Union and the European Parliament on the proposal put forward by the European Commission on 27 October 2021 on the banking package. The banking package includes amendments to the Capital Requirements

Regulation (CRR3) and to the Capital Requirements Directive (CRD6).

The banking package implements the latest Basel 3 reforms, which underpin a robust regulatory framework, efficient supervision and enhanced risk control by credit institutions. Following the CRD6/CRR3, the EBA was asked to work on the layer of the regulatory products that ensures a technical implementation of the prudential framework, including amendments to the disclosure requirements.

In November 2024, the Regulation 2024/3172 was approved by Commission laying down implementing technical standards for the application of Regulation (EU) No 575/2013 of the European Parliament and of the Council with regard to public disclosures by institutions of the information referred to in Part Eight, Titles II and III, of that Regulation, that will apply from 1 January 2025.

In addition, in February 2025 the EBA published its Implementing Technical Standards (ITS) on the Pillar 3 data hub (P3DH), which centralise prudential disclosures by institutions through a single electronic access point on the EBA website from June 2025.

1.2.1. Governance: policy, review and approval

Grupo Santander has a formal policy on the Pillar 3 disclosures which defines the requirements, the development process, the frequency and the associated governance in accordance with the Directive 2013/36/EU, Regulation (EU) no. 2024/1623 of 31 May 2024 (the EU Regulation or CRR3) amending Regulation (EU) no. 575/2013, as well as the law on supervision and capital requirements (10/2014) of the Banco de España.

This policy has been prepared in compliance with the criteria established in the Guidelines on Materiality, Proprietary, Confidentiality and Frequency of the Information by the European Banking Authority in accordance with Article 432, sections 1, 2 and 3 and Article 433 of Regulation (EU) 575/2013 and has been updated during 2025 including new CRR3 disclosure requirements.

The Pillar 3 disclosures report relies on a range of defined processes relating to the internal control framework, with duties and responsibilities for review and certification of the information contained in the report at several levels of the organisation.

2025 Pillar 3 Disclosures Report    15

Index Introduction l Capital l Risks l Remuneration l Appendices l

Additional information regarding Grupo Santander's system of internal control over financial reporting (SCI) can be found in the 'Corporate governance' chapter of the 2025 annual report.

Access 2025 Pillar 3 Disclosures Report available on the Santander Group website

The information contained in this report has been subject to an ex-ante review by the External Auditor, under a new limited assurance approach, with an even higher level of scrutiny than last year, the external auditor has not identified any findings regarding the reasonableness of the information detailed and the compliance with the information requirements established in the European Capital Directive and Regulation.

Limited assurance conclusion

'Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that the Consolidated Pillar 3 Disclosure Report has not been prepared in accordance with the Capital Requirements Regulation (CRR) 575/2013, as amended by Regulation 2024/1623 (CRR3) and the rest of applicable regulation on disclosure (please see section 1.3 for further details).

The external auditor assessment conclusions are shared for discussion with the board audit committee and approval prior to the board.

Approval by governing bodies

The report has been reviewed by the capital committee and the board audit committee at their meeting held on 17 February 2026, as well as by the board of directors' meeting on 19 February, prior to its final approval at the board of

directors' meeting on 24 February 2026.

The board of directors of Santander certifies that the publication of the Pillar 3 disclosures report is compliant with the guidelines in Part Eight of Regulation (EU) 575/2013 and consistent with the 'Pillar 3 Disclosures Policy' adopted by the board of directors.

No exceptions have been applied for the publication of information considered proprietary or confidential.

Furthermore, a quarterly Pillar 3 report is disclosed complying with the internal policy and criteria established in the European Banking Authority guidelines about disclosure frequency.

Following the launch of EBA Pillar 3 Data Hub last January 2026, Santander Group already shared historical quarterly required reports and will henceforth simultaneously publish Pillar 3 reports on EBA (https://edap-public.eba.europa.eu/Report/index/) and Santander sites.

Santander Group Pillar 3 disclosures report is also available in the Shareholders and Investors section of the Santander website (santander.com), under 'Financial and economic information'.

Access 2025 Pillar 3 Disclosures Report available on the Santander Group website

José García Cantera

Manuel Preto

Mahesh Aditya

Group Chief Financial Officer

Group Chief Accounting Officer

Group Chief Risk Officer

"

We confirm that Santander’s 2025 Pillar 3 disclosures, to the best of our knowledge, comply with updated Pillar 3 framework within Capital Requirements Regulation (CRR) 575/2013 (Part Eight), as amended, including by Regulation (EU) 2024/1623 (CRR3), and have been prepared in compliance with Santander’s policies, internal processes, systems and controls.

"

16    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

1.2.2. Background information on Santander

Banco Santander, S.A. is a legal entity subject to the rules and regulations applicable to banks operating in Spain. In addition to its direct operations, Banco Santander, S.A. is the holding company of a group of banking subsidiaries engaged in a range of business activities. The European Central Bank (ECB) is the supervisor of Grupo Santander on a consolidated basis.

The Capital Requirements Regulation (CRR) and its modifications (hereinafter referred to as CRR), Capital Requirements Directive (CRD) and its modifications, and its transposition through Banco de España Circular 2/2016, on supervision and capital adequacy, are applicable at a consolidated level to the entire Grupo Santander.

See Appendix III, CRR Mapping, for all aspects for which disclosure is required under Part Eight of the CRR, as amended but that are not applicable to Santander. These are reported as 'N/A' (not applicable).

Notes on basis of preparation

This report has been prepared in accordance with current 31.12.2025 European regulations on capital requirements (CRR3).

The ratios presented in this report have been calculated using the transitional CRR3 implementation schedules.

The information referring to periods prior to 1.01.25, unless otherwise stated in an explanatory note, has been prepared in accordance with the regulations in force at that time (CRR2 transitional arrangements)

There are differences regarding some metrics between the regulatory information in this report and the information in the annual report:

•The credit risk exposure measurements used for calculating regulatory capital requirements include:

◦Current and future risk exposures arising from future commitments (contingent liabilities and commitments) and changes in market risk factors (derivative instruments).

◦The mitigating factors for these exposures (netting agreements and collateral agreements for derivative exposures, and collateral and personal guarantees for on-balance-sheet exposures).

•The criteria used in classifying non-performing exposures in portfolios subject to advanced models for calculating regulatory capital are more conservative than those used for calculations for the segregated view provided in the annual report.

•ESG disclosure in Pillar 3 follows the Implementing Technical Standards (ITS) defined by the EBA for this purpose and it is not necessarily aligned with the management criteria reported in other Group’s ESG reports.

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 CRR2.

Finally, Appendix III shows the compliance with the various applied ITS which are in force and Appendix IV refers to the regulatory framework and the according articles on which the disclosed information is based.

In the Financial and economic information / Pillar 3 section of the Group's website, all tables including the Appendix, which are published in this document, are available in an editable format.

1.2.3. Disclosures by Santander subsidiaries

In addition to the consolidated information presented in this report and ECB requirements, (following article 13 of the CRR, Application of disclosure requirements on a consolidated basis) Santander large subsidiaries that meet at least one of the following criteria publish information at solo basis on their websites.

•The institution is a global systemically important entity (G-SIB);

•The institution has been identified as a systemically important entity (O-SII) in accordance with Article 131(1) and (3) of Directive 2013/36 EU;

•The institution is one of the three largest entities in terms of total value of assets in the Member State in which it is established;

•The institutions total assets on a solo or sub-consolidated basis are equal to or greater than EUR 30 billion.

Based on the criteria above, each subsidiaries in the European Economic Area (EEA) such as Portugal, Poland and Santander Consumer Germany or subsidiaries outside EEA such as Argentina, Brazil, Mexico, the UK and Uruguay publish their Pillar 3 reports.

Santander Consumer Finance (sub-consolidated basis) discloses information related to articles 437, 438, 440, 442, 449a, 449b,450, 451, 451a and 453 available in their website.

The additional disclosures for the large subsidiaries (in accordance with Article 4 No. 146 and 147 CRR) can be found within the Pillar 3 reports of the respective subsidiary as published on the corresponding website.

Each banking subsidiary is directly regulated by their local banking supervisors, who set and monitor their local capital and liquidity adequacy requirements. In most jurisdictions non-banking financial subsidiaries are also subject to the supervision and capital requirements of local regulatory authorities.

The regulators of the Group’s banking entities outside the EEA are at varying stages of implementation of the Basel framework. Local regulation in 2025 may have been implemented on the basis of Basel 1, 2 or 3.

For more information about the international Group structure see Appendix II.

2025 Pillar 3 Disclosures Report    17

Index Introduction l Capital l Risks l Remuneration l Appendices l

1.3. Independent auditor´s report

18    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2025 Pillar 3 Disclosures Report    19

Index Introduction l Capital l Risks l Remuneration l Appendices l

20    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2025 Pillar 3 Disclosures Report    21

Index Introduction l Capital l Risks l Remuneration l Appendices l

1.4. Regulatory framework

1.4.1. Prudential framework 2025 and Supervisory Priorities

Credit institutions must comply with a set of minimum capital and liquidity requirements. These minimum requirements are regulated by the European Capital Requirements Regulation (CRR), which is directly applicable within the Spanish legal framework, and by the Capital Requirements Directive (CRD).

On 19 June 2024, the final texts of the update to the banking package were published in the Official Journal of the European Union: Regulation (EU) 2024/1623 (hereinafter, CRR3), which amends the CRR with regard to requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the floor on risk-weighted assets (known as the output floor), as well as Directive (EU) 2024/1619 (hereinafter, CRD6), which amends the CRD as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks.

The update to the banking package aims, on the one hand, to implement the final Basel 3 reforms and, on the other, to strengthen the harmonisation of banking supervision within the European Union (EU).

CRR3, applicable since 1 January 2025, introduces greater risk sensitivity into standardised approaches, reduce the variability of risk-weighted assets among banks using internal models to calculate capital requirements, and enhance comparability across banks. The main changes introduced are outlined below:

▪Output floor: A floor on risk-weighted assets is introduced, set at 72.5% of total risk exposure calculated using standardized approaches. Its objective is to limit variability and excessive reductions in capital consumption in institutions that apply internal models. The regulation provides for transitional arrangements to allow institutions sufficient time to adapt.

▪Standardised Credit Risk approach: CRR3 introduces greater risk sensitivity through the creation of specific exposure classes and increased granularity in the range of applicable risk weights (RWs), such as the new treatment of exposures secured by immovable properties. In addition, the minimum credit conversion factor (CCF) has increased from 0% to 10%, with the introduction of a new bucket (40%), increasing the total number of buckets from four to five; a transitional regime is provided for its application.

▪IRB credit risk approach: the scaling factor is removed from the risk weight (RW) calculation formula, and institutions are allowed to apply this approach to certain exposure classes without being required to implement the IRB approach across all portfolios. In addition, the use of the Foundation IRB (F-IRB) approach is made mandatory for 'low default' exposure categories (institutions and corporates with turnover exceeding EUR 500 million), and new floors are introduced for the PD and LGD parameters in order to limit their variability.

▪Credit risk mitigation: greater clarity is introduced regarding the recognition of unfunded guarantees where exposures to the guarantor and to the obligor are treated under different credit risk approaches (Standardised Approach, F-IRB, A-IRB or slotting).

▪Operational risk: the capital requirements calculation methods in force until 31 December 2024 are replaced by a single standardised approach based on the business indicator. The new method (SMA) consists of the Business Indicator Component (BIC), which multiplies the Business Indicator (BI) by a beta factor (between 12% and 18%) depending on the size of the institution’s BI. The BI comprises three components: the Interest, Leases and Dividend Component (ILDC), the Services Component (SC) and the Financial Component (FC). The loss component (ILM), envisaged under the Basel framework, has ultimately not been included in the new regulation, as the European regulator has exercised the discretion permitted under the Basel framework. In addition, CRR3 includes: (i) the possibility of calculating a separated ILDC for a specific subsidiary, subject to supervisory approval, and (ii) a transitional period during which institutions may continue to apply the current Alternative Standardised Approach (ASA) until separated ILDC permission is granted by the ECB.

Under CRD6, the ambition to achieve more robust supervision and to safeguard financial stability is reflected in a set of rules affecting fit-and-proper requirements, an extended scope resulting from the revision of certain definitions, and new provisions regarding the establishment of third-country branches in the EU, with the aim of achieving greater regulatory harmonisation and improved supervision of this type of entity.

Although most CRR3 provisions apply since 1 January 2025, for certain provisions the regulator has established a gradual implementation (phase-in) period until 2030 in order to give the industry sufficient time to build up the capital required to meet the requirements on a fully loaded basis.

Regarding Market Risk, the European Commission and the European Parliament have approved an additional 12-month delay to the entry into force of the new market risk capital framework, or FRTB, until 1 January 2027. Beyond this date, the CRR3 does not allow for any further delay, as postponements are limited to two years. This delay also covers other provisions, such as the separation between the trading book and the banking book, the internal risk transfer regime, etc.

The CRR3/CRD6 package contains 140 mandates for the EBA to develop Level 2 or Level 3 legislation (regulatory technical standards, implementing technical standards and guidelines—RTS, ITS and GL, for their acronyms) and to issue opinions and reports to further specify certain aspects of the regulation. In this context, the EBA published its roadmap (EBA Roadmap) at the end of 2023, structuring the implementation of the banking package around four sequential phases, under which the authority will address the various mandates in an orderly manner based on their latest legal application dates (up to four years after the entry into force of CRR3 and CRD6). In addition, at the end of 2024, the EBA published its 2025 work programme, setting out the guidelines for addressing these mandates during the year. This has resulted in the publication of various consultations throughout the year on RTS, ITS and Guidelines, such as, for example:

–Regulatory Technical Standards (RTS) on off-balance-sheet exposures and unconditionally cancellable commitments

–Regulatory Technical Standards (RTS) on material changes to IRB models and model extensions

22    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

–Revision of the Guidelines on the revised definition of default

–Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS) on operational risk

In its 2025 Work Programme, the EBA undertook, among other initiatives, the revision of the SREP Guidelines, the consultation for which was published on 24 October, with the aim of updating them based on three pillars: legislative changes (CRR3 and CRD6, IRRBB/CSRBB, DORA, etc.), lessons learned, and structural changes intended to improve the usability of the Guidelines. The consultation period was set to run until early February 2026, and following the conclusion of the consultation process, the Guidelines are expected to enter into force on 1 January 2027.

On 28 July 2025, the ECB published a revised version of its Guide to Internal Models, with the objective of reflecting the regulatory changes introduced by CRR3 in relation to internal models for credit, counterparty credit and market risk; clarifying supervisory expectations for internal models that make use of machine learning; and enhancing transparency and supervisory harmonisation. This revision builds on the experience accumulated by the ECB since the first publication of the Guide in 2019.

On 25 July 2025, the ECB also published the final Guide on Options and Discretions, following a consultation process launched in November 2024. The Guide introduces clarifications and adjustments to the treatment of market risk and operational risk, as well as to the conditions under which minority interests may be included in group capital, among other aspects.

Regarding resolution regulation, institutions are required to maintain an adequate funding structure to ensure that, in the event of financial distress, they hold sufficient liabilities to absorb losses and either restore viability or be resolved while safeguarding depositor protection and financial stability. To this end, global systemically important institutions are subject to minimum loss-absorbing capacity requirements, namely Total Loss-Absorbing Capacity (TLAC) and the Minimum Requirement for own funds and Eligible Liabilities (MREL), as regulated under CRR3 and the Bank Recovery and Resolution Directive (BRRD).

On 25 October 2022, a regulation on the prudential treatment of global systemically important institutions was published, amending both the CRR and the BRRD with respect to the prudential treatment of G-SIBs with a multiple point of entry (MPE) resolution strategy, as well as the methods for the indirect subscription of eligible instruments (daisy chains) for the purpose of meeting MREL requirements. This regulation, known as the Resolution 'Quick Fix', pursues two main objectives:

•The inclusion in the BRRD and CRR3 of references to third-country subsidiaries allowing for adjustments to the deduction for holdings of TLAC instruments issued by such subsidiaries, based on excess TLAC/MREL at subsidiary level, as well as adjustments in cases where the aggregate own funds and eligible liabilities requirements of a G-SIB under an MPE strategy exceed the theoretical requirements of the same group under a single point of entry (SPE) strategy. This adjustment is therefore based on a comparison between the two possible resolution strategies.

•The introduction of a deduction regime for holdings of MREL instruments through entities within the same resolution group other than the resolution entity. The Regulation establishes a deduction at the level of the intermediate entity within the daisy chain that repurchases the instruments. As a result, the intermediate entity is required to issue an equivalent amount, thereby transferring internal MREL needs to the resolution entity, which will cover them with external MREL.

In this context, in 2025 the EBA published the Final Report on the draft Implementing Technical Standards (ITS) on resolution planning, aimed at further harmonising reporting requirements.

Regarding Deposit Guarantee Schemes (DGS), these are regulated under the Deposit Guarantee Schemes Directive (DGSD), which has not undergone substantial amendments since its publication in 2014. The Directive aims to harmonise DGS across Member States to ensure stability and consistency across countries. It establishes an appropriate framework to improve depositor access to DGS through a clear scope of coverage, short repayment periods, enhanced information, and robust funding requirements. The Directive has been transposed into Spanish law through Royal Decree 2606/1996, as amended by Royal Decree 1041/2021.

To ensure the protection of depositors, DGS collect financial resources through contributions from their members, which must be paid at least annually. These annual contributions are determined based on the number of covered deposits and the risk profile of the institutions affiliated with the DGS. The methodology for calculating contributions is set out in the EBA Guidelines (EBA/GL/2023/02). As the target level of 0.8% of covered deposits was reached with contributions collected up to 2023, the Spanish DGS did not require institutions to make contributions to the deposit guarantee compartment in 2025 (a contribution to the investor compensation compartment will be made in February 2026 based on data as of December 2025).

In April 2023, the European Commission presented its proposal for a revision of the Crisis Management and Deposit Insurance (CMDI) framework, with the objective of strengthening the stability of the European banking system. The proposal aimed to improve the management of distressed institutions through enhanced early intervention tools and more effective resolution mechanisms. It also sought to ensure better depositor protection and a more efficient use of deposit guarantee funds, while strengthening cooperation among authorities and improving the transparency of the framework. These measures entail amendments to several key pieces of EU banking legislation. In June 2025, the Council and the European Parliament reached a political agreement, which still needs to be finalized at a technical level as a prerequisite for its final formal approval.

1.4.2. Supervision

In November 2025, the ECB published its supervisory priorities, structured around two main pillars:

(i) Strengthening banks’ resilience to geopolitical risks and macro-financial uncertainties, with a focus on credit quality, lending standards, the proper implementation of CRR3, and the effective management of climate-related and environmental risks.

2025 Pillar 3 Disclosures Report    23

Index Introduction l Capital l Risks l Remuneration l Appendices l

(ii) Enhancing operational resilience and IT capabilities, including cyber resilience, outsourcing arrangements (particularly cloud services), risk data aggregation and reporting, and the governance of digitalisation. These priorities will guide the Supervisory Review and Evaluation Process (SREP) and may translate into reinforced supervisory expectations and potentially significant Pillar 2 measures with high prudential relevance.

In addition, on 11 December 2025, the ECB published—and the Governing Council subsequently endorsed—the 17 recommendations of the High-Level Task Force aimed at simplifying the regulatory, supervisory and reporting framework at the European level while preserving the resilience of the banking system. This exercise is situated within the broader competitiveness debate currently taking place in Europe, with the objective of ensuring that the regulatory and supervisory framework supports bank financing while preserving financial stability.

Furthermore, the ECB is working jointly with National Competent Authorities (NCAs) on a comprehensive reform agenda to streamline and simplify European banking supervision, reallocating resources without compromising banks’ resilience. The four specific reform initiatives are:

•SREP reform to enhance effectiveness and efficiency, including six key measures: (i) more focused risk assessments; (ii) better integration of supervisory activities; (iii) full use of the supervisory toolkit; (iv) improved communication; (v) more stable methodologies; and (vi) enhanced use of technological and analytics systems.

•'Next-level supervision' project: a set of reforms aimed at improving the efficiency and effectiveness of supervisory activities while maintaining a risk-based approach. This project focuses on six main areas: (i) speeding up decision-making within the ECB; (ii) faster approvals of internal models; (iii) streamlining stress testing; (iv) fast-tracking straightforward capital-related decisions; (v) streamlining regulatory reporting; and (vi) more targeted on-site inspections. In addition, the ECB is working to ensure that supervision is proportionate to banks’ size, systemic relevance and risk profiles.

•Supervisory culture within the SSM (Single Supervisory Mechanism): this initiative is structured around three strategic pillars defining the SSM culture—risk-based, integrated, efficient and effective supervision.

•Assessing supervisory effectiveness: the ECB is developing methodologies to evaluate the effectiveness of supervision, with the aim of promoting a more outcome-oriented supervision and strengthen accountability. By analysing the results of supervisory exercises and addressing identified weaknesses, a continuous feedback loop is created between supervisory objectives, supervisory strategies and outcomes.

1.4.3. Sustainability

In 2025, the development of sustainable finance continues to be a central pillar of public and regulatory debate, particularly in connection with Fit for 55, the EU’s objective to meet its 2030 climate target on the path towards climate neutrality. Since the publication of the European Commission’s Action Plan, which supports the EU’s climate, environmental and Sustainable Development Goals, the regulatory framework has continued to evolve through new legislative

developments, technical adjustments and a range of initiatives aimed at improving its practical applicability.

In parallel, the application of Commission Delegated Regulations (EU) 2023/2486 and 2023/2485, has become fully established during the year. These regulations complete the technical screening criteria of the EU Taxonomy for the six environmental objectives and expand the range of economic activities considered sustainable. Throughout 2025, the European Commission has adopted several simplification measures designed to reduce administrative burden and facilitate the practical application of the Taxonomy. These include amendments to the Taxonomy Disclosure Delegated Act to simplify the KPIs required from non-financial undertakings; clarification of DNSH (Do No Significant Harm) requirements and the documentation needed to demonstrate compliance; the removal or adjustment of certain overly complex or low-materiality technical criteria; and the harmonisation of definitions and methodologies across the climate and environmental delegated acts.

From a prudential perspective, the implementation of the CRR3/CRD6 package has progressed, introducing specific requirements to integrate environmental, social and governance (ESG) risks into the prudential framework. With the aim of assessing whether a specific prudential treatment is warranted, the CRR establishes three mandates: to assess the availability of ESG risk data; to evaluate the effective risk profile of exposures affected by environmental or social factors; and to analyse the potential effects on financial stability of differentiated prudential treatment, with a view to possible legislative proposals by 31 December 2026.

In addition, the CRR3/CRD6 package introduces disclosure requirements on ESG risks, reporting of ESG risk exposures to competent authorities, and an obligation for institutions to develop specific plans for managing financial risks arising from ESG factors, including those related to transition trends.

In this context, the EBA published in January 2025 the Guidelines on the Management of ESG Risks, fulfilling the CRD6 mandate to structurally integrate ESG risks into the European prudential framework. These Guidelines set out minimum standards and reference methodologies for the identification, measurement, management and monitoring of ESG risks, as well as their proper integration into internal governance processes, risk appetite frameworks and strategic planning. The Guidelines also specify minimum requirements for the development of transition plans, which must include metrics, quantifiable targets and time-bound milestones aligned with institutions’ sustainability strategies and prudential requirements. Their application will be mandatory from 11 January 2026, consolidating a prudential framework that strengthens the systematic consideration of ESG risks in supervisory and risk management processes.

At the international level, the Basel Committee on Banking Supervision (BCBS) has continued to advance work on ESG-related standards. In June 2025, the Committee published a voluntary framework for the disclosure of climate-related financial risks, aimed at guiding internationally active banks in the provision of qualitative and quantitative information on their exposures to physical and transition risks. The framework acknowledges the still nascent state of climate data availability, consistency and quality, and therefore adopts a flexible approach that allows for the use of different metrics and methodologies. While its adoption will depend on jurisdictional decisions, the Committee considers this

24    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

framework an important step towards enhancing transparency and international comparability of climate risk disclosures and intends to monitor its implementation with a view to potential future revisions.

In parallel, over the course 2025, EU institutions have continued to develop regulatory initiatives in the field of sustainable finance, notably including:

▪Adjustments to the CSRD (Corporate Sustainability Reporting Directive) and the Corporate Sustainability Due Diligence Directive (CSDDD): on February 2025, the European Commission launched a reform package known as the Omnibus Package, putting forward significant proposals to reduce the administrative burden associated with the CSRD and the CSDDD, including delayed application, higher reporting thresholds and a narrower scope. This reform, aimed at simplification and competitiveness, was concluded in December 2025.

▪Reform of the SFDR (Sustainable Finance Disclosure Regulation): towards the end of 2025, the European Commission published a proposal aimed at simplifying the sustainable finance disclosure framework and reducing the risk of greenwashing. The amendment removes the current classification based on Articles 8 and 9 and introduces new product categories (sustainable, transition and ESG-strategy products). The proposal is currently under review by the European Parliament and the Council, and final adoption is not expected before the end of 2026.

▪Implementation of the European Green Bond Regulation (EuGB – Regulation (EU) 2023/2631): applicable since 21 December 2024, the full operationalisation of the standard progressed throughout 2025 with the adoption of delegated acts and technical standards governing the authorisation and supervision of external reviewers by ESMA, as well as mandatory disclosure templates on use of proceeds, allocation and impact. These developments have enabled the practical implementation of EuGB-compliant issuance, consolidating a robust and harmonised framework for green bonds in the European Union.

▪Revision of the Energy Performance of Buildings Directive (EPBD): during 2025, the revision of the EPBD progressed with a view to accelerating the transition of the European building stock and harmonising energy performance certificates. Transposition into national law is expected by May 2026.

Overall, the EU sustainable finance regulatory framework heading into 2026 is moving towards greater clarity and proportionality, seeking to strike a balance between the ambition of sustainability objectives and a more pragmatic implementation of reporting and risk management requirements.

1.4.4. Digital

The objective of consolidating a regulatory framework governing the digital ecosystem in the European Union continued to advance throughout 2025. Regulatory momentum has remained strong and has been articulated through a set of initiatives that, on the one hand, aim to foster an environment conducive to innovation and competitiveness and, on the other, to strengthen security, operational resilience and user protection. The main regulatory developments in areas such as artificial intelligence, crypto-assets and digital resilience are outlined below.

Crypto-assets

EU regulation on crypto-assets has progressed significantly with the entry into application of the Markets in Crypto-Assets Regulation (MiCA), which establishes a common and harmonised framework for the issuance, custody and provision of services related to crypto-assets in the European Union. Since December 2024, MiCA has been fully applicable across the EU, although its practical implementation remains subject to the finalisation of certain Level 2 and Level 3 measures that are still pending adoption.

Given the global growth of crypto-asset-related activities, the EU is moving forward with the integration of Basel standards on crypto-assets through the mandate set out in CRR3, which will enable the establishment of a harmonised prudential treatment once the legislative process is completed. In fulfilment of the CRR3 mandate, the EBA has finalised and published the draft Regulatory Technical Standards (RTS) applicable to the calculation of own funds requirements for crypto-asset exposures.

Central Bank Digital Currencies (CBDCs)

During 2025, the preparatory phase of the digital euro, launched by the Eurosystem, continued with the aim of defining a robust operational and technological model ahead of any potential issuance decision. In this phase, the Eurosystem is advancing the development of the technical capabilities required for a future digital euro, including the design of prototypes, technological architecture and functional testing, while maintaining flexibility and alignment with the ongoing European legislative process. At the end of the year, the ECB announced that it was moving to the next phase, which includes additional technological developments and the launch of a pilot, among other elements.

The legislative proposal submitted by the European Commission in 2023 remains under discussion and, assuming adoption by the European co-legislators during 2026, the Eurosystem estimates that it could be ready for a first potential issuance in 2029. Any formal decision by the ECB’s Governing Council on whether and when to issue a digital euro will only be taken once the legislative act has been adopted.

Artificial Intelligence

The EU Artificial Intelligence Act (AI Act) was adopted in 2024 and will apply from 2 August 2026, following a phased implementation timeline that includes early application of certain obligations. During 2025, the following milestones entered into force: the prohibition of AI systems posing unacceptable risk (February 2025); a voluntary code of good practice (May 2025); governance requirements and provisions applicable to general-purpose AI (August 2025); and compliance obligations for high-risk AI systems (August 2026).

In parallel, during 2025 the European Commission published a Digital Omnibus Package, which includes a set of legislative amendments aimed at simplifying the digital regulatory framework, including measures potentially affecting AI, such as a possible postponement of obligations associated with high-risk AI applications.

DORA

The Digital Operational Resilience Act (DORA) has been applicable since 17 January 2025 and establishes a

2025 Pillar 3 Disclosures Report    25

Index Introduction l Capital l Risks l Remuneration l Appendices l

harmonised framework for ICT risk management for financial entities in the European Union, including common requirements on cybersecurity and operational resilience.

During 2025, the technical standards on the reporting of major ICT-related incidents, together with the corresponding notification templates and forms, were published. In addition, between June and July 2025, technical standards relating to the outsourcing of critical or important ICT services and the criteria for Threat-Led Penetration Testing (TLPT) were also issued.

In 2025, the European Commission published the first list of Critical Third-Party Providers (CTPPs), triggering the direct supervisory regime established under DORA. Financial institutions are required to adapt their third-party risk management frameworks to reflect the new supervisory oversight of CTPPs by the European Supervisory Authorities (ESAs), ensuring that internal information and controls adequately support the management of this risk. This designation further increases the need to assess operational concentration and structural dependencies on critical technology services, given their impact on the operational risk profile.

Payments

Throughout 2025, progress continued on the regulatory framework aimed at strengthening payment services. In this context, as of 9 January 2025, institutions were required to be capable of receiving instant credit transfers. Subsequently, on 9 October 2025, the rollout of the Instant Payments Regulation was completed with the obligation for institutions to send instant credit transfers across EU entities.

Data

The Financial Data Access Regulation (FiDA) seeks to establish a common framework for access to and use of financial data in the European Union, setting out rules for the secure sharing of information between financial institutions and authorised third-party providers. During 2025, the proposal continued its legislative process in the European Parliament and the Council, consolidating its position as a key initiative for the future data economy in the European financial sector.

In parallel, the Data Act establishes an EU-wide framework to facilitate access to, use and sharing of data to promote innovation and foster a more competitive data market. The Regulation strengthens users’ control over data generated by connected products and services and has been applicable since 12 September 2025. However, the Data Act may be affected by the Digital Omnibus Package, currently at proposal stage, which introduces adjustments aimed at harmonising data treatment across EU legislation. Its final impact will depend on the text ultimately adopted following the legislative negotiations.

Digital identity

During 2025, the EU made significant progress in the implementation of the European Digital Identity Framework with the adoption of six Implementing Regulations detailing the technical requirements for the application of eIDAS 2.0 (Regulation (EU) 2024/1183). These implementing acts regulate key aspects such as qualified electronic time stamps, validation of electronic signatures and seals, interoperability of electronic registered delivery services, certification of

advanced electronic signatures, and the long-term preservation of electronic signatures and seals.

Member States are required to deploy the European Digital Identity Wallet (EUDI Wallet) within 24 months of the adoption of the implementing acts. This package of measures strengthens the security, interoperability and standardisation of digital services across the EU, with direct implications for banking processes such as onboarding, digital contracting and electronic identity management.

26    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

1.4.5. AML/FT

On 19 June 2024, the new Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) legislative package was published in the Official Journal of the European Union, with the aim of strengthening and harmonising the existing European framework. The reform sought to improve the detection of suspicious transactions and to close identified regulatory gaps. Among its key innovations, the scope of application was extended to new obliged entities, including the crypto-asset sector, luxury goods traders and the football sector. In addition, more stringent customer due diligence requirements were introduced, along with enhanced rules on beneficial ownership and a EUR 10,000 limit on cash payments.

The package also included the creation of a new European Anti-Money Laundering and Countering the Financing of Terrorism Authority (AMLA), with supervisory powers at EU level; a directly applicable Regulation aimed at harmonising AML/CFT obligations across the EU; and a new Directive designed to strengthen cooperation, national supervision and the role of Financial Intelligence Units (FIUs).

Other key communications published during 2025 in relation to the AML legislative package include the following:

▪On 28 July 2025, the EBA issued its fifth Opinion on AML/CFT risks affecting the European financial sector (EBA/Op/2025/10). The Opinion highlights a complex AML/CFT risk landscape driven by rapid technological innovation (FinTech, RegTech and Artificial Intelligence), regulatory reform and evolving criminal behaviours. The EBA notes that innovation and growth in the financial sector may be outpacing institutions’ capacity to manage AML/CFT risks, with credit institutions, payment institutions and electronic money institutions being particularly vulnerable. In this context, the uncritical application of RegTech AML/CFT solutions and the indirect risks arising from the increasing interconnectedness between traditional financial service providers and innovative financial service providers—such as crypto-asset service providers—are identified as areas of particular concern.

At the same time, the Opinion points to positive trends, including a reduction in tax-related risks as well as in unjustified de-risking. Residual risk levels have improved because of stronger supervision and more effective controls.

▪On 3 July 2025, a Memorandum of Understanding (MoU) was signed between the European Central Bank (ECB) and AMLA, establishing a framework for cooperation and information exchange between the two institutions. The objective is to enhance supervisory effectiveness, maximise efficiency and avoid duplication of efforts. Both institutions will seek to ensure consistency in their regulatory approaches and supervisory standards and will cooperate closely, where appropriate, in the adoption of supervisory measures related to internal controls and governance or in the application of sanctions. This may include, where necessary due to serious breaches of AML/CFT rules, restricting or limiting an institution’s activities or withdrawing authorisations. The ECB and AMLA will also hold regular discussions on matters of common interest, and representatives of both institutions will be invited to attend meetings of each other’s Boards as observers where relevant. This Memorandum forms part of the European

AML/CFT package and fulfils the cooperation requirements set out in Article 92(3) of the AMLA Regulation.

2025 Pillar 3 Disclosures Report    27

Index Introduction l Capital l Risks l Remuneration l Appendices l

1.5. Scope of consolidation

This section covers the qualitative requirements LIA - Explanations of differences between accounting and regulatory exposure amounts and LIB - Other qualitative information on the scope of application.

1.5.1. Acquisitions and disposals

The following information 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 four years or pending to be completed:

•Tender offer for shares of Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México.

•Agreement for the acquisition of a significant stake in Ebury Partners Limited.

•Purchase by SHUSA for shares of Santander Consumer USA.

•Acquisition of Amherst Pierpont Securities LLC, a U.S. fixed-income broker dealer

•Agreement for the sale of the stake in Caceis (2024)

•Accelerated placement of ordinary shares of Santander Bank Polska (2024)

•Agreement to acquire TSB Banking Group plc (2025).

•Agreement to sell 49% of Santander Bank Polska S.A. and accelerated bookbuild of Santander Bank Polska S.A. ordinary shares (2025).

For more information on the main acquisitions and disposals of holdings in other companies and other major corporate transactions by Santander last year, refer to the 'Auditor´s report' section of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

1.5.2. Events subsequent to the close of the fiscal year

On 9 January 2026, after obtaining the necessary regulatory approvals and fulfilling the conditions for closing, the Group completed the sale of 49% of the share capital of Santander Bank Polska S.A. and 50% of the share capital of Santander Towarzystwo Funduszy Inwestycyjnych S.A. (TFI, the asset management business in Poland) to Erste Group Bank AG for a total cash amount of approximately EUR 7,000 million. The transaction generated a net capital gain of approximately EUR 1,900 million, which will be recognized in the consolidated income statement for the 2026 financial year. Santander holds the 9.7% of Santander Polska's share capital.

The transaction resulted in the loss of effective control over the entity, and therefore, effective as of 9 January 2026, Santander Bank Polska S.A. will cease to be consolidated using the global integration method in the Group's consolidated financial statements from that date forward.

Additionally, on 3 February 2026, Banco Santander, S.A. ('Santander') announced that it had reached an agreement to acquire Webster Financial Corporation ('Webster'), the parent company of Webster Bank, N.A., for approximately USD

12,200 million (around EUR 10,300 million). Webster shareholders will receive USD 48.75 in cash and 2.0548 Santander shares for each Webster share, resulting in a total consideration of USD 75 per Webster share. Completion of the transaction is expected to take place in the second half of 2026 subject to the customary conditions for this type of operations, including obtaining the relevant regulatory approvals and the approvals of both Webster's and Santander's shareholders.

1.5.3. Differences between the consolidation methods

Santander entities are consolidated using a different method for accounting consolidation.

For the purposes of calculating the capital adequacy ratio based on the nature of their business activities, the Group companies included in the prudential scope of consolidation are consolidated using the full consolidation method, with the exception of jointly controlled entities, which use proportionate consolidation. All companies that cannot be consolidated based on their business activities are accounted for using the equity method and are treated as equity exposures.

The basis of the information used for accounting purposes differs from that used for calculating regulatory capital requirements. Risk exposure measurements may differ depending on the purpose of the calculation, such as financial reporting, regulatory capital reporting and management information. The exposure data included in the quantitative disclosures in this document is used for calculating regulatory capital or leverage ratio.

The companies using a different consolidation method, depending on the regulations applied (table LI3), are listed in Appendix VI of this document.

28    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following table shows the relationship between the categories in the financial statements and the risk categories in accordance with prudential requirements.

			Table 2.LI1 - Differences between accounting and regulatory scopes of consolidation and mapping of financial statement categories with regulatory risk categories
																											EUR million
																					2025
						a			b			c			d			e			f			g
						Carrying values as reported in published financial statements			Carrying values under scope of regulatory consolidation			Carrying values of items:
												Subject to credit risk framework			Subject to the CCR framework			Subject to securitisation framework			Subject to market risk framework			Not subject to capital requirements or subject to deduction from capital
			Assets
1			Cash and cash balances at central banks			152,281			152,378			152,378			—			—			—			—
2			Financial assets held for trading			252,318			252,279			—			129,444			—			122,835			—
3			Non-trading financial assets mandatorily measured at fair value through profit or loss			7,761			5,401			1,877			—			15			3,509			—
4			Financial assets not held for trading valued mandatorily at fair value through profit or loss			8,046			5,276			—			—						5,276			—
5			Financial assets designated at fair value through profit or loss			74,612			59,701			54,980			—			2,442			—			2,280
6			Financial assets at amortised cost			1,202,689			1,207,089			1,123,008			69,669			14,384			—			28
7			Derivatives - Hedge accounting			3,931			4,030			—			4,030			—			—			—
8			Fair value changes of the hedged items in portfolio hedge of interest rate risk			50			50			—			—			—			—			50
9			Investments in subsidiaries, joint ventures and associates			7,052			6,976			—			—			—			—			6,976
10			Reinsurance assets			223			—			—			—			—			—			—
11			Tangible assets			27,438			24,315			24,315			—			—			—			—
12			Intangible assets			17,308			17,339			3,338			—			—			—			10,663
13			Tax assets			30,076			29,834			27,469			—			—			—			2,364
14			Other assets			8,719			9,039			8,255			—			—			—			784
15			Non-current assets and disposal groups classified as held for sale			75,011			75,086			75,086			—			—			—			—
16			Total assets			1,867,515			1,848,793			1,470,707			203,143			16,840			131,620			23,145
			Liabilities			—			—			—			—			—			—			—
1			Financial liabilities held for trading			(171,546)			(171,423)			—			(127,408)			—			(44,015)			—
2			Financial liabilities designated at fair value through profit or loss			(42,148)			(41,453)			—			—						(41,453)			—
3			Financial liabilities measured at amortised cost			(1,421,184)			(1,422,420)			—			(95,064)						—			(1,327,355)
4			Derivatives - Hedge accounting			(4,248)			(4,250)			—			(4,250)			—			—			—
5			Fair value changes of the hedged items in portfolio hedge of interest rate risk			(49)			(49)			—			—			—			—			(49)
6			Liabilities under insurance contracts			(18,737)			—			—			—			—			—			—
7			Provisions			(8,355)			(8,379)			(713)			—			—			—			(7,666)
8			Tax liabilities			(9,568)			(9,270)			—			—			—			—			(9,270)
9			Other liabilities			(15,937)			(15,843)			—			—			—			—			(15,843)
10			Liabilities included in disposal groups classified as held for sale			(62,995)			(62,995)			—			—			—			—			(62,995)
			Total liabilities			(1,754,767)			(1,736,082)			(713)			(226,722)			—			(85,468)			(1,423,178)

2025 Pillar 3 Disclosures Report    29

Index Introduction l Capital l Risks l Remuneration l Appendices l

The difference in total assets between the public and the reserved scopes is not material (-EUR 18,724 Bn) and corresponds to the exclusion of non financial institutions (-EUR 30,200 Bn) and the inclusion of jointly controlled (+EUR 14,364 Bn) and intra/group entities (-EUR 2,888 Bn).

In addition, the sum of the carrying amounts of certain items is greater than the carrying amounts under the scope of prudential consolidation, as the financial assets held for trading and the financial assets at fair value through profit or

loss are subject to the capital requirements of more than one risk category under the regulatory scope.

The main differences between the carrying amounts in the financial statements and the exposures for prudential purposes are shown below:

Table 3.LI2 - Main sources of differences between regulatory exposure amounts and carrying values in financial statements
EUR million
																		2025
						a			b			c			d			e
						Total			Items subject to:
									Credit risk framework			Securitisation framework			CCR framework			Market risk framework
1			Asset carrying value amount under scope of regulatory consolidation (as per template EU LI1)			1,822,311			1,470,707			16,840			203,143			131,620
2			Liabilities carrying value amount under regulatory scope of consolidation (as per template EU LI1)			(312,904)			(713)			—			(226,722)			(85,468)
3			Total net amount under regulatory scope of consolidation			1,509,407			1,469,993			16,840			(23,579)			46,152
4			Off-balance sheet amounts			395,214			395,214			—						—
			Regulatory Add-on			80,970			—			—			80,970			—
5			Differences in valuations			—			—			—						—
6			Differences due to different netting rules, other than those already included in row 2			24,478			—			—			70,630			(46,152)
			Non-eligibility of the balances corresponding to accounting hedges (derivatives)			(4,030)			—			—			(4,030)			—
10			Securitisations with risk transfer			(18,874)			(2,033)			(16,840)			—			—
11			Other			(1,486)			(108,860)			107,374			—			—
7			Differences due to consideration of provisions			(16,567)			(16,565)			(3)			—			—
8			Differences due to CRMs			(100,614)			(21,284)			(38)			(79,292)			—
9			Differences due to CCFs			(192,347)			(192,347)			—			—			—
12			Exposure amounts considered for regulatory purposes (EAD)			1,676,150			1,524,118			107,333			44,699			—

This table shows a breakdown of the differences between the amounts of exposures for prudential purposes and the carrying amounts according to various parameters.

As shown in the table, the main cause for the deviation is the amount from the off-balance sheet items (+EUR 395.214 billion) and the application of CCFs (-EUR 192.347 billion).

Further the regulatory add-on (+EUR 80.970 billion) and the differences resulting from the various offsetting rules (+EUR 24.478 billion) are also applied.

The reconciliation of the public and non-public balance sheets (table CC2) is shown in table 4.

30    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

A transparency exercise is carried out below to show the reconciliation process between the accounting balances reported in the public balance sheet and the accounting balances on which this report is prepared (regulatory perimeter), highlighting the main differences between the two perimeters:

			Table 4.CC2 - Reconciliation of regulatory own funds to balance sheet in the audited financial statements
															EUR million
			(A) ASSETS			(B) Balance under accounting consolidation			(C) Balance under regulatory consolidation			(D) Reference to transitional disclosure template (Table 2)
						a			b			c
1			Cash and cash balances at central banks (010)			152,281			152,378
2			Financial assets held for trading (050)			252,318			252,279
3			Non-trading financial assets mandatorily measured at fair value through profit or loss (096)			7,761			5,401
4			Financial assets designated at fair value through profit or loss (100)			8,046			5,276
5			Financial assets at fair value through other comprehensive income (141)			74,612			59,701
6			Held-to-maturity investments (181)			1,202,689			1,207,089
7			Derivatives - Hedge accounting (240)			3,931			4,030
8			Fair value changes of the hedged items in portfolio hedge of interest rate risk (250)			50			50
9			Investments in subsidiaries, joint ventures and associates (260)			7,052			6,976
10			Reinsurance assets (265)			223			—
11			Tangible assets (270)			27,438			24,315
12			Intangible assets (300)			17,308			17,339
13			Tax assets (330)			30,076			29,834
14			Deferred tax assets (350)			18,944			18,747
15			Other assets (360)			8,719			9,039
16			Non-current assets and disposal groups classified as held for sale (370)			75,011			75,086
17			TOTAL ASSETS (380)			1,867,515			1,848,793
			(A) LIABILITIES			(B) Balance under accounting consolidation			(C) Balance under regulatory consolidation			(D) Reference to transitional disclosure template (Table 2)
1			Financial liabilities held for trading (010)			171,546			171,423
2			Financial liabilities designated at fair value through profit or loss (070)			42,148			41,453
3			Financial liabilities measured at amortised cost (110)			1,421,184			1,422,420
4			Subordinated liabilities (149)			29,287			29,355
5			Derivatives - Hedge accounting (150)			4,248			4,250
6			Fair value changes of the hedged items in portfolio hedge of interest rate risk (160)			49			49
7			Liabilities under insurance contracts (165)			18,737			—
8			Provisions (170)			8,355			8,379
9			Tax liabilities (240)			9,568			9,270
10			Deferred tax liabilities (260)			5,904			5,633
11			Share capital repayable on demand (270)			—			—
12			Other liabilities (280)			15,937			15,843
13			Liabilities included in disposal groups classified as held for sale (290)			62,995			62,995
14			TOTAL LIABILITIES (300)			1,754,767			1,736,082
			(A) EQUITY			(B) Balance under accounting consolidation			(C) Balance under regulatory consolidation			(D) Reference to transitional disclosure template (Table 2)
1			Capital (010)			7,345			7,345
2			Share premium (040)			36,792			36,792
3			Equity instruments issued other than capital (050)			—			—

2025 Pillar 3 Disclosures Report    31

Index Introduction l Capital l Risks l Remuneration l Appendices l

4			Other equity (080)			273			273
5			Retained earnings (190)			91,959			91,605
6			Revaluation reserves (200)			—			—
7			Other reserves (210)			(7,532)			(7,178)
8			(-) Treasury shares (240)			(96)			(96)
9			Profit or loss attributable to Owners of the parent (250)			14,101			14,101
10			(-) Interim dividends (260)			(1,698)			(1,698)
11			Accumulated other comprehensive income (090)			(37,974)			(37,973)
12			Minority interests [Non-controlling interests] (270)			9,578			9,540
13			Of which other global accumulated result (280)			(1,947)			(1,945)
14			TOTAL EQUITY (300)			112,748			112,711

32    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

1.6. Financial conglomerates

The European prudential framework establishes specific requirements for groups combining banking and insurance activities through Directive 2002/87/EC on financial conglomerates (the Financial Conglomerates Directive – FiCoD). This Directive defines when a group is to be considered a financial conglomerate and, where applicable, is subject to supplementary supervision, with the aim of ensuring an integrated view of risks and capital adequacy across the group’s financial sectors.

One of the key elements associated with financial conglomerate status is the so-called Danish Compromise, provided for in Article 49(1) of the CRR in conjunction with the FiCoD. This regime allows credit institutions with significant holdings in insurance undertakings to apply a specific prudential treatment under which such holdings are treated as equity exposures, rather than being deducted from CET1 when they exceed certain significance thresholds. Its application requires: (i) that the group is formally recognised as a financial conglomerate subject to supplementary supervision; and (ii) that supervisory authorisation is obtained following evidence of adequate integration of risk management and internal control systems across the banking and insurance sectors.

In the absence of such authorisation, the general treatment applicable to insurance participations, pursuant to Article 48 of the CRR, combines a 250% risk weight up to a certain significance threshold with CET1 deduction above that threshold. This is the treatment currently applied by Santander Group.

Current situation of Santander Group

In 2006, the Banco de España granted Santander an exemption from supplementary supervision as a financial conglomerate, considering that the Group did not require additional supervision insofar as sufficient and differentiated sectoral supervision was already in place.

However, the context has evolved significantly in recent years. In light of this evolution, and given that Santander’s insurance activity has reached a scale that fully falls within the scope envisaged by the FiCoD, and that the exemption should be reviewed to reflect the current business reality and ensure a consistent application of the European regulatory framework, the ECB has withdrawn Santander’s supplementary supervision waiver with effect from 1 January 2026.

The recognition of Santander as a financial conglomerate subject to supplementary supervision would also allow the Group to initiate the process of applying for the Danish Compromise, thereby aligning the Group’s prudential treatment with that applied by other comparable European institutions.

Banco Santander has not been granted the supervisory authorisation set out in Article 49(1) of the CRR and therefore deducts holdings of own funds instruments in insurance undertakings in which it has a significant investment for the purposes of calculating own funds (unless the exemption provided for in Article 48 of the CRR applies).

Therefore, in financial year 2025 there is no requirement to publish table INS1, on non-deducted holdings in insurance undertakings, nor table INS2, on own funds and the capital ratio as a financial conglomerate.

2025 Pillar 3 Disclosures Report    33

Index Introduction l Capital l Risks l Remuneration l Appendices l

34    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

			2.1. Introduction			37
			2.2. Capital function			38
			2.2.1. Organisation			38
			2.2.2. Capital governance			38
			2.2.3. Capital targets			39
			2.3. Capital management, adequacy and profitability			40
			2.3.1. Santander Global Asset Desk			41
			2.3.2. Profitability and pricing			43
			2.3.3. Other activities in capital management			44
			2.4. Regulatory capital - Pillar 1			45
			2.4.1. Eligible capital			45
			2.4.2. Capital requirements			48
			2.4.2.1. Output floor			52
			2.4.3. Eligible capital requirements and Capital buffers			55
			2.4.3.1 Capital Buffers			55
			2.4.3.2 Eligible capital requirements			59
			2.5. Leverage ratio			61
			2.6. Economic capital - Pillar 2			66
			2.7. Capital planning and stress tests			66
			2.8. TLAC and MREL			67
			2. Capital

2025 Pillar 3 Disclosures Report    35

Index Introduction l Capital l Risks l Remuneration l Appendices l

2. CAPITAL

This chapter analyses the relevant aspects of capital management and capital adequacy in Grupo Santander, as well as the main capital figures and solvency ratios, including aspects of Pillar 2. For further details on capital requirements by type of risk, see the specific chapters on each of the risks.

Strong organic capital generation, supporting accretive capital redeployment, consistent with our capital hierarchy

Table 5. Common Equity (CET1)
EUR million									Change
			Dec'25			Dec'24			Absolute			%			Dec'23
Common Equity (CET1)			84,739			79,800			4,940			6.2		%	76,741
Tier 1			94,385			90,170			4,214			4.7		%	85,742
Eligible capital			111,845			108,589			3,256			3.0		%	102,240
Risk weighted assets			629,430			624,503			4,927			0.8		%	623,731
CET1 Ratio			13.46		%	12.78		%	0.7 p.p.						12.30		%
Tier 1 Ratio			15.00		%	14.44		%	0.6 p.p.						13.75		%
Total capital ratio			17.77		%	17.39		%	0.4 p.p.						16.39		%

RWA distribution by type of risk Calculating RWAs credit method (ex. SEC and Others)

36    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2.1. Introduction

Capital management and capital adequacy in Grupo Santander is carried out in an holistic manner, seeking to guarantee the entity's solvency, comply with regulatory requirements and maximize its profitability.

It is determined by the strategic objectives and risk appetite set by the board of directors. In order to achieve this, the following principles have been defined, which determine the Group's approach to capital management:

•Establish adequate capital planning to cover current necessities and provide the necessary equity to meet the demands of the business plans, regulatory requirements and associated risks in the short and medium term, while maintaining the risk profile approved by the board of directors.

•Ensure adequate capital to cover the needs of Group and its subsidiaries resulting from increased risks due to deteriorating macroeconomic conditions under stress scenarios.

•Optimise capital use through appropriate allocation among businesses, based on the relative return on regulatory and economic capital and taking into account risk appetite, growth and strategic objectives.

Grupo Santander manages capital and its value creation through six main blocks, placing profitability and capital at the forefront of its decisions, with the aim of improving the CET1 ratio and reinvesting freed up capital in profitable growth, shareholder remuneration and strategic investments. These blocks are:

•Capital strategy that defines an ambitious Group-wide target including a capital buffer above the requirements and incorporates a holistic market perspective compared to competitors and the supervisory authority.

•Increasing risk-adjusted returns through better allocation, analysing the performance of portfolios and carrying out both the organic (front-book) and inorganic capital allocation process.

•The detailed tracking and monitoring of performance across all countries is reviewed and evaluated at regular meetings to generate profitability-improvements.

•Portfolio management by identifying, prioritising and executing risk sharing and risk transfer across countries.

•Precise capital calculation identifying opportunities to optimise the numerator (CET1) and denominator (RWA), as well as greater industrialisation and standardisation of the Group's processes. In addition, the Group is working towards the overall optimisation of capital requirements (SREP framework, stress tests, MREL, TLAC).

•Technological infrastructure and systems, capital tools and other optimisers are cross-cutting elements and factors that allow for proper capital management.

As of 1 January 2025, Regulation (EU) 2024/1623 ('CRR3') entered into force, introducing amendments to the determination of own funds and capital requirements, including the initial phase-in of the Output Floor and further adjustments to RWAs, deductions and risk metrics. The Group has opted for the application of the transitional arrangement set out in CRR3, in accordance with the specific transitional articles, with the objective of ensuring an orderly and proportionate implementation.

Consequently, as of 31 December 2025, the CET1 phase-in ratio (applying the CRR3 transitional arrangement) stood at 13.46%. Although the CRR3 fully-loaded criteria are not yet fully defined, our current estimate for the fully-loaded CET1 ratio is comfortably above our >12% target for 2025 year end.

2025 Pillar 3 Disclosures Report    37

Index Introduction l Capital l Risks l Remuneration l Appendices l

2.2. Capital function

Core principles establish the underlying guidelines governing the actions of Santander entities in capital management, monitoring and control processes.

2.2.1. Organisation

The organizational structure was established with the purpose of ensuring compliance with the basic principles relating to capital and ensuring that the relationships between the subsidiaries and the Group headquarters are maintained. Two objectives can be achieved with this function: comply with the subsidiary’s financial autonomy while at the same time retaining coordinated monitoring at Group level.

2.2.2. Capital governance

Santander developed a structure of agile and efficient governing bodies, ensuring that the capital function operates properly when it comes to decision-making and supervision and control. This ensures involvement of all relevant business areas and involvement of senior management as necessary.

Santander's characteristic subsidiary-based structure has a strong capital governance with various committees with not only responsibilities at local level but also responsibility for coordination at Group level. The local committees have to report to the corporate committees in due time and proper form on any relevant aspects of their activity that may affect capital, to ensure proper coordination between the subsidiaries and the Corporate Centre.

Statutory committees

Board of directors

Executive-level committees

Audit Committee

Determine the 'target' level of capital adequacy considered sufficient for the entity to operate satisfactorily. Promotes efficient capital management by establishing minimum profitability requirements and allocating capital appropriately. Analyses and approves of the Pillar 3 report, disclosure exemptions and the ICAAP

Assists the board in approving the capital strategy and oversees its implementation and alignment with the risk appetite Challenge and review of the internal capital adequacy assessment process (ICAAP)

Review independently the annual accounts and the other financial and non-financial information. Reviews and submits the annual Disclosure Policy and Pillar 3 to the board for approval. Also ratifies the annual Pillar 3 external Audit.

Executive – level committees

Support forums

Executive risk committee

Capital committee

Operating capital forum

Challenge and review of the internal capital adequacy assessment process.

Committee responsible for the proper management, monitoring, control, and supervision of all matters related to the bank's capital Review capital adequacy and solvency at the consolidated level, as well as monitor capital consumption, return on capital metrics, and capital contribution per unit and business Assess the qualitative and quantitative aspects of capital requirements, as well as the schedule of actions necessary to ensure the bank's solvency Analyse the requirements of the Capital Stress Test Supervisor at the consolidated level, prior to internal approval or submission to the relevant supervisory authority Monitor all aspects related to the implementation of internal models throughout the Group and recommend improvements to capital models and their integration into capital management Validate the Pillar 3 Disclosure report and approve the quarterly Pillar 3 Disclosure exercises and reports

Forum with powers delegated by the capital committee responsible for the support functions and the review of all aspects related to the capital and solvency of the Group. It reports to the capital committee.

41 sessions during 2025

17 sessions during 2025

26 sessions during 2025

38    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2.2.3. Capital targets

In the 3-year strategic plan ended in 2025 the bank is pursued a return on tangible equity (RoTE) of 15-17% while delivering double-digit growth through the cycle in tangible net asset value per share plus dividend per share through the cycle. The group’s key financial and commercial goals include:

•Increasing the shareholder payout policy (the proportion of profit distributed to shareholders) from c.40% to c.50% in 2023-2025 through both cash dividends and share buybacks.

•Achieving a return on tangible equity of 15-17% in 2023-2025 and an efficiency ratio of c.42% by 2025.

•Maintaining a fully-loaded CET1 above 12%.

•Delivering double-digit average growth through the cycle in tangible net asset value (TNAV) per share plus dividend per share through the cycle - a key measure of value creation.

We continue to focus on disciplined capital allocation and shareholder remuneration after achieving our 2025 CET1 target of remaining above 12%-13% and closing the year above 13%.

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.

The Group places significant emphasis on the long-term sustainability of the entity and the efficient use of capital in the incentives for the Group's senior executives. In this regard, certain aspects related to capital management and profitability have been taken into account in the 2025 variable remuneration of senior management members; for example, return on risk-weighted assets (RoRWA), return on tangible equity (RoTE) and relevant capital metrics (capital generation

or CET1). For more details, see section 6.4 in the 'Corporate governance' chapter of the 2025 annual report.

2026 Objectives

Santander is in a new era of value creation. Our scale, diversification and the impact of our transformation will enable us to increase profitability again in 2026.

In 2026, our operating range remains between 12-13% and we have set the objective of ending the year between 12.8-13% following the acquisition of Webster. For more details, see note e) Capital management, i) Regulatory and economic capital, in the 'Notes to the consolidated financial statements' chapter of the 2025 annual report.

Action plans

An action plan is developed by Santander for the continuous improvement of infrastructures, processes and methodologies, supporting all aspects related to capital, with the target of further enhancing active capital management, responding more agile to the numerous and increasing regulatory requirements and efficiently carrying out all associated activities.

2025 Pillar 3 Disclosures Report    39

Index Introduction l Capital l Risks l Remuneration l Appendices l

2.3. Capital management, adequacy and profitability

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.

•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. Tracking businesses, portfolios and customers with profitability below the minimum target.

•Coordinating and promoting the bank’s asset mobilization plan (e.g. securitisations, 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).

Santander´s capital function target

Capital allocation

Maximize profitability in the economic cycle

Shift towards a fee-based, capital-light model

Provide economic value to shareholders

Continue building a sound capital base

Capital allocation based on shareholder value creation by measuring profitability on a full cost allocation basis

Sustain profitability improvements in a changing macro-economic environment

Move forward with a capital-light model, given intense competition from peers operating with lighter capital models with more competitive pricing

Improve free capital generation by increasing profitability per unit of capital deployed as well as by mitigating impacts that hinder free capital generation

Continuously improve the Group´s capital base, while cautiously following the profitable RWA growth mandate

Santander´s goal is to generate capital growth and value creation for shareholders

40    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2.3.1. Santander Global Asset Desk

Santander has shifted to a capital-light model to improve its ability to generate free capital. In this regard, it is key to actively manage not only the capital allocated to new origination but also the stock to improve capital management of less profitable assets.			In addition, the Global Asset Desk analyses the balance sheets of the Group's entities, together with the different units, identifying those risk transfer opportunities that may be attractive to investors, and assists the units in their execution through different strategies such as securitisations, asset sales, guarantees and other products.
By mid-2023, Banco Santander's board of directors approved the creation of the 'Global Asset Desk' at Group level. The Global Asset Desk is responsible for coordinating measures aimed at rotating balance sheet assets, playing a key role in achieving a more efficient use of capital, in line with the solvency and profitability strategy.
			"
			By proactively rotating our assets, we not only strengthen our financial position, but also generate capital for additional profitable growth. This approach is fundamental to our strategy of sustainable growth and value creation for our shareholders'.
			José García Cantera, Group Chief Financial Officer			"

Our efforts are focused on refining the capital model to drive growth while utilising less capital and maximises capital productivity by…
			From…			…To
Focusing on value generation & profitability			Focusing on balance sheet growth and generation of market share			Prioritising value generation and profitability, while enhancing management of low yielding assets
Ensuring capital efficiency at origination			Emphasizing lifetime return optimisation over credit exposures			Implementing a systematic approach to capital efficiency at origination to enhance profitability of the new book
Increasing balance sheet velocity and risk transfer			Maintaining position in the balance sheet and pursue targeted risk distribution initiatives within each unit			Enhancing portfolio management with dynamic reallocation and operationalisation of distribution opportunities across the entire balance sheet, to achieve higher asset rotation and risk transfer

As part of the capital management strategies, securitisation transactions with significant risk transfer (SRTs) have been carried out, allowing the Bank to release capital used to support lending by paying investors to assume part of the associated risk. Other strategies include, for example, guarantees whereby the portfolio, or part of it, is guaranteed by another entity with good credit quality or an insurance company, which assumes potential losses in exchange for a guarantee fee. This results in a significant reduction in the capital requirement applicable to the guaranteed portfolio. Finally, a pool of assets may also be sold through a competitive investor process, transferring ownership and therefore releasing the associated capital requirements.

“

'The banking model is changing and becoming much more profitable and less dependent on capital'

'I think capital generation will improve, and we will be able to accumulate capital organically in the future'

'If we continue to apply the model of using less capital to actually become much more profitable, we might be able to accumulate much more capital than we do today'.

Héctor Grisi,

Chief Executive Officer

"

2025 Pillar 3 Disclosures Report    41

Index Introduction l Capital l Risks l Remuneration l Appendices l

Risk Transfer is used by banks for various purposes, ultimately enabling them to generate capital headroom that can be reinvested in the business
Risk Transfer is typically used for three purposes …									… with relieved Capital being used in different ways
1			Risk and loss mitigation Risk Transfer allows the bank to mitigate potential future losses by transferring the risk to a third party (often out of the banking system), thus reducing overall risk of the balance sheet						Continue building solid capital base Leverage mobilized capital and headroom generated to strengthen the bank’s capital structure, effectively improving the CET1 ratio
2			Capital headroom Risk Transfer provides the bank with additional capital headroom that can enable further business growth						Distribute to shareholders Distribute generated capital headroom back to shareholders effectively maintaining the CET1 ratio constant
3			Funding and liquidity Risk Transfer transactions can provide the bank with additional liquidity and funding, especially through traditional securitisation structures						Reinvest in the business Reinvest mobilized capital in the business to increase the bank’s net profit through several identified income levers
Under a stable and predictable regulatory framework

42    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2.3.2. Profitability and pricing

A disciplined execution of our capital allocation strategy…

... leads to growth, profitability and strength…

Capital active growth

1

Growth Focused on businesses that generate high RoTE and high capital generation, along with significant potential for growth.

Higher return on risk-weighted assets

2

Profitability Focused on maintaining high and sustainable levels by scaling the markets leading to efficiency and the possibility to provide value to our customers and high returns to our shareholders.

Portfolio profitability management

3

Balance sheet strength After years of accumulating regulatory capital, we focus on maintaining capital levels above 12% (fully loaded).

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 maximise 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 2025 was 12.0% (similar to 2024).

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.

Identifying and managing businesses with low profitability is part of the Group's capital optimisation process. We dynamically target and actively monitor customers, portfolios, global businesses and markets with attractive returns on capital.

To ensure improved profitability and maximise 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 maximise profitability, with positive EVA for every transaction, customer, portfolio and/or global business, and ensure compliance with minimum return on capital targets.

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.

2025 Pillar 3 Disclosures Report    43

Index Introduction l Capital l Risks l Remuneration l Appendices l

2.3.3. Other activities in capital management

The most significant actions taken this year are as follows:

Issuances of capital and other eligible liability instruments

In 2025, Banco Santander, S.A. issued a total of (i) €1.500 billion of contingently convertible preferred shares (PPCC) that was intended to replace a €1.5 billion issuance that was subject to a tender offer, and (ii) about €360 billion of subordinate T2 debt.

In addition, Banco Santander, S.A. issued around €6,599 billion of senior non-preferred debt and €2.400 billion of senior preferred debt.

Dividends and shareholder remuneration

The board applied the current shareholder remuneration policy to the 2025 results. This policy sets a target to allocate approximately 50% of the Group's net reported profit (excluding non-cash, non-capital ratios impact items) distributed almost evenly to cash dividends and share buybacks.

Additionally, on 5 February 2025, Banco Santander signalled its objective to allocate up to EUR 10 billion to share buybacks in relation to the 2025 and 2026 results, as well as expected capital excess. As part of this target, on 5 May 2025 Banco Santander announced its intention to distribute approximately 50% of the capital that will be released upon completion of the sale of its 49% stake in Santander Bank Polska S.A., through a share buyback of approximately EUR 3.2 billion in early 2026 and that, as a result, it could exceed the EUR 10 billion target. Upon announcing the agreements to acquire TSB and Webster on 1 July 2025 and 3 February 2026 respectively, Banco Santander confirmed its goal to distribute at least EUR 10 billion in share buybacks with regard to the 2025 and 2026 results and excess capital.

In execution of the above, shareholder remuneration for financial year 2025 comprised the following:

•Interim remuneration.

◦On 30 July 2025, the board resolved to execute the First 2025 Buyback Programme worth up to EUR 1,700 million (equivalent to approximately 25% of the Group's net reported profit in H1’25). For more details, see 'First 2025 Buyback Programme' in section 2.5 of the 'Corporate governance' chapter of the 2025 annual report.

◦On 30 September 2025, the board resolved to pay an interim cash dividend in relation to the 2025 results of 11.5 euro cents per share entitled to the dividend (equivalent to approximately 25% of the Group's net reported profit in H1’25), which was paid from 3 November 2025.

•Final remuneration.

◦On 3 February 2026, the board of directors resolved to implement the Second 2025 Buyback Programme worth up to EUR 5,030 million and for which the required regulatory authorization had been obtained. The programme started on 4 February 2026. Under the shareholder remuneration policy in relation to the 2025 results, 1,830 million euros of the Second Buyback Programme correspond to c.25% of the Group's underlying profit for the second half of 2025. The remaining amount corresponds to an extraordinary buyback of 3,200 million euros, equivalent to approximately 50% of the CET1 capital generated in January 2026 following completion of the sale of 49% of Santander Bank Polska to Erste Group. For more details, see 'Second 2025 Buyback Programme' in section 2.5 of the 'Corporate governance' chapter of the 2025 annual report.

◦On 24 February 2026, the board of directors resolved to submit to the 2026 AGM the approval of a final cash dividend in the gross amount of 12.5 euro cents per share entitled to dividend. Subject to AGM approval, the dividend will be payable from 5 May 2026.

Once these actions are completed, total shareholder remuneration in relation to the 2025 results will be EUR 7,050 million (approximately 50% of the Group's 2025 net reported profit, excluding non-cash, non-capital ratios impact items), split almost evenly between cash dividends (EUR 3,520 million) and share buybacks (EUR 3,530 million). We have estimated these amounts on the assumption that, as a result of the partial execution of the Second 2025 Buyback Programme, the number of outstanding shares entitled to receive the final cash dividend will be 14,568,470,446. Therefore, the final amount may be higher if fewer shares than planned are acquired in the Second 2025 Buyback Programme; otherwise, it will be lower.

Since 2021 and including the total share buyback currently underway, Banco Santander will have returned EUR 16.2 billion to shareholders via share buybacks, and will have repurchased around 18% of its outstanding shares.

Lastly, in the geographies where the European Central Bank (ECB) is not the home supervisor, local supervisors generally did not impose restrictions on the distribution of dividends; however, in Poland the Polish Financial Supervision Authority (KNF) currently recommends setting a 75% cap on the payout ratio. Nevertheless, during 2025 there were no issues regarding increasing the distribution to c.90%. Therefore, there are no practical or legal impediments to transferring own funds without undue delay.

For more details, see section 3.3 'Dividends and shareholder remuneration' in the 'Corporate governance' chapter of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

44    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2.4. Regulatory capital - Pillar 1

The current regulatory framework for capital calculation is based on three pillars:

•Pillar 1 sets the minimum capital requirements for credit risk, market risk and operational risk, allowing internal ratings and models to be used. The target is to make regulatory requirements more sensitive to the risks actually incurred by financial institutions in their business activities.

•Pillar 2 establishes a system of supervisory review, aimed at improving banks' internal risk management and capital adequacy assessment in line with their risk profile.

•Pillar 3 is intended to enhance market discipline by developing a set of disclosure requirements that enable market agents to evaluate key information relating to the application of Basel 2: capital, risk exposures, risk assessment processes and, by extension, the bank's capital adequacy.

2.4.1. Eligible capital

Equity as of 31 December 2025 stood at EUR 112,748 million, up EUR 5,421 million from the year before.

The reconciliation between equity and capital eligible as Tier 1 is set out below.

Table 6.Reconciliation of accounting capital with regulatory capital
EUR million
			2025			2024
Subscribed capital			7,345			7,576
Share premium account			36,792			40,079
Reserves			84,700			76,568
Treasury shares			(96)			(68)
Attributable profit			14,101			12,574
Approved dividend			(1,698)			(1,532)
Shareholders' equity on public balance sheet			141,144			135,197
Valuation adjustments			(37,973)			(36,596)
Non-controlling interests			9,578			8,726
Total equity on public balance sheet			112,748			107,327
Goodwill and intangible assets			(15,037)			(16,098)
Eligible preference shares and participating securities			9,645			10,371
Accrued dividend			(1,827)			(1,611)
Other adjustments			(11,146)			(9,817)
Tier 1 (Phased-in)			94,385			90,170

2025 Pillar 3 Disclosures Report    45

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following table provides a breakdown of the Group’s eligible capital and a comparison with the previous year:

Table 7.Eligible capital
EUR million
			2025			2024
Eligible capital
Common Equity Tier 1 (CET1)			84,739			79,800
Capital			7,345			7,576
(-) Treasury shares and own shares financed			(1,892)			(1,694)
Share premium			36,792			40,079
Reserves			84,663			76,608
Other retained earnings			(39,918)			(38,617)
Minority interests			9,037			8,479
Attributable profit net of dividends			10,576			9,431
Deductions			(21,863)			(22,061)
Goodwill and intangible assets			(15,037)			(15,957)
Others			(6,826)			(6,104)
Aditional Tier 1 (AT1)			9,645			10,371
Eligible instruments AT1			8,937			9,725
T1 excesses - subsidiaries			708			645
Residual value of intangibles			—			—
Deductions			—			—
Tier 2 (T2)			17,460			18,418
Eligible instruments T2			17,754			18,869
Gen. funds and surplus loan loss prov. IRB			—			—
T2 excesses - subsidiaries			(294)			(450)
Others			—			—
Total eligible capital			111,845			108,589

Common equity Tier 1 capital (CET1) comprises the elements of Tier 1 capital (after applying prudential filters) and CET1 deductions after applying the threshold exemptions specified in the CRR.

CET1 consists of:

•Subscribed share capital, which stood at EUR 7,345 million in December 2025.

•Other tier 1 capital items: (i) paid-up share premiums; (ii) effective and disclosed reserves generated against profits and amounts that are not taken to the income statement but are recorded under 'Other reserves' (any item); (iii) other retained earnings, including certain valuation adjustments, primarily for exchange differences and for hedges of net investments in foreign operations.

•The paid-up portion of any non-controlling interests arising from the issue of ordinary shares by consolidated subsidiaries, subject to the limits set in the CRR.

•The Group's attributable net profit of cash dividends, which was €10,576 million in December 20251.

•The prudential filters exclude any positive or negative valuation adjustments from cash flow hedges. They also exclude gains or losses on liabilities and derivative liabilities measured at fair value resulting from changes in the institution’s own credit quality. The prudential filters include the additional valuation adjustments applied pursuant to article 34 of the CRR.

•Deductions from CET1 items mainly include: treasury shares; current-year losses; goodwill and other intangible assets recognised in the balance sheet; deferred tax assets that rely on future earnings (subject to the limits set in the CRR); the valuation adjustments due to prudent valuation requirements; and defined benefit pension fund assets shown on the balance sheet.

In addition to the movements in net book equity, for changes in regulatory capital, the undistributed dividend in cash for 2025 was considered to be €3,525 million, so the net attributable profit net of dividends calculated is €10,576 million.

1 The cash dividend represents c.25% of profit, see note 4.a of the Consolidated Financial Statements for the proposed result distribution.

46    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 8.Regulatory capital. Flow statement
EUR million
			2025
Common Equity Tier 1 (CET1)
Ending figure (31/12/2024)			79,800
Shares issued during the year and share premium account			(3,519)
Treasury shares and own shares financed			(198)
Reserves			(1,376)
Attributable profit net of dividends			10,576
Other retained earnings			(1,301)
Minority interests			558
Decrease/(increase) in goodwill and other intangibles			920
Other deductions			(722)
Ending figure (31/12/2025)			84,739
Aditional Tier 1 (AT1)
Ending figure (31/12/2024)			10,371
Eligible instruments AT1			(788)
AT1 excesses - subsidiaries			63
Residual value of intangibles			—
Deductions			—
Ending figure (31/12/2025)			9,645
Tier 2 (T2)
Ending figure (31/12/2024)			18,418
Eligible instruments T2			(1,115)
Gen. funds and surplus loan loss prov. IRB			—
T2 excesses - subsidiaries			157
Deductions			—
Ending figure (31/12/2025)			17,460
Deductions from total capital			—
Final figure for total capital (31/12/2025)			111,845

Eligible capital over time

EUR million

3.00%

Tier 1 Capital comprises CET1 Capital plus Additional Tier 1 Capital (AT1) including preferred issuances and CoCos issued by Grupo Santander.

Total capital comprises Tier 1 capital plus Tier 2 capital (T2) and includes, among other items, equity instruments and subordinated loans where the conditions laid down in the CRR are met.

The movement of issued shares and issue premiums is mainly due to the amortisation of shares acquired through the share buyback programme, contributing to the shareholder remuneration by increasing earnings per share, which is inherent to the reduction in the number of shares. On the other hand, the remaining variation corresponds to other retained income, deductions and prudential filters.

The decrease in Tier 1 capital is mainly explained by the evolution of the dollar currency

The decrease in Tier 2 capital is mainly due to the loss of computability of issues under English law, as well as the evolution of the dollar, partially offset by new issuances settled by Spain and Brazil

For further detail on regulatory own funds (Table CC1) see Appendix VII of this document.

On 31 December 2025, none of the financial institutions consolidated in the Group had less than the minimum capital required under applicable regulations.

Under Article 7 and 9 of the CRR, the subsidiaries Santander Leasing S.A. EFC, Santander Factoring y Confirming S.A. EFC, Banco de Albacete S.A. and Santander Investment S.A. are exempt from the minimum capital requirements, the limit on large exposures and the internal corporate governance obligations. None of the exemptions under applicable regulations have been used for any other Santander subsidiaries.

Santander maintains a very comfortable capital adequacy position, well above the levels required by applicable regulations and by the European Central Bank.

2025 Pillar 3 Disclosures Report    47

Index Introduction l Capital l Risks l Remuneration l Appendices l

2.4.2. Capital requirements

RWAs remain stable compared to 2024, increasing by 0.8% to €629.43 billion. In terms of the distribution of risks covered by Pillar 1, there is a slight change compared to last year: credit 80.3%, market 3.4% and operational 16.3%.

RWA Evolution (Phased-in)

bn€

RWA distribution by type of risk RWA distribution by type of risk

			0			Total
471,745			499,560
						Total Credit
280,993			283,612
						Credit
Workiva_Grafica			212,842
			212,842			CCR1
14,081			18,768
						CVA
7,547
						Securitisation
102,427			7,253
						Operational
11,853			5,935
						Market

vs. Dec-24
			0			+1%
471,745			499,560
						-5%
280,993			283,612
						-6%
Workiva_Grafica			212,842
			212,842			-22%
14,081			18,768
						+262%
7,547
						+6%
102,427			7,253
						+42%
11,853			5,935
						+17%

1 Including Settlement and CCR

48    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Below is a general evolution of RWA by risk, and then also by geography:

Table 9.OV1 - Overview of risk weighted exposure amounts
			EUR million			Total risk exposure amounts															Total own funds req.
						a			b												c
						Dec'25			Sep'25			Jun'25			Mar'25			Dec'24			Dec'25
1			Credit risk (excluding CCR)1			471,745			477,108			474,070			485,334			499,560			37,740
2			Of which, standardized approach (SA)			280,993			283,723			283,609			291,098			283,612			22,479
3			Of which, the foundation IRB (FIRB) approach			52,965			52,048			49,555			50,336			59,981			4,237
4			Of which, slotting approach2			15,018			13,705			13,419			14,890			13,840			1,201
EU 4a			Of which, equities under the simple risk weighted approach			3,250			3,130			2,987			3,633			4,724			260
5			Of which, the advanced IRB (AIRB) approach			114,036			119,249			119,688			120,688			129,919			9,123
6			Counterparty credit risk - CCR			14,081			14,957			15,055			15,846			18,089			1,127
7			Of which, the standardized approach			11,816			12,489			12,873			13,276			15,035			945
8			Of which, internal model method (IMM)			—			—			—			—			—			—
EU 8a			Of which, exposures to a CCP			372			400			355			354			294			30
9			Of which, other CCR			1,894			2,068			1,827			2,216			2,761			152
10			Credit valuation adjustments risk - CVA risk			2,461			2,356			2,303			2,340			679			197
EU 10a			Of which the standardised approach (SA)			—			—			—			—			—			—
EU 10b			Of which the basic approach (F-BA and R-BA)			2,461			2,356			2,303			2,340			679			197
EU 10c			Of which the simplified approach			—			—			—			—			—			—
11			Empty set in the EU
12			Empty set in the EU
13			Empty set in the EU
14			Empty set in the EU
15			Settlement risk			555			497			319			264			173			44
16			Securitisation exposures in the non-trading book (after the cap)			16,683			14,972			15,380			14,982			15,705			1,335
17			Of which, SEC-IRBA approach			7,547			6,522			6,978			6,626			7,285			604
18			Of which, SEC-ERBA (including IAA)			2,454			2,216			2,643			2,259			2,484			196
19			Of which, SEC-SA approach3			6,682			6,234			5,760			6,097			5,935			535
EU 19a			Of which, 1250%4			—			—			—			—			—			—
20			Position, foreign exchange and commodities risks (Market risk)			21,478			22,332			20,374			21,848			17,946			1,718
			Of which the standardized approach			11,853			12,682			12,438			14,077			10,693			948
			Of which IMA			9,625			9,650			7,936			7,771			7,253			770
21			Of which the Alternative standardized approach (A-SA)			—			—			—			—						—
EU 21a			Of which the Simplified standardized approach (S-SA)			—			—			—			—						—
22			Of which the Alternative Internal Models Approach (A-IMA)			—			—			—			—						—
EU 22a			Large exposures			—			—			—			—			—			—
23			Reclassifications between trading and non-trading books			—			—			—			—			—			—
24			Operational risk			102,427			98,531			98,249			98,511			72,351			8,194
EU 24a			Exposures to crypto-assets			—			—			—			—			—			—
25			Amounts below the thresholds for deduction (subject to 250% risk weight)			24,315			24,012			23,674			23,044			22,656			1,945
26			Output floor applied (%)			50		%	50		%	50		%	50		%
27			Floor adjustment (before application of transitional cap)			—			—			—			—						—
28			Floor adjustment (after application of transitional cap)			—			—			—			—						—
29			Total			629,430			630,753			625,750			639,124			624,503			50,354
			(1) It includes equities under the PD/LGD approach.
			(2) Correction from the mapping indicated by supervisor to {C 08.01, r0020, c0260, s0010} + {C 08.01, r0030, c0260, s0010}.
			(3) Correction from the mapping to the one appearing in tables SEC3+SEC4.
			(4) Banco Santander S.A. deducts from capital those securitisations that meet the deduction requirements, and therefore does not apply a 1,250% weighting to these exposures. This row does not include the EUR  7.742 million in 2025 and EUR 8.367 million in 2024 that would result from applying this weighting to these exposures.

2025 Pillar 3 Disclosures Report    49

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 10.RWAs by geographical region
																								2025
EUR Bn			Total			Europe			Of which, Spain			Of which, UK			North America			Of which, US			South America			Of which, Brazil			Other
Credit risk			505			313			169			55			78			52			114			80			0
Of which, standardised approach (SA)			280			122			47			18			67			50			91			59			0
Of which, internal rating-based (IRB) approach			183			156			95			33			8			0			18			17			0
Of which, securitisations*			17			14			10			2			2			2			0			0			0
Of which, others			26			20			17			1			2			1			5			3			0
Market risk			21			16			16			0			1			1			4			2			0
Operational risk			102			52			25			12			21			16			23			8			6
Total**			629			381			210			68			100			70			142			90			6
The amounts shown in the table are presented in billions of euros, therefore, the amounts have been rounded; consequently, some amounts may not be the exact arithmetic sum of the preceding figures.
*It does not include 1250% deductions.
**Breakdown according to debtor’s residency, except operational risk (management criteria).

50    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Note: €6bn belongs to other countries (1% of total Group RWAs)

2025 Pillar 3 Disclosures Report    51

Index Introduction l Capital l Risks l Remuneration l Appendices l

2.4.2.1. Output Floor

Template CMS1 details the risk-weighted exposure amounts (RWEAs) of internal and standardized models, broken down by type of risk. This table contains the RWEAs calculated using internal models (a) alongside those calculated under the standard approach (b) for each type of risk, culminating in the total RWEAs (c).

Additionally, to provide information regarding the application and potential impact of the 'output floor', the RWEAs resulting from applying only the standard approach to all types of risk are detailed under two scenarios: without applying the transitional provisions ('using full standardized approach') (d) and applying the transitional provisions ('base of the output floor') as laid down in Article 465 of CRR3 (EU) (d). In addition, as per JST guidance and based on EU banking package Q&A (part on Output floor: 'EU banks that are currently using the standardised approach for capital purposes would similarly compare its outcome with the FRTB Standardised Approach unless they are not subject to the current interim reporting requirements'), the calculation methodology for the market risk output floor has been updated

As can be seen from the RWEAs resulting from applying only the standard approach, there is no impact from the application of the 'output floor', both under the phase-in vision (applying the transitional provisions) and the fully- loaded vision. This is significantly below the 72.5% factor that will be applicable from 2030.

Among the factors explaining the lack of impact is the percentage of RWEAs calculated under internal models, which limits the potential savings compared to standardized models.

Table 11.EU CMS1 – Comparison of modelled and standardised risk weighted exposure amounts at risk level
			EUR million
						a			b			c			d			EU d
						Risk weighted exposure amounts (RWEAs)
						RWEAs for modelled approaches that banks have supervisory approval to use			RWEAs for portfolios where standardised approaches are used			Total actual RWEAs (a + b)			RWEAs calculated using full standardised approach			RWEAs that is the base of the output floor
1			Credit risk (excluding counterparty credit risk)			190,591			280,993			471,584			588,791			565,649
2			Counterparty credit risk			9,309			4,772			14,081			20,983			20,983
3			Credit valuation adjustment						2,461			2,461			2,461			2,461
4			Securitisation exposures in the banking book			7,547			9,136			16,683			24,695			19,010
5			Market risk			9,625			11,853			21,478			33,753			33,753
6			Operational risk						102,427			102,427			102,427			102,427
7			Other risk weighted exposure amounts						715			715			715			715
8			Total			217,072			412,358			629,430			773,826			744,998
			Template with mappings fixing that were considered incomplete and those that required a more adequate basis for their disclosure

52    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Template CMS2 details the risk-weighted exposure amounts (RWEAs) of internal and standardized credit risk models, broken down by asset class. This table contains the credit risk RWEAs calculated using internal models (a) alongside those calculated under the standard approach for each asset class (b), culminating in the total credit risk RWEAs (c).

Additionally, to provide information regarding the application and potential impact of the 'output floor', the credit risk RWEAs resulting from applying only the standard approach for all asset classes are detailed under two scenarios: without applying the transitional provisions ('using full standardized approach') (d) and applying the transitional provisions ('base of the output floor') as laid out in Article 465 of CRR3 (EU) (e).

It is important to note that less than 40% of the Grupo Santander credit risk RWEAs are calculated using internal models. As can be seen from the RWEAs resulting from applying only the standard approach, there is no impact from the application of the 'output floor', both under phase-in period (applying the transitional provisions) and the fully- loaded view. This is significantly below the 72.5% factor that will be applicable from 2030.

Table 12.EU CMS2 – Comparison of modelled and standardised risk weighted exposure amounts for credit risk at asset class level
			EUR million
						a			b			c			d			EU d
						Risk weighted exposure amounts (RWEAs)
						RWEAs for modelled approaches that institutions have supervisory approval to use			RWEAs for column (a) if re-computed using the standardised approach			Total actual RWEAs			RWEAs calculated using full standardised approach			RWEAs that is the base of the output floor
1			Central governments and central banks			—			—			29,013			29,013			29,013
EU 1a			Regional governments or local authorities			949			2,145			1,417			2,613			2,613
EU 1b			Public sector entities			222			149			569			496			496
EU 1c			Categorised as Multilateral Development Banks in SA			—			3			17			20			20
EU 1d			Categorised as International organisations in SA			—			—			—			—			—
2			Institutions			2,001			3,076			5,848			6,923			6,923
3			Equity			6,327			5,188			14,220			13,080			13,080
5			Corporates			107,522			126,947			160,176			202,527			179,601
5.1			Of which: F-IRB is applied			65,857			111,876			65,857			111,876			111,876
5.2			Of which: A-IRB is applied			41,666			40,893			41,666			40,893			40,893
EU 5a			Of which: Corporates - General			81,391			110,922			132,316			184,772			161,846
EU 5b			Of which: Corporates - Specialised lending			13,847			16,026			15,576			17,754			17,754

2025 Pillar 3 Disclosures Report    53

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 12.EU CMS2 – Comparison of modelled and standardised risk weighted exposure amounts for credit risk at asset class level
EU 5c			Of which: Corporates - Purchased receivables			12,284			21,740			12,284			21,740			21,740
6			Retail			71,324			38,013			155,319			122,009			122,009
6.1			Of which: Retail - Qualifying revolving			4,460			1,865			4,460			1,865			1,865
EU 6.1a			Of which: Retail - Purchased receivables			1,267			1,033			1,267			1,033			1,033
EU 6.1b			Of which: Retail - Other			25,305			—			25,305			—			—
6.2			Of which: Retail - Secured by residential real estate			40,293			—			40,293			—			—
EU 7a			Categorised as secured by mortgages on immovable properties and ADC exposures in SA			—			89,563			33,998			123,777			123,561
EU 7b			Collective investment undertakings (CIU)			1,085			923			1,465			1,303			1,303
EU 7c			Categorised as exposures in default in SA			—			6,417			17,566			23,983			23,983
EU 7d			Categorised as subordinated debt exposures in SA			—			—			—			—			—
EU 7e			Categorised as covered bonds in SA			—			1			83			84			84
EU 7f			Categorised as claims on institutions and corporates with a short-term credit assessment in SA			—			11,065			472			11,537			11,537
8			Others			1,160			1,165			51,422			51,427			51,427
9			Total			190,591			284,656			471,584			588,791			565,649
			Template with mappings fixing that were considered incomplete and those that required a more adequate basis for their disclosure

54    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2.4.3. Eligible capital requirements and Capital buffers

2.4.3.1 Capital Buffers

From 2016 on, Grupo Santander must comply with the combined buffer capital requirement, which is defined as the total CET1 capital necessary to meet the following obligations:

•Capital conservation buffer (CCoB): this buffer was introduced to ensure that banks have additional own funds that can be used in the event of loss occurrence. The surcharge is 2.5% and is directly applicable and mandatory for all EU banks.

•Buffers for systemically important banks (G-SIB and D-SIB): There are two types of buffers, with their own methodologies, that classify financial institutions into (global and domestic) systemicity buckets. These buckets determine their systemic risk level and their respective applicable capital surcharge. The two types are:

◦G-SIB (Global Systemically Important Banks) buffer: World-wide homogeneous methodology, following the framework and levels established by the BCBS. Applicable only at consolidated level. This surcharge is quantified by comparing the systematic nature of banking groups. There is an additional methodology that considers the eurozone as a single jurisdiction for calculation purposes and allows the competent authority to classify a G-SIB in a lower bucket, reducing the applicable G-SIB buffer surcharge accordingly.

◦D-SIB (Domestic Systemically Important Banks) buffer: EU homogenous methodology following the EBA Guidelines for the calculation of the institutions score. In this case, the banking groups against which the systemicity of a D-SIB is measured are the peers of the Member State in which the bank in question is located. The National authorities define the capital surcharges that correspond to each systemicity bucket, with EU authorities having to comply with the floor methodology published by the ECB. It can be applicable at consolidated, sub-consolidated or individual level. The ECB issued an additional methodology that considers the eurozone as a single jurisdiction for calculation purposes and will allow, from 2027, the competent authority to apply the higher of the two outcomes (national and EU scopes), which could increment the applicable D-SIB buffer surcharge accordingly.

In the case of banking groups that are G-SIBs and are also categorised as D-SIBs, the higher of the two surcharges will apply at consolidated level.

•Countercyclical capital buffer (CCyB): Applied when National authorities consider that credit is growing excessively in a certain jurisdiction with the aim of slowing it down. Designed to be built up in periods of excessive credit growth and released in times of crisis and is therefore one of the few (apart from the SyRB) capital buffers that can be released in a discretionary manner if considered appropriate by the national authority. The CET1 surcharge implied by this capital buffer is calculated specifically for each institution or group and consists of the weighted average of the countercyclical buffer rates applied in the territories in which the entity's relevant lending exposures

are located. The surcharges imposed by national authorities in the several locations of the institution's exposures are generally applicable at a consolidated level.

In line with the recommendations of the Basel Committee and the European Central Bank, national authorities in the EU are implementing the positive neutral countercyclical buffer, which activates the buffer at a minimum level greater than 0% in each jurisdiction, to give room to National authorities to perform an eventual reduction in institution's capital requirements in the event of a crisis.

•Systemic risk buffer (SyRB): National authorities may require this buffer to address macroprudential or systemic risks that are not covered by other buffers and that could trigger a disturbance in the financial system with serious consequences for both the system itself and the real economy. Its application by the authorities is discretionary and may be required either for all institutions or for a subset of institutions, for all exposures or a subset of exposures (domestic exposures, third countries, mortgage sector etc.). The surcharges imposed by the National authorities on the different exposures or institutions of a country require the endorsement of the Spanish macroprudential authority to be applicable at consolidated level in Santander.

The table below summarises the regulation that sets the buffer surcharge rates on the different capital buffers to be applied and the situation of Banco Santander in 2025:

Application

Buffers (% RWA)

2025

All institutions

CCoB

2.5

%

Designated institutions

G-SIB (1)

100% of the buffer

D-SIB (2)

100% of the buffer

At the discretion of competent national authority

SyRB (4)

0% -> 5%

CCyB (3)

0% - 2.5%

Combined buffer

CCoB+CCyB+SyRB+Max (G-SIB, D-SIB)

1) This requirement is 1% for Grupo Santander.

2) Banco de España requires a 1.25% buffer to Grupo Santander for 2026.

3) % CCyB applicable in January 2026 for exposures to customers residing in:

Germany: 0.75%			Estonia: 1.5%			Luxembourg: 0.5%
Australia: 1%			France: 1%			Norway: 2.5%
Belgium: 1%			Greece: 0.25%			Netherlands: 2%
Bulgaria: 2%			Hungary: 1%			Czech Republic: 1,25%
Cyprus: 1.5%			Hong Kong: 0.5%			Poland: 1%
Croatia: 1.5%			Ireland: 1.5%			Portugal: 0.75%
Denmark: 2.5%			Iceland: 2.5%			United Kingdom: 2%
Slovakia: 1.5%			Latvia: 1%			Romania: 1%
Slovenia: 1%			Lithuania: 1%			Sweden: 2%

Given their relevance for the Group, it is worth highlighting that, as from September 2026, the countercyclical capital buffer in Poland will be set at 2%, and as from October 2026, the countercyclical capital buffer in Spain will be set at 1%.

4) Portugal, Italy and Norway have activated the Systemic Risk Buffer (SyRB) in their jurisdictions, and the Banco de España has applied reciprocity at consolidated level, resulting in a 3bps increase in capital requirements for the Group.

2025 Pillar 3 Disclosures Report    55

Index Introduction l Capital l Risks l Remuneration l Appendices l

The detailed breakdown of the geographical distribution of credit exposures relevant for the calculation of the countercyclical capital buffer (Table CCyB1) is provided in Annex IX, available on the Grupo Santander website. The amount of the institution-specific countercyclical capital buffer (Table CCyB2) is presented in Table 12 of this document.

Access the Pillar 3 2025 file available on Grupo Santander's web site

			Table 13.CCyB2 - Amount of institution-specific countercyclical capital buffer
									EUR million
			2025
						a
1			Total risk exposure amount			629,430
2			Institution specific countercyclical capital buffer rate			0.56%
3			Institution specific countercyclical capital buffer requirement			3,496

Global Systemically Important Banks

The Group is one of 29 entities designated as global Systemically Important Bank (G-SIB) in 2025.

This designation requires Santander to meet additional requirements, mainly relating to the following:

•Higher capital buffer: Santander is in the group of banks with the lowest capital buffer, 1%.

•TLAC (Total Loss-Absorbing Capacity) requirements.

•Higher supervisory expectations: These requirements include supervisory expectations for risk management functions, risk data aggregation capabilities, risk governance and internal controls.

The Basel Committee’s framework for assessing G-SIBs is based on a set of indicators reported by a defined sample of banks to their national supervisory authorities (Banco de España, in Santander’s case). These data are consolidated and used to derive the individual scores for each bank in the sample. Institutions whose scores exceed a specified cut-off are designated as G-SIBs and assigned to buckets, which serve as the basis for determining the applicable higher loss absorbency requirement. The resulting scores and bucket assignments reflect the outcome of the mechanistic components of the G-SIB methodology and may also incorporate the application of supervisory judgement. As a result, a bank may be placed in a bucket even if its score lies above or below the corresponding threshold.

The scoring is based on a predefined set of indicators covering the main dimensions of systemic importance, namely size, interconnectedness, substitutability, complexity and cross-jurisdictional activity. Each category is composed of quantitative indicators intended to capture the extent to which a bank’s distress or failure could have an impact on the global financial system. The indicators are measured using consistent definitions across banks in the sample and are combined, using prescribed weights, to produce an overall systemic importance score.

On the basis of this information, supervisors determine which banks are subject to a G-SIB buffer and the corresponding bucket allocation. In line with the Basel framework, the G-SIB buffer applicable in a given year is derived from data as of the end of the year three years earlier. Accordingly, the G-SIB buffer applied in 2025 was calibrated using data as of end-2022 and published in November 2023.

The G-SIB buffer is expressed as a percentage of risk-weighted assets and is subject to predefined minimum and maximum levels. The lowest bucket corresponds to a buffer of 1.0%, while the highest bucket entails a buffer of 3.5%, with intermediate buckets set in increments of 0.5%. These buffer levels represent the additional loss absorbency requirement that G-SIBs must meet on top of the minimum capital and other applicable buffer requirements.

Santander is subject to a systemic capital surcharge of 1% in 2025.

For more details regarding Quantitative indicators, access file 'G-SIBs indicators quantitative', under sections Shareholders and Investors / Other presentations on the Grupo Santander website.

Access 2025 G-SIB indicators quantitative available on the Santander Group website

56    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Indicators for global systemically important institutions
Category			Individual Indicator			Supervisor's justification
Size			Exposure used for the leverage ratio calculation			An indicator of the weight of the bank in the financial system
Cross-jurisdictional activity			Cross-jurisdictional assets			Snapshot of a bank’s global footprint
			Cross-jurisdictional liabilities
Interconnection			Intra-financial system assets			Measures a bank’s interconnectedness with other financial institutions
			Intra-financial system liabilities
			Securities outstanding
Substitutability/financial infrastructure			Assets under custody			Measures whether the bank’s activity can be replaced with other banks
			Payments activity
			Transactions subscribed in debt and equity markets
			Trading Volume
Complexity			Notional amount of over-the-counter (OTC) derivatives			Measures the complexity of a financial entity
			Level 3 assets
			Held for trading and available-for-sale securities

Global systemically important institutions
Capital buffer			Entity
5 (3.50%)			(Empty)
4 (2.50%)			JP Morgan Chase
3 (2.00%)			Bank of America Citigroup HSBC
2 (1.50%)			Agricultural Bank of China Bank of China Barclays BNP Paribas China Construction Bank Deutsche Bank Goldman Sachs Industrial and Commercial Bank of China Mitsubishi UFJ FG UBS
1 (1.00%)			Bank of Communications Bank of New York Mellon Groupe BPCE Groupe Crédit Agricole ING Mizuho FG Morgan Stanley Royal Bank of Canada Santander Société Générale Standard Chartered State Street Sumitomo Mitsui FG Toronto Dominion Wells Fargo

Domestic Systemically Important Banks

The Group has been designated as a domestic systemically important institution (D-SII) in Spain for 2025 by Banco de España.

This designation entails additional prudential requirements, mainly in the form of a higher capital buffer. In particular, Santander is subject to a D-SII buffer calibrated at 1.25% of risk-weighted assets for 2025.

Banco de España identifies D-SIIs in accordance with the methodology set out in Rule 14 of Circular 2/2016, which transposes the relevant provisions of the Capital Requirements Directive and implements the EBA Guidelines on the assessment of systemic importance. The assessment is based on a predefined set of indicators covering the main dimensions of domestic systemic relevance, namely size, importance for the economy, complexity (including cross-jurisdictional activity) and interconnectedness with the financial system. These indicators are measured using harmonised definitions and combined using prescribed weights to derive an overall systemic importance score.

Based on the outcome of this assessment, institutions exceeding the relevant thresholds are designated as D-SIIs and allocated to buckets, which serve as the basis for determining the applicable D-SII buffer. In line with the regulatory framework, the D-SII identification and buffer calibration are subject to an annual review by Banco de España. 2025 D-SIB applicable surcharges are calibrated on the basis of institutions’ data as of end-2023:

2025 Pillar 3 Disclosures Report    57

Index Introduction l Capital l Risks l Remuneration l Appendices l

2025 applicable D-SIB surcharges, Spain

Since the Group has also been identified as a global systemically important institution (G-SIB), in accordance with the Capital Requirements Directive and Rule 23 of Circular 2/2016, where an institution is subject to both a G-SIB and a D-SII buffer, only the higher of the two applies. As a result, the systemic capital surcharge applicable to the Group in 2025 is 1.25%, corresponding to the D-SIB buffer.

58    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2.4.3.2 Eligible capital requirements

The capital decision resulting from the Supervisory Review and Evaluation Process (SREP) under the European Central Bank’s (ECB) Single Supervisory Mechanism comprises a Pillar 2 Requirement (Pillar 2R) and Pillar 2 Guidance (Pillar 2G). While Pillar 2R is binding and failure to comply may have direct consequences for banks, Pillar 2G is not directly binding, and failure to comply is irrelevant for the purposes of calculating the Maximum Distributable Amount (MDA). However, the ECB expects compliance with Pillar 2G at all times. If a bank is not compliant with Pillar 2G, the ECB will carefully evaluate the reasons and circumstances and may define additional supervisory control measures.

SREP Methodology at a glance: four key elements
Overall SREP assessment – holistic approach Score + rationale / main conclusion

The phased-in ratios are calculated by applying the CRR transitory schedules. In general terms, the CRR 2 transitory schedule ended on 31 December 2024 while the CRR 3 phase applies from 1 January 2025.

On a consolidated basis, the minimum levels required by the European Central Bank in 2025 were 9.8% for the CET1 ratio and 14.1% for the total capital ratio.

Our capital requirements increased in 2025 due to:

•Higher countercyclical buffer requirements by the competent authorities in the countries in which we operate (+0.17 pp), mainly due to the activation of a countercyclical capital buffer of 0.50% on exposures located in Spain, and

•A higher systemic risk buffer up to 0.05% (+0.03 pp).

At year-end, the phased-in CET1 ratio was 13.5%, resulting in a CET1 management buffer of 362 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 17.8%. Taking into account the shortfall in AT1, Santander exceeded the 2025 minimum regulatory requirements (i.e. distance to the maximum distributable amount - MDA) by 333 bps.

2025 Pillar 3 Disclosures Report    59

Index Introduction l Capital l Risks l Remuneration l Appendices l

Regulatory Capital vs. Regulatory requirement

Regulatory requirements

Regulatory Ratios 2025 (phased-in)

n

T2

2.44%

n

T2

2.77%

n

AT 1

1.83%

n

AT 1

1.53%

n

CET1:

9.84%

n

CET1

13.46%

n

Min. Pillar 1

4.50%

n

Pillar 2 R

0.98%

n

CCoBA

2.50%

A. Capital conservation buffer.

n

G-SIBB

1.25%

B. Global systemically important banks (G-SIB) buffer

n

CCyBC

0.56%

C. Countercyclical buffer

n

SyRBD

0.05%

D. Systemic risk buffer

60    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2.5. Leverage ratio

This section covers the qualitative requirement LRA - Free format text boxes for disclosure on qualitative items.

Basel 3 established the leverage ratio as a non-risk-sensitive measure to limit excessive growth of the balance sheet relative to available capital.

The ratio is calculated as the ratio of Tier 1 divided by the leverage exposure. This exposure is calculated as the sum of the following components:

•Asset value, without derivatives and without elements considered as deductions in Tier 1 (for example, the loan balance is included but not goodwill), also excluding the exposures referred to in section 1 of article 429.a of the standard.

Leverage ratio

With the publication of CRR II the definitive calibration of the leverage ratio was set at 3% for all institutions, with G-SIBs being subject to an additional surcharge of 50% of the ratio of the buffer applicable to the global systemically important institution (G-SII) from January 2023 on. Adjustments to its calculation are also included, notably the exclusion of certain exposures from the measure of total exposure: exposures to central banks in exceptional circumstances, public loans, transfer loans and officially guaranteed export credits.

•Off-balance-sheet accounts (mainly: guarantees, undrawn credit limits, letters of credit) weighted by the conversion factors of the standardised approach to credit risk.

•Inclusion of the net value of derivatives (gains and losses against a single counterparty are netted, minus collateral – provided certain criteria are met) plus a surcharge for potential future exposure.

•A surcharge for the potential risk of financing securities transactions.

•Lastly, a surcharge is included for risk relating to unhedged credit derivatives (CDS).

The Group's leverage ratio as of 31 December 2025 was as follows:

Table 14.Leverage ratio
EUR million
			2025
			CRR Phased-in
Tier 1			94,385
Exposure			1,924,349
Leverage Ratio			4.90		%

2025 Pillar 3 Disclosures Report    61

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following table gives a breakdown of the ratio calculation:

Table 15.Leverage ratio details
EUR million
			2025
Item			Amounts Consol. Balance Sheet			To be eliminated			To be included			Leverage exposure			Comment
Derivatives			62,345			62,345			54,959			54,959			Accounting value replaced by EAD netted from collateral
Securities financing transactions			143,880			—			5,197			149,076			An add-on is included over these operations
Assets deducted in Tier 1			20,943			20,943			—			—			Removed to avoid duplication
DTAs			—			—			—			—			Book value of the asset on the balance sheet adjusted for the change in DTAs, resulting from the recognition of lower provisions in the reserves account due to the transitional application of IFRS 9.
Rest of Assets			1,621,624			29,691			—			1,591,932			Excluded: the offsetting of cash receivable from sales of regular way contracts with cash payable from purchases of regular way contracts at the trading date, securitizations and certain exposures in central banks
Total Assets			1,848,792			112,979			60,155			1,795,968
Total Off-Balance-Sheet items			469,708			341,327			—			128,382			Balances are weighted according to their risk and the offsetting of cash receivable from sales of regular way contracts with cash payable from purchases of regular way contracts on the settlement date is excluded.
Total Exposure (denominator)			—			—			—			1,924,349
Tier 1 (numerator)			—			—			—			94,385
Leverage ratio			1,735,812			—			—			4.90		%	Minimum recommended 3.5%

The leverage ratio is calculated every month and reported to the operative capital forum and other governing bodies, thus ensuring adequate monitoring of the risk of excessive leverage.

The leverage ratio is a primary metric in Santander's Risk Appetite Framework, as part of its commitment to preserving robust capital adequacy ratios. It is regularly monitored to ensure that the ratio comfortably exceeds the minimum regulatory requirements. The bank's Risk Appetite Framework includes a 'stressed' leverage ratio as an additional metric, to manage the risk of excessive leverage in a forward-looking way, identifying how it will perform in a crisis scenario.

The Group has established the necessary limits and alerts within its framework to ensure that leverage is kept at tolerable risk levels, consistent with sustainable growth in the group's balance sheet and well above the minimum levels that could be considered to be a risk. Any significant changes in any of the main drivers of this indicator are therefore analysed and reported to senior management.

Additional quantitative indicators are monitored as part of the Group's active management of leverage risk, to complement the management and monitoring of the risk of excessive leverage, so as to understand the maturities, types of charges and movements of collateralised assets. These metrics include asset encumbrance and the Net Stable Funding Ratio (NSFR).

¤ For more information, see section 9.1.2.

As part of its capital planning, the Group estimates the leverage ratio over a three-year horizon under a range of macroeconomic scenarios, including recession.

For further information on the leverage ratio, see tables: LR1(LRSum)-summary reconciliation of accounting assets and leverage ratio exposures, LR2(LRCom)-leverage ratio common disclosure and LR3 (LRSpl)- breakdown of on balance sheet exposures (excluding derivatives, SFTs and exempted exposures) below.

62    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following table presents information corresponding to the reconciliation of accounting assets and leverage ratio exposures:

Table 16.LR1 - LRSum: Summary reconciliation of accounting assets and leverage ratio exposures
			EUR million			a
						2025
1			Total assets as per published financial statements			1,867,515
2			Adjustment for entities which are consolidated for accounting purposes but are outside the scope of prudential consolidation			(18,724)
3			(Adjustment for securitised exposures that meet the operational requirements for the recognition of risk transference)			(28,487)
4			(Adjustment for temporary exemption of exposures to central banks (if applicable))			—
5			(Adjustment for fiduciary assets recognised on the balance sheet pursuant to the applicable accounting framework but excluded from the total exposure measure in accordance with point (i) of Article 429a(1) CRR)			—
6			Adjustment for regular-way purchases and sales of financial assets subject to trade date accounting			(1,204)
7			Adjustment for eligible cash pooling transactions			—
8			Adjustments for derivative financial instruments			4,537
9			Adjustment for securities financing transactions (SFTs)			5,197
10			Adjustment for off-balance sheet items (i.e. conversion to credit equivalent amounts of off-balance sheet exposures)			128,382
11			(Adjustment for prudent valuation adjustments and specific and general provisions which have reduced Tier 1 capital)			—
EU-11a			(Adjustment for exposures excluded from total exposure measure in accordance with point (c ) of Article 429a(1) CRR)			—
EU-11b			(Adjustment for exposures excluded from total exposure measure in accordance with point (j) of Article 429a(1) CRR)			—
12			Other adjustments			(32,865)
13			Total exposure measure			1,924,349

Information regarding the leverage ratio is shown below:

Table 17.LR2 - LRCom: Leverage ratio common disclosure
			EUR million
						a			b
						Dec'25			Jun'25
			On-balance sheet exposures (excluding derivatives and SFTs)
1			On-balance sheet items (excluding derivatives, SFTs, but including collateral)			1,642,758			1,598,895
2			Gross-up for derivatives collateral provided where deducted from the balance sheet assets pursuant to the applicable accounting framework			—			—
3			(Deductions of receivables assets for cash variation margin provided in derivatives transactions)			(11,923)			(11,509)
4			(Adjustment for securities received under securities financing transactions that are recognised as an asset)			—			—
5			(General credit risk adjustments to on-balance sheet items)			—			—
6			(Asset amounts deducted in determining Tier 1 capital)			(20,943)			(20,967)
7			Total on-balance sheet exposures (excluding derivatives and SFTs)			1,609,893			1,566,419
			Derivative exposures
8			Replacement cost associated with SA-CCR derivatives transactions (i.e. net of eligible cash variation margin)			21,985			23,429
EU-8a			Derogation for derivatives: replacement costs contribution under the simplified standardized approach			—			—
9			Add-on amounts for potential future exposure associated with SA-CCR derivatives transactions			23,761			22,061
EU-9a			Derogation for derivatives: Potential future exposure contribution under the simplified standardized approach			—			—
EU-9b			Exposure determined under Original Exposure Method			—			—
10			(Exempted CCP leg of client-cleared trade exposures) (SA-CCR)			—			—
EU-10a			(Exempted CCP leg of client-cleared trade exposures) (simplified standardized approach)			—			—
EU-10b			(Exempted CCP leg of client-cleared trade exposures) (original exposure method)			—			—
11			Adjusted effective notional amount of written credit derivatives			27,382			21,431

2025 Pillar 3 Disclosures Report    63

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 17.LR2 - LRCom: Leverage ratio common disclosure
			EUR million
			EUR million			a			b
			EUR million			Dec'25			Jun'25
12			(Adjusted effective notional offsets and add-on deductions for written credit derivatives)			(6,247)			(4,659)
13			Total derivatives exposures			66,881			62,262
			Securities financing transaction (SFT) exposures
14			Gross SFT assets (with no recognition of netting), after adjustment for sales accounting transactions			143,880			129,361
15			(Netted amounts of cash payables and cash receivables of gross SFT assets)			—			—
16			Counterparty credit risk exposure for SFT assets			5,197			4,758
EU-16a			Derogation for SFTs: Counterparty credit risk exposure in accordance with Articles 429e(5) and 222 CRR			—			—
17			Agent transaction exposures			—			—
EU-17a			(Exempted CCP leg of client-cleared SFT exposure)			—			—
18			Total securities financing transaction exposures			149,076			134,119
			Other off-balance sheet exposures
19			Off-balance sheet exposures at gross notional amount			425,945			413,292
20			(Adjustments for conversion to credit equivalent amounts)			(327,447)			(325,234)
21			(General provisions deducted in determining Tier 1 capital and specific provisions associated with off-balance sheet exposures)			—			—
22			Off-balance sheet exposures			98,498			88,058
			Excluded exposures
EU-22a			(Exposures excluded from the leverage ratio total exposure measure in accordance with point (c) of Article 429a(1) CRR)			—			—
EU-22b			(Exposures exempted in accordance with point (j) of Article 429a (1) CRR (on and off balance sheet))			—			—
EU-22c			(-) Excluded exposures of public development banks - Public sector investments			—			—
EU-22d			(Excluded exposures of public development banks (or units) - Promotional loans)			—			—
EU-22e			( Excluded passing-through promotional loan exposures by non-public development banks (or units)			—			—
EU-22f			(Excluded guaranteed parts of exposures arising from export credits )			—			—
EU-22g			(Excluded excess collateral deposited at triparty agents )			—			—
EU-22h			(Excluded CSD related services of CSD/institutions in accordance with point (o) of Article 429a(1) CRR)			—			—
EU-22i			(Excluded CSD related services of designated institutions in accordance with point (p) of Article 429a(1) CRR)			—			—
EU-22j			(Reduction of the exposure value of pre-financing or intermediate loans )			—			—
EU-22k			(Excluded exposures to shareholders according to Article 429a (1), point (da) CRR)			—			—
EU-22l			(Exposures deducted in accordance with point (q) of Article 429a(1) CRR)			—
EU-22m			(Total exempted exposures)			—
			Capital and total exposure measure
23			Tier 1 capital			94,385			90,830
24			Total exposure measure			1,924,349			1,850,859
			Leverage ratio
25			Leverage ratio			4.90%			4.91%
EU-25			Leverage ratio (excluding the impact of the exemption of public sector investments and promotional loans) (%)			4.90%			4.91%
25a			Leverage ratio (excluding the impact of any applicable temporary exemption of central bank reserves)			4.90%			4.91%
26			Regulatory minimum leverage ratio requirement (%)			3.00%			3.00%
EU-26a			Additional own funds requirements to address the risk of excessive leverage (%)			—%			—%
EU-26b			of which: to be made up of CET1 capital (percentage points)			—%			—%
27			Leverage ratio buffer requirement (%)			0.50%			0.50%
EU-27a			Overall leverage ratio requirement (%)			3.50%			3.50%
			Choice on transitional arrangements and relevant exposures
EU-27b			Choice on transitional arrangements for the definition of the capital measure			Transitional			Transitional

64    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 17.LR2 - LRCom: Leverage ratio common disclosure
			EUR million
			EUR million			a			b
			EUR million			Dec'25			Jun'25
			Disclosure of mean values
28			Mean value of gross SFT assets, after adjustment for sale accounting transactions and netted of amounts of associated cash payables and cash receivables			167,454			137,236
29			Quarter-end value of gross SFT assets, after adjustment for sale accounting transactions and netted of amounts of associated cash payables and cash receivables			143,880			129,361
30			Total exposure measure(including the impact of any applicable temporary exemption of central bank reserves) incorporating mean values from row 28 of gross SFT assets (after adjustment for sale accounting transactions and netted of amounts of associated cash payables and cash receivables)			1,947,923			1,858,734
30a			Total exposure measure (excluding the impact of any applicable temporary exemption of central bank reserves) incorporating mean values from row 28 of gross SFT assets (after adjustment for sale accounting transactions and netted of amounts of associated cash payables and cash receivables)			1,947,923			1,858,734
31			Leverage ratio (including the impact of any applicable temporary exemption of central bank reserves) incorporating mean values from row 28 of gross SFT assets (after adjustment for sale accounting transactions and netted of amounts of associated cash payables and cash receivables)			4.85		%	4.89		%
31a			Leverage ratio (excluding the impact of any applicable temporary exemption of central bank reserves) incorporating mean values from row 28 of gross SFT assets (after adjustment for sale accounting transactions and netted of amounts of associated cash payables and cash receivables)			4.85		%	4.88		%

Below is a breakdown of the different on-balance sheet exposures:

Table 18.LR3 - LRSpl: Split-up of on balance sheet exposures (excluding derivatives, SFTs and exempted exposures)
			EUR million			a
						2025
						CRR leverage ratio exposures
EU-1			Total on-balance sheet exposures (excluding derivatives, SFTs, and exempted exposures), of which:			1,630,836
EU-2			Trading book exposures			122,835
EU-3			Banking book exposures, of which:			1,508,001
EU-4			Covered bonds			1,205
EU-5			Exposures treated as sovereigns			356,203
EU-6			Exposures to regional governments, MDB, international organisations and PSE not treated as sovereigns			5,881
EU-7			Institutions			16,548
EU-8			Secured by mortgages of immovable properties			391,510
EU-9			Retail exposures			206,977
EU-10			Corporate			222,517
EU-11			Exposures in default			24,022
EU-12			Other exposures (i.e. equity, securitisations, and other non-credit obligation assets)			283,138

2025 Pillar 3 Disclosures Report    65

Index Introduction l Capital l Risks l Remuneration l Appendices l

2.6. Economic capital – Pillar 2

This section covers the qualitative requirement OVC - ICAAP information.

Economic capital is the capital required to cover 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), with a forward-looking approach. We plan business progression and capital needs under a baseline scenario and alternative stress scenarios, ensuring that our loss absorbing capacity and solvency targets are maintained in line with the risk appetite framework, even under adverse economic conditions.

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 level.

Required economic capital in December 2025 amounted to EUR 70,594 million. Compared to the available economic capital base of EUR 101,053 million, this implies a capital surplus of EUR 30,459 million.

For more information on economic capital, please refer to the capital management chapter of the 'Economic and financial review' in the 2025 annual report.

Access 2025 annual report available on the Santander Group website

2.7. 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.

Further information on capital planning and stress exercises can be found in the 'Economic and financial review' chapter in the 2025 annual report.

Access 2025 annual report available on the Santander Group website

66    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2.8. TLAC and 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 3 Tier 1 leverage ratio exposure.

Some jurisdictions have already transposed the TLAC term sheet into law (as is the case in Europe, in the US and in 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% 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%, with the resolution authority's authorisation).

As of 31 December 2025, the TLAC of the resolution group headed by Banco Santander, S.A. stands at 27.2% of risk-weighted assets and 8.1% 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.

In May 2025, Banco de España formally communicated the (binding) MREL requirement for the Banco Santander, S.A. Resolution Group (sub-consolidated):

•Until 7 May 2025, the Group needed to 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. 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 2022 data.

•From 7 May 2025 until new official communication from Banco de España, the Group must meet the minimum requirement set at the highest of 31.92% of the Resolution Group’s RWAs and 12.75% of the Resolution Group’s leverage ratio exposure. Of the total MREL requirement, a minimum subordination level was fixed as the highest of 10.95% of RWAs and 6.27% of the leverage ratio exposure. This MREL requirement is based on December 2023 data.

•As of 31 December 2025, Banco Santander, S.A.'s MREL was 39.7% of RWAs and 15.2% of the leverage ratio exposure and subordinated MREL was 34.0% or RWAs and 13.1% of the leverage ratio exposure. As a result, it met its MREL requirements.

2025 Pillar 3 Disclosures Report    67

Index Introduction l Capital l Risks l Remuneration l Appendices l

			TLAC 2025						MREL 2025
			%						%

Req.A

22.4%

Req.A 36.3%

A: CBR: Combined Buffer Requirement, comprising a Capital Conservation Buffer (2.5%), a G-SII buffer (1.25%), a countercyclical capital buffer (0.59%) and a systemic risk buffer (0.08%).

68    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

The requirement for own funds and eligible liabilities is shown below:

Table 19.EU KM2: Key metrics - G-SII requirement for own funds and eligible liabilities (TLAC)
						Minimum requirement for own funds and eligible liabilities (MREL)			G-SII Requirement for own funds and eligible liabilities (TLAC)
						a			b			c			d			e			f
						Dec'25			Dec'25			Sep'25			Jun'25			Mar'25			Dec'24
			Own funds and eligible liabilities, ratios and components
1			Own funds and eligible liabilities			169,080			84,090			80,403			81,000			94,721			96,205
EU-1a			Of which own funds and subordinated liabilities			144,849
2			Total risk exposure amount of the resolution group (TREA)			425,530			308,832			309,863			306,474			321,250			310,413
3			Own funds and eligible liabilities as a percentage of TREA (row1/row2)			39.73%			27.23%			25.95%			26.43%			29.49%			30.99%
EU-3a			Of which own funds and subordinated liabilities			34.04%			—
4			Total exposure measure (TEM) of the resolution group			1,108,944			1,037,376			998,522			967,665			996,939			981,845
5			Own funds and eligible liabilities as percentage of the TEM			15.25%			8.11%			8.05%			8.37%			9.50%			9.80%
EU-5a			Of which own funds or subordinated liabilities			13.06%
6a			Does the subordination exemption in Article 72b(4) of Regulation (EU) No 575/2013 apply? (5 % exemption						No			No			No			No			No
6b			Aggregate amount of permitted non-subordinated eligible liabilities instruments if the subordination discretion in accordance with Article 72b(3) of Regulation (EU) No 575/2013 is applied (max 3,5 % exemption)						10,809			10,845			10,727			11,244			10,864
6c			If a capped subordination exemption applies in accordance with Article 72b (3) of Regulation (EU) No 575/2013, the amount of funding issued that ranks pari passu with excluded liabilities and that is recognised under row 1, divided by funding issued that ranks pari passu with excluded liabilities and that would be recognised under row 1 if no cap was applied (%)						44.61%			44.02%			40.70%			41.44%			38.32%
			Minimum requirement for own funds and eligible liabilities (MREL)
EU-7			MREL requirement expressed as percentage of the total risk exposure amount			31.92%
EU-8			Of which to be met with own funds or subordinated liabilities			10.95%
EU-9			MREL requirement expressed as percentage of the total exposure measure			12.75%
EU-10			Of which to be met with own funds or subordinated liabilities			6.27%

2025 Pillar 3 Disclosures Report    69

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 20.EU TLAC1 - Composition - G-SII Requirement for own funds and eligible liabilities
						a			b			c
						Minimum requirement for own funds and eligible liabilities (MREL)			G-SII requirement for own funds and eligible liabilities (TLAC)			Memo item: Amounts eligible for the purposes of MREL, but not TLAC
			Own funds and eligible liabilities and adjustments
1			Common Equity Tier 1 capital (CET1)			88,042			88,042			—
2			Additional Tier 1 capital (AT1)			9,196			9,196			—
6			Tier 2 capital (T2)			11,399			11,399			—
11			Own funds for the purpose of Articles 92a CRR and 45 BRRD			108,638			108,638			—
			Own funds and eligible liabilities: Non-regulatory capital elements
12			Eligible liabilities instruments issued directly by the resolution entity that are subordinated to excluded liabilities (not grandfathered)			35,459			35,459			—
EU-12a			Eligible liabilities instruments issued by other entities within the resolution group that are subordinated to excluded liabilities (not grandfathered)			—			—			—
EU-12b			Eligible liabilities instruments that are subordinated to excluded liabilities, issued prior to 27 June 2019 (subordinated grandfathered)			—			—			—
EU-12c			Tier 2 instruments with a residual maturity of at least one year to the extent they do not qualify as Tier 2 items			805			805			—
13			Eligible liabilities that are not subordinated to excluded liabilities (not grandfathered pre cap)			24,295			24,295			—
EU-13a			Eligible liabilities that are not subordinated to excluded liabilities issued prior to 27 June 2019 (pre-cap)			—			—			—
14			Amount of non subordinated instruments eligible, where applicable after application of Article 72b (3) CRR			24,295			10,809			13,486
17			Eligible liabilities items before adjustments			60,559			47,073			13,486
EU-17a			Of which subordinated liabilities items			36,263			36,263			—
			Own funds and eligible liabilities: Adjustments to non-regulatory capital elements
18			Own funds and eligible liabilities items before adjustments			169,196			155,710			13,486
19			(Deduction of exposures between multiple point of entry (MPE) resolution groups)						71,569
20			(Deduction of investments in other eligible liabilities instruments)			116			116			—
22			Own funds and eligible liabilities after adjustments			169,080			84,090			84,990
EU-22a			Of which: own funds and subordinated liabilities			144,849			0			0
			Risk-weighted exposure amount and leverage exposure measure of the resolution group
23			Total risk exposure amount (TREA)			425,530			308,832			116,697
24			Total exposure measure (TEM)			1,108,944			1,037,376			71,569
			Ratio of own funds and eligible liabilities
25			Own funds and eligible liabilities as a percentage of TREA			39.73		%	27.23		%	12.51		%
EU-25a			Of which own funds and subordinated liabilities			34.04		%

70    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 20.EU TLAC1 - Composition - G-SII Requirement for own funds and eligible liabilities
						a			b			c
						Minimum requirement for own funds and eligible liabilities (MREL)			G-SII requirement for own funds and eligible liabilities (TLAC)			Memo item: Amounts eligible for the purposes of MREL, but not TLAC
26			Own funds and eligible liabilities as a percentage of TEM			15.25		%	8.11		%	7.14		%
EU-26a			Of which own funds and subordinated liabilities			13.06		%
27			CET1 (as a percentage of TREA) available after meeting the resolution group’s requirements			9.23		%	9.23		%
28			Institution-specific combined buffer requirement						4.42		%
29			of which: capital conservation buffer requirement						2.50		%
30			of which: countercyclical buffer requirement						0.59		%
31			of which: systemic risk buffer requirement						0.08		%
EU-31a			of which: Global Systemically Important Institution (G-SII) or Other Systemically Important Institution (O-SII) buffer						1.25		%
			Memorandum items
EU-32			Total amount of excluded liabilities referred to in Article 72a(2) of Regulation (EU) No 575/2013						491,522

The creditor ranking is shown below:

2025 Pillar 3 Disclosures Report    71

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 21.EU TLAC3a: creditor ranking - resolution entity
						Insolvency ranking
						1			2			3			4			5			6			7			8			9			Sum of 1 to 9
						(most junior)																								(most senior)
1			Description of insolvency ranking			CET1			AT1			Tier 2			Claims from persons specially related to the debtor (including Intragroup liabilities)			Claims from fines			Rest of accrued interests			Rest of contractually subordinated claims			Senior non preferred claims			Ordinary claims
2			Liabilities and own funds			73,856			8,949			11,909			25,906			—			3,132			1,032			37,652			259,706			422,142
3			of which excluded liabilities			—			—			—			—			—			—			—			—			183,559			183,559
4			Liabilities and own funds less excluded liabilities			73,856			8,949			11,909			25,906			—			3,132			1,032			37,652			76,147			238,583
5			Subset of liabilities and own funds less excluded liabilities that are own funds and liabilities potentially eligible for meeting TLAC			73,856			8,949			11,741			—			—			—			—			35,407			24,231			154,184
6			of which residual maturity ≥ 1 year < 2 years			—			—			104			—			—			—			—			9,180			1,415			10,699
7			of which residual maturity ≥ 2 year < 5 years			—			—			3,314			—			—			—			—			15,229			14,008			32,551
8			of which residual maturity ≥ 5 years < 10 years			—			—			8,185			—			—			—			—			10,615			8,154			26,953
9			of which residual maturity ≥ 10 years, but excluding perpetual securities			—			—			—			—			—			—			—			384			654			1,037
10			of which perpetual securities			73,856			8,949			138			—			—			—			—			—			—			82,943

For further information on capital and TLAC instruments main features - Own Funds and Eligible liabilities, see Appendix X and Appendix XI.

Access the Pillar 3 2025 file available on Grupo Santander's web site

72    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2025 Pillar 3 Disclosures Report    73

Index Introduction l Capital l Risks l Remuneration l Appendices l

			3.1. Risk management and control model			75
			3.1.1. Risk principles and culture			75
			3.1.2. Types of risk			75
			3.1.3. Risk management processes and tools			76
			3.2. Governance			78
			3.2.1. Board of Directors			78
			3.2.1.1. Diversity			78
			3.2.1.2. Board committees			79
			3.2.2. Risk governance structure			79
			3.3. Lines of defence			79
			3.3.1. Second line of defence			79
			3.3.2. Third line of defence			79
			3.3.3. Internal Audit - Key processes			81
			3. Global risk view

74    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

3. GLOBAL RISK VIEW

This chapter focuses on three main sections:
1						Risk management and control model. This section covers the qualitative requirements OVA - Entity's risk management approach and OVB - Information on governance arrangements.						2						Governance. This section covers the qualitative requirements OVA - Entity's approach to risk management and OVB - Information on governance arrangements.						3						Lines of defence. This section covers paragraphs (b), (c) and (d) of the qualitative requirement CRE - Qualitative disclosure requirements related to the IRB approach.

3.1. Risk management and control model

This section covers the qualitative requirements OVA - Institution risk management approach and OVB - Disclosure on governance arrangements.

Our risk management and control model is based on common principles, a solid risk culture, robust governance and advanced processes for managing different risk types.

3.1.1. Risk principles and culture

Risk management and control follow the principles set out below and abide by our risk culture (Risk Pro). These principles are mandatory, meet regulatory requirements, and conform to market best practices:

•All employees are responsible for risk management. They must understand the risks arising from their activities and take ownership for managing them.

•Senior management involvement. Through conduct, actions and communications, senior management promotes consistent risk management, fosters our risk culture, and oversees that the risk profile remains within the appetite set.

•Independence: Risk management and control functions operate independently according to our three-lines-of-defence model, with clearly defined roles and responsibilities.

•Holistic, forward-looking approach: We take a comprehensive approach to risk management and control that extends to all businesses and risk types that could have a material impact. This approach is forward-looking and considers trends across several time horizons and scenarios.

•Corporate oversight of subsidiaries: The corporate centre sets minimum risk management and control standards through reference documents. Subsidiaries are responsible for translating these standards into their own internal policies and procedures.

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), a key lever in the Group’s purpose of helping people and businesses prosper.

Risk Pro first and foremost reflects each employee’s individual responsibility for the risks they take in their day-to-day activity, as well as their contribution to the proper and responsible identification, assessment and management of those risks.

Our risk culture is embedded in every stage of the employee life cycle: talent selection, training, day-to-day work, remuneration and recognition.

For more details about Group's risk culture, see the section '6.1. Corporate culture' of the 'Sustainability, Statement' chapter.

Access 2025 annual report available on the Santander Group website

3.1.2. Types of risk

Grupo Santander has measures and procedures in place to identify, measure, manage, control and report the risks that occur in our day-to-day activities and also for operations in special circumstances.

In addition, for each key risk type, the risk and compliance functions have appropriate internal standards that set out all processes and tools, roles and responsibilities, and the requirements for proper governance, which helps establish an appropriate control environment.

2025 Pillar 3 Disclosures Report    75

Index Introduction l Capital l Risks l Remuneration l Appendices l

Grupo Santander´s risk classification is based on our corporate risk framework and includes:

1			Credit risk is the risk of loss arising from the failure of a customer or counterparty to meet its obligations to which the Santander Group has provided financing or entered into a contractual commitment, or from the deterioration of their credit quality.
2			Market risk is the risk incurred because of adverse movements in the factors that determine the market value of financial instruments, such as interest rates, exchange rates, equity prices and commodities, among others.
3			Liquidity risk is the risk of not having the needed liquid financial resources to meet obligations as they fall due or needing to obtain them at high cost.
4			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 and behavioural factors. It also includes risks associated with insurance and pension activities, as well as the risk of not having an adequate amount or quality of capital to meet internal business objectives, regulatory requirements, or market expectations.
5			Operational risk is the risk of loss resulting from inadequate or failed internal processes, people or systems, or from external events, including legal risk, regulatory and conduct compliance risks, model risk and risk categories such as fraud, technology and cyber.
6			Financial crime risk is the risk arising from the potential misuse of the Group’s resources, products, or services for criminal or illicit purposes, including money laundering, terrorist financing, violation or evasion of international sanctions programmes, proliferation financing and other predicate offences (corruption, bribery, etc.).
7			Model risk is the risk of potential negative consequences arising from decisions based on poorly developed, poorly implemented or incorrectly used models, which could lead to financial losses, inadequate commercial or strategic decisions or damage to the Group's operations.
8			Reputational risk is the risk of actual or potential negative economic impact to the bank due to damage to the perception of the bank among employees, customers, shareholders/investors, and society at large.
9			Strategic risk is the risk of losses or damage arising from strategic decisions or their poor implementation, that affect the medium and long term interests of our key stakeholders, or from an inability to adapt to changes in the environment.

These risks may be affected by a range of factors that we need to identify and assess in a manner consistent with regulatory requirements and prevailing industry practices. These include: geopolitical developments (international conflicts, economic and monetary policy decisions, new regulations or trade tensions); digital and transformation initiatives linked to changes in technology or business models; and sustainability factors, including natural and climate-related drivers (such as extreme events and the depletion or scarcity of natural resources, and impacts arising from the transition to a more sustainable economy), social factors (related to human rights, wellbeing and interests), and good governance practices, both within Grupo Santander and across the stakeholders with whom we interact.

3.1.3. Risk management processes and tools

Grupo Santander has the following processes and tools to carry out an effective risk management :

A. 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.

It is expressed through qualitative statements and quantitative limits and metrics representative of the bank’s desired risk profile, covering all material risks to which we are exposed.

To promote a comprehensive and forward-looking coverage of these risks, we apply common corporate methodologies for risk identification and assessment across geographies and activities, including emerging risk analysis and risk and control self-assessments (RCSA). These processes support the timely identification of structural and evolving risks, including those arising from geopolitical developments and broader macro-financial conditions, and inform the calibration and ongoing review of the Group’s risk appetite.

Santander structures its risk appetite across five axes, which together provide a holistic view of the risks incurred in the development of our business model.

The main elements underpinning Santander’s risk appetite and defining our business model are:

•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. The board prepares the risk appetite statement (RAS) for the whole Group every year. Through a cascading-down process, each subsidiary's board also sets its own risk appetite.

•Comprehensiveness and forward-looking approach. Our appetite includes all material risks to which we are exposed and defines our target risk profile for the current and medium term, with a forward-looking view that considers stress scenarios.

76    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

•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. This facilitates the effective and traceable embedding of risk appetite into more granular management policies and limits across our subsidiaries.

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

•Continuous monitoring and adaptation. Risk appetite is regularly monitored, reviewed and updated to reflect changes in market conditions, regulatory requirements and supervisory expectations. Compliance with risk appetite limits is monitored on a regular basis through dedicated reporting to senior management and the board and its committees. Breaches or potential breaches are subject to predefined escalation, remediation and follow-up processes, with oversight proportionate to their materiality through senior management and the Group’s governing bodies.

•Alignment with strategy and business plans. Before approving the three-year strategic plans, annual budget, and capital and liquidity plans, the Group verifies their consistency with the limits set in the Risk Appetite Statement. We promote the alignment of strategic and business plans 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.

–continuous monitoring of risk appetite compliance through the three lines of defence model.

Through this framework, Santander establishes clear boundaries for risk-taking, promotes consistency between strategy and risk tolerance, and reinforces the board’s oversight of the Group’s risk profile. This approach underpins the resilience of our capital and liquidity position and supports the sustainable execution of our business model across the economic cycle.

B. Risk profile assessment (RPA)

At Grupo Santander we identify, assess and determine the risk profile for all risks arising from our activities. Our risk framework, which we review every year, defines the key risk types based on the main risk identification and assessment exercises.

Risk identification covers all processes to detect internal and external risks and vulnerabilities we face. These processes raise awareness among the responsible functions and form the starting point for managing and controlling those risks.

Risk assessment comprises the processes to determine, both quantitatively and qualitatively, the relevance of the risks identified. It considers both inherent risks, before mitigants and controls, and the level of residual risk.

We systematically assess the Group’s risk profile and that of its subsidiaries using a single RPA methodology. This methodology rests on fundamental principles: shared accountability of all functions, efficiency, common methodologies, full coverage, materiality and a focus on corrective and mitigating actions.

Risk profile calculation uses a scoring system with four materiality categories (low, medium-low, medium-high and high). This system helps monitor the risk appetite approved by the board of directors. It also provides a global view of risks at a given point in time, identifies weaknesses in management and possible deviations from the business plan, and supports corrective action. This approach reflects prudent risk management, underpinned by strong capital ratios and sound liquidity levels.

Access 2025 annual report available on the Santander Group website

2025 Pillar 3 Disclosures Report    77

Index Introduction l Capital l Risks l Remuneration l Appendices l

3.2. Governance

This section covers the qualitative requirements OVA - Institution risk management approach and OVB - Disclosure on governance arrangements.

Except for matters discussed by the general shareholders meeting, the board of directors is the highest decision-making body of Banco Santander, performing its duties with unity of purpose and independence of judgement. The board's policy is to delegate day-to-day management and the execution of strategy to the executive bodies and the management team, focusing on the performance of its general supervisory function.

3.2.1. Board of directors

Size

As of 31 December 2025, the board of directors comprised 15 members, whose profile and background are described in section 4.1 'Our directors' of the 'Corporate governance' chapter of the 2025 annual report. The By-laws 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

For more details on the actual knowledge, skills and experience of the members of the board of directors, as well as on the appointment, renewal and succession of directors, see chapter 'Corporate governance' of the 2025 annual report.

3.2.1.1. 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.

Moreover, our policy stipulates that board member selection must avoid any form of implicit bias that could lead to forms of discrimination based on disability, race, ethnic origin or other factors.

For more information on board diversity at Banco Santander, see 'Corporate governance' chapter of the 2025 annual report.

3.2.1.2. Board committees

The existing board committees are: executive committee, audit committee, appointments committee, remuneration committee, risk oversight, regulation and compliance committee, responsible banking, sustainability and culture committee, and innovation and technology committee.

Board committees support the board in three main areas:

•Managing the Group by exercising decision-making powers through the executive committee.

•Supervising and making important decisions through the audit committee, nomination committee, remuneration committee and risk supervision, regulation and compliance committee.

•Formulating strategy for core areas through the responsible banking, sustainability and culture committee, and the innovation and technology committee.

For more details see the 'Corporate governance' chapter of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

78    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

3.2.2. Risk governance structure

The board of directors is ultimately responsible for risk and compliance management and control. It revises and approves the bank's risk frameworks and appetite while promoting a strong risk culture across the Group. The board relies on its risk supervision, regulation and compliance committee for risk control and on the Group’s executive committee for risk approval.

For more details on board committees, see the 'Corporate governance' chapter and 'Risk management and compliance' chapter of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

3.3. Lines of defence

In this section, the provisions of letters (b), (c) and (d) of the CRE - Qualitative disclosure requirements related to IRB approach requirement

Our model of three lines of defence effectively manages and controls risks:

•First line: formed by business functions, as well as all other functions that generate risk, constitute the first line of defence. They must establish an appropriate environment to manage all risks associated with the business and support compliance with internal policies and regulation. Risk management must operate within the approved risk appetite and associated limits. The first line executes mitigation plans for risks where weaknesses are identified in its control environment.

•Second line: formed by the risk and compliance functions. It independently oversees and challenges the risk management activities that the first line carries out.

•Third line: the internal audit function is independent and provides the board of directors and senior management with assurance on the quality and effectiveness of internal

controls, governance and risk management systems, while assessing compliance with applicable regulations and helping safeguard our value, solvency and reputation.

The risk, compliance and internal audit functions have an appropriate degree of separation and independence. Each has direct access to the board of directors 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.

3.3.1. Second line of defence

The duties of the second line of defence are to help verify that Grupo Santander manages risks in line with the risk appetite established and to promote a strong risk culture across the organization.

3.3.2. Third line of defence

The Internal Audit applies the definition of the Institute of Internal Auditors. It is a permanent function and is independent of all other functions and units. Its mission is to provide the board of directors and senior management with independent assurance with regard to the quality and efficacy of the systems and internal control, risk (current and emerging) management and governance processes, helping to safeguard the organisation's value, capital adequacy and reputation. It evaluates:

•The efficacy and efficiency of the processes and systems referred to above.

•Compliance with applicable legislation and the requirements of supervisory bodies.

•The reliability and integrity of financial and operating information.

•The integrity of capital.

Internal Audit is the third line of defence, acting independently.

Its scope of work encompasses:

•All group entities over which the group exercises effective control.

•Separate asset pools (for example, investment funds) managed by the entities mentioned in the previous section.

•All entities (or separate asset pools) not included in the previous points for which there is an agreement for the group to provide internal audit functions.

The Internal Audit is guided by the following principles in this work: (i) Independence, objectivity and impartiality, (ii) Integrity, ethical behaviour and confidentiality of the information handled and its findings, (iii) Competence and professional qualifications of the auditors, (iv) Quality of the work, (v) Value creation, (vi) Adequate collaboration with other control functions in the group and with the external auditors and other assurance providers working within the organisation, (vii) A smooth relationship with the supervisory bodies and (viii) Compliance with international standards for the function.

The Internal Audit's authority comes directly from the board of directors. Internal Audit reports to the board audit committee and complies with the reporting requirements it receives from the committee in the discharge of its duties.

2025 Pillar 3 Disclosures Report    79

Index Introduction l Capital l Risks l Remuneration l Appendices l

However, as an independent unit, it reports regularly to the board of directors, at least twice a year and when it deems it necessary, direct access to the board is enabled.

In addition, it organises its activities with the flexibility necessary to adapt to the Group's current structure and circumstances and to achieve its objectives with maximum effectiveness and efficiency.

The Group Chief Audit Executive is responsible for submitting a corporate framework for the Internal Audit to the board of directors for approval and subsequent implementation. This corporate framework sets out the global function and the way in which it is to be performed, as well as any changes which arise from its regular reviews.

A plan based on an assessment of the risks to which the group is exposed is provided by the Internal Audit and submitted to the audit committee. It is subsequently submitted to the board of directors, which needs to approve it. In terms of solvency, this plan is defined, among others, in accordance with supervisory and regulatory requirements, the risk assessment process and the cycle of capital audits, taking into account the results of engagements in previous years and other criteria, such as the implementation rate of recommendations issued, the results of regulatory inspections, requests made by supervisory authorities and changes in mandatory regulations.

The scope of Santander´s Group capital functions includes, mainly, the capital measurement and reporting processes, as well as, the adequacy, planning and management. It also performs other tasks focusing on transversal issues with significant impact on the Group's solvency, such as analysis of credit portfolios and accounting provisions, risk management processes, strategic process analysis, assessment of internal control processes and data quality, etc.

Regarding the models used for capital calculation, in accordance with the EBA document 'ECB Guide to Internal Models' of July 2025 (General Aspects, point 5), the Internal Audit performs a risk assessment exercise on the models used to calculate capital, identifying main focus of review and the greatest risks in the following major lines of action:

•Reviewing compliance with the Group's internal governance model and supervisory requirements for the approval and maintenance of advanced models.

•Managing models and their adequacy and integration.

•Analysing the accuracy of risk measurement. Checking, through analysis and tests on the quality, consistency and integrity of the Basel databases, that the methodology used in constructing the risk parameter models is consistent with their intended uses and complies with corporate standards and regulatory requirements as well as, the adequacy of internal validation function.

•Review of the regulatory capital calculation and reporting process, verifying compliance with existing regulations.

•Analysing the technical aspects and applications of the technological environment.

The key processes of the internal audit function are the activities that allow to develop the function according to the following detail:

80    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

3.3.3. Internal Audit - Key processes

2025 Pillar 3 Disclosures Report    81

Index Introduction l Capital l Risks l Remuneration l Appendices l

[THIS PAGE INTENTIONALLY LEFT BLANK]

82    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2025 Pillar 3 Disclosures Report    83

Index Introduction l Capital l Risks l Remuneration l Appendices l

			4.1. General aspects			85
			4.2. Capital requirements for credit risk			86
			4.2.1. IRB roll-out plan and supervisory approval			90
			4.2.2. Internal ratings-based approach (IRB)			118
			4.2.3. Equity investments and instruments not included in the held-for-trading book			121
			4.2.4. Standardised approach			121
			4.3. Distribution of exposures			126
			4.4. Internal rating systems			141
			4.5. Rating assignment process and parameter estimation			141
			4.6. Uses of internal parameter estimates			144
			4.7. Credit risk mitigation techniques			145
			4.7.1. Recognition of credit risk mitigation			148
			4.8. Asset impairment losses: influencing factors and comparative analysis			154
			4.9. Backtesting of PD			154
			4. Credit risk

84    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

4. CREDIT RISK

Credit risk occurs from the potential financial loss arising from the failure of a customer or counterparty to meet its obligations to which the Santander Group has provided financing or entered into a contractual commitment, or from the deterioration of their credit quality.

This chapter provides a detailed analysis of Grupo Santander´s credit risk profile from several perspectives: region, activity sector, residual maturity, etc with a focus on regulatory indicators (EAD and RWA).

RWA by geography

Excludes Counterparty Credit risk

n			Spain			33%
n			Rest of Europe			17%
n			Brazil			14%
n			UK			11%
n			Rest of South America			8%
n			USA			11%
n			Rest of North America			5%

Main figures
EUR million			Total risk exposure amounts						Total own funds req.
			2025			2024			2025			2024
Credit risk (excluding CCR)1			471,745			499,560			37,740			39,965
Of which, standardized approach (SA)			280,993			283,612			22,479			22,689
Of which, the foundation IRB (FIRB) approach			52,965			59,981			4,237			4,798
Of which, slotting approach2			15,018			13,840			1,201			1,107
Of which, equities under the simple risk weighted approach			3,250			4,724			260			378
Of which, the advanced IRB (AIRB) approach			114,036			129,919			9,123			10,394
Counterparty credit risk - CCR			14,081			18,089			1,127			1,447
Of which, the standardized approach			11,816			15,035			945			1,203
Of which, internal model method (IMM)			—			—			—			—
Of which, exposures to a CCP			372			294			30			24
Of which, other CCR			1,894			2,761			152			221
Credit valuation adjustments risk - CVA risk			2,461			679			197			54
Settlement risk			555			173			44			14
Securitisation exposures in the non-trading book (after the cap)			16,683			15,705			1,335			1,256
(1) It includes equities under the PD/LGD approach.
(2) Correction from the mapping indicated by supervisor to {C 08.01, r0020, c0260, s0010} + {C 08.01, r0030, c0260, s0010}.

RWA variation

EUR million

(5.57)%

4.1. General aspects

This section covers the CRA - General qualitative information about credit risk. It also complies with (d), (e), (f) and (g) of the OVA Requirement - Institution risk management approach.

Credit risk identification, analysis, decision-making and control processes at Santander Group are supported by a holistic view of the credit risk cycle, covering the transaction, the customer and the portfolio.

Credit risk identification enables active management and effective portfolio control. We identify and classify external and internal risks in each business in order to adopt corrective and mitigating measures when needed.

2025 Pillar 3 Disclosures Report    85

Index Introduction l Capital l Risks l Remuneration l Appendices l

4.2. Capital requirements for credit risk

The following table shows the main changes in capital requirements for credit risk in the year:

Table 22.Credit risk capital requirements movements
EUR million
			RWAs			Capital requirements
Starting amount (31/12/2024)			533,207			42,657
Asset size			11,960			957
Asset quality			(1,814)			(145)
Model updates			2,636			211
Methodology and policy			(26,227)			(2,098)
Acquisitions and disposals			470			38
Foreign exchange movements			(17,564)			(1,405)
Other			—			—
Ending amount (31/12/2025)			502,668			40,213
Credit Risk, Counterparty Credit Risk (without CCPs or CVAs), Settlement Risk and Securitisations

Credit risk RWA decreased in 2025 by -€30.539 billion. This decline is mainly explained by methodology and policy, in particular the changes introduced by the new CRR3 capital regulation, which had an impact of -€27.310 billion (mainly in advanced models due to the removal of the scaling factor, the application of the effective maturity (M) in F-IRB and the reduction of unsecured LGD for corporate exposures under the F-IRB approach) and, to a lesser extent, by asset quality. These decreases were offset by increases in asset size driven by broad-based business growth, mitigated by the securitisations carried out during the year (-€24.621 billion), by the evolution in credit quality (-€1.814 billion) and by model updates (+€2.636 billion). RWA also decreased due to the impact of foreign exchange movements of -€17.564 billion (mainly the US dollar and sterling).

RWA Evolution of Credit risk (excluding counterparty credit risk, securitisations and others)

Million euros

86    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

4.2.1. IRB roll-out plan and supervisory approval

This section covers the letter (a) of the qualitative requirement CRE - Qualitative disclosure requirements related to IRB approach.

Santander has supervisory approval to use advanced approaches for calculating regulatory capital for credit risk for the parent and its main subsidiaries in Spain, the United Kingdom and Portugal and for some portfolios in Germany, Mexico, Brazil, Chile, Nordic countries (Sweden, Finland and Norway), France and the United States.

Santander Group is committed to the continuous monitoring and periodic update of our current IRB rating systems and, to achieve this, a model plan is executed annually as part of our business-as-usual operating framework.

In terms of future plans, the Decision Letter received from the ECB has confirmed the approval of the main pillars of Santander Group IRB strategy, based on a solidly supported relationship of global businesses and exposure classes, along with materiality thresholds and modellability criteria. The strategy assures the regulatory compliance and achieves a balanced combination of simplicity, feasibility and capital protection, and will allow Santander Group to grow under a well-defined and consistent across geographies IRB/Standardized landscape: Retail business under AIRB, Commercial/Corporate customer businesses under FIRB, and Payments/ Credit Cards under Standardized approach. The outcome of the strategy implies reversions to less sophisticated approaches (IRB to Standardized and AIRB to FIRB) that will be completed during 2026, mid-term completion of on-going roll out plans and long-term plans to prepare new IRB models for key Retail portfolios in America.

The following table shows the geographical scope of the internal models for credit risk (AIRB or FIRB) in the various portfolios:

List of authorised IRB models by legal entity
Country			Legal Entity			IRB portfolio (AIRB or FIRB)
UK			Santander UK PLC			Institutions, Corporates Project Finance, Mortgages, Qualifying Revolving, Other Retail.
			Abbey National Treasury Services			Institutions, Corporates Project Finance.
			Abbey Covered Bonds LLP			Institutions
Spain			Banco Santander, S.A.			Institutions, Corporates, Corporates SMEs, Corporates Project Finance, Mortgages, Qualifying Revolving, Retail SMEs, Other Retail
			Santander Factoring y Confirming S.A.			Institutions, Corporates, Corporates SMEs, Corporates Project Finance, Mortgages, Retail SMEs, Other Retail
			Santander Lease, S.A. E.F.C.			Institutions, Corporates, Corporates SMEs, Mortgages, Retail SMEs, Other Retail
			Santander Consumer EFC, S.A.			Corporates, Corporates SMEs, Qualifying Revolving, Other Retail.
			Santander Consumer Finance, S.A.			Corporates, Corporates SMEs, Qualifying Revolving, Other Retail.
Portugal			Banco Santander Totta			Institutions, Corporates, Corporates SMEs, Corporates Project Finance, Mortgages, Qualifying Revolving, Retail SMEs, Other Retail.
Brazil			Banco Santander Brasil			Corporates
			Santander Brasil EFC			Corporates
Germany			Santander Consumer Bank AG			Corporates, Corporates SMEs, Mortgages, Revolving and Other Retail
Mexico			Banco Santander México			Institutions, Corporates, Corporates SMEs, Corporates Project Finance
USA			Santander Bank, National Association			Corporates
France			Banque Stellantis France			Corporates, Corporates SMEs, Retail SMEs, Other Retail
Nordics			Santander Consumer Bank A.S.			Other Retail
			Santander Consumer Finance OY			Other Retail
Chile			Banco Santander - Chile			Institutions and Corporates

2025 Pillar 3 Disclosures Report    87

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following table shows the extent of use of the IRB and standard methods for each exposure category as of December 31, 2025:

Table 23.CR6-A - Scope of the use of IRB and SA approaches
																											2025
			EUR million			Exposure value as defined in Article 166 CRR for exposures subject to IRB approach			Total exposure value for exposures subject to the Standardised approach and to the IRB approach			Percentage of total exposure value subject to the permanent partial use of the SA (%)			Percentage of total exposure value subject to IRB approach (%)			Percentage of total exposure value subject to a roll-out plan (%)
						a			b			c			d			e
1			Central governments or central banks			—			464,456			100.00%			—			—
2			Regional governments or local authorities			2,569			25,591			87.09%			10.04%			2.87%
3			Public sector entities			310			5,180			91.11%			5.98%			2.91%
4			Institutions			—			31,690			47.98%			21.47%			30.55%
5			Corporates			214,142			399,382			29.37%			53.61%			17.01%
5.1			Of which Corporates - General			—			318,578			35.72%			45.46%			19.32%
5.2			Of which Corporates - Specialised lending			—			30,005			5.34%			79.88%			14.78%
5.2.1			Of which Corporates - Specialised lending, excluding slotting approach			—			—			—			0			0
5.2.2			Of which Corporates - Specialised lending under slotting approach			—			30,005			5.34%			79.88%			14.78%
5.3			Of which Corporates - Purchased Receivables			—			50,800			3.75%			100.00%			—
6			Retail			347,528			684,725			21.19%			50.75%			28.06%
6.1			Of which Retail – Qualifying revolving			—			48,966			12.68%			22.12%			65.21%
6.2			Of which Retail – Secured by residential immovable property			—			395,653			5.12%			70.67%			24.21%
6.3			Of which Retail - Purchased Receivables			2,125			2,829			6.68%			100.00%			—
6.4			Of which Retail - Other retail exposures			54,918			237,112			46.26%			23.16%			30.58%
7			Equity			2,974			8,462			64.86%			35.14%			—
EU 7a			Collective investment undertakings (CIU)			567			897			36.83%			63			—
8			Other non-credit obligation assets			1,160			303,965			99.62%			0.38%			—
9			Total			576,055			1,924,349			56.00%			29.93%			14.06%

88    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following table shows the geographical scope of portfolios using the internal models approach (IMA) for market risk:

List of authorised IMA models by legal entity
Country			Legal entity			IMA portfolio (product)
Spain			Banco Santander, S.A.			Trading book
			Santander London Branch			Trading book
Chile			Banco Santander - Chile			Trading book
			Santander Investment Chile Limited			Trading book
			Santander Corridors de Bolsa Limited			Trading book
Mexico			Banco Santander México			Trading book
			Casa de Bolsa Santander, S.A. de C.V.			Trading book

¤ For further information on the market risk, see chapter 7.

As regards operational risk, Santander Group applies the standardised approach to calculate regulatory capital as provided for in CRR3. In 2017, the European Central Bank authorised the use of the Alternative Standardised Approach to calculate capital requirements on a consolidated basis in Banco Santander México, in addition to the approval granted in Brazil in 2016.

¤ For further information on the operational risk, see chapter 8.

2025 Pillar 3 Disclosures Report    89

Index Introduction l Capital l Risks l Remuneration l Appendices l

4.2.2. Internal ratings-based approach (IRB)

The following table shows the main variations in IRB credit risk RWA:

Table 24.CR8 - RWEA flow statements of credit risk exposures under the IRB approach
			EUR million
						Three months ended Dec'25			Twelve months ended Dec'25			Three months ended Dec'24			Twelve months ended Dec'24
						a
						RWA			RWA			RWA			RWA
1			Risk weighted exposure amount as at the end of the previous reporting period			193,207			213,341			231,597			217,701
2			Asset size			(1,996)			5,251			(20,313)			(22,867)
3			Asset quality			(344)			(1,814)			(965)			(2,584)
4			Model updates			—			2,553			—			8,307
5			Methodology and policy			—			(23,561)			858			12,414
6			Acquisitions and disposals			—			—			—			—
7			Foreign exchange movements			(263)			(5,164)			2,164			369
8			Other			—			—			—			—
9			Risk weighted exposure amount as at the end of the reporting period			190,605			190,605			213,341			213,341
			Credit Risk, Counterparty Credit Risk (without CCPs or CVAs), Settlement Risk and Securitisations

IRB credit risk assets decreased by -€22,736 Bn in 2025. This decrease is mainly due to changes introduced in the new CRR3 capital regulation, which had an impact of -€23,561 Bn (mainly in advanced models due to the removal of the scaling factor, the application of the effective maturity (M) in F-IRB and the reduction of unsecured LGD for corporate exposures under the F-IRB approach) and, to a lesser extent, to asset quality. These decreases are offset by increases in asset size (+€5,251 Bn) and the updating of mortgage models in Spain and the United Kingdom (+€1,185 Bn), retail portfolios in SC Norway (+€884 Bn) and unsecured personal loans and bank accounts in the United Kingdom (+€484 Bn). Finally, risk assets also decreased due to the impact of exchange rates, which amounted to -€5,164 Bn (mainly due to the dollar and the pound).

The distribution of exposures and average parameters by segments and geographies in IRBs without default, equities or specialised financing is shown below:

Table 25.IRB Exposures and parameters by segment and geography
EUR million
																														2025
			Central governments and central banks			Regional governments			Public sector entities			Institutions			Corporates			Retail Mortgages			Retail SME			Retail Other			Retail Qualifying Revolving			Total
Santander Group
EAD			0			2,700			310			18,686			207,740			279,652			1,864			55,869			10,831			577,653
Average LGD in %			—		%	19.41		%	47.15		%	43.90		%	39.75		%	15.08		%	55.73		%	42.53		%	83.56		%	28.99		%
Average PD in %			—		%	0.90		%	1.98		%	0.13		%	2.43		%	2.44		%	9.50		%	6.77		%	4.20		%	3.45		%
Europe
EAD			0			288			310			17,116			158,878			279,652			1,864			55,869			10,831			524,807
Average LGD in %			—		%	20.71		%	47.15		%	43.84		%	39.93		%	15.08		%	55.73		%	42.53		%	83.56		%	28.04		%
Average PD in %			—		%	1.45		%	1.98		%	0.14		%	2.26		%	2.44		%	9.50		%	6.77		%	4.20		%	3.54		%
North America
EAD			0			2,413			0			1,117			16,679			0			0			0			0			20,210
Average LGD in %			—		%	19.26		%	—		%	44.34		%	38.35		%	—		%	—		%	—		%	—		%	36.40		%
Average PD in %			—		%	0.83		%	—		%	0.07		%	1.45		%	—		%	—		%	—		%	—		%	1.32		%
South America
EAD			0			0			0			453			32,183			0			0			0			0			32,636
Average LGD in %			—		%	—		%	—		%	45.00		%	39.64		%	—		%	—		%	—		%	—		%	39.71		%
Average PD in %			—		%	—		%	—		%	0.06		%	3.77		%	—		%	—		%	—		%	—		%	3.30		%
Default not included
EAD including counterparty credit risk, does not include neither equities nor specialised lending.

90    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

The tables in this section show, for each business segment and credit rating (internal and Standard & Poor’s) the value of exposures, credit risk parameters and capital under the IRB approach distinguishing between foundation IRB (FIRB) and advanced IRB (AIRB).

Table 26.Credit risk exposures by exposure class
AIRB
EUR million																																				2025
Exposure class			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Average PD			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
Regional governments and local authorities			3,115			245			23.51		%	2,571			0.90		%	202			18.79		%	3.79			949			36.93		%	5			(9)
Corporates			46,021			22,155			26.68		%	48,035			5.45		%	98,078			43.44		%	1.94			36,380			75.74		%	1,298			(1,533)
Public Sector Entities			99			21			1.88		%	99			6.04		%	16			51.71		%	3.39			97			97.98		%	5			(4)
Purchased receivable			6,632			453			0.95		%	5,855			5.95		%	17,386			53.62		%	0.31			5,286			90.27		%	228			(206)
Retail – Secured by residential immovable property			272,732			15,955			44.38		%	279,652			2.44		%	2,202,241			15.08		%	—			40,293			14.41		%	1,115			(682)
Retail – Purchased receivables			2,302			—			40.00		%	1,864			9.50		%	60,957			55.73		%	—			1,267			67.94		%	131			(112)
Retail – Qualifying revolving (QRRE)			3,225			17,900			42.16		%	10,831			4.20		%	19,872,053			83.56		%	—			4,460			41.18		%	394			(217)
Retail- Other retail exposures			56,349			6,599			43.73		%	55,864			6.77		%	10,685,163			42.53		%	—			25,305			45.30		%	2,060			(1,784)
Total			390,475			63,328			37.09		%	404,771			3.52		%	32,936,096			24.84		%	1.85			114,037			28.17		%	5,236			(4,547)

Table 26.Credit risk exposures by exposure class
FIRB
EUR million																																				2025
Exposure class			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Average PD			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
Institutions			5,323			8,364			21.16		%	7,844			0.20		%	1,040			42.87		%	1.00			1,992			25.39		%	7			(5)
Corporates - Other			86,922			143,093			21.74		%	103,617			1.74		%	19,551			36.76		%	2.00			45,011			43.44		%	692			(790)
Regional governments			—			—			0.00		%	—			0.00		%	—			0.00		%	—			—			0.00		%	—			—
Public Sector Entities			211			—			0.00		%	211			0.07		%	1			45.00		%	5.00			124			59.05		%	—			—
Purchased Receivable			34,804			2,250			5.48		%	34,859			0.58		%	3,569			40.71		%	—			6,998			20.08		%	80			(46)
Total			127,260			153,707			21.47		%	146,531			1.38		%	24,161			38.04		%	1.47			54,125			36.94		%	779			(841)

2025 Pillar 3 Disclosures Report    91

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 27.CR6 - AIRB approach - Credit risk exposures by exposure class and PD range
EUR million
																																				2025
PD range			On-balance sheet exposures			Off-balance-sheet exposures pre-CCF			Exposure weighted average CCF			Exposure post CCF and post CRM			Exposure weighted average PD (%)			Number of obligors			Exposure weighted average LGD (%)			Exposure weighted average maturity (years)			Risk weighted exposure amount after supporting factors			Density of risk weighted exposure amount			Expected loss amount			Value adjust-ments and provisions
			a			b			c			d			e			f			g			h			i			j			k			l
Regional governments
0.00 < 0.15			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
0.00 to < 0.10			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
0.10 to < 0.15			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
0.15 < 0.25			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
0.25 < 0.50			—			4			1.60		%	—			0.49		%	3			50.19		%	1			—			60		%	—			—
0.50 < 0.75			1,425			77			27.02		%	898			0.69		%	28			13.77		%	4			256			28		%	1			(2.00)
0.75 < 2.50			1,669			155			23.41		%	1,652			0.97		%	87			21.50		%	3			681			41		%	3			(7.00)
0.75 to < 1.75			1,656			154			23.42		%	1,638			0.96		%	86			21.27		%	3			662			40		%	3			(6.00)
1.75 to < 2.50			14			—						14			2.44		%	1			48.98		%	3			19			136		%	—			—
2.50 < 10.00			20			6			6.70		%	20			3.26		%	68			19.81		%	3			13			62		%	—			—
2.50 to <5			20			6			6.06		%	20			3.24		%	62			19.73		%	3			12			62		%	—			—
5 to <10			—			—			22.31		%	—			6.08		%	6			29.97		%	2			—			100		%	—			—
10.00 < 100.00			1			3			0.54		%	1			43.86		%	14			19.25		%	—			1			94		%	—			—
10 to < 20			—			—						—			—			100.00									—			—			—			—
20 to < 30			—			—						—			—												—			—			—			—
30 to < 100			1			3			0.54		%	1			43.86		%	13			19.25		%	—			1			94		%	—			—
100.00 (Default)			—			—						—			100.00		%	2			90.85		%	1			—			20		%	—			—
Subtotal (exposure class)			3,115			245			23.51		%	2,571			0.90		%	202			18.79		%	4			949			37		%	5			(9)
Total (all exposures classes AIRB)			390,474			63,328			37.09		%	404,772			3.52		%	32,936,096			24.84		%	2			114,036			28		%	5,234			(4,547)

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 27.CR6 - AIRB approach - Credit risk exposures by exposure class and PD range
EUR million
PD range			On-balance sheet exposures			Off-balance-sheet exposures pre-CCF			Exposure weighted average CCF			Exposure post CCF and post CRM			Exposure weighted average PD (%)			Number of obligors			Exposure weighted average LGD (%)			Exposure weighted average maturity (years)			Risk weighted exposure amount after supporting factors			Density of risk weighted exposure amount			Expected loss amount			Value adjust-ments and provisions
			a			b			c			d			e			f			g			h			i			j			k			l
Corporates - Other
0.00 < 0.15			77			107			17.06		%	99			0.11		%	163			37.91		%	4			35			36		%	—			—
0.00 to < 0.10			2			—			55.20		%	2			0.07		%	73			52.18		%	3			1			32		%	—			—
0.10 to < 0.15			76			107			16.91		%	97			0.11		%	90			37.64		%	4			35			36		%	—			—
0.15 < 0.25			1,820			662			10.45		%	3,560			0.21		%	2,208			37.05		%	2			948			27		%	1			(1.00)
0.25 < 0.50			6,600			4,651			32.98		%	9,085			0.38		%	13,092			46.96		%	2			5,540			61		%	13			(23.00)
0.50 < 0.75			9,521			3,965			31.48		%	11,022			0.60		%	18,207			43.76		%	2			7,127			65		%	26			(15.00)
0.75 < 2.50			16,839			6,779			29.04		%	15,602			1.50		%	35,394			42.78		%	2			13,403			86		%	102			(86.00)
0.75 to < 1.75			11,841			4,442			29.53		%	11,247			1.24		%	23,310			42.21		%	2			9,028			80		%	58			(44.00)
1.75 to < 2.50			4,998			2,337			28.11		%	4,356			2.17		%	12,084			44.23		%	2			4,376			100		%	44			(42.00)
2.50 < 10.00			7,386			5,311			16.97		%	5,860			4.44		%	18,722			39.39		%	2			6,367			109		%	109			(136.00)
2.50 to <5			4,547			4,127			15.53		%	3,838			3.54		%	10,966			39.09		%	2			3,905			102		%	56			(51.00)
5 to <10			2,839			1,184			22.00		%	2,022			6.15		%	7,756			39.96		%	2			2,462			122		%	52			(85.00)
10.00 < 100.00			1,257			355			25.74		%	1,039			23.83		%	4,155			41.97		%	2			2,043			197		%	94			(102.00)
10 to < 20			704			214			29.62		%	619			13.48		%	2,109			40.09		%	2			1,103			178		%	31			(44.00)
20 to < 30			56			14			41.32		%	63			24.78		%	433			53.45		%	2			160			254		%	5			(5.00)
30 to < 100			496			127			17.43		%	357			41.62		%	1,613			43.22		%	2			780			219		%	58			(54.00)
100.00 (Default)			2,521			324			24.71		%	1,768			100.00		%	6,137			56.65		%	2			916			52		%	953			(1,169.00)
Subtotal (exposure class)			46,021			22,155			26.68		%	48,035			5.45		%	98,078			43.44		%	2			36,380			76		%	1,298			(1,533)
Total (all exposures classes AIRB)			390,474			63,328			37.09		%	404,772			3.52		%	32,936,096			24.84		%	2			114,036			28		%	5,234			(4,547)

2025 Pillar 3 Disclosures Report    93

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 27.CR6 - AIRB approach - Credit risk exposures by exposure class and PD range
EUR million
PD range			On-balance sheet exposures			Off-balance-sheet exposures pre-CCF			Exposure weighted average CCF			Exposure post CCF and post CRM			Exposure weighted average PD (%)			Number of obligors			Exposure weighted average LGD (%)			Exposure weighted average maturity (years)			Risk weighted exposure amount after supporting factors			Density of risk weighted exposure amount			Expected loss amount			Value adjust-ments and provisions
			a			b			c			d			e			f			g			h			i			j			k			l
PSEs
0.00 < 0.15			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
0.00 to < 0.10			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
0.10 to < 0.15			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
0.15 < 0.25			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
0.25 < 0.50			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
0.50 < 0.75			93			21			1.16		%	93			0.74		%	12			48.99		%	4			96			103		%	—			—
0.75 < 2.50			1			1			20.00		%	1			2.44		%	2			50.08		%	1			1			115		%	—			—
0.75 to < 1.75			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
1.75 to < 2.50			1			1			20.00		%	1			2.44		%	2			50.08		%	1			1			115		%	—			—
2.50 < 10.00			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
2.50 to <5			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
5 to <10			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
10.00 < 100.00			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
10 to < 20			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
20 to < 30			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
30 to < 100			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
100.00 (Default)			5			—						5			100.00		%	2			100.00		%	2			0			—		%	4			(4.00)
Subtotal (exposure class)			99			21			1.88		%	99			6.04		%	16			51.71		%	3			97			98		%	5			(4)
Total (all exposures classes AIRB)			390,474			63,328			37.09		%	404,772			3.52		%	32,936,096			24.84		%	2			114,036			28		%	5,234			(4,547)
Certain figures contained in this section 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 given for that column or row.

94    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

CR6 - AIRB approach - Credit risk exposures by exposure class and PD range (31.12.2024)
EUR million
PD range			On-balance sheet exposures			Off-balance-sheet exposures pre-CCF			Exposure weighted average CCF			Exposure post CCF and post CRM			Exposure weighted average PD (%)			Number of obligors			Exposure weighted average LGD (%)			Exposure weighted average maturity ( years)			Risk weighted exposure amount after supporting factors			Density of risk weighted exposure amount			Expected loss amount			Value adjust-ments and provisions
Institutions
0.00 < 0.15			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
0.00 to < 0.10			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
0.10 to < 0.15			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
0.15 < 0.25			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
0.25 < 0.50			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
0.50 < 0.75			1,257			7			5.62		%	1,216			0.69		%	27			10.22		%	5			316			26		%	1			(0.19)
0.75 < 2.50			1,574			239			45.96		%	1,149			0.97		%	90			21.80		%	3			498			43		%	2			(6.26)
0.75 to < 1.75			1,574			239			45.96		%	1,149			0.97		%	90			21.80		%	3			498			43		%	2			(6.26)
1.75 to < 2.50			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
2.50 < 10.00			179			4			1.71		%	180			2.75		%	71			15.16		%	4			87			48		%	1			(0.33)
2.50 to <5			179			3			2.37		%	179			2.74		%	65			15.15		%	4			87			48		%	1			(0.33)
5 to <10			—			1			0.18		%	—			6.14		%	6			19.24		%	3			0			76		%	—			—
10.00 < 100.00			3			2			1.08		%	3			43.86		%	10			19.24		%	—			3			99		%	—			—
10 to < 20			—			—			—			—			—			—			—			—			—			—			—			—
20 to < 30			—			—			—			—			—			—			—			—			—			—			—			—
30 to < 100			3			2			1.08		%	3			43.86		%	10			19.24		%	—			3			99		%	—			—
100.00 (Default)			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
Subtotal (exposure class)			3,014			252			43.79		%	2,548			1.02		%	198			15.80		%	4			904			35		%	4			(7)
Total (all exposures classes AIRB)			417,993			65,408			40.94		%	430,724			3.94		%	31,415,628			25.41		%	—			129,919			30		%	6,034			(5,326)

2025 Pillar 3 Disclosures Report    95

Index Introduction l Capital l Risks l Remuneration l Appendices l

CR6 - AIRB approach - Credit risk exposures by exposure class and PD range (31.12.2024)
EUR million
PD range			On-balance sheet exposures			Off-balance-sheet exposures pre-CCF			Exposure weighted average CCF			Exposure post CCF and post CRM			Exposure weighted average PD (%)			Number of obligors			Exposure weighted average LGD (%)			Exposure weighted average maturity ( years)			Risk weighted exposure amount after supporting factors			Density of risk weighted exposure amount			Expected loss amount			Value adjust-ments and provisions
Corporates - Other
0.00 < 0.15			180			187			34.36		%	384			0.11		%	94			45.72		%	2			125			32		%	—			—
0.00 to < 0.10			—			—			58.86		%	—			0.06		%	10			56.04		%	2			0			37		%	—			—
0.10 to < 0.15			180			187			34.35		%	384			0.11		%	84			45.72		%	2			125			32		%	—			—
0.15 < 0.25			3,165			1,426			35.20		%	4,172			0.21		%	1,027			40.60		%	2			1,454			35		%	3			(3)
0.25 < 0.50			9,327			5,858			37.00		%	12,318			0.38		%	5,654			48.16		%	2			7,868			64		%	20			(5)
0.50 < 0.75			8,653			3,535			27.01		%	7,566			0.59		%	6,182			47.10		%	2			5,726			76		%	23			(12)
0.75 < 2.50			14,184			4,852			35.88		%	13,224			1.49		%	13,827			41.73		%	2			12,617			95		%	85			(30)
0.75 to < 1.75			9,798			3,177			36.44		%	9,186			1.19		%	8,763			41.03		%	2			8,110			88		%	47			(18)
1.75 to < 2.50			4,386			1,675			34.83		%	4,038			2.17		%	5,064			43.31		%	1			4,507			112		%	38			(12)
2.50 < 10.00			4,704			2,705			22.02		%	3,833			4.34		%	6,161			40.14		%	1			5,296			138		%	73			(46)
2.50 to <5			3,173			1,863			20.83		%	2,654			3.61		%	3,794			39.78		%	1			3,440			130		%	43			(20)
5 to <10			1,531			842			24.64		%	1,179			6.00		%	2,367			40.94		%	1			1,856			157		%	31			(26)
10.00 < 100.00			765			213			32.43		%	719			24.43		%	2,574			43.43		%	2			1,650			229		%	72			(30)
10 to < 20			439			114			24.61		%	405			13.22		%	955			44.16		%	1			878			217		%	22			(8)
20 to < 30			40			14			40.61		%	49			23.12		%	196			35.39		%	2			113			228		%	3			(6)
30 to < 100			286			85			41.61		%	265			41.78		%	1,423			43.81		%	2			660			249		%	48			(15)
100.00 (Default)			1,700			273			25.51		%	1,099			100.00		%	2,374			64.37		%	2			557			51		%	701			(825)
Subtotal (exposure class)			42,679			19,050			32.36		%	43,316			4.01		%	37,893			44.88		%	2			35,293			81		%	977			(950)
Total (all exposures classes AIRB)			417,993			65,408			40.94		%	430,724			3.94		%	31,415,628			25.41		%	—			129,919			30		%	6,034			(5,326)

96    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

CR6 - AIRB approach - Credit risk exposures by exposure class and PD range (31.12.2024)
EUR million
PD range			On-balance sheet exposures			Off-balance-sheet exposures pre-CCF			Exposure weighted average CCF			Exposure post CCF and post CRM			Exposure weighted average PD (%)			Number of obligors			Exposure weighted average LGD (%)			Exposure weighted average maturity ( years)			Risk weighted exposure amount after supporting factors			Density of risk weighted exposure amount			Expected loss amount			Value adjust-ments and provisions
SMEs
0.00 < 0.15			7			1			50.02		%	8			0.11		%	141			33.29		%	3			2			23		%	—			—
0.00 to < 0.10			—			—			53.59		%	—			0.06		%	64			56.77		%	1			—			15		%	—			—
0.10 to < 0.15			7			1			49.00		%	8			0.12		%	77			32.32		%	3			2			23		%	—			—
0.15 < 0.25			652			75			17.33		%	1,705			0.21		%	1,450			35.52		%	2			388			23		%	1			—
0.25 < 0.50			2,552			1,338			30.68		%	3,293			0.37		%	8,197			43.27		%	2			1,381			42		%	4			(8)
0.50 < 0.75			5,002			1,384			31.07		%	6,458			0.61		%	13,267			43.51		%	2			3,168			49		%	13			(5)
0.75 < 2.50			8,632			2,720			26.97		%	7,631			1.54		%	26,063			43.71		%	2			5,226			68		%	49			(21)
0.75 to < 1.75			6,181			1,676			27.40		%	5,572			1.31		%	17,207			42.94		%	2			3,576			64		%	29			(13)
1.75 to < 2.50			2,451			1,043			26.29		%	2,059			2.15		%	8,856			45.80		%	2			1,649			80		%	20			(7)
2.50 < 10.00			5,256			2,402			16.30		%	4,032			4.54		%	15,019			39.29		%	2			3,666			91		%	72			(128)
2.50 to <5			3,124			1,824			15.14		%	2,500			3.50		%	8,193			37.96		%	2			2,084			83		%	33			(18)
5 to <10			2,132			578			19.96		%	1,532			6.23		%	6,826			41.44		%	2			1,581			103		%	39			(109)
10.00 < 100.00			724			117			29.44		%	622			25.50		%	2,845			41.18		%	2			985			158		%	54			(54)
10 to < 20			409			69			26.40		%	329			13.08		%	1,450			39.40		%	2			455			138		%	16			(19)
20 to < 30			58			11			24.05		%	43			23.29		%	413			44.40		%	2			73			169		%	5			(7)
30 to < 100			257			37			36.72		%	250			42.23		%	982			42.97		%	2			457			183		%	34			(28)
100.00 (Default)			2,245			132			25.61		%	1,420			100.00		%	5,205			48.18		%	3			550			39		%	613			(837)
Subtotal (exposure class)			25,071			8,170			25.07		%	25,168			7.68		%	72,187			42.53		%	2			15,365			61		%	806			(1,053)
Total (all exposures classes AIRB)			417,993			65,408			40.94		%	430,724			3.94		%	31,415,628			25.41		%	—			129,919			30		%	6,034			(5,326)

2025 Pillar 3 Disclosures Report    97

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 28.CR6 - AIRB approach Retail - Credit risk exposures by exposure class and PD range
EUR million
																																				2025
PD range			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Average PD			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
			a			b			c			d			e			f			g			h			i			j			k			l
Retail - Sec. Residential
0.00 < 0.15			34,132			538			40.00		%	34,272			0.09		%	471,754			25.62		%	—			1,951			5.69		%	9.00			(5)
0.00 to < 0.10			22,860			321			40.00		%	22,988			0.07		%	343,530			26.52		%	—			1,178			5.13		%	6.00			(2)
0.10 to < 0.15			11,272			217			40.00		%	11,284			0.13		%	128,224			23.78		%	—			772			6.84		%	4.00			(3)
0.15 < 0.25			20,976			591			52.96		%	21,268			0.22		%	204,526			22.28		%	—			2,138			10.05		%	13.00			(4)
0.25 < 0.50			72,018			8,059			43.05		%	75,460			0.37		%	478,554			13.07		%	—			6,284			8.33		%	41.00			(20)
0.50 < 0.75			79,079			4,882			46.44		%	81,319			0.61		%	542,938			11.30		%	—			8,369			10.29		%	60.00			(16)
0.75 < 2.50			46,452			1,473			43.78		%	47,089			1.38		%	312,416			13.46		%	—			9,730			20.66		%	91.00			(51)
0.75 to < 1.75			34,565			450			51.27		%	34,791			1.16		%	233,076			13.68		%	—			6,615			19.01		%	58.00			(38)
1.75 to < 2.50			11,887			1,022			40.48		%	12,298			2.01		%	79,340			12.83		%	—			3,115			25.33		%	33.00			(13)
2.50 < 10.00			12,634			229			39.19		%	12,721			4.09		%	115,230			14.04		%	—			5,309			41.74		%	82.00			(49)
2.50 to <5			9,763			96			44.46		%	9,803			3.40		%	75,310			13.43		%	—			3,551			36.23		%	49.00			(22)
5 to <10			2,871			133			35.40		%	2,918			6.43		%	39,920			16.10		%	—			1,758			60.25		%	33.00			(27)
10.00 < 100.00			3,962			163			47.32		%	4,039			32.78		%	43,904			13.00		%	—			2,742			67.89		%	179.00			(74)
10 to < 20			1,261			76			35.21		%	1,287			14.06		%	20,657			14.43		%	—			959			74.48		%	28.00			(19)
20 to < 30			1,250			28			67.16		%	1,268			24.75		%	8,415			13.42		%	—			1,003			79.05		%	47.00			(16)
30 to < 100			1,452			59			53.51		%	1,484			55.88		%	14,832			11.40		%	—			781			52.63		%	104.00			(39)
100.00 (Default)			3,479			21			25.84		%	3,484			100.00		%	32,919			26.97		%	—			3,770			108.19		%	639.00			(461)
Subtotal (exposure class)			272,732			15,955			44.38		%	279,652			2.44		%	2,202,241			15.08		%	—			40,293			14.41		%	1,115			(682)
Total (all exposures classes AIRB)			390,474			63,328			37.09		%	404,772			3.52		%	32,936,096			24.84		%	—			114,036			28.17		%	5,234			(4,547)

98    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 28.CR6 - AIRB approach Retail - Credit risk exposures by exposure class and PD range
EUR million
PD range			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Average PD			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
			a			b			c			d			e			f			g			h			i			j			k			l
Retail - Purchased Receivables
0.00 < 0.15			5			—			40.00		%	5			0.07		%	425			87.59		%	—			1			15.77		%	—			—
0.00 to < 0.10			5			—			40.00		%	5			0.07		%	423			87.59		%	—			1			15.74		%	—			—
0.10 to < 0.15			—			—			—		%	—			0.14		%	2			87.59		%	—			0			27.91		%	—			—
0.15 < 0.25			56			—			40.00		%	56			0.22		%	2,013			56.32		%	—			17			31.39		%	—			—
0.25 < 0.50			27			—			40.00		%	28			0.38		%	1,212			51.24		%	—			10			34.50		%	—			—
0.50 < 0.75			356			—			40.00		%	350			0.62		%	10,193			53.77		%	—			172			49.26		%	1.00			(1.00)
0.75 < 2.50			1,169			—			40.00		%	842			1.54		%	27,812			53.13		%	—			583			69.18		%	7.00			(3.00)
0.75 to < 1.75			601			—			40.00		%	582			1.27		%	15,901			52.57		%	—			379			65.10		%	4.00			(2.00)
1.75 to < 2.50			568			—			40.00		%	260			2.16		%	11,911			54.36		%	—			204			78.34		%	3.00			(1.00)
2.50 < 10.00			452			—			40.00		%	400			4.55		%	11,739			54.51		%	—			345			86.17		%	10.00			(5.00)
2.50 to <5			266			—			40.00		%	243			3.41		%	7,710			53.10		%	—			200			82.33		%	4.00			(2.00)
5 to <10			186			—			40.00		%	157			6.29		%	4,029			56.67		%	—			145			92.08		%	6.00			(3.00)
10.00 < 100.00			70			—			40.00		%	58			30.54		%	2,122			54.91		%	—			80			136.35		%	10.00			(6.00)
10 to < 20			34			—			40.00		%	26			12.56		%	755			56.14		%	—			28			108.10		%	2.00			(1.00)
20 to < 30			5			—			40.00		%	3			27.96		%	438			50.26		%	—			5			138.10		%	—			—
30 to < 100			31			—			40.00		%	29			47.07		%	929			54.32		%	—			47			161.68		%	7.00			(5.00)
100.00 (Default)			168			—			40.00		%	126			100.00		%	5,441			82.41		%	—			60			47.45		%	103.00			(98.00)
Subtotal (exposure class)			2,302			—			40.00		%	1,864			9.50		%	60,957			55.73		%	—			1,267			67.94		%	131			(112)
Total (all exposures classes AIRB)			390,474			63,328			37.09		%	404,772			3.52		%	32,936,096			24.84		%	—			114,036			28.17		%	5,234			(4,547)

2025 Pillar 3 Disclosures Report    99

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 28.CR6 - AIRB approach Retail - Credit risk exposures by exposure class and PD range
EUR million
PD range			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Average PD			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
			a			b			c			d			e			f			g			h			i			j			k			l
Qualifying Revolving
0.00 < 0.15			624			8,928			30.60		%	3,358			0.09		%	4,291,499			74.83		%	—			138			4.10		%	2.00			(1.00)
0.00 to < 0.10			434			3,851			31.37		%	1,643			0.07		%	1,969,508			82.52		%	—			61			3.73		%	1.00			(1.00)
0.10 to < 0.15			190			5,077			30.01		%	1,715			0.11		%	2,321,991			67.46		%	—			77			4.46		%	1.00			(1.00)
0.15 < 0.25			302			4,513			55.47		%	2,810			0.20		%	5,668,671			95.26		%	—			330			11.75		%	6.00			(2.00)
0.25 < 0.50			69			657			33.35		%	289			0.35		%	433,717			74.57		%	—			37			12.93		%	1.00			(1.00)
0.50 < 0.75			217			726			49.52		%	579			0.63		%	2,168,186			85.98		%	—			141			24.40		%	3.00			(2.00)
0.75 < 2.50			789			1,650			50.42		%	1,636			1.29		%	2,831,199			83.69		%	—			666			40.74		%	18.00			(9.00)
0.75 to < 1.75			663			1,551			51.41		%	1,473			1.19		%	2,635,105			84.43		%	—			578			39.21		%	16.00			(8.00)
1.75 to < 2.50			126			99			34.84		%	163			2.21		%	196,094			77.01		%	—			89			54.50		%	3.00			(1.00)
2.50 < 10.00			625			1,171			59.47		%	1,337			4.66		%	2,774,725			81.18		%	—			1,367			102.26		%	55.00			(24.00)
2.50 to <5			381			742			60.02		%	838			3.41		%	1,828,311			83.78		%	—			725			86.53		%	26.00			(14.00)
5 to <10			245			430			58.53		%	500			6.75		%	946,414			76.82		%	—			643			128.64		%	29.00			(10.00)
10.00 < 100.00			425			222			92.09		%	646			28.41		%	1,518,502			85.21		%	—			1,658			256.64		%	175.00			(62.00)
10 to < 20			109			50			52.94		%	138			13.91		%	186,007			77.45		%	—			247			179.05		%	15.00			(4.00)
20 to < 30			222			144			115.10		%	398			24.31		%	1,188,787			91.06		%	—			1,216			305.39		%	105.00			(34.00)
30 to < 100			95			28			42.85		%	110			61.44		%	143,708			73.73		%	—			195			177.44		%	55.00			(24.00)
100.00 (Default)			174			32			1.10		%	175			100.00		%	185,554			80.97		%	—			121			69.29		%	133.00			(116.00)
Subtotal (exposure class)			3,225			17,900			42.16		%	10,831			4.20		%	19,872,053			83.56		%	—			4,460			41.18		%	394			(217)
Total (all exposures classes AIRB)			390,474			63,328			37.09		%	404,772			3.52		%	32,936,096			24.84		%	—			114,036			28.17		%	5,234			(4,547)

100    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 28.CR6 - AIRB approach Retail - Credit risk exposures by exposure class and PD range
EUR million
PD range			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Average PD			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
			a			b			c			d			e			f			g			h			i			j			k			l
Retail - Other
0.00 < 0.15			2,438			877			48.47		%	2,864			0.09		%	3,301,365			37.16		%	—			244			8.52		%	1.00			(1.00)
0.00 to < 0.10			766			661			50.74		%	1,101			0.06		%	2,594,418			48.55		%	—			94			8.56		%	—			—
0.10 to < 0.15			1,673			215			41.51		%	1,762			0.11		%	706,947			30.04		%	—			150			8.50		%	1.00			(1.00)
0.15 < 0.25			5,599			427			40.11		%	5,531			0.21		%	764,818			29.48		%	—			741			13.40		%	3.00			(5.00)
0.25 < 0.50			6,332			797			47.95		%	6,494			0.38		%	860,751			38.63		%	—			1,682			25.90		%	9.00			(28.00)
0.50 < 0.75			9,673			1,263			39.62		%	9,889			0.64		%	1,275,605			40.29		%	—			3,585			36.25		%	25.00			(34.00)
0.75 < 2.50			17,584			2,331			44.86		%	17,792			1.45		%	2,415,520			44.22		%	—			9,230			51.88		%	111.00			(94.00)
0.75 to < 1.75			13,031			1,852			45.80		%	13,308			1.22		%	1,770,984			43.84		%	—			6,567			49.34		%	69.00			(59.00)
1.75 to < 2.50			4,553			479			41.21		%	4,484			2.15		%	644,536			45.35		%	—			2,663			59.40		%	42.00			(34.00)
2.50 < 10.00			8,888			738			41.89		%	8,336			4.56		%	1,270,330			48.22		%	—			5,858			70.27		%	183.00			(145.00)
2.50 to <5			5,983			474			43.47		%	5,656			3.51		%	671,195			47.97		%	—			3,858			68.22		%	94.00			(67.00)
5 to <10			2,905			264			39.05		%	2,680			6.79		%	599,135			48.76		%	—			2,000			74.61		%	89.00			(78.00)
10.00 < 100.00			2,982			77			37.56		%	2,831			32.31		%	426,073			45.93		%	—			2,765			97.66		%	429.00			(216.00)
10 to < 20			1,150			38			32.74		%	1,084			14.55		%	153,869			46.59		%	—			986			90.92		%	74.00			(47.00)
20 to < 30			679			23			43.00		%	660			22.13		%	103,909			45.15		%	—			736			111.57		%	68.00			(27.00)
30 to < 100			1,152			16			41.35		%	1,087			56.20		%	168,295			45.76		%	—			1,043			95.95		%	287.00			(142.00)
100.00 (Default)			2,853			89			26.23		%	2,128			100.00		%	370,701			65.10		%	—			1,199			56.36		%	1,299.00			(1,260.00)
Subtotal (exposure class)			56,349			6,599			43.73		%	55,864			6.77		%	10,685,163			42.53		%	—			25,305			45.30		%	2,060			(1,784)
Total (all exposures classes AIRB)			390,474			63,328			37.09		%	404,772			3.52		%	32,936,096			24.84		%	—			114,036			28.17		%	5,234			(4,547)

2025 Pillar 3 Disclosures Report    101

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 28.CR6 - AIRB approach Retail - Credit risk exposures by exposure class and PD range
EUR million
PD range			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Average PD			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
			a			b			c			d			e			f			g			h			i			j			k			l
Retail - Memo - Sec SME
0.00 < 0.15			265			—			44.46		%	265			0.10		%	4,215			24.97		%	—			18			6.94		%	—			—
0.00 to < 0.10			65			—			26.15		%	65			0.07		%	1,332			25.39		%	—			3			3.99		%	—			—
0.10 to < 0.15			201			—			48.17		%	201			0.11		%	2,883			24.83		%	—			16			7.89		%	—			—
0.15 < 0.25			197			1			67.39		%	198			0.20		%	3,107			26.06		%	—			25			12.54		%	—			—
0.25 < 0.50			348			7			48.38		%	350			0.40		%	5,227			26.11		%	—			70			20.07		%	—			(1.00)
0.50 < 0.75			93			5			52.98		%	91			0.62		%	1,544			26.12		%	—			20			21.81		%	—			—
0.75 < 2.50			618			49			39.87		%	612			1.40		%	7,526			25.88		%	—			250			40.81		%	2.00			(3.00)
0.75 to < 1.75			505			37			41.09		%	506			1.22		%	6,419			25.92		%	—			198			39.22		%	2.00			(2.00)
1.75 to < 2.50			113			12			36.02		%	106			2.22		%	1,107			25.66		%	—			51			48.40		%	1.00			(1.00)
2.50 < 10.00			165			12			43.83		%	152			4.74		%	2,326			26.96		%	—			87			57.22		%	2.00			(5.00)
2.50 to <5			89			12			44.06		%	85			3.40		%	1,515			27.27		%	—			43			50.90		%	1.00			(2.00)
5 to <10			76			—			36.02		%	67			6.45		%	811			26.56		%	—			44			65.25		%	1.00			(4.00)
10.00 < 100.00			65			1			30.40		%	63			27.10		%	914			27.56		%	—			57			91.60		%	5.00			(5.00)
10 to < 20			34			1			23.97		%	33			13.34		%	505			25.86		%	—			27			83.44		%	1.00			(2.00)
20 to < 30			7			—			49.39		%	7			26.02		%	92			34.79		%	—			6			90.59		%	1.00			—
30 to < 100			24			—			22.70		%	23			47.14		%	317			27.71		%	—			24			103.60		%	3.00			(3.00)
100.00 (Default)			226			1			37.18		%	221			100.00		%	2,845			28.97		%	—			41			18.68		%	62.00			(86.00)
Subtotal (exposure class)			1,978			76			(34.96)		%	1,951			13.16		%	27,704			26.31		%	—			568			29.13		%	72			(101)
Total (all exposures classes AIRB)			390,474			63,328			37.09		%	404,772			3.52		%	32,936,096			24.84		%	—			114,036			28.17		%	5,234			(4,547)
Certain figures contained in this section 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 given for that column or row.

102    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

CR6 - AIRB approach Retail - Credit risk exposures by exposure class and PD range (31.12.2024)
EUR million
PD range			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Average PD			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
Retail - Mortgages SMEs
0.00 < 0.15			337			—			100.00		%	338			0.10		%	5,023			25.71		%	—			20			6		%	—			(0.09)
0.00 to < 0.10			115			—			100.00		%	115			0.07		%	2,054			26.56		%	—			5			4		%	—			(0.01)
0.10 to < 0.15			222			—			100.00		%	222			0.11		%	2,969			25.27		%	—			16			7		%	—			(0.07)
0.15 < 0.25			233			1			58.73		%	234			0.20		%	3,594			26.25		%	—			26			11		%	—			(0.14)
0.25 < 0.50			440			6			34.85		%	439			0.41		%	6,186			27.29		%	—			85			19		%	—			(1.77)
0.50 < 0.75			122			8			33.04		%	122			0.61		%	1,808			28.08		%	—			28			23		%	—			(0.18)
0.75 < 2.50			696			36			7.39		%	695			1.39		%	8,098			25.60		%	—			285			41		%	2			(3.33)
0.75 to < 1.75			557			28			7.54		%	557			1.19		%	6,713			25.76		%	—			213			38		%	2			(2.22)
1.75 to < 2.50			139			7			6.81		%	138			2.21		%	1,385			24.92		%	—			72			52		%	1			(1.11)
2.50 < 10.00			271			16			29.20		%	214			4.78		%	2,916			26.88		%	—			169			79		%	3			(7.76)
2.50 to <5			135			13			30.75		%	122			3.42		%	1,779			27.16		%	—			82			67		%	1			(2.05)
5 to <10			136			3			22.41		%	92			6.58		%	1,137			26.50		%	—			87			95		%	2			(5.71)
10.00 < 100.00			148			1			24.15		%	104			30.02		%	1,496			26.48		%	—			142			137		%	9			(9.94)
10 to < 20			71			—			44.59		%	49			13.41		%	818			25.92		%	—			66			134		%	2			(5.28)
20 to < 30			33			1			20.47		%	10			25.74		%	170			30.44		%	—			17			162		%	1			(0.76)
30 to < 100			45			—			22.36		%	44			49.41		%	508			26.15		%	—			60			134		%	6			(3.89)
100.00 (Default)			295			2			37.17		%	292			100.00		%	3,941			31.30		%	—			63			22		%	87			(128.60)
Subtotal (exposure class)			2,542			70			19.79		%	2,437			14.23		%	33,062			26.94		%	—			819			34		%	102			(152)
Total (all exposures classes AIRB)			417,993			65,408			40.94		%	430,724			3.94		%	31,415,628			25.41		%	—			129,919			30		%	6,034			(5,326)

2025 Pillar 3 Disclosures Report    103

Index Introduction l Capital l Risks l Remuneration l Appendices l

CR6 - AIRB approach Retail - Credit risk exposures by exposure class and PD range (31.12.2024)
EUR million
PD range			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Average PD			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
Retail - Mortgages no SMEs
0.00 < 0.15			32,992			447			100.00		%	33,439			0.09		%	475,911			25.87		%	—			1,975			6		%	8			(6.41)
0.00 to < 0.10			22,097			247			100.00		%	22,343			0.07		%	345,612			26.72		%	—			1,166			5		%	4			(2.61)
0.10 to < 0.15			10,896			200			100.00		%	11,096			0.13		%	130,299			24.14		%	—			809			7		%	3			(3.81)
0.15 < 0.25			21,210			678			59.71		%	21,615			0.22		%	198,609			22.59		%	—			2,240			10		%	11			(4.67)
0.25 < 0.50			73,407			5,710			31.46		%	75,204			0.36		%	473,939			12.58		%	—			6,250			8		%	35			(20.34)
0.50 < 0.75			83,782			5,059			34.00		%	85,502			0.61		%	560,711			11.21		%	—			9,156			11		%	59			(20.39)
0.75 < 2.50			46,940			1,499			30.12		%	47,392			1.36		%	323,490			13.85		%	—			10,404			22		%	88			(59.70)
0.75 to < 1.75			35,906			455			48.38		%	36,126			1.16		%	245,473			14.19		%	—			7,400			20		%	58			(45.01)
1.75 to < 2.50			11,034			1,044			22.16		%	11,266			2.01		%	78,017			12.77		%	—			3,004			27		%	29			(14.70)
2.50 < 10.00			13,430			262			29.23		%	13,507			4.16		%	126,487			15.10		%	—			6,402			47		%	87			(60.22)
2.50 to <5			9,977			109			42.75		%	10,023			3.40		%	80,176			13.97		%	—			3,931			39		%	47			(29.38)
5 to <10			3,453			153			19.63		%	3,484			6.35		%	46,311			18.38		%	—			2,471			71		%	40			(30.84)
10.00 < 100.00			4,966			145			41.12		%	5,025			31.41		%	52,287			15.57		%	—			4,187			83		%	239			(108.12)
10 to < 20			1,709			72			33.22		%	1,733			13.80		%	24,763			17.08		%	—			1,593			92		%	41			(31.97)
20 to < 30			1,565			27			65.07		%	1,582			24.66		%	10,747			15.47		%	—			1,497			95		%	59			(26.52)
30 to < 100			1,692			46			39.52		%	1,710			55.49		%	16,777			14.15		%	—			1,097			64		%	139			(49.64)
100.00 (Default)			4,610			30			8.69		%	4,613			100.00		%	42,907			27.71		%	—			5,027			109		%	876			(604.92)
Subtotal (exposure class)			281,338			13,830			35.85		%	286,297			2.89		%	2,254,341			15.11		%	—			45,643			16		%	1,402			(885)
Total (all exposures classes AIRB)			417,993			65,408			40.94		%	430,724			3.94		%	31,415,628			25.41		%	—			129,919			30		%	6,034			(5,326)

104    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

CR6 - AIRB approach Retail - Credit risk exposures by exposure class and PD range (31.12.2024)
EUR million
PD range			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Average PD			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
Qualifying Revolving
0.00 < 0.15			572			8,423			33.12		%	3,364			0.08		%	4,736,826			72.49		%	—			131			4		%	2			(1.28)
0.00 to < 0.10			504			5,321			36.83		%	2,465			0.07		%	3,365,934			79.24		%	—			95			4		%	1			(1.06)
0.10 to < 0.15			69			3,102			26.76		%	899			0.12		%	1,370,892			53.97		%	—			37			4		%	1			(0.22)
0.15 < 0.25			261			1,498			34.89		%	788			0.21		%	875,168			73.38		%	—			71			9		%	1			(1.85)
0.25 < 0.50			87			4,169			98.10		%	4,177			0.31		%	6,250,365			67.64		%	—			518			12		%	9			(2.67)
0.50 < 0.75			192			686			35.61		%	439			0.63		%	699,074			76.26		%	—			97			22		%	2			(1.84)
0.75 < 2.50			739			1,687			82.65		%	2,146			1.38		%	3,222,369			70.61		%	—			841			39		%	21			(13.69)
0.75 to < 1.75			591			1,489			79.16		%	1,780			1.23		%	2,609,700			70.57		%	—			640			36		%	16			(10.60)
1.75 to < 2.50			148			198			108.81		%	366			2.13		%	612,669			70.81		%	—			201			55		%	6			(3.09)
2.50 < 10.00			733			1,095			86.79		%	1,704			4.72		%	2,528,238			69.31		%	—			1,555			91		%	55			(32.83)
2.50 to <5			440			734			81.34		%	1,051			3.44		%	1,555,597			70.19		%	—			794			76		%	25			(18.30)
5 to <10			293			361			97.88		%	653			6.76		%	972,641			67.91		%	—			761			116		%	30			(14.54)
10.00 < 100.00			424			189			134.58		%	730			24.31		%	1,019,606			65.55		%	—			1,335			183		%	114			(53.27)
10 to < 20			220			129			128.68		%	397			13.14		%	562,437			68.08		%	—			676			170		%	35			(17.04)
20 to < 30			90			33			208.39		%	173			23.39		%	268,528			62.36		%	—			357			206		%	25			(11.23)
30 to < 100			114			26			69.95		%	160			53.02		%	188,641			62.70		%	—			302			189		%	53			(25.00)
100.00 (Default)			165			34			71.49		%	195			100.00		%	190,652			68.60		%	—			83			42		%	128			(111.45)
Subtotal (exposure class)			3,173			17,781			57.76		%	13,543			3.71		%	19,522,298			70.04		%	—			4,630			34		%	332			(219)
Total (all exposures classes AIRB)			417,993			65,408			40.94		%	430,724			3.94		%	31,415,628			25.41		%	—			129,919			30		%	6,034			(5,326)

2025 Pillar 3 Disclosures Report    105

Index Introduction l Capital l Risks l Remuneration l Appendices l

CR6 - AIRB approach Retail - Credit risk exposures by exposure class and PD range (31.12.2024)
EUR million
PD range			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Average PD			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
Retail - Other non SMEs
0.00 < 0.15			1,600			605			75.39		%	2,057			0.08		%	2,249,943			41.16		%	—			191			9		%	1			(1.01)
0.00 to < 0.10			436			491			74.02		%	799			0.05		%	1,647,373			56.91		%	—			73			9		%	—			(0.23)
0.10 to < 0.15			1,165			115			81.22		%	1,259			0.10		%	602,570			31.17		%	—			118			9		%	—			(0.78)
0.15 < 0.25			3,954			88			91.09		%	4,034			0.21		%	561,049			28.48		%	—			569			14		%	2			(1.42)
0.25 < 0.50			6,273			204			63.10		%	6,388			0.36		%	915,983			39.50		%	—			1,732			27		%	9			(35.56)
0.50 < 0.75			6,749			265			37.64		%	6,847			0.64		%	863,887			36.96		%	—			2,432			36		%	16			(20.37)
0.75 < 2.50			12,191			353			55.92		%	12,362			1.38		%	1,639,023			43.76		%	—			6,748			55		%	74			(62.87)
0.75 to < 1.75			9,853			289			53.56		%	9,984			1.19		%	1,255,981			43.31		%	—			5,178			52		%	51			(40.15)
1.75 to < 2.50			2,339			64			66.63		%	2,378			2.15		%	383,042			45.65		%	—			1,570			66		%	23			(22.72)
2.50 < 10.00			5,431			149			49.79		%	5,488			4.69		%	972,552			52.45		%	—			4,584			84		%	134			(107.33)
2.50 to <5			3,333			49			76.98		%	3,361			3.43		%	456,688			52.37		%	—			2,713			81		%	60			(42.84)
5 to <10			2,098			100			36.50		%	2,127			6.69		%	515,864			52.57		%	—			1,871			88		%	74			(64.49)
10.00 < 100.00			2,318			15			39.63		%	2,317			33.94		%	365,349			47.73		%	—			2,434			105		%	376			(189.46)
10 to < 20			850			5			45.80		%	851			14.36		%	128,360			52.80		%	—			949			112		%	64			(38.41)
20 to < 30			639			6			39.06		%	640			22.49		%	95,585			42.92		%	—			721			113		%	62			(21.41)
30 to < 100			829			4			31.98		%	827			62.92		%	141,404			46.24		%	—			765			92		%	250			(129.65)
100.00 (Default)			1,430			3			30.49		%	1,421			100.00		%	285,967			65.85		%	—			551			39		%	893			(861.43)
Subtotal (exposure class)			39,946			1,682			62.02		%	40,915			6.63		%	7,853,753			42.48		%	—			19,241			47		%	1,506			(1,279)
Total (all exposures classes AIRB)			417,993			65,408			40.94		%	430,724			3.94		%	31,415,628			25.41		%	—			129,919			30		%	6,034			(5,326)

106    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

CR6 - AIRB approach Retail - Credit risk exposures by exposure class and PD range (31.12.2024)
EUR million
PD range			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Average PD			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
Retail - Other non SMEs
0.00 < 0.15			446			279			50.40		%	586			0.09		%	100,771			38.12		%	—			52			9		%	—			(0.32)
0.00 to < 0.10			80			184			53.62		%	178			0.06		%	65,385			48.01		%	—			14			8		%	—			(0.17)
0.10 to < 0.15			366			95			44.17		%	408			0.11		%	35,386			33.81		%	—			38			9		%	—			(0.15)
0.15 < 0.25			1,512			291			60.53		%	1,368			0.21		%	137,260			36.03		%	—			210			15		%	1			(2.96)
0.25 < 0.50			1,275			578			52.83		%	1,226			0.38		%	135,812			42.56		%	—			309			25		%	2			(1.46)
0.50 < 0.75			2,860			921			42.53		%	2,435			0.63		%	188,442			51.16		%	—			1,001			41		%	7			(6.04)
0.75 < 2.50			6,716			1,734			47.38		%	5,678			1.47		%	536,816			49.99		%	—			2,977			52		%	40			(32.69)
0.75 to < 1.75			4,397			1,316			48.63		%	3,973			1.18		%	383,993			50.32		%	—			1,998			50		%	22			(19.65)
1.75 to < 2.50			2,319			418			43.47		%	1,705			2.14		%	152,823			49.20		%	—			978			57		%	18			(13.04)
2.50 < 10.00			4,607			610			46.38		%	3,557			4.50		%	328,727			50.46		%	—			2,442			69		%	77			(68.10)
2.50 to <5			2,975			404			47.95		%	2,443			3.55		%	218,319			49.99		%	—			1,640			67		%	40			(32.14)
5 to <10			1,631			207			43.31		%	1,114			6.56		%	110,408			51.48		%	—			802			72		%	37			(35.96)
10.00 < 100.00			1,018			77			39.25		%	712			32.24		%	89,841			46.30		%	—			660			93		%	103			(71.48)
10 to < 20			425			33			37.15		%	269			14.41		%	32,388			48.79		%	—			229			85		%	19			(22.12)
20 to < 30			179			22			39.68		%	141			24.10		%	18,346			45.07		%	—			140			99		%	16			(10.70)
30 to < 100			415			22			41.95		%	302			51.98		%	39,107			44.66		%	—			290			96		%	69			(38.66)
100.00 (Default)			1,798			82			25.77		%	937			100.00		%	124,227			74.13		%	—			375			40		%	674			(598.68)
Subtotal (exposure class)			20,232			4,572			47.46		%	16,500			8.69		%	1,641,896			49.34		%	—			8,024			49		%	904			(782)
Total (all exposures classes AIRB)			417,993			65,408			40.94		%	430,724			3.94		%	31,415,628			25.41		%	—			129,919			30		%	6,034			(5,326)

2025 Pillar 3 Disclosures Report    107

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 29.CR6 - FIRB approach - Credit risk exposures by exposure class and PD range
EUR million
																																	2025
PD range			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Exposure weighted average PD (%)			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
			a			b			c			d			e			f			g			h			i			j			k			l
Institutions
0.00 < 0.15			4,948			7,648			20.96		%	6,366			0.06		%	844			42.85		%	1			1,292			20		%	2			(1.00)
0.00 to < 0.10			4,586			7,149			20.93		%	5,874			0.06		%	735			42.68		%	1			1,148			20		%	2			(1.00)
0.10 to < 0.15			362			500			21.32		%	492			0.13		%	109			44.82		%	1			143			29		%	—			—
0.15 < 0.25			157			232			46.65		%	1,229			0.16		%	65			45.00		%	1			523			43		%	—			—
0.25 < 0.50			101			186			28.66		%	155			0.31		%	57			45.00		%	1			96			62		%	—			—
0.50 < 0.75			95			141			0.04		%	68			0.66		%	14			0.90		%	2			1			2		%	—			—
0.75 < 2.50			1			4			65.96		%	3			1.17		%	7			45.00		%	1			4			122		%	—			—
0.75 to < 1.75			1			4			65.96		%	3			1.17		%	7			45.00		%	1			4			122		%	—			—
1.75 to < 2.50			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
2.50 < 10.00			1			12			19.94		%	3			9.55		%	26			45.00		%	—			8			246		%	—			—
2.50 to <5			—			—						—															—						—			—
5 to <10			1			12			19.94		%	3			9.55		%	26			45.00		%	—			8			246		%	—			—
10.00 < 100.00			20			141			0.07		%	20			44.90		%	26			45.00		%	—			68			341		%	4			(3.00)
10 to < 20			—			—						—															—			—		%	—			—
20 to < 30			—			140						—			26.47		%	1			45.00		%	3			—			373		%	—			(3.00)
30 to < 100			20			—			29.75		%	20			45.00		%	25			45.00		%	—			67			341		%	4			—
100.00 (Default)			—			—						—						1									—						—			—
Subtotal (exposure class)			5,323			8,364			21.16		%	7,844			0.20		%	1,040			42.87		%	1			1,992			25		%	7			(5)
Total (all exposures classes FIRB)			127,260			153,708			21.47		%	146,530			1.38		%	24,161			38.04		%	2			54,126			37		%	779			(840)

108    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 29.CR6 - FIRB approach - Credit risk exposures by exposure class and PD range
EUR million
PD range			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Exposure weighted average PD (%)			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
			a			b			c			d			e			f			g			h			i			j			k			l
Corporates - Other
0.00 < 0.15			28,152			65,543			23.50		%	45,566			0.08		%	1,925			37.62		%	2			10,151			22		%	12			(10.00)
0.00 to < 0.10			21,224			47,345			24.45		%	35,865			0.06		%	1,417			36.99		%	2			7,463			21		%	7			(6.00)
0.10 to < 0.15			6,927			18,198			21.04		%	9,701			0.13		%	508			39.95		%	2			2,688			28		%	5			(4.00)
0.15 < 0.25			8,335			19,751			20.54		%	11,937			0.21		%	1,237			38.61		%	2			4,488			38		%	9			(8.00)
0.25 < 0.50			15,672			21,880			22.34		%	17,222			0.37		%	3,599			37.85		%	2			8,481			49		%	23			(26.00)
0.50 < 0.75			10,776			14,281			16.22		%	10,144			0.59		%	2,655			31.35		%	2			4,966			49		%	19			(18.00)
0.75 < 2.50			14,269			10,024			20.89		%	10,988			1.24		%	4,958			33.54		%	2			7,448			68		%	46			(52.00)
0.75 to < 1.75			13,223			9,557			20.52		%	9,854			1.13		%	4,236			33.08		%	2			6,370			65		%	38			(42.00)
1.75 to < 2.50			1,046			467			28.46		%	1,133			2.18		%	722			37.58		%	2			1,078			95		%	8			(10.00)
2.50 < 10.00			5,939			9,354			21.90		%	5,599			4.63		%	2,862			37.74		%	2			6,925			124		%	102			(199.00)
2.50 to <5			3,713			7,200			22.43		%	3,823			3.86		%	1,238			36.80		%	3			4,365			114		%	56			(142.00)
5 to <10			2,226			2,154			20.12		%	1,776			6.31		%	1,624			39.77		%	2			2,560			144		%	46			(57.00)
10.00 < 100.00			2,803			1,729			9.04		%	1,226			23.80		%	1,933			38.91		%	2			2,552			208		%	111			(59.00)
10 to < 20			1,187			373			11.40		%	719			16.63		%	201			39.29		%	1			1,456			202		%	48			(26.00)
20 to < 30			22			1			40.25		%	22			22.10		%	289			40.00		%	2			47			209		%	2			—
30 to < 100			1,594			1,355			8.36		%	484			34.51		%	1,443			38.28		%	2			1,050			217		%	62			(33.00)
100.00 (Default)			975			531			27.33		%	936			100.00		%	382			39.32		%	3			—			—		%	371			(418.00)
Subtotal (exposure class)			86,922			143,093			21.74		%	103,617			1.74		%	19,551			36.76		%	2			45,011			43		%	692			(790)
Total (all exposures classes FIRB)			127,260			153,708			21.47		%	146,530			1.38		%	24,161			38.04		%	2			54,126			37		%	779			(840)

2025 Pillar 3 Disclosures Report    109

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 29.CR6 - FIRB approach - Credit risk exposures by exposure class and PD range
EUR million
PD range			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Exposure weighted average PD (%)			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
			a			b			c			d			e			f			g			h			i			j			k			l
Regional governments
0.00 < 0.15			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
0.00 to < 0.10			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
0.10 to < 0.15			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
0.15 < 0.25			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
0.25 < 0.50			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
0.50 < 0.75			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
0.75 < 2.50			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
0.75 to < 1.75			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
1.75 to < 2.50			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
2.50 < 10.00			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
2.50 to <5			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
5 to <10			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
10.00 < 100.00			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
10 to < 20			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
20 to < 30			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
30 to < 100			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
100.00 (Default)			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
Subtotal (exposure class)			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
Total (all exposures classes FIRB)			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
Certain figures contained in this section 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 given for that column or row.

110    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

CR6 - FIRB approach - Credit risk exposures by exposure class and PD range (31.12.2024)
EUR million
PD range			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Exposure weighted average PD (%)			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
Institutions
0.00 < 0.15			11,554			13,195			23.66		%	17,679			0.06		%	1,405			44.09		%	2			5,613			32		%	4			(3)
0.00 to < 0.10			10,645			12,601			23.75		%	16,403			0.05		%	1,265			44.20		%	2			4,962			30		%	3			(3)
0.10 to < 0.15			909			594			21.68		%	1,276			0.13		%	140			42.64		%	2			651			51		%	1			—
0.15 < 0.25			2,425			2,888			43.71		%	3,623			0.16		%	258			45.00		%	2			2,156			60		%	3			(1)
0.25 < 0.50			858			787			5.09		%	834			0.32		%	153			41.70		%	2			686			82		%	1			(2)
0.50 < 0.75			223			155			0.65		%	158			0.67		%	45			39.97		%	3			177			112		%	1			—
0.75 < 2.50			170			566			16.94		%	205			1.38		%	33			4.78		%	3			36			17		%	—			—
0.75 to < 1.75			170			559			16.83		%	203			1.37		%	31			4.45		%	3			32			16		%	—			—
1.75 to < 2.50			—			7			25.28		%	2			2.46		%	2			45.00		%	3			4			207		%	—			—
2.50 < 10.00			9			22			19.92		%	82			3.81		%	46			31.26		%	3			124			151		%	—			—
2.50 to <5			1			4			20.06		%	71			2.89		%	3			29.06		%	3			90			126		%	—			—
5 to <10			8			18			19.90		%	11			9.53		%	43			45.00		%	3			35			306		%	—			—
10.00 < 100.00			98			16			0.05		%	15			15.71		%	34			45.00		%	3			56			372		%	2			—
10 to < 20			84			—			—		%	14			12.65		%	4			45.00		%	3			51			374		%	1			—
20 to < 30			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
30 to < 100			14			16			0.05		%	1			45.00		%	30			45.00		%	3			5			355		%	—			—
100.00 (Default)			—			—			—		%	—			100.00		%	2			45.00		%	3			—			—		%	—			—
Subtotal (exposure class)			15,336			17,629			25.67		%	22,596			0.13		%	1,976			43.71		%	2			8,848			39		%	10			(7)
Total (all exposures classes FIRB)			106,249			149,294			28.23		%	132,914			1.09		%	18,585			41.44		%	2			58,880			44		%	606			(577)

2025 Pillar 3 Disclosures Report    111

Index Introduction l Capital l Risks l Remuneration l Appendices l

CR6 - FIRB approach - Credit risk exposures by exposure class and PD range (31.12.2024)
EUR million
PD range			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Exposure weighted average PD (%)			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
Corporates - Other
0.00 < 0.15			27,936			60,181			37.51		%	56,234			0.07		%	1,434			42.12		%	2			13,004			23		%	13			(18.94)
0.00 to < 0.10			20,389			40,474			42.06		%	47,277			0.06		%	877			41.70		%	2			9,768			21		%	8			(16.57)
0.10 to < 0.15			7,547			19,707			28.18		%	8,956			0.13		%	557			44.34		%	3			3,237			36		%	5			(2.37)
0.15 < 0.25			9,267			17,039			25.56		%	11,945			0.21		%	1,143			43.02		%	2			5,458			46		%	10			(5.70)
0.25 < 0.50			18,916			21,856			15.72		%	16,834			0.37		%	2,779			37.57		%	3			9,009			54		%	22			(29.29)
0.50 < 0.75			11,672			11,984			19.19		%	9,763			0.59		%	2,166			38.69		%	2			6,661			68		%	21			(9.88)
0.75 < 2.50			13,751			10,825			21.85		%	8,528			1.17		%	3,646			39.33		%	3			7,613			89		%	42			(23.51)
0.75 to < 1.75			13,737			10,824			21.84		%	8,514			1.17		%	3,358			39.32		%	3			7,595			89		%	42			(23.44)
1.75 to < 2.50			14			1			75.00		%	15			2.09		%	288			45.00		%	3			18			123		%	—			(0.07)
2.50 < 10.00			5,599			7,001			28.10		%	4,366			4.52		%	2,091			42.10		%	3			6,241			143		%	86			(79.43)
2.50 to <5			4,330			4,729			27.21		%	2,835			3.44		%	961			40.72		%	3			3,592			127		%	41			(25.56)
5 to <10			1,269			2,272			29.96		%	1,530			6.53		%	1,130			44.66		%	3			2,649			173		%	45			(53.86)
10.00 < 100.00			1,945			2,018			15.47		%	684			25.24		%	1,779			38.85		%	3			1,484			217		%	68			(39.37)
10 to < 20			519			732			29.01		%	293			15.76		%	145			38.61		%	3			595			203		%	18			(23.28)
20 to < 30			22			—			75.00		%	22			22.10		%	265			45.00		%	3			57			257		%	2			(0.11)
30 to < 100			1,404			1,285			7.74		%	369			32.96		%	1,369			38.67		%	3			832			225		%	48			(15.98)
100.00 (Default)			739			526			26.45		%	743			100.00		%	233			43.09		%	3			—			—		%	320			(355.91)
Subtotal (exposure class)			89,826			131,430			28.49		%	109,097			1.28		%	15,271			40.98		%	2			49,470			45		%	582			(562)
Total (all exposures classes FIRB)			106,249			149,294			28.23		%	132,914			1.09		%	18,585			41.44		%	2			58,880			44		%	606			(577)

112    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

CR6 - FIRB approach - Credit risk exposures by exposure class and PD range (31.12.2024)
EUR million
PD range			Original on-balance-sheet gross exposures			Off-balance-sheet exposures pre-CCF			Average CCF			EAD post CRM and post CCF			Exposure weighted average PD (%)			Number of obligors			Average LGD			Average maturity			RWA			RW			EL			Value adjustments and provisions
Corporates - SMEs
0.00 < 0.15			281			154			75.00		%	397			0.08		%	18			36.16		%	3			61			15		%	—			—
0.00 to < 0.10			281			154			75.00		%	397			0.08		%	18			36.16		%	3			61			15		%	—			—
0.10 to < 0.15			—			—			—		%	—			—		%	—			—		%	—			—			—		%	—			—
0.15 < 0.25			133			71			75.00		%	186			0.16		%	7			35.21		%	3			40			22		%	—			—
0.25 < 0.50			258			—			75.00		%	258			0.43		%	145			45.00		%	3			125			48.61		%	—			(0.61)
0.50 < 0.75			19			—			75.00		%	19			0.55		%	55			45.00		%	3			10			49.97		%	—			(0.04)
0.75 < 2.50			216			5			75.00		%	177			1.46		%	438			45.00		%	3			126			71.40		%	1			(0.42)
0.75 to < 1.75			216			5			75.00		%	177			1.46		%	438			45.00		%	3			126			71.40		%	1			(0.42)
1.75 to < 2.50			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
2.50 < 10.00			144			4			75.00		%	147			5.60		%	442			45.00		%	3			152			102.95		%	4			(0.35)
2.50 to <5			—			—			—		%	—			—		%	—			—		%	—			0			—		%	—			—
5 to <10			144			4			75.00		%	147			5.60		%	442			45.00		%	3			152			102.95		%	4			(0.35)
10.00 < 100.00			26			1			75.00		%	27			20.95		%	170			45.00		%	3			48			178.24		%	3			(0.06)
10 to < 20			14			—			75.00		%	14			17.12		%	5			45.00		%	3			26			191.58		%	1			(0.03)
20 to < 30			10			1			75.00		%	10			22.07		%	111			45.00		%	3			17			164.51		%	1			(0.02)
30 to < 100			3			—			75.00		%	3			34.20		%	54			45.00		%	3			5			164.66		%	—			(0.01)
100.00 (Default)			10			—			—		%	10			100.00		%	63			45.00		%	3			0			—		%	5			(6.50)
Subtotal (exposure class)			1,087			235			75.00		%	1,221			2.34		%	1,338			40.64		%	3			562			46.03		%	13			(8)
Total (all exposures classes FIRB)			106,249			149,294			28.23		%	132,914			1.09		%	18,585			41.44		%	2			58,880			44.30		%	606			(577)

2025 Pillar 3 Disclosures Report    113

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following tables show the specialised financing exposures:

Table 30.CR10.1 - Specialised lending and equity exposures under the simple risk-weighted approach. Project financing
EUR million
																		2025
			Specialised lending : Project finance (Slotting approach)
Regulatory Categories			Remaining maturity			On-balance-sheet amount			Off-balance-sheet amount			RW			EAD			RWA			Expected loss
						a			b			c			d			e			f
Category 1			< 2.5 years			944			2,111			50		%	1,692			699			—
			>= 2.5 years			3,123			1,511			70		%	3,342			1,857			13
Category 2			< 2.5 years			3,226			4,878			70		%	4,114			2,558			17
			>= 2.5 years			6,445			5,999			90		%	7,083			5,226			58
Category 3			< 2.5 years			234			52			115		%	256			269			7
			>= 2.5 years			356			138			115		%	381			408			11
Category 4			< 2.5 years			13			19			250		%	17			41			1
			>= 2.5 years			61			17			250		%	63			147			5
Category 5			< 2.5 years			89			11			—		%	94			—			47
			>= 2.5 years			161			4			—		%	165			—			83
Total			< 2.5 years			4,505			7,070			—		%	6,172			3,567			73
			>= 2.5 years			10,145			7,668			—		%	11,035			7,639			169

The increase in EAD and in the remaining metrics between June and December is primarily driven by the growth of the project finance business at Santander Spain.

114    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 31.CR10.2 - Specialised lending and equity exposures under the simple risk-weighted approach. Income-earning real estate and highly volatile commercial real estate
EUR million
																		2025
			Specialised lending:Income-producing real estate and high volatility commercial real estate (Slotting approach)
Regulatory Categories			Remaining maturity			On-balance-sheet amount			Off-balance-sheet amount			RW			EAD			RWA			Expected loss
						a			b			c			d			e			f
Category 1			< 2.5 years			675			86			50		%	675			317			—
			>= 2.5 years			1,490			115			70		%	1,513			996			6
Category 2			< 2.5 years			1,487			380			70		%	1,502			954			6
			>= 2.5 years			1,379			219			90		%	1,387			1,122			11
Category 3			< 2.5 years			183			11			115		%	188			203			5
			>= 2.5 years			83			13			115		%	88			86			2
Category 4			< 2.5 years			6			—			250		%	6			15			—
			>= 2.5 years			—			—			250		%	—			1			—
Category 5			< 2.5 years			125			—			—		%	125			—			63
			>= 2.5 years			4			—			—		%	4			—			2
Total			< 2.5 years			2,476			478			—		%	2,496			1,489			75
			>= 2.5 years			2,956			346			—		%	2,992			2,205			22

Off-balance-sheet amounts increase between June and December as a result of business dynamics in the United Kingdom. As regards expected loss, a significant decrease is observed, driven by the reduction in defaulted exposure at Santander Spain, which more than offsets the increase recorded in the United Kingdom.

2025 Pillar 3 Disclosures Report    115

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 32.CR10.3 - Specialised lending and equity exposures under the simple risk-weighted approach. Financing of assets
EUR million
																		2025
			Specialised lending : Project finance (Slotting approach)
Regulatory Categories			Remaining maturity			On-balance-sheet amount			Off-balance-sheet amount			RW			EAD			RWA			Expected loss
						a			b			c			d			e			f
Category 1			< 2.5 years			102			48			50		%	128			61			—
			>= 2.5 years			7			2			70		%	8			5			—
Category 2			< 2.5 years			30			—			70		%	30			20			—
			>= 2.5 years			16			—			90		%	16			14			—
Category 3			< 2.5 years			—			—			115		%	—			—			—
			>= 2.5 years			9			10			115		%	9			11			—
Category 4			< 2.5 years			—			—			250		%	—			—			—
			>= 2.5 years			—			—			250		%	—			—			—
Category 5			< 2.5 years			91			—			—		%	91			—			45
			>= 2.5 years			—			—			—		%	—			—			—
Total			< 2.5 years			223			48						249			82			46
			>= 2.5 years			32			13						33			29			—

Total metrics for asset finance remain broadly stable, with the exception of off-balance-sheet exposure, which decreases by 25%. However, at category level, there are significant movements, primarily driven by changes in the operating profile of Santander Spain. These changes impact both risk categories and maturity profiles.

116    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 33.CR10.4 - Specialised lending and equity exposures under the simple risk-weighted approach. Financing of raw materials
EUR million
																		2025
			Commodities finance slotting approach
Regulatory Categories			Remaining maturity			On-balance-sheet amount			Off-balance-sheet amount			RW			EAD			RWA			Expected loss
						a			b			c			d			e			f
Category 1			< 2.5 years			—			—			50		%	—			—			—
			>= 2.5 years			—			—			70		%	—			—			—
Category 2			< 2.5 years			—			—			70		%	—			—			—
			>= 2.5 years			7			—			90		%	7			7			—
Category 3			< 2.5 years			—			—			115		%	—			—			—
			>= 2.5 years			—			—			115		%	—			—			—
Category 4			< 2.5 years			—			—			250		%	—			—			—
			>= 2.5 years			—			—			250		%	—			—			—
Category 5			< 2.5 years			—			—			—		%	—			—			—
			>= 2.5 years			—			—			—			—			—			—
Total			< 2.5 years			—			—			—		%	—			—			—
			>= 2.5 years			7			—			—		%	7			7			—

2025 Pillar 3 Disclosures Report    117

Index Introduction l Capital l Risks l Remuneration l Appendices l

4.2.3. Equity investments and instruments not included in the held-for-trading book

This section provides definitions for investments in associates, equity instruments classified as other financial assets at fair value through other comprehensive income and financial assets with mandatory classification at fair value through profit or loss. Also, the accounting policies and measurement methods applied are defined. Information is also provided on the amounts of the equity instruments not included in the held-for-trading portfolio.

Investments in associates are defined by shares allowing the Group to influence, but not to control or joint control the respective associates. For such cases usually 20% or more of the voting power is allocated to the group.

Equity instruments not held for trading issued by entities other than subsidiaries, jointly controlled entities and associates are required to be classified at fair value through profit or loss, unless the entity opts to classify them as financial assets at fair value through other comprehensive income, irrevocably, on initial recognition.

Investments in associates are recognised at cost and the Group periodically tests for their impairment.

Investments in associates are recorded at cost, and Grupo Santander periodically performs an assessment to determine whether there is any evidence of impairment of these.

Equity instruments classified as other financial assets at fair value through other comprehensive income are recognised and measured at fair value with a corresponding entry in equity, under valuation adjustments, irrevocably. Instruments classified as financial assets with mandatory recognition at fair value through profit or loss are recognised and measured at fair value with a corresponding entry in profit or loss.

Table 34.CR10.5 - Equity exposures under the simple risk-weighted approach
Eur Million			a			b			c
			Equity exposures under Articles 133 (3) to (6) and Article 495a(3) CRR
Equity Exposure			On-balance sheet exposure			Off-balance sheet exposure			Risk weighted exposure amount
Total			5,488			—			7,892

Equity exposures under the simple risk-weighted approach represent in Santander 5,488 million euros in exposure with a risk weighted exposure amount of 7,892 million.

Table 35.Equity instruments through other comprehensive income
												EUR million
									2025
			Carrying value			Fair value			Valuation adjustment
Quoted			1,995			1,994			1,007
Unquoted			287			287			(1,230)
Total			2,282			2,281			(223)

Table 36.Equity instruments mandatory at fair value through profit and loss
						EUR million
			2025
			Fair Value
Investment funds			1,190
Others			2,319
Total			3,509

118    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 37.Equity instruments through other comprehensive income. Consolidated gross valuation adjustments
						EUR million			2025
			Fair Value
						Prior-year balance			(365)
Revaluation gains and losses			142
Current-year balance			(223)

Refer to the Auditor's report and consolidated financial statements in the annual report for further information on the portfolio of equity instruments classified as other financial assets at fair value through other comprehensive income.

Access 2025 annual report available on the Santander Group website

With respect to holdings accounted for using the equity method at year-end 2025, the amounts for associates and jointly controlled entities were EUR 5,096 million and EUR 528 million, respectively.

There are also investments in group entities totalling 1,351 million, which are accounted for using the full consolidation method in the public perimeter.

The group tests these investments for impairment on a regular basis. No such impairment was found in 2025.

2025 Pillar 3 Disclosures Report    119

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following table summarises and describes EU CRE requirements on qualitative disclosure requirements related to the IRB approach:

IRB parameter models (CRE)

Article 452

Description of the article

Comments

Article 452(a)

When disclosing information on the extent of the authorization of the method by the competent authority or its approval of the transition process in accordance with Article 452(a) of the CRR, entities shall describe the main characteristics of the qualification systems used under the IRB method for which authorization has been granted by the competent authority, as well as the types of exposures covered by those rating systems. Institutions shall also describe the types of exposures for which they are permitted to permanently partially use the standardized approach in accordance with Article 150 of the CRR and which form part of their plans to deploy the IRB approach in accordance with Article 148 of the CRR. . The description will be provided at the group level.

See Appendix XII and section 2.4.2.1

Article 452(b)

For each exposure category referred to in Article 147, the percentage of the total exposure value of each exposure category subject to the standard method established in part three, title II, chapter 2 or the IRB method established in part three, title II, chapter 3, as well as the part of each exposure category subject to an implementation plan; Where authorized to use their own loss given default (LGD) estimates and conversion factors for the calculation of risk-weighted amounts of exposures, institutions shall separately disclose the percentage of the total exposure value of each category of exhibition subject to said authorization;

See table CR6

Article 452(c)

The description of the control mechanisms of the rating systems will cover the estimation of risk parameters, including the development and calibration of internal models, as well as controls on the application of the models and changes to the rating systems. In accordance with Article 452(c)(i) to iv) of the CRR, the role description of the functions mentioned above will also include: i) the relationships between the risk management function and the internal audit function ii) processes and methods for the review of rating systems, including periodic reviews of estimates in accordance with Article 179(1)(c) CRR and validations, iii) organizational procedures and modalities to ensure the independence of the function responsible for reviewing the models (validation function) with respect to the functions responsible for the development and calibration of the models, iv) and the procedure to ensure that the functions responsible for developing and reviewing the models have the obligation to render accounts.

See sections 3.3 and 4.5

Article 452(d)

The entities will specify the role of the functions involved in the model development, calibration, approval and subsequent changes of the credit risk models.

See Appendix XII and section 2.4.2.1

Article 452(e)

Entities will disclose the scope and main content of the management reports related to the IRB models referred to in Article 189 of the CRR, as well as the recipients and frequency of such reports.

See Appendix XII and section 2.4.2.1

Article 452(f)

Disclosure of information on internal rating systems by exposure class will include the number of key models used in each exposure class with respect different types of exposures, with a brief description of the main differences among the models within the same exposure class. It will also include a description of the main characteristics of the key approved models, in particular: i) the definitions, methods and data used for the estimation and validation of the probability of default (PD), including the estimation and validation of the PD for low-default portfolios, any applicable regulatory floors and the drivers for differences observed between PD estimates and actual default rates at least for the last three years; ii) where applicable, the definitions, methods and data for the estimation and validation of LGD, including estimation and validation of downturn LGD, information on how LGDs are estimated for low default portfolios, and the average time lapse between the default event and the closure of the exposure; iii) where applicable, the definitions, methods and data used to estimate and validate the conversion factors, including assumptions employed in the derivation of those estimates

See Appendix XII and section 4.5.

Article 452(g)

As applicable, the following information in relation to quantitative information on the use of the IRB approach covered by Article 147 [...]

See table 24, CR6 and CR4

120    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

4.2.4. Standardised approach

This section covers the CRD requirement - Qualitative disclosure requirements related to standardised approach

For the calculation of regulatory capital under the standardised approach, Santander uses the external rating agencies designated as eligible by the ECB (European Central Bank). The agencies used for the capital calculation at 31 December 2025 are Fitch, Moody's, DBRS, Standard & Poor's, Japan Credit Rating Agency, Inbonis Rating, HR Ratings de México and Scope Ratings.

For the central government and central banks category, if the requirements of Article 137 of the CRR are met, the Group uses the OECD's Country Risk Classification of the Participants to the Arrangement on Officially Supported Export Credits.

Different risk weights are applied to credit exposures depending on the rating assigned by the credit rating agencies (e.g. Fitch, Moody's, Standard & Poor's and Inbonis Rating for the segments approved under Part III, Title II, Chapter II of the CRR) or the minimum export insurance premium rating (e.g. OECD for the central government and central bank segment, as explained above). Japan Credit Rating Agency, HR Ratings de México and Scope Ratings are used for credit exposures in the Sovereign segment.

Grupo Santander does not currently transfer the issuer and issue credit ratings onto items not included in the trading book for exposures treated under the standardised approach.

The assignment of weights according to credit ratings complies with the regulatory requirements, aligning the alphanumeric scale of each agency used with the credit quality steps set down in Chapter II, Section II of the CRR, as follows:

Credit quality step

S&P / Inbonis

Moody's

Fitch

DBRS

Japan Credit Rating Agency

HR Ratings Mexico

Scope Ratings

1

AAA a AA-

AAA a AA3

AAA a AA-

AAA a AAL

AAA a AA

HR AAA a HR AA

AAA a AA-

2

A+ a A-

A1 a A3

A+ a A-

AH a AL

A

HR A

A+ a A-

3

BBB+ a BBB-

BAA1 a BAA3

BBB+ a BBB-

BBBH a BBBL

BBB

HR BBB

BBB+ a BBB-

4

BB+ a BB-

BA1 a BA3

BB+ a BB-

BBH a BBL

BB

HR BB

BB+ a BB-

5

B+ a B-

B1 a B3

B+ a B-

BH a BL

B

HR B

B+ a B-

6

Inferior a B-

Inferior a B3

Inferior a B-

CCCH e inferior

CCC a inferior

HR CCC a inferior

CCC a inferior

Credit quality step			Central governments and central banks			Regional administrations			Public sector entities			Institutions ≤ 3 months rated			Institutions > 3 months rated			Corporates
1			0%			20%			20%			20%			20%			20%
2			20%			50%			50%			20%			30%			50%
3			50%			50%			100%			20%			50%			75%
4			100%			100%			100%			50%			100%			100%
5			100%			100%			100%			50%			100%			150%
6			150%			150%			150%			150%			150%			150%

2025 Pillar 3 Disclosures Report    121

Index Introduction l Capital l Risks l Remuneration l Appendices l

In accordance with article 150 of the CRR, Santander always uses the standardised approach for sovereign exposures denominated and funded in the Member State’s local currency, applying a 0% risk weighting.

Guarantees are applied by reallocating exposures to the corresponding asset categories and risk weightings.

When credit institutions use some of their qualifying financial collateral as a credit risk mitigation technique, the valuation of this collateral for the calculation of risk-weighted exposure amounts can either follow the financial collateral simple method under Article 222 of the CRR or the financial collateral comprehensive method under Article 223 of the CRR.

			Table 38.CR4 - standardised approach - Credit risk exposure and CRM effects
			EUR million
																								2025
						Exposures before CCF and CRM									Exposures post CCF and CRM									RWAs and RW
			Exposure classes			On-balance-sheet amount			Off-balance-sheet amount						On-balance-sheet amount			Off-balance-sheet amount						RWAs			RW
						a			b						c			d						e			f
1			Central governments or central banks			359,319			7,312						388,891			3,831						29,013			7		%
2			Non-central government public sector entities			22,031			3,154						22,007			1,076						815			4		%
EU 2a			Regional governments or local authorities			18,224			2,214						17,588			808						467			3		%
EU 2b			Public sector entities			3,808			940						4,419			268						347			7		%
3			Multilateral Development Banks			3,658			11						7,347			1,714						17			—		%
EU 3a			International Organisations			1,704			—						1,704			—						—			—		%
4			Institutions			16,407			2,768						16,653			1,713						3,847			21		%
5			Covered bonds			828			—						828			—						83			10		%
6			Corporates			63,707			37,296						56,214			3,770						52,653			88		%
6.1			Of which: Specialised Lending			1,449			2,238						1,438			551						1,729			87		%
7			Subordinated debt exposures and equity			5,488			—						5,488			—						7,892			144		%
EU 7a			Subordinated debt exposures			—			—						—			—						—			—		%
EU 7b			Equity			5,488			—						5,488			—						7,892			144		%
8			Retail			139,284			96,564						124,078			950						83,995			67		%
9			Secured by mortgages on immovable property and ADC exposures			98,959			7,911						93,918			498						33,998			36		%
9.1			Secured by mortgages on residential immovable property - non IPRE			67,404			3,275						63,584			150						17,178			27		%
9.2			Secured by mortgages on residential immovable property - IPRE			10,108			111						10,102			15						2,486			25		%
9.3			Secured by mortgages on commercial immovable property - non IPRE			13,276			1,248						12,262			216						7,427			60		%
9.4			Secured by mortgages on commercial immovable property - IPRE			4,621			162						4,499			16						2,810			62		%
9.5			Acquisition, Development and Construction (ADC)			3,550			3,115						3,471			101						4,097			115		%
10			Exposures in default			15,919			440						15,347			95						17,566			114		%
EU 10a			Claims on institutions and corporates with a short-term credit assessment			709			1,368						1,198			182						472			34		%
EU 10b			Collective investments undertakings			328			221						328			221						380			69		%
EU 10c			Other items			70,415			3,126						74,449			398						50,262			67		%
12			Total			798,757			160,171						808,451			14,448						280,993			34		%
			Securitisations are not included.

122    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

			CR4 - standardised approach - Credit risk exposure and CRM effects (31.12.2024)
			EUR million
																								2024
						Exposures before CCF and CRM									Exposures post CCF and CRM									RWAs and RW
			Exposure classes			On-balance-sheet amount			Off-balance-sheet amount						On-balance-sheet amount			Off-balance-sheet amount						RWAs			RW
						a			b						c			d						e			f
1			Central governments or central banks			366,596			4,359						393,423			2,114						27,211			7		%
2			Regional governments or local authorities			15,428			2,115						14,956			758						357			2		%
3			Public sector entities			3,564			926						4,212			235						359			8		%
4			Multilateral Development Banks			2,860			4						8,104			127						—			—		%
5			International Organisations			1,721			—						1,721			—						—			—		%
6			Institutions			21,107			2,991						21,526			3,348						5,555			22		%
7			Corporates			64,205			37,248						55,032			3,558						53,269			91		%
8			Retail			147,730			92,337						133,178			1,022						94,258			70		%
9			Secured by mortgages on immovable property			94,387			7,334						90,655			304						33,494			37		%
10			Exposures in default			15,119			537						14,467			170						15,872			108		%
11			Items associated with particularly high risk			561			342						553			21						861			150		%
12			Covered bonds			3,019			—						3,019			—						496			16		%
13			Claims on institutions and corporates with a short-term credit assessment			307			184						901			96						365			37		%
14			Collective investments undertakings (CIU)			345			—						345			—						303			88		%
15			Equity			53			—						53			—						53			100		%
16			Other items			82,705			20,757						87,173			233						51,158			59		%
17			Total			819,705			169,135						829,317			11,987						283,612			34		%
			Securitisations not included.

Table CR4 illustrates the effect of all CRM techniques applied in the Standard Approach, including the Simple Approach for Financial Collateral and the Comprehensive Approach for Financial Collateral. The density of the RWAs has not changed significantly compared to the previous period.

2025 Pillar 3 Disclosures Report    123

Index Introduction l Capital l Risks l Remuneration l Appendices l

			Table 39.CR5 - standardised approach
																																																																			EUR million
																																																																																				2025
						Risk Weight																																																																Total			Of which unrated
						0%			2%			4%			10%			20%			30%			35%			40%			45%			50%			60%			70%			75%			80%			90%			100%			105%			110%			130%			150%			250%			370%							400%			1250%			Otros
						a			b			c			d			e			f			g			h			i			j			k			l			m			n			o			p			q			r			s			t			u			v			w			x			y			z			aa
1			Central governments or central banks			373,449			—			586			184			2,257			—			—			—			—			1,417			—			—			—			—			—			6,152			—			—			—			26			8,651			—			—			—			—			392,722			392,601
2			Non-central government public sector entities			20,825			—			—			—			1,771			—			—			—			—			57			—			—			—			—			—			430			—			—			—			2			—			—			—			—			—			23,084			23,084
EU 2a			Regional government or local authorities			17,428			—			—			—			626			—			—			—			—			—			—			—			—			—			—			341			—			—			—			—			—			—			—			—			—			18,396			18,396
EU 2b			Public sector entities			3,397			—			—			—			1,145			—			—			—			—			57			—			—			—			—			—			88			—			—			—			1			—			—			—			—			—			4,688			4,688
3			Multilateral development banks			8,980			—			—			—			80			—			—			—			—			2			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			9,062			8,976
EU 3a			International organisations			1,704			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			1,704			1,704
4			Institutions			1,236			3,534			—			—			11,314			942			—			144			—			382			—			—			112			—			—			303			—			—			—			400			—			—			—			—			—			18,366			12,013
5			Covered bonds			—			—			—			828			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			828			466
6			Corporates			—			—			—			—			4,771			—			—			—			—			1,540			—			—			735			10			—			52,041			—			—			546			342			—			—			—			—			—			59,984			56,532
6.1			Of which: Specialised Lending			—			—			—			—			—			—			—			—			—			—			—			—			—			10			—			1,433			—			—			546			—			—			—			—			—			—			1,989			1,989
7			Subordinated debt exposures and equity			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			402			—			—			—			—			1,125			—			—			—			3,961			5,488			5,488
EU 7a			Subordinated debt exposures			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—
EU 7b			Equity			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			402			—			—			—			—			1,125			—			—			—			3,961			5,488			5,488
8			Retail exposures			—			—			—			—			—			—			4,509			—			11,629			—			—			—			108,117			—			—			772			—			—			—			—			—			—			—			—			—			125,027			125,027
9			Secured by mortgages on immovable property and ADC exposures			105			—			—			—			64,507			243			144			—			77			—			13,120			—			8,162			—			1			6,662			47			7			—			1,259			—			—			—			—			82			94,416			94,416
9.1			Secured by mortgages on residential immovable property - non IPRE			—			—			—			—			55,650			—			—			—			—			—			—			—			7,819			—			—			265			—			—			—			—			—			—			—			—			—			63,734			63,734
9.1.1			No load splitting applied			—			—			—			—			4,390			—			—			—			—			—			—			—			633			—			—			146			—			—			—			—			—			—			—			—			—			5,169			5,169
9.1.2			Loan splitting applied (secured)			—			—			—			—			51,259			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			51,259			51,259
9.1.3			Loan splitting applied (unsecured)			—			—			—			—			—			—			—			—			—			—			—			—			7,187			—			—			119			—			—			—			—			—			—			—			—			—			7,306			7,306
9.2			Secured by mortgages on residential immovable property - IPRE			6			—			—			—			8,791			243			144			—			77			—			12			—			24			—			—			728			47			—			—			45			—			—			—			—			—			10,117			10,117
9.3			Secured by mortgages on commercial immovable property - non IPRE			15			—			—			—			67			—			—			—			—			—			9,321			—			318			—			—			2,758			—			—			—			—			—			—			—			—			—			12,478			12,478
9.3.1			No loan splitting applied			—			—			—			—			21			—			—			—			—			—			—			—			86			—			—			1,269			—			—			—			—			—			—			—			—			—			1,376			1,376
9.3.2			loan splitting applied (secured)			—			—			—			—			—			—			—			—			—			—			9,321			—			—			—			—			—			—			—			—			—			—			—			—			—			—			9,321			9,321
9.3.3			loan splitting applied (unsecured)			15			—			—			—			46			—			—			—			—			—			—			—			231			—			—			1,489			—			—			—			—			—			—			—			—			—			1,781			1,781
9.4			Secured by mortgages on commercial immovable property - IPRE			84			—			—			—			—			—			—			—			—			—			3,787			—			1			—			1			389			—			7			—			164			—			—			—			—			82			4,515			4,515
9.5			Acquisition, Development and Construction (ADC)			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			2,522			—			—			—			1,050			—			—			—			—			—			3,572			3,572
10			Exposures in default			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			11,194			—			—			—			4,248			—			—			—			—			—			15,442			15,442
EU 10a			Claims on institutions and corporates with a short-term credit assessment			—			—			—			—			969			—			—			—			—			325			—			—			—			—			—			22			—			—			—			64			—			—			—			—			—			1,380			—
EU 10b			Collective investment undertakings (CIU)			223			—			—			—			—			—			—			—			—			—			—			—			—			—			—			310			—			—			—			12			—			—			—			4			—			549			549
EU 10c			Other items			19,172			329			—			—			2,545			1,309			—			—			—			346			—			—			81			—			—			40,704			—			—			—			41			—			—			—			—			10,320			74,846			74,840
EU 11c			Total			425,694			3,863			586			1,011			88,213			2,494			4,653			144			11,707			4,069			13,120			—			117,206			10			1			118,992			47			7			546			6,393			9,777			—			—			4			14,363			822,899			811,138

124    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

			CR5 - standardised approach (31.12.2024)
																																																						EUR million
																																																						2024
						Risk Weight																																													Total			Of which unrated
						0%			2%			4%			10%			20%			35%			50%			70%			75%			100%			150%			250%			370%			1250%			Otros
						a			b			c			d			e			f			g			h			i			j			k			l			m			n			o			p			q
1			Central governments or central banks			378,030			—			—			—			2,562			—			945			—			—			5,833			19			8,147			—			—			—			395,536			395,449
2			Regional government or local authorities			14,944			—			—			—			497			—			30			—			—			243			—			—			—			—			—			15,714			15,412
3			Public sector entities			3,143			—			—			—			1,112			—			111			—			—			81			—			—			—			—			—			4,447			3,218
4			Multilateral development banks			8,231			—			—			—			—			—			—			—			—			—			—			—			—			—			—			8,231			8,231
5			International organisations			1,721			—			—			—			—			—			—			—			—			—			—			—			—			—			—			1,721			1,721
6			Institutions			—			4,979			—			—			15,899			—			3,486			—			—			454			56			—			—			—			—			24,874			17,255
7			Corporates			—			—			—			—			1,779			—			1,255			—			—			54,661			895			—			—			—			—			58,589			56,721
8			Retail			—			—			—			—			—			4,019			—			—			130,181			—			—			—			—			—			—			134,200			134,200
9			Secured by mortgages on immovable property			—			—			—			—			—			76,033			12,876			—			—			1,676			374			—			—			—			—			90,959			90,959
10			Exposures in default			—			—			—			—			—			—			—			—			—			12,166			2,471			—			—			—			—			14,637			14,637
11			Exposures associated with particularly high risk			—			—			—			—			—			—			—			—			—			—			574			—			—			—			—			574			574
12			Covered bonds			—			—			—			1,075			1,944			—			—			—			—			—			—			—			—			—			—			3,019			2,775
13			Institutions and corporates with a short-term credit assessment			—			—			—			—			612			—			296			—			—			75			15			—			—			—			—			997			6
14			Collective investment undertakings			22			—			—			—			34			—			—			—			—			276			13			—			—			—			—			345			345
15			Equity			—			—			—			—			—			—			—			—			—			53			—			—			—			—			—			53			53
16			Other items			22,125			210			—			—			17,381			—			15			—			20			47,655			—			—			—			—			—			87,407			87,407
17			Total			428,216			5,189			—			1,075			41,819			80,052			19,014			—			130,201			123,173			4,417			8,147			—			—			—			841,303			828,963

Table CR5 presents the breakdown of exposures under the Standard Approach by asset class and risk weighting (corresponding to the risk attributed to exposure according to the risk criterion under the Standard Approach).

2025 Pillar 3 Disclosures Report    125

Index Introduction l Capital l Risks l Remuneration l Appendices l

4.3. Distribution of exposures

This section covers the CRB requirement - Additional disclosure concerning the credit quality of assets.

The tables below give a breakdown of the exposures to credit and dilution risk of the Group:

•Exposure category

•Business sector

•Geographical area

•Residual maturity

The information is also presented for non-performing exposures, impairment loss allowances and provisions for contingent liabilities and commitments.

In this section the numbers include the amounts for counterparty and credit risk excluding securitisations.

The distribution by geography in standard portfolios is mainly concentrated in Brazil, Spain and the United States. The most prominent segments continue to be central administrations (with a strong presence in Spain, Brazil and UK) and retailers and companies with a prominent presence in Brazil, the United States and UK.

In terms of IRB portfolios most of the exposure is concentrated in the corporate and retail segments in Spain and the UK.

Exposures by geographic area

n			Spain			38		%
n			UK			19		%
n			Rest of Europe			15		%
n			Brazil			9		%
n			USA			5		%
n			Rest of South America			7		%
n			Rest of North America			5		%

126    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 40.Exposures by geographic area
EUR million
																											2025
Exposures Post CRM - Post CCF
			Europe			Of which, Spain			Of which, UK			North America			Of which, USA			South América			Of which, Brazil			Others			Total
IRB approach
Central governments or central banks			0			0			0			0			0			0			0			0			0
Of which: Regional governments or local authorities			0			0			0			0			0			0			0			0			0
Regional governments or local authorities			288			0			0			2,413			0			0			0			0			2,700
Public sector entities			310			0			0			0			0			0			0			0			310
Institutions			12,403			1,287			4,436			3,669			3,263			316			300			2,307			18,696
Companies			135,741			57,413			23,858			44,214			25,867			41,958			32,812			8,813			230,725
Of which: SMEs			25,382			18,218			2,424			4,705			54			873			815			69			31,029
Of which: Large companies			84,864			25,836			15,267			34,059			25,262			31,586			22,888			8,594			159,103
Specialised lending			15,062			4,797			5,667			5,653			4,068			1,169			56			1,101			22,985
Of which: Specialised lending - project finance			10,996			3,772			3,430			4,586			4,068			1,087			56			538			17,207
Of which: specialised financing - commodity financing			201			94			0			0			0			0			0			82			282
Of which: specialised financing - raw materials financing			7			0			0			0			0			0			0			0			7
Of which: specialised financing - BIGR			3,858			931			2,237			1,067			0			82			0			481			5,488
Acquired receivables			29,810			11,920			3,406			5,831			4,463			3,575			3,353			1,498			40,714
Other			90,869			40,696			14,785			32,730			17,337			37,214			29,403			6,214			167,026
Retail exposures			347,088			82,183			203,467			489			400			257			107			381			348,216
Of which: Secured by real estate			280,474			57,893			199,093			463			385			198			68			349			281,484
Of which: SMEs			1,949			1,910			1			1			0			1			0			1			1,951
Of which: Non-SMEs			278,525			55,982			199,093			462			385			197			68			348			279,533
Secured by residential real estate			278,647			56,123			199,090			461			383			197			68			347			279,652
Eligible revolving exposures			10,802			5,381			3,754			7			4			12			3			9			10,831
Acquired receivables			1,862			1,839			2			2			2			0			0			1			1,864
Other retail exposures			55,777			18,840			621			20			11			48			36			24			55,869
Of which: SMEs			14,582			8,498			1			3			3			2			0			7			14,594

2025 Pillar 3 Disclosures Report    127

Index Introduction l Capital l Risks l Remuneration l Appendices l

Of which: Non-SMEs			41,195			10,342			620			17			8			46			35			17			41,275
Collective investment undertakings (CIUs)			566			566			0			0			0			0			0			0			567
Transparency approach			566			566			0			0			0			0			0			0			567
Mandate-based approach			0			0			0			0			0			0			0			0			0
Alternative approach			0			0			0			0			0			0			0			0			0
Equities			2,097			1,607			205			365			274			487			483			25			2,974
Total IRB approach			498,493			143,057			231,967			51,150			29,804			43,019			33,702			11,526			604,188
Standardised approach
Central governments or central banks			247,095			116,420			49,707			80,255			54,866			59,060			44,059			11,389			397,798
Regional governments or local authorities			17,081			16,148			3			1,069			1,042			379			271			0			18,530
Public sector entities			3,126			1,723			52			1,505			1,505			89			0			0			4,720
Multilateral development banks			0			0			0			0			0			0			0			10,294			10,294
International organisations			0			0			0			0			0			0			0			1,749			1,749
Entities			12,482			1,031			6,434			9,519			8,619			2,011			1,498			247			24,259
Companies			33,232			7,309			7,183			10,632			9,539			19,136			10,096			868			63,868
Of which: SMEs			6,332			365			1,599			714			580			5,537			2,845			137			12,720
Of which: Specialised financing			643			0			0			378			378			1,043			908			0			2,064
Retail			43,179			5,283			5,817			34,672			24,443			45,567			33,011			1,609			125,027
Of which: SMEs			11,938			1,123			482			3,823			2,219			11,878			7,929			37			27,676
Secured by mortgages on real estate and ADC exposures			26,894			5,766			1,369			28,557			18,468			38,547			14,083			418			94,416
Secured by mortgages on residential property - non-BIGR (with collateral)			13,464			2,047			13			12,475			3,248			25,311			9,511			9			51,259
Secured by mortgages on residential property - non-BIGR (without collateral)			2,472			506			1			1,387			579			3,445			834			1			7,306
Secured by mortgages on residential property - other - non-BIGR			4,916			3,058			1,328			25			14			228			48			1			5,169
Secured by mortgages on residential property - BIGR			159			34			0			9,432			9,432			481			6			0			10,072
Secured by mortgages on residential property - other - BIGR			0			0			0			24			24			21			1			0			45
Secured by mortgages on commercial property - non-BIGR (with collateral)			2,291			1			1			678			659			6,156			2,833			195			9,321
Secured by mortgages on commercial property - non-BIGR (without collateral)			383			15			0			96			92			1,224			498			78			1,781
Secured by mortgages on commercial property - other - non-BIGR			522			0			0			56			52			684			142			115			1,376
Secured by mortgages on commercial real estate - BIGR			1,902			92			0			2,419			2,403			26			12			4			4,351
Secured by mortgages on commercial real estate - other - BIGR			127			1			0			0			0			37			26			0			164

128    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Acquisition, development and construction (ADC)			658			13			26			1,966			1,966			934			171			15			3,572
of which: SMEs			3,533			1			10			6,975			6,519			8,275			3,737			107			18,890
Exposures in default			2,958			1,020			538			6,072			5,284			6,370			3,940			51			15,451
Subordinated debt exposures			0			0			0			0			0			0			0			0			0
Guaranteed bonds			828			0			466			0			0			0			0			0			828
Exposures to entities and companies with short-term credit ratings			1,256			57			155			136			135			101			95			21			1,513
Collective investment undertakings (CIUs)			548			535			0			0			0			1			0			0			549
Transparency approach			548			534			0			0			0			1			0			0			548
Mandate-based approach			1			1			0			0			0			0			0			0			1
Alternative approach			0			0			0			0			0			0			0			0			0
Equity exposures			4,831			4,474			76			180			3			442			324			35			5,488
Other exposures			42,230			20,813			8,691			18,677			13,612			13,924			5,698			102			74,934
Total Standardised Approach			435,742			180,582			80,491			191,272			137,516			185,627			113,075			26,783			839,425
Total			934,235			323,638			312,458			242,422			167,319			228,646			146,776			38,310			1,443,613

2025 Pillar 3 Disclosures Report    129

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 41.CR1-A: Maturity of exposures
			EUR million			2025
						a			b			c			d			e			f
						Net exposure value
						On demand			<= 1 year			r > 1 year <= 5 years			> 5 years			No stated maturity			Total
1			Loans and advances			52,298			362,762			333,373			339,184			—			1,087,617
2			Debt securities			—			31,867			59,437			92,757			—			184,061
3			Total			52,298			394,629			392,810			431,941			—			1,271,678

CR1-A: Maturity of exposures (31.12.2024)
			EUR million			2024
						a			b			c			d			e			f
						Net exposure value
						On demand			<= 1 year			r > 1 year <= 5 years			> 5 years			No stated maturity			Total
1			Loans and advances			42,078			357,047			363,047			342,159			—			1,104,331
2			Debt securities			—			40,375			65,854			77,575			—			183,804
3			Total			42,078			397,422			428,901			419,734			—			1,288,135

This table breaks down loans and advances and Debt securities by maturity period. From a maturity perspective, the balance sheet is predominantly medium-to long-term: around 65% of exposures mature beyond one year, while short-term exposures represent approximately 35% of the total.

The following table shows the stock of loans classified as non-performing between the close of the previous year and the end of current year.

Table 42.CR2 - Changes in the stock of non-performing loans and advances
												EUR million			2025
						a
						Gross carrying amount
10			Opening balance			38,258
20			Inflows to non-performing portfolios			32,256
30			Outflows from non-performing portfolios			(34,164)
40			Outflows due to write-offs			(13,339)
50			Outflow due to other situations			(20,825)
60			Closing balance			36,349

In terms of Table CR2:

Non-performing loan (NPL) inflows remained low, reflecting improved recovery performance across the Group supported by enhanced recovery and collections practices. Write-offs were broadly in line with the prior year. The Group continued to prioritise the reduction of legacy NPLs, including through portfolio sales. Figures are impacted by the agreement to sell Santander Bank Polska, which is classified as held for sale as of December 2025; accordingly, figures reflect the updated reporting perimeter.

130    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following table displays performing and non-performing exposures including provisions by stage:

			Table 43.CR1 - Performing and non-performing exposures and related provisions
			EUR million			2025
						a			b			c			d			e			f			g			h			i			j			k			l			m			n			o
						Gross carrying amount/nominal amount																		Accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions																		Accumulated partial write-off			Collateral and financial guarantees received
						Performing exposures									Non-performing exposures									Performing exposures - accumulated impairment and provisions									Non-performing exposures - accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions												On performing exposures			On non-performing exposures
									Of which, stage 1			Of which, stage 2						Of which, stage 2			Of which, stage 3						Of which, stage 1			Of which, stage 2						Of which, stage 2			Of which, stage 3
5			Cash balances at central banks and other demand deposits			145,035			145,035			—			—			—			—			(1)			(1)			—			—			—			—			—			21			—
10			Loans and advances			1,072,661			987,356			78,426			36,348			3,916			31,872			(7,159)			(3,038)			(4,121)			(14,234)			(568)			(13,549)			(230)			702,279			15,583
20			Central banks			16,007			16,007			—			—			—			—			—			—			—			—			—			—			—			—			—
30			General governments			33,987			32,688			437			85			4			83			(26)			(22)			(4)			(11)			(1)			(10)			—			5,577			69
40			Credit institutions			62,469			62,057			—			—			—			—			(5)			(5)			—			—			—			—			—			29,545			—
50			Other financial corporations			101,022			95,278			2,124			295			2			224			(134)			(111)			(23)			(134)			(1)			(101)			—			52,688			104
60			Non-financial corporations			301,928			273,762			26,215			10,976			713			10,072			(1,825)			(691)			(1,134)			(4,710)			(78)			(4,567)			—			186,424			4,083
70			Of which SMEs			105,614			94,212			11,137			6,519			523			5,900			(850)			(356)			(494)			(2,891)			(70)			(2,776)			—			74,408			2,534
80			Households			557,248			507,564			49,650			24,992			3,197			21,493			(5,169)			(2,209)			(2,960)			(9,379)			(488)			(8,871)			(230)			428,045			11,327
90			Debt securities			184,633			182,871			1,460			849			6			842			(127)			(62)			(65)			(393)			(1)			(392)			—			2,604			19
100			Central banks			5,436			5,436			—			—			—			—			—			—			—			—			—			—			—			—			—
110			General governments			136,665			136,635			—			—			—			—			(4)			(4)			—			—			—			—			—			526			—
120			Credit institutions			10,242			10,242			—			—			—			—			—			—			—			—			—			—			—			—			—
130			Other financial corporations			17,343			16,903			321			3			—			3			(26)			(23)			(3)			(2)			—			(2)			—			1,053			—
140			Non-financial corporations			14,947			13,655			1,139			846			6			839			(97)			(35)			(62)			(391)			(1)			(390)			—			1,025			19
150			Off-balance-sheet exposures			486,407			465,168			21,236			1,465			80			1,327			536			335			201			177			4			166						30,951			283
160			Central banks			1			1			—			—			—			—			—			—			—			—			—			—						—			—
170			General governments			8,739			8,393			346			4			—			4			2			1			1			—			—			—						23			—
180			Credit institutions			75,603			75,492			111			—			—			—			1			1			—			—			—			—						2,374			—
190			Other financial corporations			40,912			39,742			1,171			14			—			12			23			15			8			4			—			4						2,514			1
200			Non-financial corporations			233,655			223,742			9,910			1,283			63			1,165			218			144			74			164			3			157						23,964			278
210			Households			127,497			117,798			9,698			164			17			146			292			174			118			9			1			5						2,076			4
220			Total			1,888,736			1,780,430			101,122			38,662			4,002			34,041			(7,823)			(3,436)			(4,387)			(14,804)			(573)			(14,107)			(230)			735,855			15,885

2025 Pillar 3 Disclosures Report    131

Index Introduction l Capital l Risks l Remuneration l Appendices l

			CR1 - Performing and non-performing exposures and related provisions (31.12.2024)
			EUR million			2024
						a			b			c			d			e			f			g			h			i			j			k			l			m			n			o
						Gross carrying amount/nominal amount																		Accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions																		Accumulated partial write-off			Collateral and financial guarantees received
						Performing exposures									Non-performing exposures									Performing exposures - accumulated impairment and provisions									Non-performing exposures - accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions												On performing exposures			On non-performing exposures
									Of which, stage 1			Of which, stage 2						Of which, stage 2			Of which, stage 3						Of which, stage 1			Of which, stage 2						Of which, stage 2			Of which, stage 3
5			Cash balances at central banks and other demand deposits			183,115			183,115			—			—			—			—			—			—			—			—			—			—			—			—			—
10			Loans and advances			1,088,446			1,000,062			82,269			38,259			3,422			33,993			(7,538)			(3,314)			(4,224)			(14,836)			(587)			(14,046)			(215)			726,561			17,610
20			Central banks			16,200			16,200			—			—			—			—			—			—			—			—			—			—			—			—			—
30			General governments			28,569			27,180			337			104			1			103			(22)			(17)			(5)			(10)			—			(10)			—			3,345			79
40			Credit institutions			55,938			55,513			18			1			—			1			(5)			(5)			—			—			—			—			—			23,194			—
50			Other financial corporations			92,515			88,321			1,150			313			1			302			(139)			(105)			(34)			(137)			—			(131)			—			49,878			118
60			Non-financial corporations			311,617			282,453			27,615			11,778			407			10,921			(1,802)			(713)			(1,089)			(4,992)			(59)			(4,760)			(42)			199,927			4,874
70			Of which SMEs			117,006			103,230			13,399			7,269			222			6,846			(1,040)			(382)			(658)			(3,317)			(35)			(3,198)			(18)			81,172			3,160
80			Households			583,607			530,395			53,149			26,063			3,013			22,666			(5,570)			(2,474)			(3,096)			(9,697)			(528)			(9,145)			(173)			450,217			12,539
90			Debt securities			185,226			184,018			597			748			—			701			(48)			(39)			(9)			(301)			—			(301)			—			1,988			19
100			Central banks			6,187			6,187			—			—			—			—			—			—			—			—			—			—			—			—			—
110			General governments			135,098			134,987			41			—			—			—			(4)			(4)			—			—			—			—			—			471			—
120			Credit institutions			10,854			10,854			—			—			—			—			—			—			—			—			—			—			—			—			—
130			Other financial corporations			19,821			19,544			49			4			—			4			(10)			(10)			—			(2)			—			(2)			—			672			—
140			Non-financial corporations			13,266			12,446			507			744			—			697			(34)			(25)			(9)			(299)			—			(299)			—			845			19
150			Off-balance-sheet exposures			453,115			435,548			17,565			1,661			111			1,509			494			305			189			218			5			208			—			17,034			125
160			Central banks			536			536			—			—			—			—			—			—			—			—			—			—			—			—			—
170			General governments			5,474			5,256			218			17			—			17			2			1			1			—			—			—			—			357			—
180			Credit institutions			66,092			65,984			108			—			—			—			1			1			—			—			—			—			—			614			—
190			Other financial corporations			43,261			41,609			1,653			92			—			85			94			62			32			15			—			15			—			1,784			—
200			Non-financial corporations			218,031			209,775			8,254			1,360			101			1,226			212			128			84			196			4			187			—			13,269			121
210			Households			119,721			112,388			7,332			192			10			181			185			113			72			7			1			6			—			1,010			4
220			Total			1,909,902			1,802,743			100,431			40,668			3,533			36,203			(8,080)			(3,658)			(4,422)			(15,355)			(592)			(14,555)			(215)			745,583			17,754

132    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

From Table CR1 can be seen that:

•Solid portfolio quality: Performing exposures represent the majority of the credit book, with limited provisioning requirements.

•Non-performing exposures are primarily concentrated in Households and SME.

•Collateral and financial guarantees contribute to risk mitigation, while conservative provisioning—aligned with supervisory expectations—provides adequate coverage for impaired exposures.

As of December 2025, the portfolio reflects a balanced and controlled risk profile, supported by high-quality assets, conservative provisioning and robust collateral coverage. Non-performing exposures decreased vs. December 2024 (-5%), from €40.8bn to €38.7bn, reflecting continued progress in asset quality management and the ongoing recovery of distressed exposures.

2025 Pillar 3 Disclosures Report    133

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following table breaks down performing and non-performing exposures according to the number of days past due:

			Table 44.CQ3 - Credit quality of performing and non-performing exposures by past due days
			EUR million																														2025
						a			b			c			d			e			f			g			h			i			j			k			l
						Gross carrying amount/nominal amount
						Performing exposures									Non-performing exposures
									Not past due or past due ≤ 30 days			Past due > 30 days ≤ 90 days						Unlikely to pay that are not past due or are past due ≤ 90 days			Past due > 90 days ≤ 180 days			Past due > 180 days ≤ 1 year			Past due > 1 year ≤ 2 years			Past due > 2 years ≤ 5 years			Past due > 5 years ≤ 7 years			Past due > 7 years			Of which defaulted
5			Cash balances at central banks and other demand deposits			145,035			145,035			—			—			—			—			—			—			—			—			—			—
10			Loans and advances			1,072,661			1,066,547			6,114			36,348			21,990			4,655			4,415			3,158			1,896			98			136			36,057
20			Central banks			16,007			16,007			—			—			—			—			—			—			—			—			—			—
30			General governments			33,987			33,978			9			85			26			39			3			—			11			6			—			86
40			Credit institutions			62,469			62,469			—			—			—			—			—			—			—			—			—			—
50			Other financial corporations			101,022			100,265			757			295			215			18			11			22			20			—			9			295
60			Non-financial corporations			301,928			300,646			1,282			10,976			6,321			1,217			1,381			1,136			789			55			77			10,801
70			Of which SMEs			105,614			104,942			672			6,519			3,119			931			1,115			618			637			40			59			6,508
80			Households			557,248			553,182			4,066			24,992			15,428			3,381			3,020			2,000			1,076			37			50			24,875
90			Debt securities			184,633			184,633			—			849			848			—			1			—			—			—			—			846
100			Central banks			5,436			5,436			—			—			—			—			—			—			—			—			—			—
110			General governments			136,665			136,665			—			—			—			—			—			—			—			—			—			—
120			Credit institutions			10,242			10,242			—			—			—			—			—			—			—			—			—			—
130			Other financial corporations			17,343			17,343			—			3			3			—			—			—			—			—			—			1
140			Non-financial corporations			14,947			14,947			—			846			845			—			1			—			—			—			—			845
150			Off-balance-sheet exposures			486,407									1,465																								1,440
160			Central banks			1									—																								—
170			General governments			8,739									4																								4
180			Credit institutions			75,603									—																								—
190			Other financial corporations			40,912									14																								14
200			Non-financial corporations			233,655									1,283																								1,263
210			Households			127,497									164																								160
220			Total			1,888,736			1,396,215			6,114			38,662			22,838			4,655			4,416			3,158			1,896			98			136			38,343

134    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

The portfolio reached a gross carrying amount of €1.93tn, of which 98% is current and fully performing, confirming the solid quality of the loan book. Non-performing exposures as a percentage of total gross carrying amount declined to 2.01% as of December 2025, consistent with an improvement in asset quality and the ongoing recovery of distressed portfolios.

Early arrears exposures represent approximately 0.4% of performing exposures within the 30–90 days past-due bucket.

Non-performing exposures (NPEs) totalled at €38.7bn (2.01% of total Gross Carrying Amount), with more than 59% concentrated in early-stage arrears (≤90 days), evidencing controlled inflows into default and high recoverability potential.

Overall, the portfolio reflects a well-contained and stable risk profile, with effective early warning mechanisms, low structural arrears, and NPE levels consistent with a resilient balance sheet.

2025 Pillar 3 Disclosures Report    135

Index Introduction l Capital l Risks l Remuneration l Appendices l

			Table 45.CQ4 - Quality of non-performing exposures by geography
																											EUR million
						2025
						a			b			c			d			e			f			g
						Gross carrying/Nominal amount												Accumulated impairment			Provisions on off-balance sheet commitments and financial guarantee given			Accumulated negative changes in fair value due to credit risk on non-performing exposures
									of which: non-performing						of which: subject to impairment
												of which: defaulted
10			On balance sheet exposures			1,439,525			37,197			36,903			1,432,350			(21,905)						(8)
20			GB			315,750			3,285			3,282			315,313			(897)						(3)
30			ES			295,056			6,397			6,213			291,099			(3,592)						(5)
40			US			196,915			7,839			7,839			196,730			(3,854)						—
50			BR			150,825			9,333			9,332			149,637			(6,245)						—
60			MX			68,862			1,677			1,677			68,423			(1,461)						—
			PL			11,971			304			304			11,959			(336)						—
			IT			48,457			403			403			48,385			(352)						—
			DE			55,413			1,430			1,430			55,397			(1,066)						—
			FR			41,987			365			365			41,987			(325)						—
			CL			50,971			2,654			2,654			50,969			(1,181)						—
70			Other countries			203,318			3,510			3,404			202,451			(2,596)						—
80			Off balance sheet exposures			487,873			1,465			1,440									713
90			GB			62,173			90			90									105
100			ES			92,821			473			470									79
110			US			69,883			177			177									74
120			BR			49,310			409			409									197
130			MX			20,682			16			12									83
			PL			24,891			40			40									2
			IT			4,853			53			53									7
			DE			16,073			19			19									17
			FR			54,004			2			—									6
			CL			14,256			17			17									31
140			Other countries			78,927			169			153									112
150			Total			1,927,398			38,662			38,343			1,432,350			(21,905)			713			(8)

136    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

The composition of the non-performing portfolio remains broadly consistent with the risk profile of the Bank’s loan book. Higher NPL ratios are observed in geographies combining greater profitability and a stronger retail focus, such as Brazil, Chile, and Mexico.

During 2025, the Group reduced its overall NPL ratio, mainly driven by the continued reduction of legacy non-performing exposures in Europe (notably Spain and the UK). This improvement was partially offset by higher NPL levels in higher-yielding geographies.

2025 Pillar 3 Disclosures Report    137

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following two tables show all exposures by industry and geographical area:

			Table 46.CQ5 - Credit quality of loans and advances by industry
																								EUR million
						2025
						a			b			c			d			e			f
						Gross carrying amount												Accumulated impairment			Accumulated negative changes in fair value due to credit risk on non-performing exposures
									of which: non-performing						of which: loans and advances subject to impairment
												of which: defaulted
10			Agriculture, forestry and fishing			7,401			449			448			7,391			(255)			—
20			Mining and quarrying			10,811			157			156			10,785			(80)			—
30			Manufacturing			45,065			1,451			1,449			45,028			(906)			—
40			Electricity, gas, steam and air conditioning supply			14,127			238			238			13,691			(169)			—
50			Water supply			1,477			62			62			1,471			(35)			—
60			Construction			18,553			801			795			18,541			(476)			—
70			Wholesale and retail trade			71,598			2,715			2,706			71,574			(1,751)			(1)
80			Transport and storage			15,779			779			778			15,737			(327)			(3)
90			Accommodation and food service activities			10,605			508			508			10,514			(311)			—
100			Information and communication			13,515			233			233			13,510			(150)			—
110			Financial and insurance activities			—			—			—			—			—			—
120			Real estate activities			41,136			993			993			40,926			(466)			—
130			Professional, scientific and technical activities			16,703			618			617			16,675			(325)			—
140			Administrative and support service activities			11,672			517			517			11,667			(287)			—
150			Public administration and defense, compulsory social security			1,055			—			—			1,055			(1)			—
160			Education			1,703			65			65			1,690			(53)			—
170			Human health services and social work activities			4,028			260			259			4,021			(133)			—
180			Arts, entertainment and recreation			1,471			66			59			1,471			(39)			—
190			Other services			26,205			1,064			918			25,202			(767)			—
200			Total			312,904			10,976			10,801			310,949			(6,531)			(4)

138    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

The corporate loan book is diversified, with the largest exposures in wholesale and retail trade, manufacturing, and real estate activities. Overall, the sector composition remained broadly stable in 2025, with a slight decline in the share of manufacturing in favour of other service activities.

Provisioning is aligned with risk profile and sector concentrations. Sectors with higher NPL ratios carry higher reserve allocation, consistent with a prudent provisioning approach. In addition, reflecting the Group’s continued efforts to reduce non-performing exposures, the NPL ratio in the Accommodation sector—one of the more material portfolios—declined by more than 4 percentage points.

Credit quality across non-financial corporates remained well contained. Higher NPL ratios concentrated in more cyclical sectors (e.g. agriculture), while core exposures such as manufacturing, utilities, and real estate remained broadly stable. Overall, the portfolio reflects a balanced risk-return profile, supported by prudent provisioning and diversification.

2025 Pillar 3 Disclosures Report    139

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following table shows the credit quality of the restructured or forborne exposures:

Table 47.CQ1 - Credit quality of forborne exposures
			EUR million
						2025
						a			b			c			d			e			f			g			h
						Gross carrying amount/nominal amount of exposures with forbearance measures												Accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions						Collateral received and financial guarantees received on forborne exposures
						Performing forborne			Non-performing forborne									On performing forborne exposures			On non-performing forborne exposures						Of which collateral and financial guarantees received on non-performing exposures with forbearance measures
												Of which defaulted			Of which impaired
5			Cash balances at central banks and other demand deposits			—			—			—			—			—			—			—			—
10			Loans and advances			10,566			14,322			14,300			13,120			(781)			(5,513)			13,225			6,343
20			Central banks			—			—			—			—			—			—			—			—
30			General governments			3			10			10			10			—			(8)			4			1
40			Credit institutions			—			—			—			—			—			—			—			—
50			Other financial corporations			148			97			97			95			(4)			(61)			161			26
60			Non-financial corporations			4,173			4,881			4,877			4,508			(189)			(2,040)			5,181			1,988
70			Households			6,242			9,334			9,316			8,507			(588)			(3,404)			7,879			4,328
80			Debt Securities			331			530			530			525			(27)			(230)			—			—
90			Loan commitments given			255			61			61			59			6			5			16			2
100			Total			11,152			14,913			14,891			13,704			(814)			(5,748)			13,241			6,345

The stock of restructured exposures maintained a downward trend in 2025. Coverage remained high (25%), and the portfolio continues to be strongly provisioned. Strong payment performance and the outcome of deleveraging plans—mainly in European geographies—offset higher activity in other regions. Collateral associated with the restructured portfolio represents 49% of the exposure. More than 50% of the portfolio is classified as non-performing.

The following table shows the collateral obtained through repossession and foreclosure processes:

Table 48.CQ7 - Collateral obtained by taking possession and execution processes
			EUR million			2025
						a			b
						Collateral obtained by taking possession
						Value at initial recognition			Accumulated negative changes
10			Property, plant and equipment (PP&E)			—			—
20			Other than PP&E			4,793			1,918
30			Residential immovable property			820			240
40			Commercial Immovable property			3,685			1,658
50			Movable property (auto, shipping, etc.)			276			20
60			Equity and debt instruments			12			—
70			Other collateral			—			—
80			Total			4,793			1,918

Asset foreclosure is one of the tools used by the Group to resolve non-performing loans. The stock of repossessed assets continued its downward trend in 2025. Real estate assets are managed through specialised property sale companies, complemented by the Group’s commercial network. The fair value of these assets is determined based on market value (appraisals), adjusted by discounts derived from internal valuation methodologies grounded in the Group’s sales experience with assets of similar characteristics.

140    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

4.4. Internal rating systems

Since 1993, Santander Group has used its own internal models for assigning creditworthiness grades, known as ratings or scorings, to assess the credit quality of customers and exposures. Each rating corresponds to a specific probability of default, derived from the Group’s historical experience, except for certain portfolios classified as low default portfolios.

More than 400 internal rating models are used in the Group’s credit approval and risk monitoring process.

Global rating tools are those applied to the CIB segments of Corporates, Financial Institutions, Sovereigns and Specialised Lending. The management of these tools is centralised within Grupo Santander, both in terms of rating assignment and risk monitoring. For the Corporate, Financial Institutions and Sovereign segments, the tools assign a rating to each counterparty based on a model that relies on the analyst’s judgement, supported by an automatic quantitative module composed of balance-sheet ratios and/or macroeconomic variables. In certain cases, such as Corporate CIB, additional adjustments to the rating may be applied, for example when the counterparty belongs to a group that provides explicit support. The analyst uses the output of the model as a reference, reviews it and, in exceptional cases of disagreement, may override it in order to determine the final rating. In the case of Specialised Lending, a fully expert-based model in line with regulatory requirements is used.

For the Corporate and Institutional segment (including SMEs with the highest turnover), Grupo Santander's parent company has defined a single methodology for the construction of a rating in each country. The aim is to incorporate all available information (internal behaviour, external sources, etc.) in a structured way, statistically weighting the weight of the objective (automatic) assessment and the subjective (expert) assessment according to the client's characteristics. Additionally, further adjustments may be applied for predefined reasons, such as ESG-related considerations. Ultimately, in the event of disagreement, the analyst may override the final score.

Customer ratings are reviewed regularly to take into account new information. Ratings are reviewed more frequently when certain automatic alerts are triggered and for customers placed on special watch. The rating tools are also reviewed in order to refine the ratings they generate.

For the retail segment (individuals and SMEs), scoring tools are in place that automatically assign a rating to credit applications submitted for approval. These credit approval systems are complemented by behavioural rating models, which enhance the predictive power of the risk assumed. In addition to supporting the approval of new exposures, these models are also used for ongoing monitoring and limit setting.

For each of the Group’s portfolios, PD models are developed, with rating and/or scoring models serving as key inputs. In the case of CIB portfolios, these models establish the following relationship between internal ratings and probabilities of default:

Mapping of internal ratings and PD
Corporate						Banks						Financial institutions non banks
Rating			PD			Rating			PD			Rating			PD
9.2			0.03%			9.2			0.03%			9.2			0.030%
9.0			0.03%			9.0			0.03%			9.0			0.030%
8.5			0.03%			8.5			0.03%			8.5			0.030%
8.0			0.03%			8.0			0.04%			8.0			0.03%
7.5			0.03%			7.5			0.05%			7.5			0.05%
7.0			0.03%			7.0			0.08%			7.0			0.08%
6.5			0.07%			6.5			0.13%			6.5			0.14%
6.0			0.15%			6.0			0.20%			6.0			0.22%
5.5			0.32%			5.5			0.30%			5.5			0.37%
5.0			0.66%			5.0			0.46%			5.0			0.61%
4.5			1.38%			4.5			0.70%			4.5			1.00%
4.0			2.89%			4.0			1.07%			4.0			1.65%
3.5			6.05%			3.5			1.62%			3.5			2.70%
3.0			12.65%			3.0			2.46%			3.0			4.38%
2.5			26.47%			2.5			3.72%			2.5			7.04%
2.0			45.00%			2.0			5.58%			2.0			11.13%
1.5			45.00%			1.5			9.55%			1.5			19.91%
1.0			45.00%			1.0			9.55%			1.0			19.91%

These PDs are applied uniformly across Santander and are consistent with the global management of the portfolios. As can be seen, the PD assigned to any given internal rating is not exactly the same in every portfolio. In these cases, regulatory requirements require differentiated calibration.

4.5. Rating assignment process and parameter estimation

The credit risk classification policy establishes criteria for the proper classification of transactions with customers, depending on the credit risk to which the bank is exposed. This classification is based on two regulations comprising:

•Accounting principles: pursuant to International Financial reporting Standard 9 (IFRS 9), which is used for internal management, reporting and accounting purposes.

•Prudential requirements: pursuant to Article 178 of Regulation (EU) no. 575/2013 of the European Parliament and of the Council of 26th June 2013, on prudential requirements for credit institutions and investment firms, as well as the EBA Guidelines on the application of the definition of default.

Due to accounting reasons, the classification is broken down into the following categories: Phase 1, Phase 2, Phase 3 and Write-off. Furthermore, for prudential purposes, the classification is separated into: Non-Default and Default.

As a result of consistency between the classification for prudential and accounting purposes, the transactions are classified by credit risk:

2025 Pillar 3 Disclosures Report    141

Index Introduction l Capital l Risks l Remuneration l Appendices l

•Stage 1/No-default risk: This includes all transactions that do not meet the requirements to be classified in other categories.

•Stage 2/No-default risk: This category contains all the transactions, which, without meeting the criteria for individual classification as Phase 3/Default or write-off, show significant increases in credit risk since initial recognition. Transactions are classified as Phase 2 based on the total value of the risk.

•Stage 3/Default risk: This includes all transactions, whether or not past due, for which the circumstances for classification as write-offs have not arisen, however, there are reasonable doubts with regarding to their total repayment (principal and interest) by the obligor as set out in the contract. It also includes off-balance-sheet exposures where payment by the entity is likely, but recovery is doubtful. Transactions are classified as Phase 3/Default based on the total value of the risk.

•Write-off risk: This includes debt instruments, whether or not past due, in relation to which an individual analysis considers that recovery is unlikely, due to severe or irretrievable impairment of the solvency of the transaction or the obligor. This is an accounting classification only, hence there is no equivalent in the prudential criteria.

The accounting and prudential definitions were aligned Since 2022 by incorporating core regulation aspects that better capture the economic downturn, such as day count and materiality thresholds. Only certain criteria that capture an exclusively prudential assessment have been excluded from the definition, thus avoiding excessive conservatism in the accounting perspective.

Additionally, the Group's Customer Forborne Loans Debt Policy defines forbearance as the modification of the payment conditions of a transaction, which allows a customer experiencing financial difficulties (current or foreseeable) to fulfil his/her payment obligations, on the basis that if this modification were not made, it would be reasonably certain that the customer would not be able to meet his/her financial obligations.

The modification may be made to the original transaction or through a new transaction which replaces it and is accompanied with concessions by the bank.

Measuring the credit risk of a transaction involves calculating both the expected and the unexpected loss on the transaction. Unexpected loss is the basis for the calculation of both regulatory and economic capital. It refers to a very high, though improbable, level of loss that is not considered a recurring cost and has to be absorbed by capital. Measuring risk involves two separate steps: estimating the risk and then assigning the credit risk parameters: PD, LGD and EAD.

The PD (probability of default) estimates the likelihood of a customer or a contract to default within 12 months. The PD is used for regulatory capital in the long run, or TTC (through-the-cycle) PD, not dependent on a specific point in the cycle.

The default event being modelled is based on the definition in article 178 of the European Central Bank Solvency Regulation2, which considers defaults to be defined for a customer/contract when at least one of the following circumstances arises:

•The entity considers reasonable doubts regarding the obligor's ability to fulfil their credit obligations in full.

•The customer/contract is past due by more than 90 days on any material credit obligation.

The definition of default has been adapted in accordance with the EBA Guidelines on the application of the definition of default, as well as the materiality thresholds set by the competent authorities.

For either portfolios managed at the customer level or portfolios managed on the contract level, in both cases the probability of the customer defaults has to be modelled.

The calculation of the PD is based on the institution's internal experience, i.e. historical observations of defaults by rating or scoring level. The level at which it is estimated (contract or customer) is agreed with the management.

The LGD (loss given default) is the mathematical expectation of the percentage loss in the event of a default event. The LGD is calculated using internal data on the income and expenses incurred by the institution during the recovery process once the default event has arisen, discounted to the start date of the default.

The LGD is calculated to determine the regulatory capital for the case of a 'downturn', i.e. considered for a worst-case scenario in the economic cycle.

In addition to the estimation of the downturn LGD that will be used for normal operations, a specific loss estimate is made for operations in default. This is determined using LGD and ELBE (expected loss best estimate) parameters. The ELBE attempts to provide the best estimate of economic loss at a particular time based mainly on the time during which the operation has been at default, with due regard to the prevailing economic situation, while the LGD for transactions in default is increased by any further unexpected losses that may be reported during the recovery period.

Finally, the EAD (exposure at default) is calculated. It is defined as the value of the debt at the time of default. For lending products or any product with no off-balance-sheet amount, the EAD equals the balance of the transaction plus any interest accrued but not yet paid. For products providing facilities it is necessary to estimate any future drawings that will be made between the present time and any possible future default event. The CCF (credit conversion factor) is calculated, in order to show the percentage of the balance not currently utilised (off-balance-sheet amount) which would be utilised at the time of default.

Past information on portfolios is essential for estimating regulatory parameters, as established in EU regulations (Regulation No 575/2013). The minimum data periods to be used in estimates are between five and seven years, depending on the parameter and the portfolio. However, the period used in the estimate can be longer, depending on the historical information available. The Bank has an internal data model containing historical information on portfolios, which is subject to review by the internal supervisory divisions (Validation and Audit) and by the supervisory authorities.

2 Regulation (EU) No 575/2013 of the European Parliament and Council of 26 June 2013 on prudential requirements for credit institutions and investment firms.

142    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

The methodology used to estimate the credit risk parameters was updated under the new regulatory guidelines, mainly established in the 'Guidelines on PD estimation, LGD estimation and the treatment of defaulted exposures', to incorporate the requirements and interpretations deriving from these regulatory provisions.

For regulatory purposes, observations of frequency of default and associated losses have to be averaged out over an entire economic cycle in the case of the PD, or represent a downturn situation in the case of the LGD or EAD, or represent the current economic cycle in the case of the ELBE for non-performing transactions.

For this reason, recent observations are not directly comparable with the regulatory parameters and backtesting exercises should be treated with caution and placed in the context of the current economic environment. As explained in section 4.9, recent observed default frequencies (ODFs) are below the regulatory PDs in geographic locations with economic growth rates above the average for the cycle. Conversely, in regions where economic growth is below average, the ODFs may exceed the regulatory PDs.

The risk parameters must be estimated separately for each entity, country and segment and have to be reviewed at least once a year.

The parameters are then assigned to the transactions recorded on each unit’s balance sheet, in order to calculate the expected losses and capital requirements associated with the unit’s exposure.

In certain portfolios there is only a limited amount of default experience, that alternative approaches to parameter estimation have to be used. These are known as low default portfolios.

Low default portfolio: corporates; banks and non-bank financial institutions.

In line with industry practices and supervisory expectations, these portfolios are treated under the Foundation IRB approach, under which internal modelling is limited to the estimation of the Probability of Default (PD), while Loss Given Default (LGD) and Credit Conversion Factors (CCF) are defined in accordance with the applicable regulation.

For low default portfolios, PD estimation is primarily based on datasets from external credit rating agencies, which reflect the pooled default experience of a large number of rated entities and sovereigns. These datasets contain extensive historical information, allowing for the identification of complete economic cycles as well as the analysis of downturn conditions.

The definition of default used by the rating agencies is assessed in detail against the regulatory definition. Although the two definitions are not fully aligned, they share sufficient common elements to allow their use for PD estimation purposes.

With respect to PD, rating agencies do not directly report long-run (through-the-cycle, TTC) PD estimates, but rather annual observed default frequencies. These observations are averaged over a full economic cycle and by external rating grade in order to derive a long-run PD. This long-run PD is assigned to all counterparties with an external rating and is subsequently used to calibrate the internal rating system. As a result, the final PD depends on the counterparty’s internal rating, rather than its external rating, and can also be applied to counterparties without an external rating.

The parameters estimated for global portfolios are uniform across all Santander Group units. Accordingly, a financial institution assigned an internal rating of 8.5 is associated with the same PD regardless of the Santander Group unit in which the exposure is booked.

Corporates (including SMEs, specialised lending and receivables)

The estimation is based on the entity’s own internal experience for portfolios of customers that have an account manager assigned to them with sufficient experience of internal defaults. The PD is calculated for customers by observing new NPLs in the portfolio and relating these to the ratings assigned to the customers concerned. To this end, long-run observed default frequencies (LR ODFs) are calculated for a rating or group of ratings and are adjusted to the average PD observed for each portfolio over a complete economic cycle.

Compared to low default portfolios, corporates portfolios have specific rating systems in each the Group unit, requiring specific PD calibrations in each case.

The LGD in Corporates portfolios is calculated on the basis of observed recoveries of defaulted transactions. This calculation takes into account not only the cash inflows and outflows associated with the recovery process but also the timing of these flows, to calculate their present value and direct and indirect recovery costs. For regulatory use, LGD estimates must be associated with a period of economic crisis or a downturn. The existence of major variables (known as 'drivers') is modelled to explain the emergence of various LGDs for different groups of transactions. The main drivers used are the age of the transactions, the existence or absence of guarantees, the type of guarantee, the Loan to Value, etc. Statistical significance and business relevance are required for these explanatory variables. Estimated ELBE and LGD are also calculated for operations in default.

Finally, the EAD is estimated by comparing the percentage use of off-balance sheet operations at the time of default and in normal circumstances, to estimate the extent to which customers make more use of their credit facilities as they approach default. To estimate the CCF, information on past defaults is gathered from databases and balances (on and off the balance sheet) are compared between the time of default and earlier periods before the downturn in the customer’s credit quality had yet to be observed.

In the case of specialised lending exposures, risk-weighted assets are calculated directly using the so-called slotting criteria approach, which defines different risk categories based on expert judgement criteria.

2025 Pillar 3 Disclosures Report    143

Index Introduction l Capital l Risks l Remuneration l Appendices l

Retail

In portfolios where customers do not have an account manager assigned to them but are treated on a pooled or standardised basis, PDs are estimated based on the entity’s internal experience.

The PDs are calculated by observing new NPLs and relating each new NPL to the score assigned to the transaction at the time of approval or, for transactions beyond a certain age, to the customer's rating. As with the corporates portfolios, the LGD is calculated on the basis of an observed recovery process, adjusted to downturn conditions. Estimated ELBE and LGD are also calculated for transactions in default. The EAD estimation is also similar to that for corporates.

For further details, see Appendix XII, which contains several tables summarising the parameter models used in the geographies, complying with the requirement (e) of CRE in relation to the article 452 (f) of the CRR.

Access the Pillar 3 2025 file available on Grupo Santander's web site

4.6. Uses of internal parameter estimates

One major application of the PD, LGD and EAD credit risk parameters is to determine minimum capital requirements within the CRR framework.

The CRR states that these parameters and their associated metrics, including expected and unexpected loss, are to be used not only for regulatory purposes but also for internal credit risk management.

The Group has adapted its projection methodology to IFRS 9, resulting in an impact on the estimation of expected loss and the other relevant credit risk metrics arising from the parameters obtained, thus making full use of the risk parameters (PD, LGD and EAD) in its management through the calculation of provisions and allowances.

The internal credit risk parameter estimates are also used in a variety of management tools, including pre-classifications, economic capital allocation, the RoRAC (return on risk-adjusted capital) calculation, the RoRWA (return on risk-weighted assets), stress testing and scenario analyses. These results are reported to senior management through various internal committees.

The pre-classification tool is used to assign limits to customers based on their risk characteristics. For the Corporate Investment Banking (CIB) segment, limits are established for capital at risk (CaR) and nominal CAP.3 Limits for financial institutions are managed using credit risk equivalent (CRE) models.

Through the calculation and allocation of economic capital, all the various types of risks arising from the lending business are integrated in a single measurement, combining measurement of credit risk with that of other risks, including market, operational, business and on-balance-sheet interest rate risk. The economic capital allocation at the business unit level provides a view of the distribution of risk by business activity and geographical area, taking the benefits of diversification into account. By linking economic capital to financial results, it is possible to calculate the risk-adjusted return (RoRAC) to be compared to the cost of capital to determine each unit contributing to value creation in the Group.

The use of economic capital figures in determining management compensation and setting capital and RoRAC-related targets for the business units reinforces the integration of economic capital in management.

In scenario analyses, the credit risk parameters (including provisions under IFRS 9) are related to macroeconomic variables, such as the unemployment rate, GDP growth and interest rates, using statistical models. This allows credit risk to be quantified under different macroeconomic scenarios, and in particular, to assess potential risk levels in stress situations.

For further details on IFRS 9, see the 'Risk management and compliance' chapter (section 3.4) of the 2025 annual report.

3 Maximum nominal amount of a risk transaction, excluding market transactions and with maximum terms according to the type of transaction.

144    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

4.7. Credit risk mitigation techniques

This section covers the CRC requirements - Qualitative disclosure requirements related to credit risk mitigation techniques.

Among other factors, Santander applies various credit risk mitigation techniques based on customer and product type.

Some are inherent to specific operations (such as real estate collateral) while others apply to a series of transactions (such as netting or collateral).

Risk approval is generally determined by the borrowers' ability to make payment due, irrespective of any additional collateral or personal guarantees that may be required to modulate the exposure. To determine repayment capacity, Grupo Santander reviews funds or net cash flows from its businesses or revenues without guarantors or assets pledged as collateral. When approving a loan, the Group always considers guarantors and guarantees as a secondary means of recourse if the first channel fails.

In general, guarantees serve to reinforce a credit transaction and mitigate a loss if the borrower defaults on its payment obligation. Grupo Santander's techniques for mitigating credit risk cover various types of customers and products. Some are for specific transactions (e.g. property) or a series of transactions (e.g. clearing derivatives and guarantees). They are grouped into collateral, personal guarantees and credit derivative hedges.

Grupo Santander makes sure its mitigation techniques meet the requirements for legal enforceability in all jurisdictions. Each guarantee comes with a legal opinion that confirms its validity and enforceability. Throughout the process, Grupo Santander maintains internal oversight and effective control over the value of the collateral, reflecting the specific features of each credit situation or type of collateral.

As noted in the previous section, from a risk acceptance perspective, granting criteria focus on the borrower’s repayment capacity to meet, in full and on time, all assumed financial obligations, although the transaction’s risk profile may require a higher level of collateral.

This repayment capacity will be assessed based on the funds or net cash flows generated by the borrower’s businesses or regular sources of income, without relying on guarantors, sureties or assets provided as collateral. These should always be considered when assessing whether to grant the transaction as a secondary and exceptional recovery route if the primary route fails. In general terms, a guarantee is defined as a reinforcing measure added to a credit transaction to mitigate the loss arising from a default on the payment obligation.

Effective guarantees, for these purposes, are collateral and personal guarantees whose validity is demonstrated as mitigating the credit risk and whose valuation is compliant with the internal policies and procedures in place. When assessing the effectiveness of collateral, the analysis should consider, among other factors, the time required to enforce the collateral, the ability to realise the underlying asset and the availability of appropriate documentation that is legally enforceable.

For regulatory capital calculations, Grupo Santander only considers collateral that meets the requirements set out in both the CRR and the EBA guidelines on credit risk mitigation techniques.

Implementation of mitigation techniques follows the minimum requirements established in the guarantee management policy: legal certainty (possibility of legally requiring the settlement of guarantees at all times); the lack of a substantial positive correlation between the counterparty and the value of the collateral; the correct documentation of all guarantees; the availability of the documented methodologies used for each mitigation technique; and appropriate monitoring, traceability and regular monitoring of the items or assets used for the guarantee.

The mitigation techniques can be grouped into the following categories:

Personal guarantees

This type of guarantee grants the creditor a personal right or entitlement affecting the equity of the guarantor. Examples include bonds, guarantees and stand-by letters of credit. Only personal guarantees provided by persons who meet the minimum requirements established by the CRR and the supervisory authority can be recognised in capital calculations.

Hedging through credit derivatives

Credit derivatives are financial instruments that are mainly used to hedge credit risk. By buying protection from a third party, Banco Santander transfers the risk of the issuer of the underlying instrument. Credit derivatives are over-the-counter (OTC) instruments that are traded on non-organised markets. Hedging with credit derivatives is contracted with leading financial institutions, mainly using credit default swaps.

The distribution of personal guarantees and credit derivatives for the corporates, banks, non-financial institutions and sovereigns segments by rating grade is shown below, in compliance with one of the transparency recommendations originally issued by the Basel Committee:

2025 Pillar 3 Disclosures Report    145

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 49.Guarantees by external rating
EUR million						2025
Corporates
External Rating			Exposures in default			Exposures not in default
AAA/AA			—			856
A			—			10,524
BBB			—			16,786
BB			—			4,066
B			—			1,930
Rest			—			414
Unrated			—			145
Total			—			34,722
Banks
External Rating			Exposures in default			Exposures not in default
AAA/AA			—			6,367
A			—			10,216
BBB			—			1,046
BB			—			—
B			—			—
Rest			—			—
Unrated			—			—
Total			—			17,629
Other financial institutions
External Rating			Exposures in default			Exposures not in default
AAA/AA			—			22,481
A			—			9,422
BBB			—			2,419
BB			—			274
B			—			7
Rest			—			—
Unrated			—			—
Total			—			34,603
Sovereign
External Rating			Exposures in default			Exposures not in default
AAA/AA			—			20,607
A			—			21,819
BBB			—			10,451
BB			—			120
B			—			11
Rest			—			—
Unrated			—			—
Total			—			53,007

Collateral

This is collateral pledged on assets (movable or immovable) or rights that are specific and determinate. These are rights that secure performance of the main obligation for the creditor via the attachment of an asset. As a result of this attachment, in the event of default on the secured obligation, the creditor may realise the economic value of the asset through a regulated procedure and collect the proceeds; preference over other creditors may be upheld in this collection method. Collateral may also be classified as follows:

•Real estate guarantees implemented as first charge real estate mortgages. The property can be buildings and parts of finished buildings (homes, offices, commercial premises,

multi-purpose buildings, non multi-purpose buildings and hotels), urban land and land for urban development, and other property (buildings under construction, developments in progress, etc.).

•Pledges on financial instruments (cash deposits, debt instruments).

A very important example of financial collateral is that which is used for the purpose (as with the netting technique) of reducing counterparty credit risk. Collateral consists of instruments with certain economic value and high liquidity that are deposited/transferred by one party in favour of another to guarantee or reduce any counterparty credit risk arising from portfolios of risk-bearing transactions between the two. Transactions backed by collateral are marked to market periodically (usually daily) and the parameters defined in the collateral agreement are applied, obtaining an amount of collateral (usually cash or securities) to be called from, or returned to, the counterparty.

From an estimation standpoint, the collateral adjudication flows are reduced on the basis of a haircut, which reflects the difference between the sale value of the asset and the adjudication value, as well as other aspects such as indirect costs or the effect of the discount factor.

Netting

The concept of netting involves offsetting gains and losses on multiple transactions of the same type under the umbrella of a master agreement such as an ISDA or similar (CSA, OSLA, ISMA, GMRA, etc.).

Market gains and losses on derivative transactions between Santander and a counterparty are offset against one another, so if the counterparty defaults, it owes (or Santander owes, if the net amount is negative) a single net amount, rather than a large number of positive and negative amounts relating to the individual transactions entered into with that counterparty.

An important feature of a master netting agreement is that it entails a single legal obligation, encompassing all the transactions covered by the agreement. This is what makes it possible to offset the risks of all the transactions covered by the agreement with a counterparty.

There are two methodologies for the measurement of exposure: a mark-to-market (MtM) methodology, involving replacement cost in the case of derivatives, plus an add-on for potential future exposure; and a methodology including calculation of exposure using Monte Carlo simulation, which is used in certain regions and for some products. We also calculate capital at risk or unexpected loss, i.e. the loss in economic capital once expected loss is subtracted, net of guarantees and recoveries.

Exposures are recalculated at market close, adjusting all transactions to their new time horizon. Potential future exposure is adjusted and mitigation measures (netting, collateral, etc.) are applied, so that exposures can be checked on a daily basis against the limits approved by senior management. Risk control is performed through an integrated system in real time, enabling the exposure limit available with any counterparty to be known at any time.

146    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 50.Credit risk mitigation techniques - IRB and SA
																								EUR million
						Exposures unsecured			Exposures secured			Exposures secured by personal guarantees			Exposures secured by collateral pledged			Exposures secured by mortgage collateral
			Total IRB exposures (after CCFs)			369,584			401,872			89,401			29,750			282,721
			Total STD exposures			818,569			140,335			15,394			24,736			100,204
			Type of guarantee applied in credit risk mitigation evaluated under standard methodology
			Central governments and central banks			362,971			3,659			3,659			—			—
			Regional governments or local authorities			19,721			843			703			13			126
			Public sector entities			4,651			219			43			54			122
			Multilateral development banks			3,669			—			—			—			—
			International organisations			1,704			—			—			—			—
			Institutions			16,316			2,859			2,539			320			—
			Corporates			89,958			36,499			5,324			5,721			25,455
			of which: SMEs			16,414			3,843			922			2,922			—
			Of which: Specialised Lending			3,668			57			9			10			39
			Retail			214,828			95,519			2,651			18,369			74,499
			of which: SMEs			37,597			4,128			1,961			2,167			—
			Secured by mortgages on immovable property and AUE exposures			6,574			100,295			2,623			2,683			94,989
			Secured by mortgages on residential immovable property - non-BIGR (with collateral)			—			55,464			912			1,307			53,245
			Secured by mortgages on residential immovable property - non-BIGR (unsecured)			—			9,581			1,070			547			7,964
			Secured by mortgages on residential real estate - other - non-BIGR			—			5,633			49			64			5,520
			Secured by mortgages on residential real estate - BIGR			—			10,174			1			5			10,168
			Secured by mortgages on residential real estate - other - BIGR			—			45			—			—			45
			Secured by mortgages on commercial real estate - non-BIGR (secured)			—			10,337			240			296			9,800
			Secured by mortgages on commercial real estate - non-BIGR (unsecured)			—			2,213			121			147			1,944
			Secured by mortgages on commercial real estate - other - non-BIGR			—			1,975			206			127			1,642
			Secured by mortgages on commercial real estate - BIGR			—			4,595			—			109			4,486
			Secured by mortgages on commercial real estate - other - BIGR			—			188			1			12			175
			Acquisition, development and construction (AUE)			6,574			91			23			69			—
			of which: SMEs			19,805			1,040			449			591			—
			Exposures in default			15,755			604			446			158			—
			Subordinated debt exposures			—			—			—			—			—
			Guaranteed bonds			828			—			—			—			—
			Claims on institutions and corporates with a short-term credit assessment			2,045			32			1			31			—
			Collective investments undertakings			549			—			—			—			—
			Transparency approach			548			—			—			—			—
			Mandate-based approach			1			—			—			—			—
			Alternative approach			—			—			—			—			—
			Equity			5,488			—			—			—			—
			Other items			73,510			9			7			1			2
			Type of guarantee applied in credit risk mitigation evaluated under IRB methodology
			IRB methods when neither own LGD estimates nor conversion factors are used			—			—			—			—			—

2025 Pillar 3 Disclosures Report    147

Index Introduction l Capital l Risks l Remuneration l Appendices l

			Central governments or central banks			—			—			—			—			—
			Of which: Regional governments or local authorities			—			—			—			—			—
			Regional governments or local authorities			—			—			—			—			—
			Public sector entities			211			—			—			—			—
			Institutions			11,510			2,182			2,073			80			29
			Companies			230,528			77,202			64,114			7,232			5,855
			Of which: SMEs			6,004			1,166			509			1			656
			Of which: large companies			211,481			70,342			62,308			6,968			1,066
			Specialised lending			33,690			7,806			7,806			—			—
			Acquired collection rights			22,967			14,041			13,561			481			—
			Others			173,871			55,354			42,748			6,752			5,855
			IRB approaches where own LGD estimates and/or conversion factors are used			—			—			—			—			—
			Regional governments or local authorities			1,128			2,223			604			1,619			—
			Public sector entities			116			—			—			—			—
			Corporates			43,596			29,925			16,845			4,084			8,997
			Of which: SMEs			16,907			15,908			7,830			2,348			5,730
			Acquired receivables			5,152			1,727			1,704			(21)			43
			Other			38,444			28,199			15,141			4,104			8,954
			Retail exposures			81,927			290,340			5,765			16,735			267,841
			Of which: Secured by residential property			21,882			267,959			219			22			267,718
			Of which: SMEs			160			1,793			63			9			1,721
			Of which: Non-SMEs			21,722			266,166			156			13			265,996
			Secured by residential property			21,662			266,343			162			6			266,176
			Eligible revolving exposures			20,907			—			—			—			—
			Acquired receivables			1,658			532			527			4			1
			Other retail exposures			37,700			23,465			5,076			16,725			1,664
			Of which: SMEs			10,985			9,404			4,848			2,713			1,843
			Of which: Non-SMEs			26,655			14,238			234			14,005			—
			Collective investment undertakings (CIUs)			567			—			—			—			—
			Transparency approach			567			—			—			—			—

4.7.1. Recognition of credit risk mitigation

Valuation and control processes

The valuation of collateral should always use conservative criteria appropriate to the time horizon of the secured transaction, using the most appropriate processes for each type of collateral to minimise the risk of overvaluation. The time value of the collateral offered, as well as its possible change in nature, especially in the case of rights, or risks of reduction in value, amortisation or disappearance, must be appropriate to the maturity and payment flow of the main transaction. From the point of view of parameter estimation, the collateral allotment flows are discounted on the basis of a haircut, which reflects the difference between the sale value of the asset and the allotment value, as well as other aspects such as indirect costs or the effect of the discount factor.

For collateral, the value of the collateral established at the time of grant must be updated in accordance with minimum frequencies, either by individual valuation or by automated methods. In any case, the following frequency criteria shall be observed depending on the type of collateral:

•Financial collateral shall be valued at least quarterly, taking its fair value as a reference value.

•For movable and immovable collateral, the existence of indications of significant falls in their reference valuations must be verified at least annually or when the thresholds established by the unit are exceeded, which in this case

could trigger an individualised update. In determining whether there are indications of significant falls, factors such as the development of published mortgage market price indices or the opinion of an independent valuator will be taken into account. For transactions classified as doubtful risk, the minimum frequency must be annual.

•More specific review periods, with a higher frequency than normal, may be established for: real estate under construction, collateral securing transactions with a high LTV ratio, or when securing loans with a low credit quality, as defined in the relevant customer monitoring governance for each segment.

148    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

In any case, individualised updates of the value of collateral shall be made in the following cases:

•If the monitoring of the customer's performance reveals any negative symptoms that make it necessary to take urgent measures to secure the customer's credit operations.

•If a decision is taken to initiate a legal claim, or to negotiate a restructuring, with or without granting new credits.

•If it is intended to adjust the credits in an amending way, altering essential elements of the same (amount and term).

•If partial release or substitution of collateral associated with a transaction is sought.

•In guarantees granted through financial securities, where daily value updates and immediate requirement of additional coverage must be made when the thresholds established in the corresponding contract are exceeded. In this type of guarantees, the inclusion of a clause for replenishment or the provision of additional collateral in the event of variations in value below a certain threshold is considered to be an eligibility policy.

•If market conditions or extraordinary events make it advisable for certain types of transactions or when there is a specific regulation that makes it compulsory to do so.

•If transactions that have been in the doubtful risk category for more than 3 years.

•If its required to evaluate the type and complexity of the collateral, e.g. aircraft, ships, factories, machinery, etc.

For loans exceeding EUR 3 million or 5% of an institution's own funds, the valuation on the real estate must be reviewed by an expert valuer at least every 3 years.

Table 51.CR3 - CRM techniques overview: Disclosure of the use of credit risk mitigation techniques
			EUR million
																					2025
						Unsecured carrying amount						Secured carrying amount
															Of which secured by collateral			Of which secured by financial guarantees
																					Of which secured by credit derivatives
						a						b			c			d			e
1			Loans and advances			514,789						717,862			613,556			104,306			1,318
2			Debt securities			182,859						2,623			550			2,073			—
3			Total			697,648						720,485			614,106			106,379			1,318
4			Of which non-performing exposures*			21,595						15,602			13,696			1,906			8
EU-5			Of which defaulted**			20,150						4,264			4,066			198			—
			*Correction of the mapping {F 18.00, r0070+r0191+r0221, c0060} - {F 18.00, r0070+r0191+r0221, c0200+c0210} + ({F 18.00, r0010+r0181+r0211, c0060} - {F 18.00, r0010+r0181+r0211, c0200+c0210})
			**Defaulted information net of provisions

CR3 - CRM techniques overview: Disclosure of the use of credit risk mitigation techniques (31.12.2024)
			EUR million
																					2024
						Unsecured carrying amount						Secured carrying amount
															Of which secured by collateral			Of which secured by financial guarantees
																					Of which secured by credit derivatives
						a						b			c			d			e
1			Loans and advances			543,272						744,171			644,793			99,378			2,391
2			Debt securities			183,967						2,007			30			1,977			—
3			Total			727,239						746,178			644,823			101,355			2,391
4			Of which non-performing exposures			21,377						17,629			15,863			1,766			—
EU-5			Of which defaulted*			20,058						5,562			5,372			189			—
			*Defaulted information net of provisions

Table CR3 breaks down the carrying amount for loans and advances an debt securities by type of collateral and financial guarantees.

2025 Pillar 3 Disclosures Report    149

Index Introduction l Capital l Risks l Remuneration l Appendices l

More than 50% of loans and advances and debt securities are secured by collateral or financial guarantees. More than 85% of the secured exposures are backed by physical (tangible) collateral. Unsecured non-performing exposures account for just over 1% of the portfolio.

Table 52.IRB approach. Credit risk mitigation techniques: credit derivatives and personal guarantees
															EUR million
			2025						2024
Original hedged exposure by collateral type and exposure category			Financial guarantees			Personal guarantees			Financial Guarantees			Personal guarantees
IRB Approach
Central administrations and banks			—			—			—			—
Institutions			85			1,988			85			2,345
Corporates			4,703			76,918			8,223			67,509
Retail			—			5,765			—			7,463
Total			4,788			84,671			8,308			77,317

The following table shows the impact of the credit derivatives used as credit mitigation techniques in RWA:

Table 53.CR7 - IRB approach - Effect on the RWEAs of credit derivatives used as CRM techniques
															EUR million
									2025
						Pre-credit derivatives RWAs			Actual RWAs
						a			b
1			Central governments and central banks - F-IRB			—			—
EU 1a			Regional governments and local authorities -F-IRB			—			—
EU 1b			Public sector entities - F-IRB			124			124
2			Central governments and central banks - A-IRB			—			—
EU 2a			Regional governments and local authorities A-IRB			949			949
EU 2b			Public sector entities A-IRB			97			97
3			Institutions - FIRB			1,814			2,001
5			Corporates - F-IRB			65,610			65,857
EU 5a			Corporates - General			43,916			45,011
EU 5b			Corporates - Specialised lending			14,762			13,847
EU 5c			Corporates - Purchased receivables			6,933			6,998
6			Corporates - A-IRB			42,010			41,666
EU 6a			Corporates - General			36,648			36,380
EU 6b			Corporates - Specialised lending			—			—
EU 6c			Corporates - Purchased receivables			5,362			5,286
EU 8a			Retail - A-IRB			70,943			71,324
9			Retail - Qualifying revolving (QRRE)			4,460			4,460
10			Retail - Secured by residential immovable property			40,294			40,293
EU10a			Retail - Purchased receivables			1,287			1,267
EU10b			Retail - Other retail exposures			24,903			25,305
17			Exposures under F-IRB			67,549			67,982
18			Exposures under A-IRB			114,000			115,122
19			Total exposures			181,549			183,104
			Does not include CCPs

150    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

In the calculation of regulatory capital for exposures under the AIRB approach, the effects of credit risk mitigation of hedges are recognised through the credit risk parameters, depending on the technique to be used depending on the type of collateral involved, real or personal. This mitigation process will be carried out provided that the collateral has been tested for validity and is considered eligible for application.

In relation to personal guarantees, the substitution method is applied so that, for the exposure covered by the personal guarantee, the PD and LGD of the holder are substituted for those of the guarantor, provided that the resulting risk-weighted assets and the expected loss are lower than those estimated with the PD and LGD of the holder. Similarly, if the guarantor belongs to a standardised portfolio, the risk-weighted assets are directly substituted for those of the guarantor calculated under the standardized approach.

In relation to collateral, in general, its effect is reflected in the final value of the estimated LGD. For this purpose, potentially significant factors such as the type of collateral, the type of product or, in the case of mortgage collateral, the LTV. This will be done provided that the warranties have been checked for validity and are deemed to be enforceable.

Between June and December, the most significant changes are observed in the following segments:

•PSEs AIRB, where RWA growth is driven by an increase in both EAD and average RW in this segment. Santander Totta is the only entity reporting this segment.

•Institutions FIRB, where the decrease is primarily explained by a reduction in EAD at Santander Spain.

•Specialised lending, where RWAs increase in line with EAD, with Santander Spain and the United Kingdom being the main contributors to this EAD growth.

2025 Pillar 3 Disclosures Report    151

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 54.CR7-A - IRB approach - Disclosure of the extent of the use of CRM techniques
																																																												EUR million
						2025
												Credit risk Mitigation techniques																																							Credit risk Mitigation methods in the calculation of RWEAs
												Funded credit Protection (FCP)																														Unfunded credit Protection (UFCP)									RWEA without substitution effects (reduction effects only)			RWEA with substitution effects (both reduction and substitution effects)
			A-IRB			Total exposures						Part of exposures covered by Financial Collaterals (%)			Part of exposures covered by Other eligible collaterals (%)												Part of exposures covered by Other funded credit protection (%)															Part of exposures covered by Guarantees (%)			Part of exposures covered by Credit Derivatives (%)
																		Part of exposures covered by Immovable property Collaterals (%)			Part of exposures covered by Receivables (%)			Part of exposures covered by Other physical collateral (%)						Part of exposures covered by Cash on deposit (%)			Part of exposures covered by Life insurance policies (%)			Part of exposures covered by Instruments held by a third party (%)
						a						b			c			d			e			f			g			h			i			j						k			l						m			n
1			Central governments and central banks			—						—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%				—		%	—		%				—			—
2			Regional governments and local authorities			2,571						—		%	63.00		%	—		%	—		%	63.00		%	—		%	—		%	—		%	—		%				—		%	—		%				949			949
3			Public sector entities			99						—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%				—		%	—		%				97			97
5			Corporates			53,891						—			—			—			—			—			—			—			—			—						—			—						42,010			41,666
5.1			Corporates - General			48,035						4.40		%	23.00		%	18.60		%	0.20		%	4.10		%	—		%	—		%	—		%	—		%				—		%	—		%				36,648			36,380
5.2			Corporates - Specialised lending			—						—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%				—		%	—		%				—			—
5.3			Corporates - Purchased Receivables			5,855						—			—			—			—			—			—			—			—			—						—			—						5,362			5,286
6			Retail			348,211						—			1			1			—			—			—			—			—			—						—			—						70,943			71,324
6.1			Retail - Qualifying revolving			10,831						—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%				—		%	—		%				4,460			4,460
6.2			Retail - Secured by residential immovable property			279,652						—		%	95.20		%	95.20		%	—		%	—		%	—		%	—		%	—		%	—		%				—		%	—		%				40,294			40,293
6.3			Retail - Purchased Receivables			1,864						0.20		%	0.10		%	0.10		%	0.10		%	—		%	—		%	—		%	—		%	—		%				—		%	—		%				1,286			1,267
6.4			Retail - Other retail exposures			55,864						1.50		%	31.50		%	3.00		%	0.10		%	28.40		%	—		%	—		%	—		%	—		%				—		%	—		%				24,903			25,305
7			Total			405,339						0.70		%	73.10		%	68.30		%	—		%	4.80		%	—		%	—		%	—		%	—		%				—		%	—		%				114,000			115,122

152    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 54.CR7-A - IRB approach - Disclosure of the extent of the use of CRM techniques
			EUR million
												Credit risk Mitigation techniques																																							Credit risk Mitigation methods in the calculation of RWEAs
												Funded credit Protection (FCP)																														Unfunded credit Protection (UFCP)									RWEA without substitution effects (reduction effects only)			RWEA with substitution effects (both reduction and substitution effects)
			F-IRB			Total exposures						Part of exposures covered by Financial Collaterals (%)			Part of exposures covered by Other eligible collaterals (%)												Part of exposures covered by Other funded credit protection (%)															Part of exposures covered by Guarantees (%)			Part of exposures covered by Credit Derivatives (%)
																		Part of exposures covered by Immovable property Collaterals (%)			Part of exposures covered by Receivables (%)			Part of exposures covered by Other physical collateral (%)						Part of exposures covered by Cash on deposit (%)			Part of exposures covered by Life insurance policies (%)			Part of exposures covered by Instruments held by a third party (%)
						a						b			c			d			e			f			g			h			i			j						k			l						m			n
1			Central governments and central banks			0						—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%				—		%	—		%				0			0
2			Regional governments and local authorities			—						—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%				—		%	—		%				0			0
3			Public sector entities			211						—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%				—		%	—		%				124			124
4			Institutions			7,853						1.00		%	0.40		%	0.40		%	—		%	—		%	—		%	—		%	—		%	—		%				10.63		%	0.46		%				2,001			2,001
5			Corporates			159,639						4.60		%	3.90		%	3.70		%	0.20		%	—		%	0.10		%	—		%	0.10		%	—		%				34.05		%	2.67		%				65,857			65,857
5.1			Corporates - General			103,617						6.50		%	6.00		%	5.70		%	0.30		%	—		%	—		%	—		%	—		%	—		%				32.63		%	3.96		%				45,011			45,011
5.2			Corporates - Specialised lending			21,163						—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%				34.05		%	0.02		%				13,847			13,847
5.3			Corporates - Purchased receivables			34,859						1.80		%	—		%	—		%	—		%	—		%	0.46		%	—		%	0.46		%	—		%				—		%	38.90		%				6,998			6,998
6			Total			167,702						4.50		%	3.70		%	3.50		%	0.20		%	—		%	0.10		%	—		%	0.10		%	—		%				31.77		%	2.45		%				67,982			67,982

2025 Pillar 3 Disclosures Report    153

Index Introduction l Capital l Risks l Remuneration l Appendices l

4.8. Financial asset impairment

IFRS 9 introduced a substantial change in the approach to calculating impairment provisions for credit risk exposures, moving from an incurred loss model to an expected loss model. Under this new approach, provisions are recognised from the moment a transaction is originated, since credit risk exists from that moment and not only when defaults occur.

This change required a review of the models and methodologies used to estimate expected loss for customers and portfolios, incorporating the expected evolution of the economy and the residual life of different transactions.

The methodology to quantify expected credit losses – and therefore impairment provisions – is based on an unbiased, probability-weighted estimate of up to five future macroeconomic scenarios that could affect the ability to collect contractual cash flows. These scenarios take into account the time value of money, relevant information about past events, current conditions and projections of significant macroeconomic factors, such as GDP, house prices, unemployment rate and interest rates, among others.

The parameters used by the Group to calculate impairment provisions (mainly EAD, PD, LGD and discount rate) build on our internal model infrastructure and the experience gained in regulatory and management environments. However, rather than simply adapting existing models, these parameters are specifically designed, updated and validated to comply with IFRS 9 requirements.

IFRS 9 classifies transactions based on how credit risk has evolved since origination to the analysis date, so we can determine both their accounting treatment and pricing. Transactions with different probabilities of default must carry different interest rates or margins that cover their expected loss.

If a transaction has undergone a significant increase in credit risk since origination, the interest rate initially applied no longer covers its potential risk, so it requires a higher level of provisions. Under the standard, transactions fall into three groups or stages:

•Stage 1 includes assets whose current credit risk has not increased relative to origination or initial recognition. Provisions are calculated to cover expected credit losses from possible defaults over the next 12 months.

•Stage 2 includes assets that have not yet incurred credit losses but have shown a significant increase in credit risk since origination or initial recognition. Impairment provisions must cover potential loss over the lifetime of the exposure, during which losses may materialise.

•Stage 3 includes assets where there is evidence of credit deterioration that will eventually materialise as credit losses. Provisions must cover potential loss over the lifetime of the exposure.

For further details on financial asset impairment, see the 'Risk management and compliance' chapter of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

4.9. Backtesting of PD

The backtesting of the PD accesses the suitability of regulatory PDs by comparing them with the Observed Default Frequencies (ODFs) for both the most recent period and the last five years.

This comparison complies with the quantitative approach required by the European Banking Authority (EBA) in its Guidelines on disclosure requirements under part eight of the capital requirements regulation (EU) No 575/2013, of August 2017.

This proposes reporting information for backtesting the PD in accordance with Template 24: - Internal ratings-based approach (IRB) - Back-testing of PD per exposure class.

For further details on PD backtesting (in accordance with the format of table CR9), see tables 55 to 58. A summary of the conclusions from the results obtained can be found below:

Regulatory PDs are consistent with observed historical default rates, although the following relevant facts can be highlighted:

•In general, the PDs are higher than observed default rates, both in the last year and from a historical perspective. This is a reflection of: 1) the conservatism adopted in the estimation of the parameters and 2) the progressive reflection of a better economic situation once the recession of 2008 and the COVID period have been overcome. These combined tend to reduce the observed default frequencies.

•Noteworthy is the good performance of the retail mortgage portfolios, both non-SME and residential, and credit cards, where the differences between the model's PDs and levels of NPLs are more notable.

•In the case of the portfolios of Large Corporates and Financial Institutions, where point (f) of article 180 (1) of the CRR is being applied for the estimation of PD, it is also noted a good performance with regulatory PDs higher than the observed default rates, except in some ranges where low volumes affect the observed values.

For more information on PD backtesting results, see table 55, table 56, table 57 and table 58.

154    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 55.CR9 - AIRB approach - Back-testing of PD per exposure class (fixed PD scale)
EUR million
																					2025
Exposure class			PD scale			Number of obligors at the end of the year						Observed average default rate (%)			Exposures weighted average PD (%)			Average PD (%)			Average historical annual default rate (%)
									of which: number of obligors which defaulted during the year
a			b			c			d			e			f			g			h
Regional Governments
			0.00 to <0.15			—			—			—		%	—		%	—		%	—		%
			0.00 to <0.10			—			—			—		%	—		%	—		%	—		%
			0.10 to <0.15			—			—			—		%	—		%	—		%	—		%
			0.15 to <0.25			—			—			—		%	—		%	—		%	—		%
			0.25 to <0.50			—			—			—		%	0.49		%	—		%	—		%
			0.50 to <0.75			6			—			—		%	0.69		%	0.69		%	—		%
			0.75 to <2.50			16			—			—		%	0.97		%	0.90		%	1.43		%
			0.75 to <1.75			16			—			—		%	0.96		%	0.90		%	1.43		%
			1.75 to <2.5			—			—			—		%	2.44		%	—		%	—		%
			2.50 to <10.00			11			—			—		%	3.26		%	2.70		%	—		%
			2.5 to <5			11			—			—		%	3.24		%	2.70		%	—		%
			5 to <10			—			—			—		%	6.08		%	—		%	—		%
			10.00 to <100.00			—			—			—		%	43.86		%	—		%	—		%
			10 to <20			—			—			—		%	—			—		%	—		%
			20 to <30			—			—			—		%	—			—		%	—		%
			30.00 to <100.00			—			—			—		%	43.86		%	—		%	—		%
			100.00 (Default)			—			—			—		%	100.00		%	—		%	100.00		%

2025 Pillar 3 Disclosures Report    155

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 55.CR9 - AIRB approach - Back-testing of PD per exposure class (fixed PD scale)
EUR million
																					2025
Exposure class			PD scale			Number of obligors at the end of the year						Observed average default rate (%)			Exposures weighted average PD (%)			Average PD (%)			Average historical annual default rate (%)
									of which: number of obligors which defaulted during the year
a			b			c			d			e			f			g			h
Corporates - Other
			0.00 to <0.15			108			—			—		%	0.11		%	0.10		%	0.20		%
			0.00 to <0.10			27			—			—		%	0.07		%	0.05		%	0.30		%
			0.10 to <0.15			81			—			—		%	0.11		%	0.11		%	0.04		%
			0.15 to <0.25			1,682			5			0.30		%	0.21		%	0.20		%	0.36		%
			0.25 to <0.50			7,103			13			0.18		%	0.38		%	0.39		%	0.33		%
			0.50 to <0.75			10,126			39			0.39		%	0.60		%	0.62		%	0.50		%
			0.75 to <2.50			20,937			233			1.11		%	1.50		%	1.57		%	1.04		%
			0.75 to <1.75			13,980			124			0.89		%	1.24		%	1.27		%	0.87		%
			1.75 to <2.5			6,957			109			1.57		%	2.17		%	2.17		%	1.37		%
			2.50 to <10.00			10,014			493			4.92		%	4.44		%	4.71		%	5.15		%
			2.5 to <5			5,570			130			2.33		%	3.54		%	3.35		%	2.58		%
			5 to <10			4,444			363			8.17		%	6.15		%	6.41		%	8.69		%
			10.00 to <100.00			3,546			360			10.15		%	23.83		%	28.13		%	18.57		%
			10 to <20			1,293			188			14.54		%	13.48		%	12.94		%	20.50		%
			20 to <30			417			30			7.19		%	24.78		%	25.23		%	14.46		%
			30.00 to <100.00			1,836			142			7.73		%	41.62		%	39.48		%	19.60		%
			100.00 (Default)			4,477			4,477			100.00		%	100.00		%	100.00		%	100.00		%
Memo - Large Corp
			0.00 to <0.15			51			—			—		%	—		%	0.11		%	—		%
			0.00 to <0.10			—			—			—		%	—		%	—		%	—		%
			0.10 to <0.15			51			—			—		%	—		%	0.11		%	—		%
			0.15 to <0.25			101			—			—		%	—		%	0.21		%	0.78		%
			0.25 to <0.50			412			1			0.24		%	—		%	0.35		%	0.08		%
			0.50 to <0.75			348			2			0.57		%	—		%	0.59		%	0.24		%
			0.75 to <2.50			620			18			2.90		%	—		%	1.44		%	0.58		%
			0.75 to <1.75			449			11			2.45		%	—		%	1.17		%	0.49		%
			1.75 to <2.5			171			7			4.09		%	—		%	2.17		%	0.82		%
			2.50 to <10.00			176			3			1.70		%	—		%	4.03		%	0.89		%
			2.5 to <5			125			1			0.80		%	—		%	3.17		%	0.72		%
			5 to <10			51			2			3.92		%	—		%	6.15		%	0.78		%
			10.00 to <100.00			113			6			5.31		%	—		%	31.90		%	22.64		%
			10 to <20			20			2			10.00		%	—		%	10.73		%	22.00		%
			20 to <30			4			—			—		%	—		%	25.66		%	25.00		%
			30.00 to <100.00			89			4			4.49		%	—		%	36.94		%	1.50		%
			100.00 (Default)			22			22			100.00		%	—		%	100.00		%	100.00		%

156    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 55.CR9 - AIRB approach - Back-testing of PD per exposure class (fixed PD scale)
EUR million
																					2025
Exposure class			PD scale			Number of obligors at the end of the year						Observed average default rate (%)			Exposures weighted average PD (%)			Average PD (%)			Average historical annual default rate (%)
									of which: number of obligors which defaulted during the year
a			b			c			d			e			f			g			h
Memo - SMEs
			0.00 to <0.15			38			—			—		%	0.10		%	0.09		%	0.31		%
			0.00 to <0.10			18			—			—		%	0.07		%	0.05		%	0.51		%
			0.10 to <0.15			20			—			—		%	0.11		%	0.12		%	0.07		%
			0.15 to <0.25			1,086			3			0.28		%	0.21		%	0.20		%	0.40		%
			0.25 to <0.50			4,389			8			0.18		%	0.37		%	0.40		%	0.31		%
			0.50 to <0.75			6,976			28			0.40		%	0.62		%	0.62		%	0.61		%
			0.75 to <2.50			13,275			169			1.27		%	1.54		%	1.58		%	1.12		%
			0.75 to <1.75			9,037			96			1.06		%	1.32		%	1.30		%	0.94		%
			1.75 to <2.5			4,238			73			1.72		%	2.16		%	2.17		%	1.46		%
			2.50 to <10.00			6,873			406			5.91		%	4.52		%	4.83		%	5.89		%
			2.5 to <5			3,660			100			2.73		%	3.45		%	3.37		%	2.83		%
			5 to <10			3,213			306			9.52		%	6.25		%	6.50		%	9.15		%
			10.00 to <100.00			1,687			230			13.63		%	26.83		%	26.04		%	21.55		%
			10 to <20			776			135			17.40		%	13.86		%	13.76		%	22.27		%
			20 to <30			270			22			8.15		%	24.78		%	25.06		%	21.43		%
			30.00 to <100.00			641			73			11.39		%	45.52		%	41.33		%	21.21		%
			100.00 (Default)			2,919			2,919			100.00		%	100.00		%	100.00		%	100.00		%
Certain figures contained in this section 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 given for that column or row.

2025 Pillar 3 Disclosures Report    157

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 56.CR9 - AIRB approach Retail - Back-testing of PD per exposure class (fixed PD scale)
EUR million
																					2025
Exposure class			PD scale			Number of obligors at the end of the year						Observed average default rate (%)			Exposures weighted average PD (%)			Average PD (%)			Average historical annual default rate (%)
									of which: number of obligors which defaulted during the year
a			b			c			d			e			f			g			h
Retail - Sec. Residencial
			0.00 to <0.15			470,557			200			0.04		%	0.09		%	0.09		%	0.05		%
			0.00 to <0.10			341,072			122			0.04		%	0.07		%	0.07		%	0.05		%
			0.10 to <0.15			129,485			78			0.06		%	0.13		%	0.12		%	0.08		%
			0.15 to <0.25			195,120			156			0.08		%	0.22		%	0.22		%	0.11		%
			0.25 to <0.50			461,003			555			0.12		%	0.37		%	0.36		%	0.17		%
			0.50 to <0.75			548,762			963			0.18		%	0.61		%	0.60		%	0.22		%
			0.75 to <2.50			318,354			1,875			0.59		%	1.38		%	1.36		%	0.48		%
			0.75 to <1.75			241,515			1,231			0.51		%	1.16		%	1.15		%	0.42		%
			1.75 to <2.5			76,839			644			0.84		%	2.01		%	2.04		%	0.64		%
			2.50 to <10.00			124,969			2,409			1.93		%	4.09		%	4.46		%	1.52		%
			2.5 to <5			78,900			1,257			1.59		%	3.40		%	3.36		%	1.20		%
			5 to <10			46,069			1,152			2.50		%	6.43		%	6.34		%	2.08		%
			10.00 to <100.00			50,581			7,596			15.02		%	32.78		%	28.65		%	12.54		%
			10 to <20			23,718			1,503			6.34		%	14.06		%	13.40		%	5.51		%
			20 to <30			10,426			1,404			13.47		%	24.75		%	25.33		%	11.53		%
			30.00 to <100.00			16,437			4,689			28.53		%	55.88		%	52.76		%	23.92		%
			100.00 (Default)			44,043			44,043			100.00		%	100.00		%	100.00		%	100.00		%
Qualifying Revolving
			0.00 to <0.15			3,875,130			2,455			0.06		%	0.09		%	0.09		%	0.04		%
			0.00 to <0.10			2,661,448			505			0.02		%	0.07		%	0.08		%	0.02		%
			0.10 to <0.15			1,213,682			1,950			0.16		%	0.11		%	0.12		%	0.08		%
			0.15 to <0.25			606,050			1,332			0.22		%	0.20		%	0.21		%	0.10		%
			0.25 to <0.50			5,906,088			4,378			0.07		%	0.35		%	0.31		%	0.07		%
			0.50 to <0.75			477,400			1,768			0.37		%	0.63		%	0.64		%	0.26		%
			0.75 to <2.50			2,563,116			14,906			0.58		%	1.29		%	1.34		%	0.43		%
			0.75 to <1.75			2,077,556			10,334			0.50		%	1.19		%	1.16		%	0.36		%
			1.75 to <2.5			485,560			4,572			0.94		%	2.21		%	2.10		%	0.74		%
			2.50 to <10.00			1,961,454			33,588			1.71		%	4.66		%	4.78		%	1.61		%
			2.5 to <5			1,204,897			16,261			1.35		%	3.41		%	3.49		%	1.18		%
			5 to <10			756,557			17,327			2.29		%	6.75		%	6.84		%	2.22		%
			10.00 to <100.00			782,305			88,733			11.34		%	28.41		%	22.63		%	10.72		%
			10 to <20			424,845			24,262			5.71		%	13.91		%	12.94		%	5.36		%
			20 to <30			217,791			22,180			10.18		%	24.31		%	22.77		%	9.67		%
			30.00 to <100.00			139,669			42,291			30.28		%	61.44		%	51.89		%	28.58		%
			100.00 (Default)			176,549			176,549			100.00		%	100.00		%	100.00		%	100.00		%

158    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 56.CR9 - AIRB approach Retail - Back-testing of PD per exposure class (fixed PD scale)
EUR million
																					2025
Exposure class			PD scale			Number of obligors at the end of the year						Observed average default rate (%)			Exposures weighted average PD (%)			Average PD (%)			Average historical annual default rate (%)
									of which: number of obligors which defaulted during the year
a			b			c			d			e			f			g			h
Retail - Other
			0.00 to <0.15			2,406,290			5,879			0.24		%	0.09		%	0.09		%	0.10		%
			0.00 to <0.10			1,761,517			947			0.05		%	0.06		%	0.07		%	0.05		%
			0.10 to <0.15			644,773			4,932			0.76		%	0.11		%	0.13		%	0.27		%
			0.15 to <0.25			681,349			1,197			0.18		%	0.21		%	0.20		%	0.15		%
			0.25 to <0.50			1,008,513			2,888			0.29		%	0.38		%	0.38		%	0.26		%
			0.50 to <0.75			1,023,017			5,477			0.54		%	0.64		%	0.61		%	0.44		%
			0.75 to <2.50			2,198,409			24,739			1.13		%	1.45		%	1.38		%	0.99		%
			0.75 to <1.75			1,680,481			14,238			0.85		%	1.22		%	1.14		%	0.78		%
			1.75 to <2.5			517,928			10,501			2.03		%	2.15		%	2.15		%	1.65		%
			2.50 to <10.00			1,340,270			49,646			3.70		%	4.56		%	4.97		%	3.57		%
			2.5 to <5			709,054			20,486			2.89		%	3.51		%	3.40		%	2.69		%
			5 to <10			631,216			29,160			4.62		%	6.79		%	6.74		%	5.57		%
			10.00 to <100.00			463,982			104,584			22.54		%	32.31		%	35.15		%	23.19		%
			10 to <20			164,660			19,390			11.78		%	14.55		%	14.46		%	10.65		%
			20 to <30			113,538			26,232			23.10		%	22.13		%	23.44		%	24.45		%
			30.00 to <100.00			185,784			58,962			31.74		%	56.20		%	60.65		%	36.67		%
			100.00 (Default)			382,693			382,693			100.00		%	100.00		%	100.00		%	100.00		%
Retail - Memo - Sec SME
			0.00 to <0.15			1,378			—			—		%	0.10		%	0.10		%	0.06		%
			0.00 to <0.10			268			—			—		%	0.07		%	0.07		%	0.01		%
			0.10 to <0.15			1,110			—			—		%	0.11		%	0.11		%	0.06		%
			0.15 to <0.25			1,102			2			0.18		%	0.20		%	0.20		%	0.17		%
			0.25 to <0.50			1,810			14			0.77		%	0.40		%	0.40		%	0.57		%
			0.50 to <0.75			322			—			—		%	0.62		%	0.63		%	0.52		%
			0.75 to <2.50			2,659			39			1.47		%	1.40		%	1.29		%	1.65		%
			0.75 to <1.75			2,277			28			1.23		%	1.22		%	1.14		%	1.32		%
			1.75 to <2.5			382			11			2.88		%	2.22		%	2.19		%	3.92		%
			2.50 to <10.00			964			86			8.92		%	4.74		%	4.52		%	8.06		%
			2.5 to <5			629			43			6.84		%	3.40		%	3.51		%	5.89		%
			5 to <10			335			43			12.84		%	6.45		%	6.43		%	11.49		%
			10.00 to <100.00			446			123			27.58		%	27.10		%	27.15		%	23.60		%
			10 to <20			250			60			24.00		%	13.34		%	13.08		%	22.58		%
			20 to <30			24			7			29.17		%	26.02		%	26.29		%	24.18		%
			30.00 to <100.00			172			56			32.56		%	47.14		%	47.72		%	26.16		%
			100.00 (Default)			1,636			1,636			100.00		%	100.00		%	100.00		%	100.00		%

2025 Pillar 3 Disclosures Report    159

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 56.CR9 - AIRB approach Retail - Back-testing of PD per exposure class (fixed PD scale)
EUR million
																					2025
Exposure class			PD scale			Number of obligors at the end of the year						Observed average default rate (%)			Exposures weighted average PD (%)			Average PD (%)			Average historical annual default rate (%)
									of which: number of obligors which defaulted during the year
a			b			c			d			e			f			g			h
Retail - Memo - Sec nonSME
			0.00 to <0.15			432,825			188			0.04		%	0.09		%	0.09		%	0.06		%
			0.00 to <0.10			307,999			115			0.04		%	0.07		%	0.07		%	0.05		%
			0.10 to <0.15			124,826			73			0.06		%	0.13		%	0.12		%	0.08		%
			0.15 to <0.25			175,828			142			0.08		%	0.22		%	0.22		%	0.11		%
			0.25 to <0.50			444,032			511			0.12		%	0.37		%	0.36		%	0.16		%
			0.50 to <0.75			540,778			947			0.18		%	0.61		%	0.60		%	0.22		%
			0.75 to <2.50			306,272			1,763			0.58		%	1.38		%	1.37		%	0.46		%
			0.75 to <1.75			231,250			1,153			0.50		%	1.16		%	1.15		%	0.41		%
			1.75 to <2.5			75,022			610			0.81		%	2.01		%	2.04		%	0.62		%
			2.50 to <10.00			121,123			2,244			1.85		%	4.09		%	4.46		%	1.47		%
			2.5 to <5			76,852			1,189			1.55		%	3.40		%	3.37		%	1.17		%
			5 to <10			44,271			1,055			2.38		%	6.43		%	6.34		%	1.98		%
			10.00 to <100.00			48,403			7,209			14.89		%	32.79		%	28.65		%	12.48		%
			10 to <20			22,724			1,365			6.01		%	14.09		%	13.39		%	5.25		%
			20 to <30			9,926			1,341			13.51		%	24.76		%	25.34		%	11.48		%
			30.00 to <100.00			15,753			4,503			28.59		%	55.99		%	52.76		%	24.03		%
			100.00 (Default)			40,784			40,784			100.00		%	100.00		%	100.00		%	100.00		%
Retail - Memo - Other - SME
			0.00 to <0.15			88,237			352			0.40		%	0.10		%	0.08		%	0.21		%
			0.00 to <0.10			54,013			102			0.19		%	0.06		%	0.05		%	0.09		%
			0.10 to <0.15			34,224			250			0.73		%	0.11		%	0.12		%	0.46		%
			0.15 to <0.25			107,076			380			0.35		%	0.21		%	0.20		%	0.31		%
			0.25 to <0.50			109,094			777			0.71		%	0.38		%	0.39		%	0.50		%
			0.50 to <0.75			138,298			1,118			0.81		%	0.65		%	0.63		%	0.75		%
			0.75 to <2.50			384,802			5,882			1.53		%	1.49		%	1.45		%	1.32		%
			0.75 to <1.75			270,665			3,358			1.24		%	1.21		%	1.16		%	1.12		%
			1.75 to <2.5			114,137			2,524			2.21		%	2.15		%	2.14		%	1.80		%
			2.50 to <10.00			253,585			13,118			5.17		%	4.44		%	4.51		%	4.68		%
			2.5 to <5			173,106			6,297			3.64		%	3.57		%	3.50		%	3.30		%
			5 to <10			80,479			6,821			8.48		%	6.56		%	6.67		%	8.48		%
			10.00 to <100.00			63,748			18,276			28.67		%	32.42		%	32.46		%	22.70		%
			10 to <20			22,115			4,198			18.98		%	14.37		%	14.40		%	11.93		%
			20 to <30			14,370			2,951			20.54		%	23.77		%	24.00		%	21.26		%
			30.00 to <100.00			27,263			11,127			40.81		%	51.38		%	51.56		%	42.97		%
			100.00 (Default)			88,295			88,295			100.00		%	100.00		%	100.00		%	100.00		%

160    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 56.CR9 - AIRB approach Retail - Back-testing of PD per exposure class (fixed PD scale)
EUR million
																					2025
Exposure class			PD scale			Number of obligors at the end of the year						Observed average default rate (%)			Exposures weighted average PD (%)			Average PD (%)			Average historical annual default rate (%)
									of which: number of obligors which defaulted during the year
a			b			c			d			e			f			g			h
Retail - Memo - Other - nonSME
			0.00 to <0.15			2,318,034			5,527			0.24		%	0.09		%	0.09		%	0.09		%
			0.00 to <0.10			1,707,485			845			0.05		%	0.06		%	0.07		%	0.05		%
			0.10 to <0.15			610,549			4,682			0.77		%	0.10		%	0.13		%	0.20		%
			0.15 to <0.25			574,267			817			0.14		%	0.21		%	0.20		%	0.12		%
			0.25 to <0.50			898,887			2,111			0.23		%	0.38		%	0.38		%	0.23		%
			0.50 to <0.75			884,615			4,357			0.49		%	0.64		%	0.60		%	0.40		%
			0.75 to <2.50			1,812,902			18,853			1.04		%	1.44		%	1.36		%	0.89		%
			0.75 to <1.75			1,409,237			10,877			0.77		%	1.22		%	1.13		%	0.69		%
			1.75 to <2.5			403,665			7,976			1.98		%	2.14		%	2.16		%	1.62		%
			2.50 to <10.00			1,085,592			36,486			3.36		%	4.62		%	5.10		%	3.16		%
			2.5 to <5			535,014			14,157			2.65		%	3.48		%	3.38		%	2.42		%
			5 to <10			550,578			22,329			4.06		%	6.89		%	6.78		%	4.95		%
			10.00 to <100.00			400,127			86,295			21.57		%	32.40		%	35.94		%	23.45		%
			10 to <20			142,514			15,188			10.66		%	14.61		%	14.48		%	11.10		%
			20 to <30			99,144			23,279			23.48		%	21.74		%	23.32		%	24.24		%
			30.00 to <100.00			158,469			47,828			30.18		%	57.54		%	63.14		%	35.66		%
			100.00 (Default)			293,907			293,907			100.00		%	100.00		%	100.00		%	100.00		%
Certain figures contained in this section 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 given for that column or row.

2025 Pillar 3 Disclosures Report    161

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 57.CR9 - FIRB approach - Back-testing of PD per exposure class (fixed PD scale)
EUR million
																					2025
Exposure class			PD scale			Number of obligors at the end of the year						Observed average default rate (%)			Exposures weighted average PD (%)			Average PD (%)			Average historical annual default rate (%)
									of which: number of obligors which defaulted during the year
a			b			c			d			e			f			g			h
Corporates - Other
			0.00 to <0.15			109			—			—		%	0.08		%	0.08		%	—		%
			0.00 to <0.10			109			—			—		%	0.06		%	0.08		%	—		%
			0.10 to <0.15			0			—			—		%	0.13		%	—		%	—		%
			0.15 to <0.25			19			—			—		%	0.21		%	0.16		%	—		%
			0.25 to <0.50			1,411			1			0.07		%	0.37		%	0.44		%	0.01		%
			0.50 to <0.75			494			—			—		%	0.59		%	0.58		%	0.04		%
			0.75 to <2.50			2,272			4			0.18		%	1.24		%	1.54		%	0.19		%
			0.75 to <1.75			1,935			4			0.21		%	1.13		%	1.45		%	0.19		%
			1.75 to <2.5			337			—			—		%	2.18		%	2.09		%	0.13		%
			2.50 to <10.00			1,637			17			1.04		%	4.63		%	5.70		%	0.96		%
			2.5 to <5			228			—			—		%	3.86		%	3.98		%	0.29		%
			5 to <10			1,409			17			1.21		%	6.31		%	5.97		%	0.80		%
			10.00 to <100.00			602			18			2.99		%	23.80		%	26.26		%	2.91		%
			10 to <20			75			1			1.33		%	16.63		%	17.58		%	2.23		%
			20 to <30			377			15			3.98		%	22.10		%	22.13		%	1.75		%
			30.00 to <100.00			150			2			1.33		%	34.51		%	40.98		%	0.42		%
			100.00 (Default)			149			149			100.00		%	100.00		%	100.00		%	100.00		%
Memo - Large Corp
			0.00 to <0.15			97			—			—		%	0.08		%	0.08		%	—		%
			0.00 to <0.10			97			—			—		%	0.06		%	0.08		%	—		%
			0.10 to <0.15			0			—			—		%	0.13		%	—		%	—		%
			0.15 to <0.25			15			—			—		%	0.21		%	0.16		%	—		%
			0.25 to <0.50			914			—			—		%	0.37		%	0.44		%	—		%
			0.50 to <0.75			268			—			—		%	0.59		%	0.60		%	—		%
			0.75 to <2.50			675			—			—		%	1.25		%	1.61		%	0.05		%
			0.75 to <1.75			600			—			—		%	1.14		%	1.53		%	—		%
			1.75 to <2.5			75			—			—		%	2.18		%	2.29		%	0.56		%
			2.50 to <10.00			425			—			—		%	4.43		%	5.77		%	0.36		%
			2.5 to <5			37			—			—		%	3.92		%	3.76		%	0.32		%
			5 to <10			388			—			—		%	6.58		%	5.97		%	0.07		%
			10.00 to <100.00			142			1			0.70		%	24.02		%	25.23		%	1.71		%
			10 to <20			16			—			—		%	16.32		%	17.36		%	1.41		%
			20 to <30			105			1			0.95		%	22.11		%	22.08		%	0.48		%
			30.00 to <100.00			21			—			—		%	34.20		%	46.93		%	—		%
			100.00 (Default)			23			23			100.00		%	100.00		%	100.00		%	100.00		%

162    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 57.CR9 - FIRB approach - Back-testing of PD per exposure class (fixed PD scale)
EUR million
																					2025
Exposure class			PD scale			Number of obligors at the end of the year						Observed average default rate (%)			Exposures weighted average PD (%)			Average PD (%)			Average historical annual default rate (%)
									of which: number of obligors which defaulted during the year
a			b			c			d			e			f			g			h
Memo - SMEs
			0.00 to <0.15			13			—			—		%	0.08		%	0.07		%	—		%
			0.00 to <0.10			13			—			—		%	0.08		%	0.07		%	—		%
			0.10 to <0.15			0			—			—		%	0.13		%	—		%	—		%
			0.15 to <0.25			4			—			—		%	0.19		%	0.16		%	—		%
			0.25 to <0.50			145			1			0.69		%	0.38		%	0.43		%	0.14		%
			0.50 to <0.75			55			—			—		%	0.59		%	0.55		%	0.25		%
			0.75 to <2.50			438			1			0.23		%	1.30		%	1.68		%	0.73		%
			0.75 to <1.75			438			1			0.23		%	1.30		%	1.68		%	0.73		%
			1.75 to <2.5			0			—			—		%	—		%	—		%	—		%
			2.50 to <10.00			442			16			3.62		%	4.34		%	5.77		%	2.48		%
			2.5 to <5			0			—			—		%	3.16		%	—		%	1.32		%
			5 to <10			442			16			3.62		%	6.16		%	5.77		%	3.25		%
			10.00 to <100.00			170			13			7.65		%	30.25		%	25.78		%	4.51		%
			10 to <20			5			—			—		%	17.12		%	17.12		%	1.67		%
			20 to <30			111			13			11.71		%	22.07		%	22.07		%	5.20		%
			30.00 to <100.00			54			—			—		%	34.20		%	34.20		%	0.61		%
			100.00 (Default)			63			63			100.00		%	100.00		%	100.00		%	100.00		%
Certain figures contained in this section 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 given for that column or row.

2025 Pillar 3 Disclosures Report    163

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 58.CR9.1 - FIRB approach - Back-testing of PD per exposure class (only for PD estimates according to point (f) of Article 180(1) CRR)
EUR million
																					2024
Exposure class			PD range			External rating equivalent			Number of obligors at the end of previous year						Observed average default rate (%)			Average PD (%)			Average historical annual default rate (%)
												Of which number of obligors which defaulted in the year
a			b			c			d			e			f			g			h
Institutions
			0,000% - 0,030%			AA			254			—			—		%	0.03		%	—		%
			0,030% - 0,040%			AA-			362			—			—		%	0.04		%	—		%
			0,040% - 0,061%			AA-			559			—			—		%	0.05		%	—		%
			0,061% - 0,099%			A			741			—			—		%	0.07		%	—		%
			0,099% - 0,158%			BBB+			567			—			—		%	0.12		%	—		%
			0,158% - 0,267%			BBB			359			—			—		%	0.20		%	—		%
			0,267% - 0,506%			BBB-			186			—			—		%	0.34		%	—		%
			0,506% - 0,998%			BB+			67			—			—		%	0.67		%	—		%
			0,998% - 1,730%			BB			25			—			—		%	1.35		%	—		%
			1,730% - 2,260%			BB-			1			—			—		%	1.67		%	—		%
			2,260% - 3,315%			B+			2			—			—		%	1.96		%	—		%
			3,315% - 5,277%			B+			2			—			—		%	2.97		%	—		%
			5,277% - 5,445%			B			0			—			—		%	4.48		%	—		%
			5,445% - 7,003%			B			0			—			—		%	5.58		%	—		%
			7,003% - 99,999%			B-			0			—			—		%	9.55		%	—		%
			NR			NR			77			—			—		%	9.55		%	—		%
			10000.00		%	D			2			2			100.00		%	100.00		%	100.00		%
Corporates - Other
			0,000% - 0,030%			AA			69			—			—		%	0.03		%	0.14		%
			0,030% - 0,040%			AA			108			—			—		%	0.03		%	—		%
			0,040% - 0,066%			AA-			269			—			—		%	0.05		%	—		%
			0,066% - 0,108%			A			464			—			—		%	0.08		%	—		%
			0,108% - 0,179%			BBB+			693			—			—		%	0.14		%	0.09		%
			0,179% - 0,296%			BBB			1,097			—			—		%	0.22		%	—		%
			0,296% - 0,489%			BB+			1,209			—			—		%	0.37		%	—		%
			0,489% - 0,806%			BB			855			—			—		%	0.61		%	0.04		%
			0,806% - 1,326%			BB-			451			1			0.22		%	1.00		%	1.58		%
			1,326% - 2,174%			B+			252			1			0.40		%	1.65		%	2.73		%
			2,174% - 3,546%			B+			230			2			0.87		%	2.70		%	0.60		%
			3,546% - 5,733%			B			130			7			5.38		%	4.38		%	21.88		%
			5,733% - 9,139%			B-			26			—			—		%	7.04		%	1.14		%
			9,139% - 14,264%			B-			11			2			18.18		%	11.13		%	29.55		%
			14,264% - 99,999%			CCC			10			1			10.00		%	19.91		%	2.50		%
			NR LC			NR			859			3			0.35		%	19.91		%	0.11		%
			10000.00		%	D			98			98			100.00		%	100.00		%	100.00		%

164    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2025 Pillar 3 Disclosures Report    165

Index Introduction l Capital l Risks l Remuneration l Appendices l

			5.1. Counterparty credit risk definition and framework			167
			5.2. Collateral agreements and guarantees			168
			5.3. Wrong-way risk			168
			5.4. Credit rating downgrade			168
			5.5. Credit Value Adjustment (CVA)			168
			5.6. Central counterparties			170
			5.7. Credit counterparty credit risk indicators			171
			5. Counterparty credit risk

166    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

5. COUNTERPARTY CREDIT RISK

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 due to its possible effect on both parties of a transaction. Additional uncertainty arises due to market factors, which can be volatile.

This chapter analyses Grupo Santander's counterparty credit risk profile from several approaches: country, type of financial contract, calculation method and notional value. It also focuses on regulatory indicators (EAD and RWA).

Main figures
EUR million
			EAD									RWA
			2025			2024						2025			2024
Counterparty credit risk*			56,396			61,906						16,267			18,564
Of which the standardised approach			44,825			49,770						13,806			17,885
Of which internal model method (IMM)			—			—						—			—
Of which exposures to CCPs**			4,804			4,453						96			89
Of which credit valuation adjustment - CVA			11,571			12,136						2,461			679
									*Includes counterparty credit risk + CVA
**Does not include CCPs exposures corresponding to pre-funded default fund contributions and unfunded default fund contributions.

EAD variation						RWA variation
EUR million						EUR million

(8.9)% (12.4)%

5.1 Counterparty credit risk definition and framework

This section covers the qualitative requirement CCRA - Qualitative disclosure related to CCR. It also complies with (d), (e), (f) and (g) of the OVA Requirement - Institution risk management approach.

Chapter 6 of the CRR (Regulation (EU) No 575/2013) describes counterparty credit risk as the risk a counterparty to a transaction could default before the final settlement of the transaction's cash flows. It includes the following transaction types: derivatives contracts, repurchase agreements,

securities and commodities lending, long settlements and margin lending transactions.

Santander includes counterparty credit risk in its Credit Risk Framework.

For management purposes, it also has a specific counterparty credit risk model, policy and procedures.

This risk is controlled using an integrated system that provides real-time information so that exposures can be checked on a daily basis against the limits approved by senior management for any counterparty, product or maturity, in any Group unit.

2025 Pillar 3 Disclosures Report    167

Index Introduction l Capital l Risks l Remuneration l Appendices l

Specific counterparty credit risk limits are included in the overall credit risk limits and counterparty credit risk is independently monitored and controlled. These limits are set and reviewed in accordance with the appetite set by the board. The definition of limits and appetite metrics are reviewed and updated every year.

There are two methodologies for the measurement of counterparty credit risk management exposure: a mark-to-market (MtM, replacement cost in the case of derivatives) methodology with an add-on for potential future exposure; and a methodology including calculation of exposure using Monte Carlo simulation, which is used in certain geographies and for some products.

In addition, monthly and quarterly management exposure stress tests are conducted and the results are reported to senior management.

Credit risk equivalent is used to calculate capital at risk or unexpected loss, i.e. the loss in economic capital once expected loss is subtracted, net of guarantees and recoveries.

The risk teams report every quarter to senior management on the main risk metrics (exposure, MtM, notional amounts) of Group's Counterparty Credit Risk portfolio broken down by geography and segment.

5.2. Collateral agreements and guarantees

A policy is applied to regulate eligibility criteria for eligible collaterals and applicable haircuts complying with the Variation and Initial Margin regulatory requirements. The policy applies to derivatives, repo and securities lending transactions.

Transactions subject to collateral agreements are valued daily and, on that valuation, the parameters agreed in the collateral agreement are applied, giving an amount of collateral to be called from, or returned to, the counterparty.

The counterparty that receives the margin call checks the valuation, at which point discrepancies may arise.

A monitoring committee (Discrepancies Committee) meets weekly to analyse transactions in which significant discrepancies have been detected and manages them with Risk teams to ensure they are valued correctly.

5.3. Wrong-way risk

Wrong-way risk occurs if the potential exposure of a transaction with a counterparty is highly and positively (adversely) correlated with the credit rating of the counterparty, i.e. if the counterparty's credit rating deteriorates, potential exposure increases.

The criterion used by Group for calculating the credit exposure of derivatives with specific wrong way risk (WWR) is very conservative, as exposure to derivatives with WWR resembles exposure to basic financing.

Santander has defined criteria to identify transactions subject to specific wrong way risk on the basis of the legal connection between the counterparty and the issuer of the underlying instrument. Additionally, a method for measuring general wrong way risk has also been defined.

Most of the collateral is in cash, so only a small risk of adverse effects arises from specific correlations between the collateral and the collateral provider. Any adverse effects arising from correlations in non-cash collateral are immaterial since issuances from the same counterparty and its subsidiaries are excluded from collateral eligibility policies.

5.4. Credit rating downgrade

It is estimated that if our credit rating was downgraded and it was required to post additional collateral, the impact of collateral would be relatively limited. This is due to the Group's credit rating affects only a small percentage of its current collateral agreements. In the event of a hypothetical one-notch downgrade in the group's credit rating, it is estimated that the the resulting collateral to be posted would amount to €146 million.

5.5. Credit Value Adjustment (CVA)

The team responsible for managing counterparty credit risk in each geographic location charges the corresponding treasury desk a credit premium at the start of each transaction, in exchange for assuming the credit risk involved.

The team can then cover the CVA sensitivities through a combination of credit derivatives, interest rate derivatives, currency derivatives and other instruments

The CVA regulatory capital is also calculated. The purpose of this charge is to improve the resilience of banks to potential losses of market value associated with a reduction in the solvency of counterparties in derivatives transactions that are not settled through clearing houses

In addition, regulatory capital is calculated for CVA. The purpose of this charge is to enhance banks’ resilience to potential mark-to-market losses associated with a deterioration in the creditworthiness of counterparties in derivative transactions that are not cleared through central counterparties.

The CVA desk is the unit responsible for the active management of counterparty credit risk in the derivatives portfolio, which is incorporated into transaction valuations through the Credit Valuation Adjustment (CVA) as a fair value adjustment.

168    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Its objective is to control and mitigate the impact of credit risk on mark-to-market (MtM) and the income statement, through the dynamic management of CVA sensitivities and the execution of market hedges against the main risk factors, in particular credit spread movements, changes in expected exposure and market volatility.

The desk centrally manages aggregate CVA risk, continuously monitoring metrics such as Expected Exposure (EE), Expected Positive Exposure (EPE), exposure time profiles and CVA sensitivities, as well as the potential impact of credit events. To do so, it uses market instruments that help reduce P&L volatility, stabilise MtM and optimise capital consumption.

The desk’s activity is carried out within a robust governance, limits and control framework, with documented valuation and hedging processes, and in close coordination with the Risk, Markets, Models and Control areas, ensuring consistency across pricing, models, hedges and reporting, and contributing to prudent and efficient management of the Group’s counterparty risk.

For the calculation of the own funds requirements for CVA risk in accordance with article 386.3 of CRR, only positions in the following hedging instruments shall be recognised as eligible hedges: (a) single-name credit default swaps and single-name contingent-credit default swaps and (b) index credit default swaps.

At year-end, Group has CVA capital hedges focused on covering systemic risk and executed through index credit default swaps. These hedges are typically rolled semi-annually in line with index updates.

The following table shows the valuation adjustment for counterparty credit risk (Credit Valuation Adjustment, or CVA).

Table 59.CVA 2 – Credit valuation adjustment risk under the Full Basic Approach (F-BA)
			EUR million
						2025
						a			EU b
						Own Funds Requirements			Notional of CVA hedges
1			BACVAcsr-unhedged			794			—
2			BACVAcsr-hedged			139			—
3			Total			197			—
EU 4			Single-name CDS			—			—
EU 5			Index CDS			—			5,856
EU 6			Total			—			5,856

2025 Pillar 3 Disclosures Report    169

Index Introduction l Capital l Risks l Remuneration l Appendices l

5.6. Central counterparties

The clearing of transactions through central counterparties is a common market practice for Santander. As a member of the clearing houses with which it operates, the bank contributes to their risk management framework through payments into the default fund, in addition to daily margin calls.

The risk associated with this type of counterparty is managed through the credit risk framework.

The following tables show central counterparty (CCP) exposure following risk mitigation techniques.

Table 60.CCR8 - Exposures to CCPs
			EUR million
									2025
						a			b
						EAD (post CRM)			RWA
1			Exposures to QCCPs (total)						372
2			Exposures for trades at QCCPs (excluding initial margin and default fund contributions); of which			4,804			96
3			(i) OTC derivatives			2,554			51
4			(ii) Exchange-traded derivatives			603			12
5			(iii) Securities financing transactions			1,647			33
6			(iv) Netting sets where cross-product netting has been approved
7			Segregated initial margin
8			Non-segregated initial margin
9			Pre-funded default fund contributions			1,417			276
10			Unfunded default fund contributions			1,778			—
11			Exposures to non-QCCPs (total)						—
12			Exposures for trades at CCPs non-qualified (excluding initial margin and fund contributions); of which			—			—
13			(i) OTC derivatives			—			—
14			(ii) Exchange-traded derivatives			—			—
15			(iii) Securities financing transactions			—			—
16			(iv) Netting sets where cross-product netting has been approved			—			—
17			Segregated initial margin			—
18			Non-segregated initial margin			—			—
19			Pre-funded default fund contributions			—			—
20			Unfunded default fund contributions			—			—

During 2025, an increase was observed in transactions involving counterparty credit risk with clearing houses, with exposure to this customer segment increasing by 22% compared to the previous year.

170    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

5.7. Credit counterparty credit risk indicators

The following table shows a breakdown of derivatives exposure by the type of product, category, geographical area and rating of the counterparty:

Derivatives exposure by product						Derivatives exposure by category
%						%

n			Interest rate			43%
n			Exchange rate			41%
n			Equity			10%
n			Commodities			5%
n			Credit			1%

n			Corporates			50%
n			Institutions			41%
n			Sovereign			9%

Derivatives exposure by geography						Derivatives exposure by rating
%						%

n			Spain			8%
n			UK			20%
n			Rest of Europe			33%
n			South America			23%
n			USA			10%
n			Others			6%

n			AAA			5%
n			AA			1%
n			A			37%
n			BBB			34%
n			BB			9%
n			B			—%
n			Rest			13%

The exposure to counterparty credit risk in 2025 from derivative transactions was concentrated in counterparties with high credit quality, so that 43% of the exposure was with counterparties rated A or higher. The distribution by type of counterparty was 41% Institutions, 9% in Sovereigns and 50% Corporates.

As regards geographic distribution, 20% of the exposure was accounted for by UK counterparties with the remainder being accounted for by Spain (8%), the rest of Europe (33%), South America (23%), the United States (10%) and the rest of the world (6%).

2025 Pillar 3 Disclosures Report    171

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following table shows exposure to counterparty credit risk depending on the calculation methodology used.

Table 61.CCR1 - Analysis of CCR exposure by approach
			EUR million
						a			b			c			d			e			f			g			h
						Replacement cost (RC)			Potential future exposure (PFE)			EEPE			Alpha used for computing regulatory exposure value			Exposure value pre-CRM			Exposure value-post CRM			Exposure Value			RWEA
EU1			EU - Original Exposure Method (for derivatives)			—			—						—			—			—			—			—
EU2			EU - Simplified SA-CCR (for derivatives)			—			—						—			—			—			—			—
1			SA-CCR (for derivatives)			9,529			13,116						1.4			59,438			31,296			31,170			11,816
2			IMM (for derivatives and SFTs)									—			—			—			—			—			—
2a			Of which securities financing transactions netting sets									—						—			—			—			—
2b			Of which derivatives and long settlement transactions netting sets									—						—			—			—			—
2c			Of which from contractual cross-product netting sets									—						—			—			—			—
3			Financial collateral simple method (for SFTs)															—			—			—			—
4			Financial collateral comprehensive method (for SFTs)															201,072			8,725			8,725			1,894
5			VaR for SFTs															—			—			—			—
6			Total															260,510			40,021			39,895			13,710

172    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

As of January 2025, Santander has implemented the changes required under the new CRR3 regulation in the standard methodologies for the calculation of EAD, including SA-CCR for derivatives and FCCM applicable to repos and securities lending transactions.

The following table details the breakdown of counterparty credit risk exposures calculated using the standardised approach, by portfolio (counterparty type) and risk weighting (degree of risk resulting from the standardised approach):

Table 62.CCR3 - Standardised approach - CCR exposures by regulatory exposure class and risk weights
			EUR million
			2025
						Risk Weight
						a			b			c			d			e			f			g			h			i			j			k			l
						0		%	2		%	4		%	10		%	20		%	50		%	70		%	75		%	100		%	150		%	Others *			Total
1			Central governments or central banks			4,432			—			28			8			516			47			—			—			—			45			—			5,077
2			Regional government or local authorities			74			—			—			—			54			—			—			—			6			—			—			134
3			Public sector entities			26			—			—			—			6			1			—			—			—			—			—			32
4			Multilateral development banks			1,228			—			—			—			4			—			—			—			—			—			—			1,232
5			International organisations			44			—			—			—			—			—			—			—			—			—			—			44
6			Institutions			—			5,006			—			—			409			58			—			7			28			129			255			5,893
7			Corporates			—			—			—			—			81			15			—			135			3,620			3			30			3,884
8			Retail			—			—			—			—			—			—			—			—			—			—			—			—
9			Institutions and corporates with a short-term credit assessment			—			—			—			—			62			57			—			—			1			13			—			133
10			Other items			—			—			—			—			—			—			—			—			88			9			—			97
11			Total			5,805			5,006			28			8			1,132			179			—			141			3,743			198			286			16,526
			(*) The ‘Others’ column includes all exposures with weightings that do not appear in the other columns of the table.

CCR3 - Standardised approach - CCR exposures by regulatory exposure class and risk weights (31.12.2024)
			EUR million
			2024
						Risk Weight
						a			b			c			d			e			f			g			h			i			j			k			l
						0		%	2		%	4		%	10		%	20		%	50		%	70		%	75		%	100		%	150		%	Others*			Total
1			Central governments or central banks			3,198			—			—			—			10			35			—			—			—			—			—			3,243
2			Regional government or local authorities			100			—			—			—			68			—			—			—			2			—			—			171
3			Public sector entities			36			—			—			—			11			1			—			—			—			—			—			48
4			Multilateral development banks			1,042			—			—			—			—			—			—			—			—			—			—			1,042
5			International organisations			10			—			—			—			—			—			—			—			—			—			—			10
6			Institutions			—			4,453			—			—			424			582			—			—			125			—			—			5,584
7			Corporates			—			—			—			—			—			61			—			—			3,635			2			—			3,698
8			Retail			—			—			—			—			—			—			—			73			—			—			—			73
9			Institutions and corporates with a short-term credit assessment			—			—			—			—			3			3			—			—			6			—			—			12
10			Other items			—			—			—			—			—			—			—			—			5			12			—			17
11			Total			4,385			4,453			—			—			518			682			—			73			3,773			14			—			13,898
			(*) The ‘Others’ column includes all exposures with weightings that do not appear in the other columns of the table.

In this case, 72% of counterparty credit risk exposure subject to risk weighting under the Standardised Approach remains within risk weights below 50%.

2025 Pillar 3 Disclosures Report    173

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following table shows a breakdown of counterparty credit risk exposure by portfolio and PD scale (excluding CCPs and specialised lending).

Table 63.CCR4 - AIRB approach - CCR exposures by exposure class and PD scale
			EUR million
						2025
			a			b			c			d			e			f			g			h
			PD scale			Exposure value			Exposure weighted average PD (%)			Number of obligors			Exposure weighted average LGD (%)			Exposure weighted average maturity (years)			RWEA			Density of risk weighted exposure amount
			Institutions
1			0.00 < 0.15			—			—		%	—			—		%	—			—			—		%
2			0.15 < 0.25			—			—		%	—			—		%	—			—			—		%
3			0.25 < 0.50			—			—		%	—			—		%	—			—			—		%
4			0.50 < 0.75			—			—		%	—			—		%	—			—			—		%
5			0.75 < 2.50			—			—		%	—			—		%	—			—			—		%
6			2.50 < 10.00			—			—		%	—			—		%	—			—			—		%
7			10.00 < 100.00			—			—		%	—			—		%	—			—			—		%
8			100.00 (Default)			—			—		%	—			—		%	—			—			—		%
9			Sub-total			—			—		%	—			—		%	—			—			—		%
			Corporates
1			0.00 < 0.15			0			0.11		%	1			39.74		%	1			—			18.13		%
2			0.15 < 0.25			14			0.21		%	169			43.43		%	1			4			30.99		%
3			0.25 < 0.50			46			0.44		%	81			42.05		%	2			24			52.42		%
4			0.50 < 0.75			30			0.62		%	412			44.67		%	2			21			67.88		%
5			0.75 < 2.50			240			1.44		%	758			40.73		%	2			215			89.31		%
6			2.50 < 10.00			55			4.58		%	310			40.89		%	1			66			119.85		%
7			10.00 < 100.00			27			30.06		%	97			39.78		%	3			60			222.35		%
8			100.00 (Default)			2			100.00		%	14			62.91		%	1			—			26.47		%
9			Sub-total			415			3.93		%	1,842			41.31		%	2			390			94.04		%
			Retail
1			0.00 < 0.15			4			0.13		%	69,849			87.60		%	0			1			25.93		%
2			0.15 < 0.25			—			0.20		%	3,046			87.59		%	0			—			35.21		%
3			0.25 < 0.50			—			—		%	0			—		%	—			—			—		%
4			0.50 < 0.75			—			0.54		%	3,668			87.59		%	—			—			65.51		%
5			0.75 < 2.50			—			1.38		%	3,078			71.45		%	—			—			76.39		%
6			2.50 < 10.00			—			7.24		%	3,004			87.59		%	—			—			135.61		%
7			10.00 < 100.00			—			40.68		%	58			87.59		%	—			—			209.47		%
8			100.00 (Default)			—			100.00		%	84			83.62		%	—			—			5.57		%
9			Sub-total			5			3.95		%	82,787			87.02		%	—			1			28.77		%

174    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

CCR4 - AIRB approach - CCR exposures by exposure class and PD scale (31.12.2024)
			EUR million
						2024
			a			b			c			d			e			f			g			h
			PD scale			Exposure value			Exposure weighted average PD (%)			Number of obligors			Exposure weighted average LGD (%)			Exposure weighted average maturity (years)			RWEA			Density of risk weighted exposure amount
			Institutions
1			0.00 < 0.15			0			—		%	0			—		%	0			—			—		%
2			0.15 < 0.25			0			—		%	0			—		%	0			—			—		%
3			0.25 < 0.50			0			—		%	0			—		%	0			—			—		%
4			0.50 < 0.75			4			0.69		%	4			21.74		%	2			2			42.51		%
5			0.75 < 2.50			85			1.01		%	9			26.24		%	5			62			73.00		%
6			2.50 < 10.00			1			2.70		%	2			45.00		%	1			1			117.13		%
7			10.00 < 100.00			—			—		%	—			—		%	—			—			—		%
8			100.00 (Default)			0			—		%	0			—		%	0			—			—		%
9			Sub-total			89			1.01		%	15			26.19		%	5			64			72.08		%
			Corporates
1			0.00 < 0.15			110			0.11		%	7			39.74		%	5			50			45.25		%
2			0.15 < 0.25			54			0.21		%	202			43.43		%	1			17			30.51		%
3			0.25 < 0.50			245			0.43		%	142			39.90		%	3			150			61.20		%
4			0.50 < 0.75			20			0.63		%	451			45.11		%	3			16			80.90		%
5			0.75 < 2.50			521			1.45		%	825			39.85		%	1			444			85.20		%
6			2.50 < 10.00			120			4.29		%	324			40.06		%	2			165			137.81		%
7			10.00 < 100.00			26			30.32		%	92			39.76		%	1			58			223.82		%
8			100.00 (Default)			7			100.00		%	22			76.65		%	4			4			59.44		%
9			Sub-total			1,103			2.60		%	2,065			40.36		%	2			904			81.96		%
			Retail
1			0.00 < 0.15			1			0.10		%	67,382			88.17		%				—			22.99		%
2			0.15 < 0.25			—			0.20		%	2,898			87.59		%				—			37.32		%
3			0.25 < 0.50
4			0.50 < 0.75			—			0.54		%	3,430			87.59		%	0			—			69.39		%
5			0.75 < 2.50			1			1.58		%	3,027			67.54		%	0			1			85.17		%
6			2.50 < 10.00			—			7.28		%	3,359			87.59		%	0			—			143.89		%
7			10.00 < 100.00			—			32.07		%	30			87.59		%	0			—			207.16		%
8			100.00 (Default)			—			100.00		%	151			65.05		%	0			—			91.02		%
9			Sub-total			2			2.46		%	80,277			81.87		%	0			1			63.98		%

2025 Pillar 3 Disclosures Report    175

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 64.CCR4 - FIRB approach - CCR exposures by exposure class and PD scale
			EUR million
						2025
			a			b			c			d			e			f			g			h
			PD scale			Exposure value			Exposure weighted average PD (%)			Number of obligors			Exposure weighted average LGD (%)			Exposure weighted average maturity (years)			RWEA			Density of risk weighted exposure amount
			Institutions
1			0.00 < 0.15			10,280			0.06		%	626			44.62		%	1			2,074			20		%
2			0.15 < 0.25			231			0.19		%	46			45.00		%	1			97			42		%
3			0.25 < 0.50			309			0.36		%	53			45.00		%	1			170			55		%
4			0.50 < 0.75			18			0.67		%	4			45.00		%	1			16			86		%
5			0.75 < 2.50			3			1.20		%	7			45.00		%	—			3			108		%
6			2.50 < 10.00			—			9.55		%	24			45.00		%	1			0			263		%
7			10.00 < 100.00			1			45.00		%	16			45.00		%	4			5			375		%
8			100.00 (Default)			0			—		%	0			—		%	0			0			—		%
9			Sub-total			10,842			0.08		%	776			44.64		%	1			2,365			22		%
			Corporates
1			0.00 < 0.15			9,311			0.07		%	1,762			41.76		%	2			2,016			22		%
2			0.15 < 0.25			2,334			0.20		%	402			40.48		%	3			1,091			47		%
3			0.25 < 0.50			1,563			0.35		%	391			40.11		%	2			783			50		%
4			0.50 < 0.75			930			0.61		%	313			40.03		%	2			607			65		%
5			0.75 < 2.50			634			1.27		%	339			34.55		%	3			510			80		%
6			2.50 < 10.00			145			3.88		%	86			40.00		%	2			183			126		%
7			10.00 < 100.00			43			31.56		%	266			40.36		%	1			97			224		%
8			100.00 (Default)			—			—		%	1			—		%	0			—			—		%
9			Sub-total			14,960			0.33		%	3,560			40.95		%	2			5,287			35		%

CCR4 - FIRB approach - CCR exposures by exposure class and PD scale (31.12.2024)
			EUR million
						2024
			a			b			c			d			e			f			g			h
			PD scale			Exposure value			Exposure weighted average PD (%)			Number of obligors			Exposure weighted average LGD (%)			Exposure weighted average maturity (years)			RWEA			Density of risk weighted exposure amount
			Institutions
1			0.00 < 0.15			17,739			0.06		%	1,604			44.55		%	1			4,506			25.40		%
2			0.15 < 0.25			1,922			0.16		%	160			45.00		%	2			1,063			55.31		%
3			0.25 < 0.50			706			0.33		%	186			45.00		%	1			493			69.89		%
4			0.50 < 0.75			420			0.66		%	56			45.00		%	1			366			87.31		%
5			0.75 < 2.50			71			1.39		%	22			45.00		%	1			86			120.84		%
6			2.50 < 10.00			7			4.27		%	24			45.00		%	1			14			196.09		%
7			10.00 < 100.00			24			45.00		%	86			45.00		%	2			84			353.80		%
8			100.00 (Default)			0			—		%	0			—		%	0			0			—		%
9			Sub-total			20,889			0.15		%	2,138			44.62		%	1			6,612			31.65		%
			Corporates
1			0.00 < 0.15			7,120			0.08		%	383			45.00		%	2			1,801			25.29		%
2			0.15 < 0.25			2,053			0.21		%	192			45.00		%	3			1,012			49.28		%
3			0.25 < 0.50			1,173			0.36		%	207			45.00		%	3			744			63.44		%
4			0.50 < 0.75			673			0.59		%	177			44.99		%	3			526			78.23		%
5			0.75 < 2.50			303			1.16		%	150			44.96		%	3			308			101.91		%
6			2.50 < 10.00			130			4.36		%	51			45.00		%	3			196			150.92		%
7			10.00 < 100.00			66			31.68		%	77			45.00		%	2			174			262.78		%
8			100.00 (Default)			190			100.00		%	3			45.00		%	3			0			—		%
9			Sub-total			11,708			2.04		%	1,240			45.00		%	2			4,762			40.67		%

83% of counterparty credit risk exposure subject to risk weighting under the FIRB Approach remains within PD buckets below 0.50.

176    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following table shows a summary of the effects of netting agreements and collateral for exposure to counterparty credit risk, in addition to the type of collateral exchanges in derivatives transactions and securities financing transactions (SFTs).

Table 65.CCR5 - Composition of collateral for CCR exposures
			EUR million
						2025
						a			b			c			d			e			f			g			h
						Collateral used in derivative transactions												Collateral used in SFTs
						Fair value of collateral received						Fair value of posted collateral						Fair value of collateral received						Fair value of posted collateral
						Segregated			Unsegregated			Segregated			Unsegregated			Segregated			Unsegregated			Segregated			Unsegregated
1			Cash - domestic currency			165			10,712			160			5,318			—			174,163			—			131,138
2			Cash - other currencies			19			6,208			246			6,451			111			59,938			—			71,897
3			Domestic sovereign debt			4,856			1,969			3,754			235			226			97,761			15,042			89,127
4			Other sovereign debt			1,545			2,066			2,140			153			61			79,496			2,117			42,950
5			Government agency debt			27			—			8			—			70			461			116			54
6			Corporate bonds			2,338			173			85			20			1,890			70,402			5,018			62,350
7			Shares			983			239			1,801			—			10,575			5,752			12,485			2,952
8			Other collateral			—			—			—			—			—			1			—			—
9			Total			9,934			21,366			8,196			12,178			12,933			487,974			34,778			400,468

In derivatives activity, 55% of the collateral received is cash. With regard to securities financing transactions, 82% of collateral received consists of cash and sovereign bonds.

Table 66.CCR6 - Credit derivatives exposures
			EUR million
									2025
						a			b
						Credit derivatives hedges
						Protection bought			Protection sold
			Notionals
1			Single-name credit default swaps			28,929			20,610
2			Index credit default swaps			16,812			6,432
3			Total return swaps			1,809			—
4			Credit options			—			—
5			Other credit derivatives			—			—
6			Total notionals			47,550			27,042
			Fair values			—			—
7			Positive fair value (asset)			190			869
8			Negative fair value (liability)			(1,844)			(270)
			*Bought credit derivatives do include loan coverage

2025 Pillar 3 Disclosures Report    177

Index Introduction l Capital l Risks l Remuneration l Appendices l

CCR6 - Credit derivatives exposures (31.12.2024)
			EUR million
									2024
						a			b
						Credit derivatives hedges
						Protection bought			Protection sold
			Notionals
1			Single-name credit default swaps			16,872			13,981
2			Index credit default swaps			11,401			3,255
3			Total return swaps			118
4			Credit options
5			Other credit derivatives
6			Total notionals			28,391			17,237
			Fair values
7			Positive fair value (asset)			230			618
8			Negative fair value (liability)			(1,211)			(236)
			*Bought credit derivatives do include loan coverage

Table CCR7- Statement of flows of risk-weighted amounts of counterparty exposures subject to IMA is not included as Santander does not have an internal model to calculate counterparty credit risk EAD.

For more information, see the 'Risk management and compliance' chapter of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

178    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2025 Pillar 3 Disclosures Report    179

Index Introduction l Capital l Risks l Remuneration l Appendices l

			6.1. Introduction			181
			6.2. Management of the securitisation activity			183
			6.2.1. Securitisation objectives and management			183
			6.2.2. Securitisation functions			183
			6.2.3. Risk inherent to the securitisation activity			186
			6.3. Santander Securitisation activity			187
			6.3.1. As asset manager			187
			6.3.2. As originator			187
			6.3.3. As investor			187
			6.3.4. As sponsor			187
			6.3.5. Significant Risk Transfer (SRT)			195
			6.3.6. Overview of the securitisation process			196
			6.3.7. SRT Regulation and approval process			197
			6.4. Securitisation accounting policies			198
			6.5. Capital requirements - Securitisations			199
			6. Credit risk - Securitisations

180    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

6. CREDIT RISK - SECURITISATIONS

This chapter provides details of Grupo Santander's securitisation activity. It also describes the basic concepts in securitisations and summarises the objectives and functions that Grupo Santander performs in the management of securitisation activity.

Number of securitisations (2025)1

1 Originated SRT

Main figures
EUR million
						EAD									RWA*
			2025			2024						2025			2024
Originator			74,603			73,536						11,682			11,417
Investor			30,831			26,384						4,805			4,227
Sponsor			1,058			403						196			60
Total			106,492			100,323						16,683			15,705
*The EAD considered is before deductions (exposures RW 1,250%)

2025 Pillar 3 Disclosures Report    181

Index Introduction l Capital l Risks l Remuneration l Appendices l

6.1 Introduction

Historically, banks used deposits to fund loans that they kept on their balance sheets until maturity. Over time, however, this model of banking started to change. Banks began expanding their funding sources to include bonds financing, commercial paper financing, and repurchase agreement (repo) funding.

Bank credit has shifted from the traditional originate-to-hold to the 'originate-to-distribute' business model. In the originate to distribute 'OTD' business model, adopted by most banks to a different extent, the originator of a loan sells it to third parties through a securitisation process or using other risk transfer strategies.

better risk sharing, reducing concentration of credit risk, minimizing overall funding cost and, under certain conditions, reducing regulatory capital.

Furthermore, the process frees up capital for new lending, provides income from the sale of the loans and generates fees from continuing servicing of the underlying loans (collecting interest and principal repayments and passing them on to the holders of securities).

In summary, the originate-to-distribute model has many advantages, such as capital efficiency, optimization of the balance sheet, increased returns and the capacity to enhance financial system stability.

OTD structures: originate-to-distribute

Please note that this overview is a reference to the paper from the ESRB (European Systemic Risk Board): The European significant risk transfer securitisation market pp.7

182    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

6.2. Management of the securitisation activity

This section covers the qualitative requirement SECA - Qualitative disclosure requirements related to securitisation exposures. Letters (d), (e), (f) and (i) are not applicable to Santander. Also, the provisions of letters (d), (e), (f) and (g) of the OVA requirement -Institution risk management approach, are complied with.

6.2.1. Securitisation objectives and management

Santander pursues various objectives through its securitisation activity:

•Management and diversification of credit risk: the group mitigates risk that arises naturally from growth in its commercial activity through securitisation of transactions and the subsequent transfer of credit risk to third parties. The effective transfer of risk achieved through these transactions enables the group to optimise its credit risk exposure and contributes to value creation by reducing Banco Santander's need to retain own funds.

•Optimization of capital consumption: significantly transferring risk allows for reductions in capital consumption contributing to this objective. 38 new transactions, which benefit from the new securitisation framework, were issued in 2025.

•Obtaining liquidity: securitisation enables Santander to mobilise its balance sheet by transforming illiquid assets into liquid assets and obtain wholesale funding by selling the transformed assets or using them as collateral. Retained securitisation positions can also be used as collateral for ECB and Bank of England.

•Diversifying funding sources: the liquidity obtained from securitisation allows the Group to diversify its funding sources, in terms of maturity and product type.

The Financial Management division draws up the issuances and securitisations plan for each Santander subsidiary/global business annually, on the basis of the financial plan and considering certain prudential limits on raising short-term market funding.

Grupo Santander also has a robust governance process for all securitisations intended to transfer risk. The review assesses transactions from a risk, capital, regulatory and economic approach.

6.2.2. Securitisation functions

Santander's role in the securitisation process is mainly that of an originator – i.e. the entity that creates the exposures (underlying assets) subsequently traditionally or synthetically securitized. Apart from being the originator, Santander also generally manages the underlying portfolio (servicing).

Santander usually also acts as the facilitator for credit enhancements (subordinated loan, credit facilities or interest-rate swaps or caps) in traditional securitisations, necessary for the securitisation fund and will subsequently issue the notes that typically have an external rating.

The structuring and placing of its own securitisations, as for third parties, are also done by Santander, initiating and promoting new structures in various jurisdictions for both funding and risk transfer purposes. This activity is carried out against a backdrop of securitisation revival as a tool for channelling credit to the real economy, with a special focus on the SMEs and consumer loans.

Conversely, Santander also acts as an investor, acquiring securitisation positions originated by non-Santander entities.

Finally, Grupo Santander is sponsor of three securitisations with different types of underlying as the short-term receivables on individual debtors issued by a corporate client in the energy sector or mortgages loans.

The distribution of Grupo Santander's exposure according to its activity as of December 31st 2025, is shown below:

As indicated in the graph, originator activity accounts for more than 76% of Santander securitisation activity, while investment activity accounts for 24%. 61% of the volume of securitisations originated by Santander is concentrated in Spain and the United States. On the investment side, 92% of acquisitions of investment positions are concentrated in Spain and 4% in the United States, as shown in the graph on the right.

2025 Pillar 3 Disclosures Report    183

Index Introduction l Capital l Risks l Remuneration l Appendices l

EAD variation

Million euros

6.1%

RWA variation

Million euros

6.2%

Distribution of the Group’s securitisation function (EAD)
Overview			Originator Activity			Investor Activity

n

Originator -

76%

n

Spain -

47%

n

Poland

5%

n

Spain -

92%

n

Investor -

24%

n

USA -

14%

n

Brasil -

1%

n

USA -

4%

n

Others -

9%

n

UK -

12%

n

UK -

1%

n

Portugal -

10%

n

Brazil

2%

n

Others

3%

The information on the securitisation positions of the investment and trading portfolio of Santander is included.

184    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following table gives a breakdown of the distribution of the activity carried out by Grupo Santander as of 31 December 2025:

Table 67.Securitisation positions purchased and retained with risk transfer by exposure type in the banking book
EUR million
			2025																					2024
			Exposure									RWA												EAD									RWA
			Originator			Investor			Sponsor			Originator			Investor			Sponsor						Originator			Investor			Sponsor			Originator			Investor			Sponsor
Traditional securitisations			587			30,831			1,058			70			4,805			196						533			26,384			403			61			4,227			60
Residential mortgages			—			4,273			11			—			586			1						—			3,117			—			—			448			—
Commercial mortgages			—			—			—			—			—			—						—			—			—			—			—			—
Credit cards			—			560			—			—			104			—						—			675			—			—			94			—
Leasing			—			100			—			—			16			—						—			—			—			—			1			—
Loans to corporates or to SMEs treated as corporates			—			6,235			—			—			1,125			—						—			4,888			—			—			980			—
Consumer loans			523			8,353			766			61			1,161			153						426			8,070			—			46			1,180			—
Receivables			—			2,406			—			—			411			—						—			1,485			—			—			223			—
Others			64			8,904			281			8			1,402			42						107			8,149			403			14			1,302			60
Resecuritisations			—			—			—			—			—			—						—			—			—			—			—			—
Securitisation positions			—			—			—			—			—			—						—			—			—			—			—			—
Synthetic securitisations			74,016			—			—			11,613			—			—						73,003			—			—			11,356			—			—
Residential mortgages			12,863			—			—			1,985			—			—						11,569			—			—			1,812			—			—
Commercial mortgages			7,045			—			—			1,153			—			—						5,156			—			—			960			—			—
Credit cards			—			—			—			—			—			—						—			—			—			—			—			—
Leasing			146			—			—			14			—			—						274			—			—			27			—			—
Loans to corporates or to SMEs treated as corporates			33,543			—			—			4,892			—			—						34,172			—			—			5,140			—			—
Consumer loans			16,685			—			—			3,028			—			—						14,736			—			—			2,483			—			—
Receivables			1,610			—			—			235			—			—						2,032			—			—			300			—			—
Others			2,123			—			—			307			—			—						5,065			—			—			635			—			—
Total			74,603			30,831			1,058			11,682			4,805			196						73,536			26,384			403			11,417			4,227			60

2025 Pillar 3 Disclosures Report    185

Index Introduction l Capital l Risks l Remuneration l Appendices l

6.2.3. Risk inherent to the securitisation activity

Securitisation offers advantages in terms of diversified funding sources and better risk management. However, it exposes investors to certain inherent risks, which are defined below. Santander is not exposed to any additional risk by acting as the originator or sole investor in a securitisation. In fact, doing so, it reduces liquidity risk by transforming illiquid assets (the loans originated) into liquid assets (securitisation bonds).

•Credit risk: the risk that borrowers will fail to meet their contractual obligations in due time and proper form, with the consequent impairment of the underlying assets backing the securitisation positions. Credit risk is assessed by external credit rating agencies, which assign ratings to the securitisation positions. For third-party positions Grupo Santander invests in, this credit risk is first assessed by external credit rating agencies, who assign ratings to the securitisation positions. At the Group, the maximum exposure in the banking book is limited by rating (AAA, AA, A, BBB) and by type of underlying. In addition, the group continuously monitors published data on default of the underlying, the credit quality of the originator and mandatory minimum ratios and ratings in the structure, as well as data on granularity, geographical distribution and type of underlying.

•Prepayment risk: the risk of early repayment of some or all of the assets underlying the securitisation, so that the securitisation positions mature faster than expected and therefore fewer coupons are received than expected. Calculations of the average life, return and duration of securitisation positions are subject, among other aspects, to assumptions about the rate at which the underlying assets will be prepaid, which may vary.

•Interest rate risk: This risk arises in case of a mismatch between the interest rates of the securitized assets and those of the securitisation positions. At Santander, and for any traditional securitisations that arise, this risk is usually hedged with swaps (Interest Rate Swaps — IRS).

•Exchange rate risk: This exists in securitisations where the securitized assets and the securitisation positions are denominated in different currencies. Traditional securitisations issued by Santander are issued in the same currency as the underlying asset, so this risk is therefore absent. However, this risk will only be partially present in a small portion of synthetic securitisations.

•Liquidity risk: this risk is diminished through the securitisation process, whereby naturally illiquid assets are transformed into debt securities that can be traded on organised financial markets. In some securitisations, however, such as those which issue commercial paper, liquidity risk is still significant and is manifested in the need to cover potential timing mismatches between interest payments on the underlying assets and payments of interest on the securities. At Santander, this risk tends to be very small and is mitigated by liquidity facilities included in the structure (excluding synthetic securitisations). The liquidity risk associated with investing in bond positions is managed by establishing maximum holding periods.

•Counterparty risk: This risk is not present in traditional securitisations issued by Santander due to the notes/bonds being actually sold in exchange for cash. This translates to no counterparty risk. However, there is risk present in synthetic securitisations if the hedging/protection obtained is not anchored. Synthetic transactions originated by Santander can be structured through a SPV (Special Purpose Vehicle), which hedges the portfolio and issues CLNs (Credit Link Notes), or the financial guarantee can be issued directly. If the financial guarantees are funded, there will be no counterparty risk. However, if hedged and if they are not funded, this risk will be present (the counterparty risk). Lastly, a synthetic transaction can be structured without an SPV and without issuing notes. These types of guarantees are financial in nature and will tend not to be anchored. In this case, counterparty risk will indeed be present. Finally, this type of risk will be present only if the synthetic guarantee received is not anchored. Santander will therefore have to reclaim losses generated by the hedged portfolio from the investor, whenever such losses reach their tranche. In synthetic securitisations, there is no right of credit risk transfer nor sale of the underlying portfolio. The financial guarantees received can be funded or unfunded. In the latter case, Banco Santander has to reclaim the losses from the investor, which generates counterparty risk.

Santander analyses annually the evolution of the securitisations originated with the release of capital, assessing the different parameters from a risks and capital perspective (backtesting). These reviews are submitted to the relevant management bodies.

186    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

6.3. Santander securitisation activity

The list of SPPEs is listed in Appendix XIII of the 2025 Pillar 3 report file available on the Santander website.

Access the Pillar 3 2025 file available on Grupo Santander's web site

6.3.1. As asset manager

Grupo Santander has Santander de Titulización S.G.F.T., S.A. (Sociedad Gestora de Fondos de Titulización) and Gamma, STC. (Sociedade de Titularização de Créditos), in order to set up, manage and legally represent the securitisation funds originated in Spain and Portugal, respectively.

6.3.2. As originator

Grupo Santander originated in 2025 38 securitisations mainly for risk transfer purposes.

Grupo Santander has a total of 138 securitisations that transfer risk and free up capital (55 traditional transactions and 83 synthetic). The main underlying portfolios are consumer loans (primarily for cars) and loans to businesses.

A general target is to achieve and maintain the STS (Simple, Transparent and Standardised Securitisations) certification for all newly originated securitisations (both synthetic and traditional) whenever possible. Currently 82 securitisations have this certification.

The key components of an STS (Simple, Transparent and Standardised Securitisations)

Monitoring process for changes in associated risk:

•Securitisation positions originated: periodic monitoring is the responsibility of the different securitisation fund managers (trustees/management companies) or of the originators directly no fund is created. In any of the cases that prepare regular reports containing an update of the rating performance of the bonds' underlying portfolios of the securitisation positions generated.

Of the 83 synthetic securitisation funds, 19 were originated in 2025.

Santander also originates and holds positions in traditional securitisation funds whose underlying portfolios mainly comprise consumer and corporate loans.

An external rating has been given to Santander by one or more of the following external rating agencies for each of these traditional structures and for certain synthetic securitisations, regardless of the underlying product: Standard & Poors, Moody's, Fitch, DBRS, Arc, Scope and KROLL. The group obtains ratings from at least two of these agencies when a traditional securitisation is placed on the market in Europe.

Grupo Santander does not provide implicit support in synthetic securitisations, where there is significant risk transfer at the regulatory level.

6.3.3. As investor

With regard to investment activity, Santander holds positions in securitisation funds originated by entities outside the Group whose underlying assets mainly comprise receivables, credit cards, corporate, SME and mortgage loans. As Santander limits its maximum exposure by rating (AAA, AA, A, BBB), it does not usually employ hedging techniques to mitigate the risk.

6.3.4. As sponsor

As of 31 of December 2025, Santander Group participates as a sponsor in three securitisation structures where Santander maintains investor positions in mezzanine and senior tranches, additionally participating in 5% of the junior tranche to comply with the regulatory requirements for retention of economic interest.

•Securitisation positions invested in: published NPL metrics (90+, default, recoveries) and prepayments are monitored regularly using specialised software, which also checks whether the established rating-based limits are being met.

The processes mentioned above serve to monitor changes in credit and market risk for securitisation exposures.

2025 Pillar 3 Disclosures Report    187

Index Introduction l Capital l Risks l Remuneration l Appendices l

This overview below displays the provided information regarding Santander securitisation activity, broken down by each table in the Pillar 3 disclosure report:

Overview of tables provided in the Pillar 3 Report
Table			Positions			Information
SEC 1			Retained and invested positions in SEC in banking book			EAD broken down by type of securitisation (synthetic, traditional), and role of the institution (originator/investor)
SEC 2			Retained and invested positions in SEC in trading book
SEC 3			Retained positions from originator/sponsor in banking book			EAD & RWA broken down by regulatory approach of RW calculation
SEC 4			Institutions acting as investor. Banking book
SEC 5			All exposures securitized by the institutions			Underlying on-balance broken down by asset class

A typical SRT is structured in at least in one senior and one junior tranch, depending on the risk level, where the junior tranche is the one absorbing the first losses of the underlying portfolio.

Disclosure of information in the Pillar 3 Report

However, in most cases additional tranches are included, such as a mezzanine (covering the unexpected loss) tranche, as shown in the example below.

Depending on the specific structure of the SRT, the investors risk preference and the banks' capital strategy, several tranches may be sold to investors while others are retained by the bank. In the exemplary overview below, the mezzanine tranche is sold to investors while the senior and junior tranche are retained by Santander.

Please note that tranches which are sold to investors are not held on the balance sheet of the Bank and therefore are not shown in the provided tables included in the Pillar 3 report. Only tranches, which are owned by the Santander and are included in its banking book, are represented by the corresponding EAD and RWA metric. Information regarding EAD and RWA of the portions held by investors are not shown in this report and cannot be deducted by the presented information.

188    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following tables show the distribution, by type of underlying asset, of the securitisation positions issued and repurchased by the Group as an originator, investor and sponsor as of 31st December 2025, in both the banking book and trading book.

Table 68.SEC1 - Securitisation exposures in the non-trading book
			EUR million
																																																						2025
						a			b			c			d			e			f			g			h			i			j			k			l			m			n			o			n			o
						Bank acting as originator																								Bank acting as sponsor															Bank acting as investor
						Traditional												Synthetic						Sub-total						Traditional						Synthetic			Sub-total						Traditional						Synthetic			Sub-total
						STS						Non-STS									of which SRT									STS			Non-STS												STS			Non-STS
									of which SRT						of which SRT
1			Total exposures			2,027			512			19,101			75			74,065			74,016			95,193						—			1,058			—			1,058						4,319			26,512			—			30,831
2			Retail (total)			2,027			512			16,951			75			30,392			30,392			49,371						—			1,058			—			1,058						4,139			13,456			—			17,595
3			Residential mortgages			—			—			9,066			—			12,863			12,863			21,929						—			11			—			11						1,114			3,159			—			4,273
4			Credit card			—			—			—			—			—			—			—						—			—			—			—						248			312			—			560
5			Other retail exposures			2,027			512			7,885			75			17,530			17,529			27,442						—			1,047			—			1,047						2,777			9,986			—			12,762
6			Resecuritisation			—			—			—			—			—			—			—						—			—			—			—						—			—			—			—
7			Wholesale (total)			—			—			2,150			—			43,673			43,624			45,823						—			—			—			—						181			13,056			—			13,236
8			Loans to corporates			—			—			737			—			33,592			33,543			34,329						—			—			—			—						—			6,235			—			6,235
9			Commercial mortgage			—			—			—			—			7,045			7,045			7,045						—			—			—			—						—			—			—			—
10			Finance leases and receivables			—			—			—			—			1,756			1,756			1,756						—			—			—			—						181			2,326			—			2,506
11			Other wholesale exposures			—			—			1,412			—			1,279			1,279			2,692						—			—			—			—						—			4,495			—			4,495
12			Resecuritisation			—			—			—			—			—			—			—						—			—			—			—						—			—			—			—

2025 Pillar 3 Disclosures Report    189

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 69.SEC2 - Securitisation exposures in the trading book
			EUR million
									2025
						a			b			c			d			e			f			g			h			i			j			k			l
						Bank acting as originator												Bank acting as sponsor												Bank acting as investor
						Traditional						Synthetic			Subtotal			Traditional						Synthetic			Subtotal			Traditional						Synthetic			Subtotal
						STS			Non-STS									STS			Non-STS									STS			Non-STS
1			Total																											81			836						917
2			Retail (total)			—			—			—			—			—			—			—			—			81			223			—			304
3			Residential mortgages			—			—			—			—			—			—			—			—			7			171			—			177
4			Credit card			—			—			—			—			—			—			—			—			—			—			—			—
5			Other retail exposures			—			—			—			—			—			—			—			—			74			52			—			127
6			Resecuritisation			—			—			—			—			—			—			—			—			—			—			—			—
7			Wholesale (total)			—			—			—			—			—			—			—			—			—			613			—			613
8			Loans to corporates			—			—			—			—			—			—			—			—			—			—			—			—
9			Commercial mortgage			—			—			—			—			—			—			—			—			—			141			—			141
10			Finance leases and receivables			—			—			—			—			—			—			—			—			—			—			—			—
11			Other wholesale exposures			—			—			—			—			—			—			—			—			—			472			—			472
12			Resecuritisation			—			—			—			—			—			—			—			—			—			0.19			—			0.19

For December 2025, total RWAs for the same books were $248 million. This level is lower than June 2025 and broadly in line with December 2024. The reduction in RWAs primarily reflects market conditions and the available opportunity set during the period.

Given general market moves in the second half of last year we saw an increase in secondary activity in the UK BTL/NCF space which is a market typically populated by asset managers who are less STS focussed than bank treasuries. Our secondary book is a reflection of client activity, so this reflects that change.

190    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Finally, in its role as originator and investment entity for securitisations, Santander complies with the requirements relating to the net retention of economic interest and requirements established in procedure and control policies for all securitisation funds issued since 1 January 2011. We have to distinguish between the requirements for originators and for investment positions:

Securitisations originated:

•Santander always retains a minimum of 5% of the net economic interest.

•Santander meets all the due diligence requirements, making available to investors all the information needed to ensure the risks of the investment are fully known before purchase and to enable regular monitoring of the performance of the investment. This information includes

details of the risk criteria applied to the securitised exposures, which in all cases are the same as for the non-securitised exposures in the originator's balance sheet.

Investment positions in securitisations:

•The Group performs due diligence to ensure that the investment risks are understood before purchase and to be able to monitor the performance of the investment on a regular basis.

•The Group verifies that the originators of the securitisations in which it invests retain a 5% net economic interest.

The positions in securitisations with risk transfer and in investment and sponsoring positions in the banking book are presented below on the basis of the approach used to calculate regulatory capital:
Table 70.Breakdown of repurchased positions in SSPEs with risk transfer, distributed by function and approach used
EUR million
			2025															2024
			On-balance sheet amount exposures			Off-balance sheet amount exposures			EAD			EAD after capital reductions			RWA*			On-balance sheet amount exposures			Off-balance sheet amount exposures			EAD			EAD after capital reductions			RWA*
Originator - standardised approach			—			—			—			—			—			—			—			—			—			—
Originator - SEC standardised approach			13,529			684			13,273			12,994			2,747			14,275			18			14,049			13,656			2,100
Originator - SEC ERB approach			8,648			109			8,758			8,758			1,957			10,088			116			10,204			10,204			2,142
Originator - RB approach			—			—			—			—			—			—			—			—			—			—
Originator - SF approach			—			—			—			—			—			—			—			—			—			—
Originator - IRB approach			52,737			161			52,528			52,232			7,547			49,377			158			49,246			49,008			7,285
Originator - 1250%			227			1			44			—			—			265			2			37			—			—
Total originator			75,141			341			74,603			73,985			12,252			74,006			294			73,536			72,868			11,527
Investor - standardised approach			—			—			—			—			—			—			—			—			—			—
Investor - SEC standardised approach			28,634			268			28,899			28,899			4,436			24,583			227			24,806			24,805			3,885
Investor - SEC ERB approach			1,884			47			1,932			1,932			369			1,473			106			1,579			1,579			342
Investor - RB approach			—			—			—			—			—			—			—			—			—			—
Investor - SF approach			—			—			—			—			—			—			—			—			—			—
Investor - IRB approach			—			—			—			—			—			—			—			—			—			—
Investor - 1250%			0.439			—			0.439			—			—			0.439			—			0.439			—			—
Total investor			30,519			315			30,831			30,830			4,805			26,056			332			26,384			26,384			4,227
Sponsor - standardised approach			—			—			—			—			—			—			—			—			—			—
Sponsor - SEC standardised approach			289			—			289			289			45			403			—			403			402			60
Sponsor - SEC ERB approach			769			—			769			769			164			—			—			—			—			—
Sponsor - RB approach			—			—			—			—			—			—			—			—			—			—
Sponsor - SF approach			—			—			—			—			—			—			—			—			—			—
Sponsor - IRB approach			—			—			—			—			—			—			—			—			—			—
Sponsor - 1250%			—			—			—			—			—			—			—			—			—			—
Total sponsor			1,058			—			1,058			1,058			209			403			—			403			402			60
Total			106,718			655			106,492			105,873			17,266			100,465			627			100,323			99,654			15,815
Of which: traditional securitisations			32,304			655			32,476			32,399			5,084			27,110			627			27,320			27,257			4,348
Of which: synthetic securitisations			74,414			—			74,016			73,473			12,182			73,355			—			73,003			72,397			11,466
EAD IRB (RBA & SFA): exposures net of collateral, before provisions and deductions and after outflows to other regulatory reports.
EAD STD: exposures net of collateral, before deductions and after provisions and outflows to other regulatory reports.
RWA IRB (RBA & SFA): after provisions, deductions and outflows to other regulatory reports and before application of the limit.
*RWA before the CAP.

2025 Pillar 3 Disclosures Report    191

Index Introduction l Capital l Risks l Remuneration l Appendices l

It should be noted that for all securitisations that qualify for a weighting of 1250%, the company deducts this exposure from own funds.

As shown in Table 68, exposure has increased by 46.0%, due to the increase in exposures in securitisations originated by the Group. This year, 38 new securitisations with significant risk transfer were originated, with the main goal of transferring credit risk and optimising capital consumption.

Securitisation positions in the trading portfolio are eliminated from the regulatory capital calculation based on an internal market risk model and are included in the calculation of capital for specific risk, in accordance with article 335 of the CRR. The correlation trading portfolio is also included among these positions. This book consists of securitisation positions and nth-to-default derivatives that meet all the criteria in article 338.1 of the CRR. Therefore, none of these positions are considered in the VaR spread and IRC calculation, although they are included in the interest rate VaR calculation (general risk).

For these positions, capital is treated as for securitisation positions in the banking book, so that capital requirements are calculated taking into account the new approaches considered in the new Regulation (EU) 2017/2401 on securitisations.

Finally, Regulation (EU) 2017/2402 on securitisations came into force on the 1st of January 2019. This regulation changed the prudential requirements for credit institutions and investment firms, establishing new treatment for securitisation positions. One of the most significant changes is that positions in preferential securitisation tranches may not consume more capital than the loan portfolio. It also provides for a more favourable treatment for senior tranches of STS (simple, transparent and standardised) securitisations which was updated on 31st March 2021 Regulation (EU) 2021/558 amending Regulation (EU) No 575/2013 regarding adjustments to the securitisation framework to support the economic recovery in response to the covid-19 crisis.

The following table shows the aggregate value of securitisation positions purchased and retained in the trading portfolio.

192    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 71.Aggregate amount of securitisation positions purchased and retained. Trading book
EUR million
			2025
			Investor positions						Originator positions						Sponsor positions
ABS PORTFOLIO			Mark to market			RWA			Mark to market			RWA			Mark to market			RWA
SEC - ERBA approach			321			136			0			0			0			0
10 -12%			67			1			—			—			—			—
12-20%			218			68			—			—			—			—
20-40%			7			14			—			—			—			—
40-100%			12			10			—			—			—			—
100-150%			5			10			—			—			—			—
150-200%			—			—			—			—			—			—
200-500%			3			9			—			—			—			—
500-950%			5			14			—			—			—			—
1,250%			3			10			—			—			—			—
SEC-SA			464			70			0			0			0			0
10 -12%			—			—			—			—			—			—
12-20%			464			70			—			—			—			—
20-40%			—			—			—			—			—			—
40-100%			—			—			—			—			—			—
100-150%			—			—			—			—			—			—
150-200%			—			—			—			—			—			—
200-500%			—			—			—			—			—			—
500-950%			—			—			—			—			—			—
1,250%			—			—			—			—			—			—
ABS PORTFOLIO			133			3			0			0			0			0
10 -12%			3			—			—			—			—			—
12-20%			69			1			—			—			—			—
20-40%			61			2			—			—			—			—
40-100%									—			—			—			—
1,250%									—			—			—			—
Total ABS Portfolio			917			209			0			0			0			0
Correlation portfolio			0			0			0			0			0			0
SEC - ERBA approach			0			0			0			0			0			0
40-75 %			—			—			—			—			—			—
100%			—			—			—			—			—			—
250%			—			—			—			—			—			—
Supervisory formula method			0			0			0			0			0			0
FS			—			—			—			—			—			—
Total correlation portfolio			0			0			0			0			0			0
Total			0			0			0			0			0			0

2025 Pillar 3 Disclosures Report    193

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following table shows the current situation of the underlying portfolio for originated securitisations with risk transfer and the changes compared to 2023.

Table 72.Securitisation structures with risk transfer
EUR million
			2025												2024
Traditional SPVs			Outstanding balance			Of which, in default			Value adjustments in the period			RWA			Outstanding balance			Of which, in default			Value adjustments in the period			RWA
Residential mortgages			—			—			—			—			—			—			—			—
Commercial mortgages			—			—			—			—			—			—			—			—
Loans to corporates or to SMEs treated as corporates			—			—			—			—			—			—			—			—
Consumer loans			24,025			644			181			61			16,488			432			87			46
Others			4,629			105			53			8			4,655			87			29			14
Resecuritisations
Securitisation positions			—			—			—			—			—			—			—			—
Total traditional SPVs			28,655			749			234			70			21,142			519			115			61
Synthetic securitisation SPVs
Residential mortgages			14,446			62			8			1,985			13,014			56			7			1,812
Commercial mortgages			7,301			76			9			1,153			5,326			42			5			960
Loans to corporates or to SMEs treated as corporates			34,820			135			42			4,892			36,168			178			21			5,140
Consumer loans			18,419			322			55			3,596			16,696			269			144			2,593
Others			5,219			13			5			557			9,341			30			8			962
Total synthetic securitisation SPVs			80,205			607			119			12,182			80,546			575			184			11,466
Total			108,860			1,355			353			12,252			101,688			1,093			299			11,527

38 new significant risk transfer securitisations have been issued this year, with the main objective of transferring credit risk and optimizing capital consumption

Regarding securitisation funds without risk transfer, Grupo Santander retains the majority of the positions of the originated securitisation funds, so they do not meet the

regulatory conditions that would allow the significant transfer of risk.

For these funds, capital is calculated for the securitized exposures as if they had not been securitized. The underlying assets securitized in the funds launched by Grupo Santander consist of mainly mortgages and consumer loans.

194    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

6.3.5. Significant Risk Transfer (SRT)

Significant Risk Transfer (SRT) is a mechanism by which a financial institution transfers a substantial portion of the credit risk associated with a portfolio of assets to external investors, generally through securitisation transactions or structured credit instruments.

Significant risk transfer (SRT) overview
Banks use SRTs as a de-risking strategy, purchasing credit protection on credit portfolios.						Investors see SRTs as an attractive risk-return investment for their stakeholders
									Unique platform of assets SRT investors benefit from obtaining access to banks’ wide range of portfolios, ranging across product categories (e.g. mortgages, auto loans, SMEs, etc), segments (e.g. retail), stages (e.g. NPLs) and more
									Optimal risk-return Banks’ wide portfolio offerings enable SRT investors to invest in assets that are core business to the bank, through securitisation technology to achieve investors´ expected risk-return (e.g.; senior, mezzanine, junior / synthetic vs. cash / funded vs. unfunded)
									Highly-supervised transactions SRT transactions are heavily supervised by the regulator, with a wide range of regulations and mechanisms that provide investors with a high degree of standardization, transparency and protection

This transfer allows the institution to optimize its regulatory capital management, in line with the requirements of the Basel framework, by reducing its exposure to credit risk and improving its ability to grant new financing.

The assessment of an SRT by regulators is based on specific criteria to ensure that the risk transfer is effective and complies with applicable prudential requirements.

2025 Pillar 3 Disclosures Report    195

Index Introduction l Capital l Risks l Remuneration l Appendices l

6.3.6. Overview of the securitisation process

The following graphic details the process of a securitisation from inception to the monitoring phase after the deal is closed. Finance department starts through CFO mandate considering suitable underlying to be managed through different strategies, such as an asset sale, a single risk guarantee or securitisation. In this phase data screening is performed and suitable portfolios are analysed until a specific pool of assets is identified. Afterwards, still under the pre-deal phase, the transactions are structured and tranched based on investors risk appetite. This is also performed considering cost of capital and the economic value.

Overview of the securitisation process

*The entire process typically takes 4-6 months, depending on deal complexity, regulatory requirements, and investor demand

Finance department coordinates the entire process with several internal and external parties involved. Transactions are only presented to investors once the relevant portfolio data has been created and the transaction structured. Individual solutions may be discussed with investors at certain stages. The regulatory pre-notification has to be submitted to the joint supervisory team from the ECB several weeks in advance. Before the final regulatory approval, Investors can propose non-binding bids. After the closure of the transaction and the disbursement, the portfolio is monitored until the end of the transactions.

196    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

6.3.7. SRT Regulation and approval process

Several factors after the financial crisis have helped to consolidate the standing of the SRT market as a resilient and dependable capital management tool for European significant institutions, as well as a reliable source of investment opportunities for investors.

As more banks adapt their risk management, IT, accounting, legal and capital management infrastructure to the new technology, supply is set to increase. Once these investments have been made, banks have an incentive to continue using SRT and expand their offering.

The SRT securitisation market in the EU has developed significantly since the introduction of new regulation. Policy makers reacted to the financial crisis by bringing in new regulatory requirements (the Dodd Frank Act in the US and Basel 3 internationally). In response to the failings in the securitisation intermediation chain, regulators attempted to realign incentives and address structural weaknesses as a way of reviving the securitisation markets. At a high level, these regulatory initiatives aimed to increase disclosure, mandate risk retention, restructure ratings agencies and impose capital requirements. In Europe this was complemented with securitisations labelled simple, transparent and standardised (STS) as part of a Capital Markets Union (CMU) Action Plan.

Regulation and adequate supervisory attention and capacity have been enabling factors for the growth of the SRT market. Since the introduction of the CRR and the various clarifications issued by the EBA and the SSM, banks can expect predictability when issuing transactions.

The EBA discussion paper on SRT was taken by the Joint Supervisory Teams (JSTs) at the SSM responsible as the basis for their assessments and helped make the regulatory process for SRT clearer.

Banking supervisors assess SRT transactions to evaluate the degree of risk transfer from banks to investors, allowing institutions to achieve capital relief when this is considered sufficient. SRT transactions are assessed following a comprehensive review to ensure they comply with the CRR rules and authorities’ expectations.

Large European banks are expected to provide information on their SRT transactions to the competent authority as a condition of recognition. Entities should notify the ECB of their intentions at least three months in advance of the expected closing date of the transaction, in accordance with the ECB Public Guidance on the recognition of significant credit risk transfer.

Originator institutions should also provide the final version of the documentation no later than 15 days after the closing date of the transaction. Based on the documentation provided by the institution, the JST will assess the transaction and the credit risk that has been transferred to third parties. The JST may also ask the institution to provide any other information necessary to perform its assessment of the transaction, e.g. the specific features of an individual transaction. As the conditions for SRT have to be met on a continuous basis over the life of the securitisation transaction, the ECB also continuously reviews the securitisation transactions to which originator institutions apply an SRT for the determination of their capital requirements.

Table 73.SEC5 - Exposures securitised by the institution - Exposures in default and specific credit risk adjustments
			EUR million									2025
						a			b			c
						Exposures securitised by the institution - Institution acts as originator or as sponsor
						Total outstanding nominal amount						Total amount of specific credit risk adjustments made during the period
									Of which exposures in default
1			Total exposures			170,833			2,219			587
2			Retail (total)			122,018			2,007			535
3			residential mortgage			35,518			364			131
4			credit card			—			—			—
5			other retail exposures			86,500			1,643			404
6			re-securitisation			—			—			—
7			Wholesale (total)			48,815			212			52
8			loans to corporates			36,532			135			43
9			commercial mortgage			7,301			76			9
10			lease and receivables			2,018			1			(1)
11			other wholesale			2,964			—			—
12			re-securitisation			—			—			—

2025 Pillar 3 Disclosures Report    197

Index Introduction l Capital l Risks l Remuneration l Appendices l

6.4. Securitisation accounting policies

This section covers letter (g) of the qualitative requirement SECA - Qualitative disclosure requirements related to securitisation exposures.

According to IFRS 9, the initial recording, classification and subsequent measurement of financial assets is influenced by the company's business model and by the nature of the cash flows that financial assets. Specifically, to allow them to be measured at amortised cost or at fair value with changes in OCI, the Standard requires that contractual cash flows meet the criteria of a basic loan agreement (SPPI [Solely Payments of Principal and Interest] flows).

The criterion for derecognising securitised assets is that set by IFRS 9 in section 3.2. The accounting treatment of transfers of financial assets depends on the form and extent to which the cash flows, risks and rewards are transferred to third parties, as well as with the control of the assets transferred:

•Where substantially all the risks and rewards are transferred to third parties, e.g. in asset securitisations in which the transferor neither retains subordinated debt nor grants any credit enhancement to the new holders, the transferred financial assets are derecognised. Any right or obligation retained or created in the transfer is recognised. The difference between the carrying amount recorded prior to the transfer and the fair value of the retained rights or obligations is recognised in profits or losses for the year.

•Where substantially all the risks and rewards associated with the transferred financial asset are retained (as in securitisations in which subordinated debt or some other type of credit enhancements are retained that absorb substantially all of the expected credit losses for the transferred asset or the probable variation of its future net cash flows), the transferred financial asset is not derecognised and continues to be measured using the same criteria as before the transfer. Additionally, it should be recognised:

◦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 at fair value through profit or loss.

◦The income from the financial asset that has been transferred but not derecognised and any expense incurred on the new financial liability are presented on the profit and losses without netting.

•The following distinction is made when substantially all the risks and rewards associated with the transferred financial asset are neither transferred nor retained, e.g. in securitisations in which the transferor takes on subordinated debt or some other type of credit enhancement for a portion of the transferred asset and thus significantly, but not substantially, reduces its exposure to variations in the present value of future net cash flows:

a

•Where the transferor does not retain control of the transferred financial asset: the transferred financial asset is derecognised and any right or obligation retained or created in the transfer is recognised.

•Where the transferor retains control of the transferred financial asset: it continues to recognise the transferred financial asset on its balance sheet for an amount equal to its exposure to possible changes in value and recognises a financial liability associated with the transferred financial asset. The net 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 any of the following circumstances occur:

•The rights to the future cash flows generated have been extinguished.

•The risks and benefits have been substantially transferred to third parties.

•If not all risks and benefits are retained or transferred, when control has been transferred.

There have been no changes with respect to the previous year in the methods, assumptions and key data used to assess the securitised exposures or re-securitisation exposures (i.e. securitisations in which at least one of the underlying exposures is a securitisation exposure).

There is no specific accounting treatment for synthetic securitisations or assets awaiting securitisation.

198    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

6.5. Capital requirements - Securitisations

Grupo Santander calculates regulatory capital under the securitisation approach for positions held in originated securitisations only if the regulatory conditions established in the Capital Requirements Regulation (CRR) for significant risk transfer are met. Otherwise, capital is calculated for the securitized exposures as if they had never been securitized. Capital is also calculated for investment positions in securitisation funds originated by third parties.

Regulation 2017/2401 modified the CRR in those areas related to the calculation methods for capital requirements for securitisations. Within this framework, with the objective of reducing the dependence on external ratings, the entity must use its own calculation of regulatory capital requirements so long as it is authorized, in order to apply the internal ratings-based approach for securitized exposures: the Securitisation and Exchange Commission Internal ratings-based approach (SEC-IRBA). Entities that cannot use the SEC-IRBA must apply the standardised approach (SEC-SA) to securitisations. The SEC-SA is based on the capital requirements calculated under the standardised approach for credit risk. When neither of these two approaches are available, entities must adopt the external ratings-based approach for securitisations (SEC-ERBA). In accordance with SEC-ERBA, capital requirements must be assigned to securitisation tranches based on their external rating.

Capital requirements for securitisation positions are calculated by applying the appropriate risk weight to the exposure value of each position, depending on the approach used by the entity to calculate the risk-weighted exposure amounts of the securitized portfolio.

In November 2020, the Basel Committee published a technical amendment establishing the prudential treatment for securitisations of non-performing loans. In 2021, this technical amendment was transposed into an EU regulation as part of the 'quick fix' for securitisations implemented through two EU regulations, as explained below.

•

•Regulation (EU) 2021/557, amending Regulation (EU) 2017/2402 (Securitisation Regulation) to aid recovery from the covid-19 crisis. In addition to establishing a framework for securitisations of non-performing exposures, this regulation also aimed to extend the benefits of STS (simple, transparent and standardized) securitisation to synthetic securitisations. To this end, the framework was created so that institutions could trade their non-performing exposures in the market by securitizing such exposures.

•Regulation 2021/558, amending Regulation 575/2013 (CRR) to specify the capital requirements applicable to the changes introduced by Regulation 2021/557, such as securitisations of NPLs, senior tranches of STS synthetic securitisations, etc.

The European Banking Authority (EBA) published in February 2023 its final Regulatory Technical Standards (RTS) amending the regulatory technical standards established in Delegated Regulation (EU) 2019/1851 with regard to the assessment of the consistency of underlying exposure in simple, transparent and standardised (STS) on-balance-sheet securitisation.

Lastly, in October 2023, Delegated Regulation (EU) 2023/2175 was published, specifying in greater detail the risk retention requirements for originators, sponsors, original lenders and servicers. Among other aspects, this Delegated Regulation sets forth the requirements concerning the types of risk retention, prohibits selling or hedging the retained economic interest, establishes the conditions of retention on a consolidated basis, as well as the types of risk retention in the case of the traditional securitisation of non-performing exposures.

In addition, in recent years the European Commission has promoted several initiatives to review and update the securitisation regulatory framework. In 2024, it conducted a public consultation to assess the functioning of the existing framework and to identify potential improvements. During 2025, it published a legislative draft proposing amendments to i) Securitisation Regulation which establishes a general framework for securitisation, and to CRR which sets, among others, the capital requirements for securitisations.

In the same year, the Commission also launched a public consultation on amendments to Commission Delegated Regulation (EU) 2015/61, which supplements Regulation (EU) No 575/2013 regarding the Liquidity Coverage Ratio (LCR), with a view to expanding the eligibility of certain securitisations.

2025 Pillar 3 Disclosures Report    199

Index Introduction l Capital l Risks l Remuneration l Appendices l

A breakdown of all securitisations in the banking book is provided below, together with the corresponding capital consumption arranged by RW (risk weighting) interval and the calculation method employed when the Group acts as originator or sponsor.

Table 74.SEC3 - Securitisation exposures in the non-trading book and associated regulatory capital requirements - institution acting as originator or as sponsor
			EUR million
						2025
						a			b			c			d			e						f			g			h			i
						Exposure values (by RW bands/deductions)																		Exposure values (by regulatory approach)
						<= 20%			> 20% to 50%			> 50% to 100%			> 100% to 1250%			1250% RW/ deductions						SEC-IRBA			SEC-ERBA (including IAA)			SEC-SA			1250%/ deductions
1			Total exposure			68,817			5,673			206			346			619						52,232			9,526			13,283			619
2			Traditional securitisation			1,795			65			—			3			76						333			878			357			76
3			Securitisation			1,795			65			—			3			76						333			878			357			76
4			Retail underlying			1,795			65			—			3			76						333			878			357			76
5			Of which STS			435			2			—			—			75						320			96			21			75
6			Wholesale			—			—			—			—			—						—			—			—			—
7			Of which STS			—			—			—			—			—						—			—			—			—
8			Re-securitisation			—			—			—			—			—						—			—			—			—
9			Synthetic securitisation			67,021			5,608			206			344			543						51,899			8,648			12,926			543
10			Securitisation			67,021			5,608			206			344			543						51,899			8,648			12,926			543
11			Of which, retail underlying			26,559			3,039			173			39			288						15,632			7,467			7,005			288
12			Of which, wholesale underlying			40,462			2,569			34			304			255						36,267			1,182			5,920			255
13			Of which, resecuritisation			—			—			—			—			—						—			—			—			—

Table 74.SEC3 - Securitisation exposures in the non-trading book and associated regulatory capital requirements - institution acting as originator or as sponsor
			EUR million
						j			k			l			m						n			o			EU-p			EU-q
						RWEA (by regulatory approach)*															RWEA (by regulatory approach)
						SEC-IRBA			SEC-ERBA (including IAA)			SEC-SA			1250% RW						SEC-IRBA			SEC-ERBA (including IAA)			SEC-SA			1250% RW
1			Total exposure			7,547			2,121			2,793			—						604			167			180			—
2			Traditional securitisation			38			182			59			—						3			13.7			4			—
3			Securitisation			38			182			59			—						3			13.7			4			—
4			Retail underlying			38			182			59			—						3			13.7			4			—
5			Of which STS			34			15			2			—						3			1.2			—			—
6			Wholesale			—			—			—			—						—			—			—			—
7			Of which STS			—			—			—			—						—			—			—			—
8			Re-securitisation			—			—			—			—						—			—			—			—
9			Synthetic securitisation			7,509			1,939			2,734			—						601			153			175			—
10			Securitisation			7,509			1,939			2,734			—						601			153			175			—
11			Of which, retail underlying			2,530			1,280			1,856			—						202			100			105			—
12			Of which, wholesale underlying			4,979			660			878			—						398			53			70			—
13			Of which, resecuritisation			—			—			—			—						—			—			—			—

200    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 75.SEC4 - Securitisation exposures in the non-trading book and associated regulatory capital requirements - institution acting as investor
						2025
						a			b			c			d			e						f			g			h			i
			EUR million			Exposure values (by RW bands/deductions)																		Exposure values (by regulatory approach)
						<= 20%			> 20% to 50%			> 50% to 100%			> 100% to 1250%			1250		%				SEC-IRBA			SEC-ERBA (including IAA)			SEC-SA			1250		%
1			Total exposure			28,512			2,237			52			30			0.82						—			1,932			28,899			0.82
2			Traditional securitisation			28,512			2,237			52			30			0.82						—			1,932			28,899			0.82
3			Securitisation			28,512			2,237			52			30			0.82						—			1,932			28,899			0.82
4			Retail underlying			17,444			117			3			30			0.82						—			784			16,810			0.82
5			Of which STS			4,133			—			—			5			—						—			199			3,940			—
6			Wholesale			11,068			2,120			49			—			—						—			1,147			12,089			—
7			Of which STS			181			—			—			—			—						—			—			181			—
8			Re-securitisation			—			—			—			—			—						—			—			—			—
9			Synthetic securitisation			—			—			—			—			—						—			—			—			—
10			Securitisation			—			—			—			—			—						—			—			—			—
11			Of which, retail underlying			—			—			—			—			—						—			—			—			—
12			Of which, wholesale underlying			—			—			—			—			—						—			—			—			—
13			Of which, resecuritisation			—			—			—			—			—						—			—			—			—

Table 75.SEC4 - Securitisation exposures in the non-trading book and associated regulatory capital requirements - institution acting as investor
						j			k			l			m						n			o			EU-p			EU-q
			EUR million			RWEA (by regulatory approach)															RWEA (by regulatory approach)
						SEC-IRBA			SEC-ERBA (including IAA)			SEC-SA			1250% RW						SEC-IRBA			SEC-ERBA (including IAA)			SEC-SA			1250% RW
1			Total exposure			—			369			4,436			—						—			29			355			—
2			Traditional securitisation			—			369			4,436			—						—			29			355			—
3			Securitisation			—			369			4,436			—						—			29			355			—
4			Retail underlying			—			132			2,377			—						—			11			190			—
5			Of which STS			—			33			405			—						—			3			32			—
6			Wholesale			—			236			2,059			—						—			19			165			—
7			Of which STS			—			—			18			—						—			—			1			—
8			Re-securitisation			—			—			—			—						—			—			—			—
9			Synthetic securitisation			—			—			—			—						—			—			—			—
10			Securitisation			—			—			—			—						—			—			—			—
11			Of which, retail underlying			—			—			—			—						—			—			—			—
12			Of which, wholesale underlying			—			—			—			—						—			—			—			—
13			Of which, resecuritisation			—			—			—			—						—			—			—			—

2025 Pillar 3 Disclosures Report    201

Index Introduction l Capital l Risks l Remuneration l Appendices l

[THIS PAGE INTENTIONALLY LEFT BLANK]

202    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2025 Pillar 3 Disclosures Report    203

Index Introduction l Capital l Risks l Remuneration l Appendices l

			7.1. Activities subject to market risk			205
			7.2. Capital requirements for market risk			206
			7.2.1. Internal initiatives on methods for calculating market risk			209
			7.3. Trading activity			211
			7.3.1. Value at Risk			212
			7.3.2. Stressed VaR			214
			7.3.3. Incremental Risk Charge			214
			7.3.4. Analysis of scenarios and stress testing			215
			7.3.5. Backtesting (MR4)			216
			7.3.6. Internal validation of the models			218
			7.4. Structural balance sheet risks			220
			7.4.1. Main interest rate risk in the banking book (IRRBB) metrics			220
			7. Market risk

204    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

7. MARKET RISK

Market risk is the risk of value reduction of financial instruments arising from changes in market parameters, volatility of these parameters and the correlations between them.

The following chapter provides information on the activities subject to market risk and market outcomes in 2025, distinguishing trading activity from structural risks. It also describes the methodologies and different metrics used in Grupo Santander.

Main figures
€ Million
			RWA
			2025						2024
Market risk			21,478						17,946
Of which, standardised approach			11,853						10,693
Of which, IMA			9,625						7,253

RWA by calculation approach						RWA by geography
%						%

n			SA approach			55		%
n			IMA approach			45		%

n			Spain			73.7%
n			Brasil			7.8%
n			Rest of South America			10.9%
n			United States			4.6%
n			Rest of Europe			3.0%

7.1. Activities subject to market risk

This section covers the qualitative requirement MRA - Qualitative disclosure requirements related to market risk and MRB - Qualitative disclosure requirements for institutions using the internal market risk models.

Also, the provisions of letters (d), (e), (f) and (g) of the OVA requirement -Institution risk management approach, are complied with.

The measurement, control and monitoring perimeter of the Market Risk area includes all transactions where risk arises due to changes in market factors. This risk arises from changes in risk factors (interest rate, exchange rate, equities, credit spreads, commodity prices and the volatility of each of these) which may impact earnings or capital, and from the liquidity risk of the products and markets in which Santander operates.

The activities are segmented according to the purpose of the risk, as follows:

•Trading: the trading book includes all financial instruments that a bank holds for short-term resale in order to profit from short-term price movements, to make arbitrage profits or to hedge risks arising from the positions or instruments in this portfolio. This includes the provision of financial services in the markets to customers where the bank is the counterparty, as well as proprietary trading and positioning primarily in fixed income, equities, currencies and commodities. It should be noted that a corporate policy transposed by the different units delimits the boundary between the Trading Book and the Banking Book.

See chapter 'Risk management and compliance', of the Group annual report, for further information about the different risks of this activity.

Access 2025 annual report available on the Santander Group website

2025 Pillar 3 Disclosures Report    205

Index Introduction l Capital l Risks l Remuneration l Appendices l

•Structural risks: these are composed of the market risks inherent in the balance sheet, excluding the trading book. Namely:

◦Structural interest rate risk: this risk arises from timing mismatches in maturities and repricing of all balance sheet assets and liabilities.

◦Structural foreign exchange risk (hedging of results): foreign currency risk arising from the currency in which investments in consolidated and non-consolidated companies are made (structural exchange rate). This category also includes the positions taken to hedge the foreign currency risk on future results generated in currencies other than the euro (hedging of results).

◦Structural equity risk: this includes equity investments in non-consolidated financial and non-financial companies, and the available-for-sale portfolios of equity positions.

7.2. Capital requirements for market risk

This section provides more detailed information on changes in capital requirements for market risk through both internal and standardised models. The Group's consumption of regulatory capital for market risk at the end of December 2025 breaks down as follows.

Table 76.Regulatory capital requirements for market risk
EUR million
			2025			2024
Position risk - Trading book* - Standardised approach			379			420
Commodity Risk - Standardised approach			15			30
Specific risk in the correlation trading risk portfolio			—			—
Currency risk - standardised approach			554			406
Position and currency risk - Tradingbook - Internal models			770			580
Spain & SLB			604			440
Chile			63			64
Mexico			103			76
Total			1,718			1,436

Grupo Santander has an internal market risk model in Spain, Chile and Mexico.

At the end of the 2025 financial year, Grupo Santander had authorization to use the internal market risk model for calculating regulatory capital in the trading books of the Spain, Chile and Mexico units. From October 2021 on, the market risk capital of the internal model for Spain and SLB will be reported in a single entity, following regulatory approval of the diversification between the two units. The other geographical units calculate capital consumption by market risk through the standardized approach. This calculation methodology is also used by entities that have approved internal models for only some of their portfolios. The standardized approach is applied to portfolios for which the internal model is not approved.

Consolidated regulatory capital under the internal market risk model for Santander is computed as the sum of the regulatory capital of the units that have the necessary approval from the European Central Bank. This is a conservative criterion when consolidating the Group's capital, as it takes no account of the capital savings arising from the geographical diversification effect.

The regulatory capital of the trading activity for the perimeter concerned is calculated with advanced approaches, using VaR, Stressed VaR and incremental risk charge (IRC) as the core metrics, in line with the new bank capital requirements under the Basel Accords and, specifically, the CRR.

The capital resulting from the VaR and SVaR metrics is adjusted through a Kr coefficient, derived from the number of backtesting overshootings existing for each unit in its local internal model and by a qualitative coefficient Kc determined by the European Supervisor. At the end of 2023, due to improvements made by the Bank to align with the supervisory expectations of the TRIM guidance the multiplier was reduced to zero.

In 2025 new not-in-model risks were added to the calculation of capital by market risk, for those risk factors not included in the current regulatory capital metrics (VaR, SVaR, etc.).

206    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

A breakdown of capital requirements in the units that use the internal model is shown below, by geography and component, at year-end:

Table 77.Capital requirements for market risk. Internal model
EUR million
			2025
			CR (VaR)			CR (SVaR)			IRC			Risk Not in VaR			Add-On			Total
Spain & SLB			135			344			33			92			—			604
Chile			14			47			3			—			—			63
México			24			64			15			—			—			103
Total			173			455			50			92			—			770

Below is a breakdown of capital requirements and RWA for market risk and calculation component with internal model approval at 2025 year-end:

Table 78.MR2-A - Market risk under the internal model approach (IMA)
			EUR million
									2025
						a			b
						RWA			Capital requirements
1			VaR (higher of values a and b)			2,160			173
(a)			(a) Previous day’s VaR (Article 365(1) of the CRR (VaRt-1))			662			53
(b)			(b) Average of the daily VaR (Article 365(1)) of the CRR on each of the preceding 60 business days (VaRavg) x multiplication factor (mc) in accordance with Article 366 of the CRR			2,160			173
2			SVaR (higher of values a and b)			5,684			455
(a)			(a) Latest SVaR (Article 365(2) of the CRR (SVaRt-1))			2,134			171
(b)			(b) Average of the SVaR (Article 365(2) of the CRR) during the preceding 60 business days (SVaRavg) x multiplication factor (ms) (Article 366 of the CRR)			5,684			455
3			IRC (higher of values a and b)			631			50
(a)			(a) Most recent IRC value (incremental default and migration risks calculated in accordance with Article 370 and Article 371 of the CRR)			505			40
(b)			(b) Average of the IRC number over the preceding 12 weeks			631			50
4			Comprehensive risk measure (higher of values a, b and c)			—			—
(a)			(a) Most recent risk number for the correlation trading portfolio (Article 377 of the CRR)			—			—
(b)			(b) Average of the risk number for the correlation trading portfolio over the preceding 12 weeks			—			—
(c)			(c) 8% of the own funds requirement in the standardised approach on the most recent risk number for the correlation trading portfolio (Article 338(4) of the CRR)			—			—
5			Other*			1,150			92
6			Total			9,625			770
			* Other includes Risks not in Model not included in Var or Svar

2025 Pillar 3 Disclosures Report    207

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 79.MR2-B - RWA flow statements of market risk exposures under the IMA
			EUR million
																								2025
						a			b			c			d			e			f			g
						VaR			SVaR			IRC			Comprehensive risk measure			Other*			Total RWAs			Total capital requirements
1			RWEAs at previous period end			2,080			5,766			987			—			817			9,650			772
1a			Regulatory adjustment			1,326			3,623			414			—			—			5,363			429
1b			RWEAs at the previous quarter-end (end of the day)			754			2,143			573			—			817			4,287			343
2			Movement in risk levels			(1,385)			(3,115)			(356)			—			334			(4,523)			(362)
3			Model updates/changes			—			—			—			—			—			—			—
4			Methodology and policy			—			—			—			—			—			—			—
5			Acquisitions and disposals			—			—			—			—			—			—			—
6			Foreign exchange movements			1,465			3,033			—			—			—			4,498			360
7			Other			—			—			—			—			—			—			—
8a			RWEAs at the end of the reporting period (end of the day)			662			2,134			505			—			1,150			4,451			356
8b			Regulatory adjustment			1,498			3,550			126			—			—			5,174			414
8			RWEAs at the end of the reporting period			2,160			5,684			631			—			1,150			9,625			770
			* Other includes Risks not in Model not included in Var or Svar

The table above shows the variations in the last quarter of the year. It should be noted that, globally, for the geographies under the internal model, the figures for RWAs by VaR, SVaR, IRC and RNIM remained stable during the quarter. The most notable change is the decrease in RWAs by IRC due to a lower net long position. For the year as a whole, in line with the comments in section 7.3.1. Value at Risk, the SVaR levels recorded were slightly higher than in the previous year, which contributed to the increase in capital during 2025.

Table 80.MR1 - Market risk under the standardised approach
			EUR million
						2025
						a
						RWEAs
			Outright products			11,320
1			Interest rate risk (general and specific)			4,052
2			Equity risk (general and specific)			295
3			Foreign exchange risk			6,780
4			Commodity risk			193
			Options			533
5			Simplified approach			—
6			Delta-plus approach			255
7			Scenario approach			—
8			Securitisation (specific risk)			278
9			Total			11,853

At the total level, an increase is observed, mainly explained by the variation in the Foreign Exchange Risk operation. Following an on-site inspection regarding the market risk framework for structural foreign exchange risk, there was a change in the calculation methodology. Consequently, the positions and the corresponding capital consumption were higher than before. This conducted an impact of €3.2 bn of RWAs in the first quarter of the year. The rest of the lines show a downward trend between the two dates, attributable to the evolution of the business.

208    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Below is a breakdown of capital requirements and RWA for market risk with standardised model approval from 2024 to 2025.

Table 81.Capital requirements for market risk. Standardised approach
EUR million
			Capital			RWAs
Starting figure (31 Dec. 2024)			855			10,693
Changes in business			93			1,159
Ending figure (31 Dec. 2025)			948			11,853

Prudent Valuation Adjustments (PVA)

In addition, Table 82 provides the breakdown of Banco Santander's Prudent Valuation Adjustments (PVA) corresponding to assets valued at fair value (at market prices or according to model) and for which this type of adjustment applies.

The amount of Prudent Valuation Adjustments has increased slightly compared to December 2024, mainly due to the increase in the valuation of positions subject to PVA, as well as the incorporation of new positions in the calculation perimeter.

The details of prudent valuation adjustments (table PV1) can be found in table 82.

7.2.1. Internal initiatives on methods for calculating market risk

Grupo Santander has dedicated great efforts in recent years to improve the internal Market Risk models, under the global initiative called Market Risk Advanced Platform (MRAP), with the double objective of transforming and strengthening them in line with the new requirements of market risk regulatory framework published by Basel ('Fundamental Review of Trading Book' - FRTB) and to adapt them to the guidelines of the ECB's TRIM exercise ('Targeted Review of Internal Model') and supervisor expectations.

This program adopted a multidisciplinary and multi-geographic approach, with the participation of all entities that carry out activities with market risk and all relevant interest groups, including market risk, technology, Front Office and Regulatory Affairs and Compliance. It has introduced significant improvements in terms of functional and IT architecture and operating models, which entails a change in the culture established in the Group and the generation of synergies between all initiatives and resources.

Within this program, during the years 2019 and 2020, intense work was done on improving and adapting the IRC model in order to comply with the findings previously raised by the supervisor. Finally, in October 2021, after the improvements and developments executed for this purpose, the new model was approved by the ECB for the calculation of capital requirements for market risk for Spain and SLB, along with other material changes (improvement in the treatment of credit VaR and VaR percentiles), after the corresponding inspection (IMI 4313). Additionally, during 2023 work continued on improving all components of the internal model (VaR/SVaR, RNIMs and IRC) in order to respond to the obligations raised by the supervisor in the TRIM and in the aforementioned IMI. As a result of all this, the ECB closed all obligations at the end of 2023 and eliminated the corresponding capital surcharges.

Currently, the Group's focus is on strengthening the regulatory calculation model for the future implementation of FRTB/CRR3 in January 2027, improving the quality of sensitivity metrics, making technological implementation more efficient and filling certain gaps in monitoring and the 'end-to-end' validation exercise.

See the Group annual report, for further information about the IBOR initiative.

Access 2025 annual report available on the Santander Group website

2025 Pillar 3 Disclosures Report    209

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 82.PV1 - Prudent valuation adjustments (PVA)
																								2025
						a			b			c			d			e			EU e1			EU e2			f			g			h
						Risk category															Category level AVA - Valuation uncertainty						Total category level post-diversification
			Category level AVA			Equity			Interest Rates			Foreign exchange			Credit			Commodities			Unearned credit spreads AVA			Investment and funding costs AVA						Of which: Total core approach in the trading book			Of which: Total core approach in the banking book
1			Market price uncertainty			316,450,703			139,899,078			9,704,499			41,522,927			817			10,049,214			19,364,940			268,496,089			60,516,246			207,979,843
2			Set not applicable in the EU																														0
3			Close-out cost			30,187,029			80,944,456			19,509,190			22,413,208			138,659			24,556,324			—			88,874,433			56,282,076			32,592,357
4			Concentrated positions			158,968,697			9,957			—			4,901,736			—			—			—			163,880,390			2,244,882			161,635,508
5			Early termination			—			—			—			—			—			—			—			—			—			—
6			Model risk			68,687			50,640,308			1,698,261			12,660,129			—			60,242,355			1,432,624			63,371,183			60,957,049			2,414,134
7			Operational risk			17,365,803			14,043,771			1,155,239			3,160,943			11,296			—			—			35,737,052			11,679,832			24,057,220
8			Set not applicable in the EU																														—
9			Set not applicable in the EU																														—
10			Future administrative costs			504,350			14,669,727			2,485,651			1,789,381			78,415			—			—			19,527,524			19,145,475			382,050
11			Set not applicable in the EU																														0
12			Total Additional Valuation Adjustments (AVAs)			523,545,268			300,207,296			34,552,841			86,448,325			229,188			94,847,893			20,797,564			639,886,671			210,825,560			429,061,111

210    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

7.3. Trading activity

The goal of daily market risk function monitoring is to ensure that market risk positions remain within approved limits and to assess performance and significant deviations in risk metrics.

Trading activity at Santander is monitored by the local market risk units, under the principle of independence of business units, monitoring market risk positions on a daily basis and analysing the value of a set of metrics identified and approved by the Group, the changes in them, any material changes that may occur and compliance with the approved limits on these metrics.

Regular reports are prepared and distributed on the basis of this analysis. These reports ensure the appropriate monitoring of market risk activities within the group and are distributed to senior management and other internal and external stakeholders, so that market risk activities are properly monitored.

The corporate Market Risk functions also monitor positions daily, both locally at the level of the individual unit and globally, through exhaustive checking of changes in the portfolios to detect any incidents and to adjust them immediately.

The local Market Risk functions are also responsible for the daily calculation and analysis of the results of the trading books. Preparing and analysing a daily income statement is an excellent risk indicator, helping to identify the impact of changes in financial variables on the portfolios.

The main market risk metrics are:

•VaR and Stressed VaR

•Equivalent and/or nominal positions

•Sensitivities of the various market risk factors to underlying factors (delta, vega, gamma and theta)

•Delivery risk for short positions in securities (fixed income and equities)

•The volume of effective and relative losses resulting from the monitoring of results during a period:

◦Loss trigger

◦Stop loss

•Credit metrics:

◦Total exposure and exposure by sector/geography/rating

◦Jump to default by issuer, product, currency and seniority

◦Sensitivity to credit risk

•Volume of origination transactions

•P&L of each desk and/or portfolio

These metrics are used to establish limits and sub-limits, in order to provide a sufficiently granular limit structure to enable effective control of the various types of market risk factors to which the group's portfolios are exposed in its trading activities.

The establishment of market risk limits for trading is a dynamic process that responds to the level of risk appetite established by the group. This process is part of an annual limits plan defined by the group's senior management, involving all of the group's subsidiaries.

For more information on the process of setting limits please refer to the chapter 'Risk management and compliance' of the Group annual report.

Access 2025 annual report available on the Santander Group website

A scenario analysis is also performed as a risk management tool, to control the potential impact of extreme or unexpected movements in market risk factors on trading books. These scenarios can replicate past events (historical scenarios), identify plausible alternatives that do not correspond to past events (hypothetical scenarios) or look for market movements that cause a particular impact on results (reverse scenarios).

2025 Pillar 3 Disclosures Report    211

Index Introduction l Capital l Risks l Remuneration l Appendices l

7.3.1. Value at Risk

Santander's VaR calculation methodology consists of a historical simulation at a 99% confidence level, with a one-day horizon for internal risk management and a ten-day horizon when calculating own funds for market risk.

Statistical adjustments are applied in VaR to enable swift and efficient incorporation of the most recent events affecting the levels of risk assumed. Currently, all units use historical simulation with full revaluation, except for Market Risk Spain, which, while using this methodology for certain portfolios, applies historical simulation using a Taylor series approximation for the bulk of its portfolios.

The group uses a two-year window, or 520 daily readings, backwards in time from the VaR calculation reference date. Two figures are calculated every day: one applying an exponential decay factor that accords less weight to the observations furthest away in time and another with the same weight for all observations. The reported VaR is the higher of these two figures. Additionally, it should be noted that VaR is calculated with a one-day horizon and scaled using the square root of time rule. Periodically, a comparison is made between this method and the direct calculation with 10-day returns.

To calibrate the VaR model, the risk factors use different calculation methodologies (relative, absolute or mixed approaches), based on observable data. The criteria for assigning these methodologies to the different groups of risk factors are set out in standards defined by Methodology and independently validated by Internal Validation (2nd Line of Defence). In addition, the corporate VaR guidance requires an annual review of the selection criteria for performance models.

At the same time as the VaR is calculated, the value at earnings (VaE) is also calculated, which measures the maximum potential gain at a certain level of confidence and time horizon, applying the same methodology as for VaR.

The VaR by historical simulation has many advantages as a risk metric: it sums up the market risk of the portfolio in a single number and is based on observed market movements without the need for assumptions about functional forms or correlations between market factors.

In relation to the VaR, the Expected Shortfall (ES) is also calculated by estimating the expected value of the potential loss when this is greater than the level set by the VaR.

Unlike VaR, the ES has the advantage of being able to capturing the risk of large losses with low probability (tail risk) and of being a sub-additive metric. The BCBS considers that a 97.5% confidence interval delivers a similar level of risk to VaR at a 99% confidence interval. ES is calculated by applying uniform weightings to all observations.

Santander had authorisation from the European Central Bank to use the internal market risk model for calculating regulatory capital in the trading portfolios of the Spain, Santander London Branch, Chile and Mexico units at the end of December 2025.

The total regulatory capital figures based on the internal model are calculated as the linear sum of the individual regulatory capital of the units that have received internal model approval; i.e. without considering diversification.

Moreover, for those Grupo Santander entities without approval for calculating regulatory capital based on the internal model, capital will be calculated based on the standard model. This calculation methodology is also used by entities that have approved internal models for only some of their portfolios. The standardised approach is applied to portfolios for which the internal model is not approved.

During the year, the Group maintained its strategy of focusing its trading activity on client business, minimizing exposure to open directional risk in net terms as much as possible. Low risk levels have been maintained in the trading portfolio with geographical diversification and by risk factor.

During 2025, in addition to the trade war, some of the major central banks recorded movements (mainly downward) in benchmark interest rates, demonstrating the soundness, robustness, and effectiveness of risk management processes despite the occasional spikes in VaR observed throughout the year.

This fact is reflected in the VaR of the trading portfolio, which, despite the volatility of interest rate and exchange rate markets caused mainly by the tariff war and geopolitical risks, remained at levels similar to or lower than in recent years for most of the year and closed December at €19 million. Despite these moderate VaR levels, the slightly higher figures in stress risk metrics (SVaR) meant that the contribution of trading risks to capital was slightly higher than in previous years.

Santander also continues to have very limited exposure to complex structured instruments or vehicles, reflecting a risk culture in which prudent risk management is one of the key features.

Our exposure to hedge funds at the end of December 2025 was 115 million euros, which is indirect, as Santander acts as counterparty in derivative transactions. We analyse the risk related to this type of counterparty on a case-by-case basis, establishing collateralization percentages according to the characteristics and assets of each fund.

The group's policy for approving new transactions related to these products remains very prudent and conservative, and is subject to strict supervision by the group's senior management.

The bank's derivatives activity is mainly focused on the sale of investment products and on hedging risks for our customers. Risk management is focused on ensuring that net open risk is as low as possible.

This type of transaction includes options on equities, fixed income, and exchange rates. The units where this activity has mainly been carried out are Spain, Brazil, the United States, and Mexico.

In comparison with other similar financial groups, the Group's trading risk profile can be classified as low. Dynamic management of risk enables Santander to adopt changes in strategy to unlock opportunities in an uncertain environment.

For more information, see the 'Risk management and compliance' chapter of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

212    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

At year-end 2025, VaR by geography was as follows:

Table 83.MR3 - IMA values for trading portfolios
EUR million
						a
Total						2025			2024			Variation
Var (10 days - 99%)
1			Maximum			117			92			27		%
2			Average			61			56			9		%
3			Minimum			39			38			2		%
4			End of period			55			69			(20)		%
Stressed VaR (10 days - 99%)
5			Maximum			210			188			12		%
6			Average			157			110			43		%
7			Minimum			81			63			29		%
8			End of period			171			151			13		%
Incremental Risk Charge (99.9%)
9			Maximum			221			204			8		%
10			Average			59			53			10		%
11			Minimum			27			23			17		%
12			End of period			40			29			38		%
Comprehensive risk measure (99.9%)
13			Maximum			—			—			—
14			Average			—			—			—
15			Minimum			—			—			—
16			End of period			—			—			—
Figures do not include risks not in model

						a
Spain						2025			2024			Variation
Var (10 days - 99%)
1			Maximum			85			53			59		%
2			Average			46			38			22		%
3			Minimum			30			28			7		%
4			End of period			42			46			(8)		%
Stressed VaR (10 days - 99%)
5			Maximum			152			124			23		%
6			Average			127			78			64		%
7			Minimum			67			46			46		%
8			End of period			131			124			6		%
Incremental Risk Charge (99.9%)
9			Maximum			208			134			55		%
10			Average			53			48			11		%
11			Minimum			26			23			14		%
12			End of period			33			28			18		%
Comprehensive risk measure (99.9%)
13			Maximum			—			—			—
14			Average			—			—			—
15			Minimum			—			—			—
16			End of period			—			—			—
Figures do not include risks not in model

						a
Chile						2025			2024			Variation
Var (10 days - 99%)
1			Maximum			10			17			(42		%)
2			Average			5			9			(43		%)
3			Minimum			3			4			(35		%)
4			End of period			4			6			(37		%)
Stressed VaR (10 days - 99%)
5			Maximum			26			24			8		%
6			Average			14			14			—		%
7			Minimum			8			7			13		%
8			End of period			13			9			34		%
Incremental Risk Charge (99.9%)
9			Maximum			6			7			(21)		%
10			Average			3			2			29		%
11			Minimum			—			—			117		%
12			End of period			1			1			117		%
Comprehensive risk measure (99.9%)
13			Maximum			—			—			—
14			Average			—			—			—
15			Minimum			—			—			—
16			End of period			—			—			—
Figures do not include risks not in model

						a
Mexico						2025			2024			Variation
Var (10 days - 99%)
1			Maximum			22			21			4		%
2			Average			9			9			6		%
3			Minimum			6			6			2		%
4			End of period			9			12			(23)		%
Stressed VaR (10 days - 99%)
5			Maximum			32			40			(20)		%
6			Average			16			19			(14)		%
7			Minimum			6			10			(39)		%
8			End of period			27			18			49		%
Incremental Risk Charge (99.9%)
9			Maximum			7			63			(89)		%
10			Average			3			3			(5)		%
11			Minimum			1			—			2841		%
12			End of period			7			3			151		%
Comprehensive risk measure (99.9%)
13			Maximum			—			—			—
14			Average			—			—			—
15			Minimum			—			—			—
16			End of period			—			—			—
Figures do not include risks not in model

2025 Pillar 3 Disclosures Report    213

Index Introduction l Capital l Risks l Remuneration l Appendices l

7.3.2. Stressed VaR

In addition to standard VaR, Stressed VaR is also calculated daily for the main portfolios. The methodology for calculating Stressed VaR is the same as that used to calculate VaR, apart from two differences:

•Historical window for observing factors: in the stressed VaR calculation a window of 260 data readings is used, instead of the 520 used for computing the ordinary VaR measurement.

•Unlike the method used for the ordinary VaR calculation: stressed VaR is not obtained as the higher of the uniformly weighted percentile and the exponentially weighted percentile; instead, the uniformly weighted percentile is used directly.

All other aspects of the methodology and inputs for calculating the stressed VaR are the same as for the VaR.

The Market Risk functions periodically define the window used to calculate SVaR (the observation period), using the most severe at any given time, depending on the positions in the portfolio. The scope considered comprises the Treasuries for which approval has been obtained for the use of the internal model at 31 December 2025: Spain + SLB, Chile and Mexico.

The windows currently used to calculate Stressed VaR are:

Stress Window
			Period
Spain & SLB			03/03/2008 – 11/03/2009
Chile			26/06/2008 – 13/07/2009
Mexico			18/05/2016 – 22/05/2017

The Market Risk functions review these stress windows every quarter. The SVaR figures are also checked daily, comparing them to the VaR figures. If this analysis reveals that the current window used to calculate daily VaR covers a period with greater volatility than the period used to calculate SVaR, the stress timeframe is reviewed on an extraordinary basis.

7.3.3. Incremental risk charge

Following the recommendations of the Basel Committee on Banking Supervision and applicable regulations, an additional metric is calculated in relation to the credit risk inherent to the trading portfolios: the incremental risk charge (IRC).

The IRC is intended to measure both rating migration risk and any incremental default risk that is not captured by VaR, through changes in the corresponding credit spreads. To this end, transition matrices are used, which represent the probabilities of migrating from one rating to another over a certain time horizon. The matrices are extracted from reports published by one of the leading ECAIs for the various sectors. The above-mentioned reports are produced annually by the ECAI, analysing more than thirty years of default data and one-year rating migrations for various types of debt. Some modifications are made to the transition matrices extracted from the reports in order to guarantee their consistency and that they can be used in the defined model.

The IRC metric is calculated for public and private fixed-income bonds, bond derivatives and credit derivatives in the trading portfolio. In addition, the new IRC model approved for Spain (including the SLB) uses correlations that are

determined by the relationship between each issuer and the systemic factors. These ratios are calibrated to a one-year time frame using historical price series representing each issuer and the systemic factors. The price series used are at least ten years long and include at least one stress period in accordance with regulatory requirements.

In the previous IRC model, which applies for the Mexican and Chilean units, the current calculation of correlations utilizes the single-factor formula proposed by the Basel regulation.

The method used to calculate the IRC, which is essentially similar to that applied to the credit risk of non-trading portfolio exposures, is based on the Merton structural model, which dictates that the default event occurs when the assets of a company fall below a certain level of its debts. This internally developed model comprises direct measurements on the distribution queues of losses caused by the different credit events it provides for, i.e. default risk and migration of credit quality subject to a confidence interval of 99.9% and a capital horizon of one year for all positions. The assumed liquidity horizon coincides with the one-year capital horizon and using the Montecarlo simulation approach.

During 2019 and 2020 a new IRC model was developed in response to the deficiencies and findings that had been raised by the regulator in the previous IMI. The new IRC model incorporated various improvements in fundamental aspects of the model and following IMI 4313 carried out during 2020, obtained the regulator's approval for Spain, including SLB, as well as the consequent elimination of the multiplier that had previously been imposed. In addition, along with this approval, a series of Obligations were established for the resolution of which improvements have been made during 2022 and 2023. Finally, in 2024 the ECB considered all the Obligations to be implemented.

As approval of the new model was only granted for Spain, the geographies of Chile and Mexico will continue to calculate their regulatory capital for market risk using the previous IRC model.

214    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

7.3.4. Analysis of scenarios and stress testing

The risk measures described above are based on assumptions that underpin day-to-day risk management and decision-making, including normal market conditions, continuous pricing and adequate liquidity, although they do not fully predict extreme movements or unforeseen market turbulence.

Stress testing is an important risk management tool that identifies unexpected outcomes related to a wide range of risks, indicating how much capital would be needed to absorb losses if these unexpected events were to occur.

Stress tests play a particularly important role in: estimating future risk; overcoming the inherent constraints of models and the use of historical data; the communication of internal and external risks; supporting liquidity and capital plans; reporting the establishment of risk tolerance levels; and designing risk mitigation and contingency plans for stressed conditions.

The group's stress test programme includes the following scenarios:

•Historical Scenarios: study the behaviour of trading books under crisis conditions or significant market events relevant to portfolio positions that have occurred in the past, seeking to estimate maximum losses under the hypothesis that such events may occur again.

•Hypothetical Scenarios – Abrupt Crisis: combines movements in risk factors and their respective volatilities, based on the application of the market shocks defined in the new regulatory framework for the calculation of market risk capital requirements. For each risk factor (Interest Rates, FX, Equity, Credit and Commodities), positive and negative shocks are applied in both linear and non-linear products, identifying the most unfavourable scenarios.

•EBA adverse scenario: based on the adverse macroeconomic scenario to be applied to market risk factors, as proposed by the EBA for the 'EU-wide stress test 2023' exercise.

•Forward-looking scenario: a plausible scenario defined by the Market Risk functions, based on the portfolio positions and their expert judgement regarding short-term changes in market variables that can have a negative impact on such positions.

Other quarterly scenarios:

•Reverse Stress Test Scenarios: exercise that seeks to identify those market scenarios that, affecting positions in trading portfolios, may jeopardize the viability of the institution. For this purpose, the official capital requirements calculated according to the regulation in force at the time of calculation will be considered.

•IRC Scenarios: designed to stress the default risk and rating migration risk of credit positions in the trading portfolio, with a view to identifying credit events that could impact regulatory capital and measure how reasonable the assumptions of the IRC model are.

•Use of Proxies Scenarios: defined to analyse what impact incorrect estimates of proxies could have on determining the time horizons used to calculate VaR.

•Valuation Adjustments Stress scenario: aims to estimate the potential increase in valuation adjustments of fair valued instruments in market stress conditions. It includes both Fair Value Adjustments (FVAs) with P&L impact and Additional Valuation Adjustments (AVAs), with impact on capital.

The Market Risk functions regularly calculate and analyse all these scenarios. A consolidated stress test report is prepared every month, based on the results of each of the scenarios and for all the group's units with trading activities. There are also alerts on the stress results which, when exceeded, trigger communication and joint analysis by Risk and Business functions.

The table below shows the results as of 31 December 2025, broken down by risk factor (interest rate, equities, foreign currency, credit spread, commodities and the volatility for each), in a scenario based on the application of the market shocks defined in the new regulatory framework for the calculation of market risk capital requirements.

The scenario is defined by taking the change that produces the highest potential loss in the global portfolio for each risk factor, discarding the most improbable combinations in economic and financial terms.

Table 84.Stress scenario: Maximum volatility (worst case)
EUR million
			2025																					2024
			Interest rate			Equities			Foreign currency			Credit spread			Commodities			Total						Interest rate			Equities			Foreign currency			Credit spread			Commodities			Total
Total Trading			(128.3)			25.7			(80.3)			(119.5)			—			(302.4)						(275.8)			26.3			(83.2)			(69.2)			—			(401.9)
Europe & Asia			(70.3)			28.2			(75.1)			(42.7)			—			(159.9)						(118.4)			27.6			(80.3)			(69.2)			—			(240.3)
South America			(20.8)			(2.6)			(3.0)			—			—			(26.4)						(5.5)			(1.1)			(1.0)			—			—			(7.6)
North America			(37.2)			0.1			(2.2)			(76.8)			—			(116.1)						(151.9)			(0.2)			(1.9)			—			—			(154.0)

The result of the analysis is that the economic impact on Grupo Santander's trading portfolios, in terms of market price, would be EUR 302.5 million if the worst-case stress movements were to materialise in the market.

2025 Pillar 3 Disclosures Report    215

Index Introduction l Capital l Risks l Remuneration l Appendices l

7.3.5. Backtesting (MR4)

The backtesting exercise consists of comparing the VaR forecasts, given a certain confidence level and time horizon, with the actual losses incurred over a time horizon equal to the VaR time horizon.

The general aim of backtesting is to verify the accuracy of the Value at Risk (VaR) calculation model. In other words, whether to accept or reject the model used to estimate the maximum loss on a portfolio with a given level of confidence, over a certain period of time.

Backtesting is analysed at local level by the local market risk control units. The market risk consolidation unit is responsible for backtest reporting at consolidated level. It is important to note that the backtesting methodology is applied identically to all the sub-portfolios covered by the internal market risk model. The analysis of regulatory backtesting is conducted daily at portfolio and sub-portfolio level.

Four types of backtesting are defined, depending on the kind of P&L used:

•The economic P&L (dirty P&L): refers to the daily P&L calculated on the basis of mark-to-market or mark-to-model securities (depending on the instruments) of the books and records of Banco Santander at the end of the day. It is calculated using Front Office systems (data on positions, pricing models, valuation methods, price parameters and end-of-day market data)

•Actual P&L (dirty P&L without mark-ups): refers to the daily P&L calculated by comparing the portfolio's closing value and its actual value at the end of the following day, including losses and gains derived from intraday activities, excluding fees, commission and net interest income. Santander, as considered acceptable in paragraph 63 of the TRIM guidance ('ECB Guide to Internal Models', Oct 2019), has established that net interest income is equal to zero in the trading portfolio. The 'actual P&L' includes all time effects (theta). This P&L is used for the regulatory backtesting in accordance with article 366 (3) of the CRR in order to compute the number of overshootings. The additional aspects included in the TRIM guidance are also considered.

•The Hypothetical P&L (clean P&L due to subtractions): this refers to the daily P&L calculated by comparing the portfolio's closing value and its actual value at the end of the following day assuming unchanged positions. In this case, time effects are not considered in order to be consistent with the VaR. Similarly, the additional aspects included in the TRIM guidance are also considered. Specifically, any valuation adjustment made in actual P&L that is not included in VaR is also not included in the hypothetical P&L. The hypothetical P&L is obtained from the Front Office platforms by the Market Risk function, without considering intraday results or changes in portfolio positions. This P&L, like actual P&L, is used for the regulatory backtesting in accordance with article 366 (3) of the CRR in order to calculate the number of overshootings.

•The Risk-theoretical P&L (clean P&L due to change of factors): this hypothetical P&L is similar to the previous measure but is calculated using the Market Risk calculation engine (AIRE), without considering intraday results, changes in portfolio positions or time effects (theta). This P&L is

exclusively used to verify the quality of the internal VaR model.

Of these four backtesting methods, only the backtesting on actual P&L (dirty P&L without mark-ups) and the hypothetical P&L (clean P&L due to subtractions) are used to measure and report the accuracy of the model, for regulatory purposes.

In order to calibrate and control the effectiveness of the internal systems for measuring and managing market risks, in 2025 Grupo Santander regularly carried out the necessary analyses and tests, obtaining conclusions that confirm the reliability of the model.

Number of overshootings

Overshooting occurs whenever the losses or gains observed in a day exceed the VaR estimate. The number (or percentage) of overshootings recorded is one of the most intuitive indicators of a model's accuracy.

When the P&L exceeds the previous day's VaR it is considered to be an overshooting (or exception). The number (or percentage) of overshootings recorded is one of the most intuitive indicators of the model's accuracy. A regulatory coefficient 'K' is calculated on the basis of the number of overshootings in the regulatory backtesting. This affects the calculation of regulatory capital in accordance with the following table:

Backtesting overshootings						KR value
0						—
1						—
2						—
3						—
4						—
5						0.40
6						0.50
7						0.65
8						0.75
9						0.85
10						1.00

216    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

The confidence level for the VaR calculation is a measure of the number of overshootings expected to occur in a given time frame. For example, if the daily VaR is calculated with a confidence level of 99%, the percentiles of interest are the 1st and the 99th percentiles of the P&L distribution. The expectation would be 2% of overshootings during the days studied (1% due to excess profits and 1% due to excess losses).

If there are significantly more (or fewer) overshootings, this might be a sign of problems in the VaR model employed. The observed P&L and estimated VaR data can be used to construct a hypothesis test to check the validity of the VaR/P&L relationship.

Time between overshootings

The confidence level for the VaR calculation is also an indicative measure of the number of days that can be expected to elapse between two successive overshootings. For instance, if the daily VaR is calculated at 99% confidence (1st and 99th percentiles), we may expect an average time of approximately 50 days between overshootings.

Similarly to the frequency of overshootings, hypothesis-testing can be done based on the time between overshootings, as a means of validating the VaR model.

Distance between overshootings

Whereas the VaR predicts the risk that is assumed with a certain probability, average overshooting (expected shortfall) is a predictor for that probability of the average loss once VaR is exceeded. This testing should be included when analysing the backtesting report to obtain the size of the potential losses that exceed the VaR level.

Daily VaR/P&L relationship

To validate the VaR model it is not sufficient to analyse the number and type of overshootings that occur in a time window. Other indicators must be observed to ensure the model's consistency. One such indicator is the daily VaR/P&L relationship. This relationship is defined as:

•The P&L figure, as a percentage of VaR, on all the days on which there are no overshootings (losses or gains).

•Calculation of its arithmetic mean.

The percentage should be close to a value determined by the VaR confidence level. The higher the chosen confidence level, the higher the VaR estimate (and the smaller the P&L results as a percentage of that estimate).

If the percentage observed is above the expectation, the risk is being underestimated and the model should be reviewed. Conversely, if the percentage is significantly smaller, then the risk is being overestimated and the VaR model should be adjusted. The latter outcome may, however, be desirable if the target is to maintain conservative risk estimates.

The following diagram shows the annual backtest (MR4) at the end of December 2025 for each unit with internal model approval (see table 86).

Access the Pillar 3 2025 file available on Grupo Santander's web site

The number of overshootings at 31 December 2025 for the units with internal model approval are shown below.

Table 85.Exceptions at units with internal model
															2025
			Exceptions			Model Status
Spain & SLB			2			0
Chile			2			0
Mexico			1			0

During 2025, on the one hand, there were two exceptions in Spain & SLB and Mexico. On the other hand, there was one in Mexico.

Such exceptions were mainly driven by the volatility observed in the financial markets as a result of the tariff war during the year.

The fair value of a financial instrument is calculated using quoted market prices or appropriate valuation models, duly validated and approved. This may cause a degree of uncertainty in the valuation of less liquid financial instruments, which are not traded on a regular basis or which use valuation models. These uncertainty factors are incorporated into the fair value of positions through valuation adjustments.

Valuation adjustments are designed to ensure the fair valuation of positions, by including variables in the market value that are not considered in the valuation models or for which there is sufficient uncertainty to significantly affect the valuation.

The valuation adjustment categories used at the Group include:

•Market liquidity valuation adjustments (close out cost): adjustments arising from the use of average prices when valuing portfolio positions, where accounting rules require valuation based on the exit price.

Valuation adjustments are included due to the existence of spreads between buy and sell prices.

These adjustments are calculated taking into account the spread between market buy and sell prices and are estimated independently for each risk factor, distinguishing between: interest rate curves, prices, dividends, volatilities and correlation.

2025 Pillar 3 Disclosures Report    217

Index Introduction l Capital l Risks l Remuneration l Appendices l

•Valuation adjustments due to uncertainty in market prices (market price uncertainty): these are warranted because of considerable uncertainty in the market data used for the calculation of fair value, distinguishing between:

◦Observable market data

◦Unobservable market data

•Valuation adjustments due to model risk: these are warranted when there is a high degree of uncertainty in the valuation models or in the parameters used by these models. This uncertainty may be caused by: adding certain assumptions that may be erroneous, models whose results cannot be calibrated because there are no alternatives or because of dependence on parameters that are subject to possible estimation errors.

•Other valuation adjustments: adjustments for limitations in valuation systems, for exotic items not captured in the payoffs configured in the systems, uncertainty in the financing/investment costs used in estimating the exit price, profit reserves for specific or one-off transactions (generally associated with the first-day profit or loss of instruments classified as Level 3 in the fair value hierarchy) and credit risk adjustments (CVA/DVA).

7.3.6. Internal validation of the models

Market, counterparty and other non-financial risk models

In 2025, in accordance with the model risk policies, the Internal Validation team performed independent review exercises for the main models used in the group's various geographies. The areas covered are counterparty risk (maximum and expected exposures, CVA/DVA), issuer risk (incremental risk charge), valuation (interest rates, FX, equity, credit and commodities), valuation adjustments (AVA, FVA), market risk (VaR/SVaR), structural interest rate and liquidity risk (prepayments, accounts with no specified maturity, mortgages, calculation of EVE/NIM) and other non-financial risks (operational risk, macroeconomic scenarios).

The group also continued to monitor on a quarterly basis the VaR & SVaR models used to calculate regulatory capital for market risk, based on key indicators of the quality of the models, in order to proactively and independently monitor the operation of these models.

218    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 86.MR4 - Comparison of VaR estimates with gains/losses

2025 Pillar 3 Disclosures Report    219

Index Introduction l Capital l Risks l Remuneration l Appendices l

7.4. Structural balance sheet risks

This section covers the requirement IRRBBA - IRRBB qualitative information.

Structural risk is inherent in the banking business and arises as a result of changes in a number of factors, including market or balance sheet behaviour variables, which affect the profit or loss or economic value of balance sheet items (banking book). This risk includes both the potential losses from price changes for assets recognised at fair value and economic losses arising from management of assets and liabilities carried at amortised cost in the banking book positions.

Within structural risk, interest rate risk in the banking book (IRRBB) is considered the main source of balance sheet risk. There are three sources of IRRBB: mismatch risk (or gap risk), basis risk and option risk (automatic and behavioural).

The management of IRRBB measures aims to ensure the stability of net interest margin and the economic value within the Group's defined risk appetite.

Additionally, within the structural risks is the credit spread risk in the banking book (hereinafter CSRBB), which measures the risk of changes in the market price due to credit risk, liquidity or other characteristics of the instruments with credit risk, which is not captured by other existing risk frameworks such as IRRBB or the expected default risk.

These activities are based on the following principles, which take into account internal policy, regulatory and market best practice requirements:

•Independence of risk management and control functions following the group's established lines of defence model.

•Involvement of senior management, ensuring that it has the necessary relevant information on these risks.

• Holistic approach to risk: IRRBB and CSRBB control and monitoring must take into account all potential sources of risk and the fact that risks can arise due to factors related to subsidiaries or for reasons not related to them, such that local risk events may have an impact on the Group. Furthermore, the approach should be forward-looking and analyse trends over different time periods and scenarios.

• Robust systems and high-quality internal data, with adequate traceability of information.

• Use of methodologies and models that are standardised and documented ensuring consistency in risk measurement.

• Establishment and adaptability of limits for an adequate control of these risks.

For more information, see the 'Risk management and compliance' chapter of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

The financial area of each group subsidiary manages interest rate risk originated by retail and commercial banking and is responsible for management of the structural risk generated by interest rate fluctuations. Mitigation strategies are used to manage the IRRBB risk profile by using interest rate instruments such as fixed income bond portfolios (usually government bonds) or derivative instruments with high credit quality, high liquidity and low capital consumption that complement the natural hedges provided by the balance sheet itself. They are always carried out taking into account the market environment.

For more information, see the 'Risk management and compliance' chapter of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

7.4.1. Main interest rate risk in the banking book (IRRBB) metrics

The management, measurement and control of IRRBB risk and metrics are performed independently in each subsidiary. The set of metrics used in the Group is standardised to ensure consistent measurement. However, the specific metrics implemented in each subsidiary depend on the dimensions and risk factors identified as relevant by each subsidiary in its IRRBB self-assessment, based on the individual features and nature of its business, its balance sheet structure and the complexity of the markets in which it operates.

IRRBB metrics are calculated under various scenarios and provide a static and/or dynamic overview of balance sheet exposure and net interest margin in response to adverse interest rate movements and/or on the main behavioural parameters and assumptions under which optionality is modelled. The main metrics are as follows:

•Repricing gap: it measures the difference between the volume of sensitive assets and liabilities, on and off the balance sheet, that re-price (i.e. that mature or are subject to rate revisions) at certain times.

•Economic value and its sensitivity: Economic value of equity (EVE) is the difference between the present value of assets less the present value of liabilities of the banking book, excluding own equity and other instruments that are not interest rate sensitive. The present value is calculated by discounting projected cash flows of assets and liabilities with the appropriate discount curve. The EVE sensitivity is calculated as the difference between the EVE in a selected interest rates scenario and the EVE calculated in the baseline scenario. Therefore, the EVE can have as many sensitivities as scenarios considered. This metric enables the identification of long-term risks and supplements the sensitivity of the net interest margin.

220    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

• Net interest income and its sensitivity: Net interest income (NII) is calculated as the difference between the interest income of assets and the interest cost of liabilities of the banking book in a determined time horizon (typically from one to three years, with the Group's standard being one year). Its sensitivity reflects the impact of changes in interest rates on net interest income in the given time horizon. Net interest margin sensitivity is calculated as the difference between the net interest margin in a selected scenario and the net interest income in the baseline scenario. Therefore, the net interest margin can have as many sensitivities as scenarios considered. This metric enables the identification of short-term risks, and supplements economic value of equity sensitivity.

• Earnings metric: Measures the change in expected future profitability within a given time horizon (e.g. three months) as a result of changes in interest rates and credit spreads as risk factors. This metric takes into account both the impact of net interest income and the instruments whose value could be affected by changes in interest rates and which can be sold in the short term (mainly the instruments assigned to the Held to Collect and Sale (HTC&S) model and reported in the Fair Value Through Other Comprehensive Income category).

•Economic P&L of the ALCO portfolio: to estimate losses from price changes of assets recognised at fair value, an economic P&L is calculated under stress for fixed-income instruments managed by the ALCO (ALCO portfolios). The impact this market stress could have on the portfolio is then measured. A change in the value of this portfolio would reduce the group's equity and therefore have a negative effect on its capital ratio. The stress has a statistical component as it is calibrated according to past observed performance in the market and a forward-looking component. It also uses stress scenarios generated by the group based on macro-economic analysis.

•Value at risk (VaR and EaR) for the purpose of calculating economic capital: the economic capital model by IRRBB in the group is based on a value-at-risk model that assesses the potential impact of movements in market variables, interest rates and credit spreads (the latter limited to the FV positions managed by ALCO) on both the economic value of equity and earnings. The VaR and EaR represent the maximum amount of estimated losses on the economic value of equity and earnings calculated over a two-year period, which are expected to be exceeded only in a small percentage of cases (confidence level 0.05%) and over a time horizon that varies for each subsidiary depending on its balance sheet structure.

System for controlling limits

The measurement, analysis and control of IRRBB metrics guarantees that the level of risk is aligned with the group's policies, approved management limits and risk appetite.

As a general rule the metrics are measured and controlled on a monthly basis, using the previous month's closing data.

IRRBB limits are set independently for each subsidiary in accordance with the individualised management and control per subsidiary. The main limits set in all subsidiaries are:

•Net interest income sensitivity limit at one year.

•Market value of equity sensitivity limit.

•Limit of the market value of banking book portfolios used for on-balance-sheet interest rate management that could have an impact on equity due to their accounting classification (fair value through equity).

The limits are reviewed regularly and have flexible modification mechanisms that can adapt to extreme or unfavourable market situations, but also to market opportunities.

If one of these limits or their sub-limits is exceeded (by currency or IRRBB risk type), the heads of risk management have to justify the reasons and facilitate an action plan.

IRRBB information is reported to the group's senior management collectively on a subsidiary-by-subsidiary basis. In this way, the Group's management can assess and control the risk profile in the subsidiaries, while at the same time obtaining a comprehensive overview of the risk so it can be analysed and controlled from a global perspective.

The internal metrics used in the group to monitor IRRBB, based on the direct application of shocks to interest rate curves, are the economic value and the net interest margin sensitivities. The most commonly used interest rate scenarios are:

•Parallel scenarios with shocks of +/-100 bps.

•Regulatory scenarios defined by the EBA4 for calculating EVE and NII sensitivity.

In addition, each subsidiary of the Group uses a variety of scenarios sufficient to ensure appropriate measurement and control of its IRRBB profile. The use of these scenarios plays an important role in providing supplementary future risk estimates. These scenarios are defined annually and are based on the IRRBB self-assessment carried out by each entity in the Group. They can be of different types, e.g. historical, forward-looking, probabilistic or based on expert judgement.

Grupo Santander measures structural risks using models to support decision-making processes, obtain predictive information and generate metrics that are adapted to the economic environment of each subsidiary and its balance sheet structure. These models must be consistent with the methodological standards defined in the Group. If possible, the Group aligns all methodologies and models used for the calculation of regulatory and internal metrics. Currently there are no relevant differences.

The general IRRBB management strategies are transactions with fixed-income instruments or derivatives. Hedging carried out through fixed-income instruments is generally recorded at fair value through equity and, to a lesser extent, at amortised cost. For hedging through derivatives the Group's general policy to reduce asymmetries in accounting treatment is to use fair value or cash flow hedges depending on the exposure of the underlying asset.

Fair value hedges hedge portfolio risks (fixed rate) and are therefore exposed to changes in the fair value of the portfolios due to changes in interest rates.

Cash flow hedges hedge the exposure of future flows subject to changes in interest rates. The purpose of these hedges is to actively manage the interest rate risk of variable rate balance

4 EBA/GL/2018/02

2025 Pillar 3 Disclosures Report    221

Index Introduction l Capital l Risks l Remuneration l Appendices l

sheet items by using interest rate derivatives the bank swaps variable rate flows for fixed rate flows.

Both types of hedging are used in the Group. The financial management divisions of each subsidiary are responsible for designing and implementing the transactions according to their balance sheet structure, risk exposure and markets. These hedges are usually carried out through interest rate derivatives.

Derivatives that do not meet the conditions for consideration as hedging instruments are treated as trading derivatives for accounting purposes.

For further details, see the 'Risk management and compliance' chapter of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

Methodologies

There are three elements necessary to calculate the IRRBB metrics in Santander:

•Yield curves for capitalisation and discounting.

•Behavioural models that enable the cash flows of certain instruments to be determined.

•Assumptions about future changes in the entity's balance sheet and its various items.

Among these three elements, the behavioural element is the main one subject to modelling.

The Group develops methodological standards that establish best practices and criteria to be followed for the successful development and implementation of IRRBB models. Models may be based on quantitative approaches and methods using statistical or other mathematical techniques or on assumptions and hypotheses assessed by experts. All models are managed within the framework of the Model Risk framework, which defines the principles and processes (including planning, development, validation, etc.) required to ensure adequate control of the models used in the group.

The main models used in the management and control of IRRBB are described below, by product type:

a. Treatment of non-maturity deposits (NMD)

Accounts with no contractual maturity are subject to two types of optionality. The customer's option to withdraw their money without prior notice and/or the bank's option to review the interest paid. The NMD corporate model models the product as a synthetic bond, with callable nominal and a periodic coupon. The callable nominal is determined by the stable balance and the estimated run-off for these flows. The coupon can be fixed, variable or subject to an elasticity with respect to market interest rates, or a more complex function depending on different variables.

The model is based on the following sub-models and variables:

•Beta model: this sub-model defines the relationship between benchmark interest rates in the market and the

remuneration paid to customers. The model can use a single beta or multi betas for the same account.

•Stable and unstable balance: A statistical model is used to estimate the stable balance based on the historical distribution of aggregated balances at the segment level and the observed outflows in relation to the trend of the series. The stable balance is determined on the basis of a certain confidence level, which is usually above 95%. For the unstable balance, an outflow is assumed in the first time bucket (typically one day).

• Run-off model: This sub-model attempts to estimate customer behaviour on the basis of historical data (evolution of accounts created on the same date). The estimate can be made using a statistical model that depends on several variables (interest rates, spread with other products, macro variables) or it can be calculated using an optimisation process that assumes a certain function, e.g. assuming an exponential function and calibrating the decay rate5, defining a maximum maturity horizon.

The average repricing maturity is not a parameter used directly in the NMD corporate model, however, duration as a parameter is used. Following regulatory criteria, the group ensures that the average repricing maturity of NMDs for each currency does not exceed the thresholds set out in the EBA guidelines. This is calculated using the average maturity of the expected cash flows of the entire NMD balance (stable and unstable) adjusted by the betas of the model. For segments with fixed coupons or a beta of zero, the average maturity of the repricing dates matches the average maturity of the cash flows and as the unstable balance (repricing balance) or betas increase, the gap between them opens (causing the average repricing maturity to decrease).

This model requires a variety of inputs:

•Parameters inherent to the product.

•Customer and/or bank behavioural parameters (in this case, analysis of historical data is combined with expert judgement on the business).

•Market data.

•Historical data for the portfolio.

b. Treatment of non-maturity assets (NMA)

The model used on the asset side for products such as credit cards can be modelled in a similar way to the NMD model, sharing some of the same methodology and assumptions. The difference between the two models is that for assets without a fixed maturity, the fixed credit limit, which serves as a ceiling for future drawdowns, has to be taken into account.

c. Treatment of prepayment of certain assets.

The prepayment option is defined as the possibility offered to customers to repay their loans before the contractual maturity date, without this involving a significant additional cost for them. Prepayment can be total or partial and mainly affects fixed-rate products, such as fixed-rate mortgages in markets where the yield curves for these loans are at low levels and there is an incentive for customers to prepay when the market interest rate is below the product's reference

5 An exponential function implies assuming higher outflows in the short/medium term followed by long-term stability; i.e. the empirically observed behavior of most units with positive interest rates.

222    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

interest rate. However, prepayment does not only depend on the level of interest rates, it also depends on other more complex factors resulting from macroeconomic and cultural situations in the market. This means that the normal techniques used to value options cannot be applied directly and have to be combined with empirical statistical models that aim to model customer behaviour.

Prepayment can also occur with variable rate products and variable rate mortgages are also modelled in the Group. In these cases prepayment is usually due to factors other than the level of interest rates and the impact in terms of IRRBB risk is lower due to having variable repricing.

The prepayments model assumes that these balances naturally decline as customers gradually repay. Prepayment parameters can be constant values or a function dependent on several variables. The model creates a function that produces a fall in flows until the maturity for the transaction.

d. Non-Performing Exposures Treatment

The Group includes and models NPEs in the IRRBB measurement. The definition of the parameters used in the model (e.g. estimated recovery period) is based on expert judgement and/or credit risk model parameters (probability of default and loss given default).

The use of additional behavioural models in the Group (e.g. early termination of time deposits or pipelines) depends on the structure and complexity of each subsidiary's balance sheet. The rationale for these models is based on those described above.

The published sensitivity to economic value in the IRRBB1 table follows all methodologies and criteria defined within the group and is adjusted (if necessary) by the principles set out in the EBA guidelines.

The published sensitivity to net interest income is calculated for the interest rate shocks established in the EBA guidelines in all currencies and following all methodologies and principles defined for internal metrics.

The average and maximum repricing maturity of NMDs in the group is calculated by each subsidiary based on its historical data and statistical techniques. The data for the group are:

						Average repricing maturity									Longest repricing maturity
						Total volume			Core volume						Total volume			Core volume
Retail						2.5			3.4						20			20
Non-financial wholesale						2.6			3.8						20			20

For further details, see the 'Risk management and compliance' chapter of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

The following tables show changes in the bank's economic value of equity (EVE) and net interest income (NII) for every prescribed interest rate scenario and for every currency:

Table 87.IRRBB1 - Interest rate risks of non-trading book activities
			EUR million
			2025
						a			b			c			d
			Total			Changes of the economic value of equity						Changes of the net interest income
			Supervisory shock scenarios			Current period			Last period			Current period			Last period
1			Parallel up			(7,049)			(4,765)			668			637
2			Parallel down			3,231			717			(1,942)			(2,255)
3			Steepener			(910)			135
4			Flattener			(1,734)			(2,296)
5			Short rates up			(3,577)			(3,539)
6			Short rates down			1,671			1,043

2025 Pillar 3 Disclosures Report    223

Index Introduction l Capital l Risks l Remuneration l Appendices l

						a			b			c			d
			EUR			Changes of the economic value of equity						Changes of the net interest income
			Supervisory shock scenarios			Current period			Last period			Current period			Last period
1			Parallel up			(1,976)			688			1,099			1,582
2			Parallel down			2,886			(633)			(1,077)			(1,570)
3			Steepener			(1,043)			(166)
4			Flattener			736			236
5			Short rates up			(2)			401
6			Short rates down			126			(520)

						a			b			c			d
			USD			Changes of the economic value of equity						Changes of the net interest income
			Supervisory shock scenarios			Current period			Last period			Current period			Last period
1			Parallel up			(966)			(783)			329			396
2			Parallel down			(215)			(298)			(372)			(423)
3			Steepener			(291)			(277)
4			Flattener			(282)			(227)
5			Short rates up			(451)			(351)
6			Short rates down			149			104

						a			b			c			d
			GBP			Changes of the economic value of equity						Changes of the net interest income
			Supervisory shock scenarios			Current period			Last period			Current period			Last period
1			Parallel up			(1,008)			(1,464)			599			144
2			Parallel down			1,404			996			(381)			(313)
3			Steepener			323			320
4			Flattener			(422)			(666)
5			Short rates up			(723)			(1,086)
6			Short rates down			934			786

						a			b			c			d
			BRL			Changes of the economic value of equity						Changes of the net interest income
			Supervisory shock scenarios			Current period			Last period			Current period			Last period
1			Parallel up			(1,306)			(1,097)			(289)			(350)
2			Parallel down			1,267			908			224			306
3			Steepener			(75)			108
4			Flattener			(208)			(363)
5			Short rates up			(726)			(693)
6			Short rates down			695			665

224    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2025 Pillar 3 Disclosures Report    225

Index Introduction l Capital l Risks l Remuneration l Appendices l

			8.1. Definition and objectives			228
			8.2. Capital requirements for Operational Risk			230
			8. Operational risk

226    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

8. OPERATIONAL RISK

Operational risk is the risk of losses resulting from the deficiencies or failures in processes, personnel, information systems or external events outside Grupo Santander.

This chapter details the objectives of Grupo Santander in terms of control and management of operational risk, presenting the main capital figures and their evolution.

Main figures
€ Million
			RWA
			2025			2024
Operational risk			102,427			72,351
Of which, standardised approach			92,176			61,459
Of which, alternative standardised approach			10,251			10,892

RWA by geography

%

n			Spain			25%
n			UK			12%
n			Rest of Europe			14%
n			USA			16%
n			Rest of North America			4%
n			Brazil			8%
n			Rest of South America			15%
n			Others			6%

RWA variation

EUR million

41.6%

2025 Pillar 3 Disclosures Report    227

Index Introduction l Capital l Risks l Remuneration l Appendices l

8.1. Definition and objectives

This section covers the letter (a) of the qualitative requirement ORA - Qualitative information on operational risk. Also, the provisions of letters (d), (e), (f) and (g) of the OVA requirement -Institution risk management approach, are complied with.

Paragraphs (c) and (d) of the qualitative requirement ORA are not applicable as Banco Santander does not use the AMA approach to calculate minimum capital requirements.

Our operational risk management and control model establishes the necessary elements to identify, evaluate, manage and report this risk in accordance with regulatory standards and industry best practices. The application of the model promotes that management priorities are properly established and updated, and that internal controls are defined and executed to mitigate risk throughout the organisation. Santander Group has a low tolerance for losses caused by internal failures or avoidable events, as a high level of internal control and operational excellence is expected in order to prevent them.

Group applied new developments and enhancements to the operational risk management model in 2025 in the risk assessment and control tools, operational risk appetite, monitoring of provisioning models, third-party risk management, as well as the integration and reporting of new risks (such as transformation risk, data risk or climate risk) into the non-financial risk monitoring and control model.

These improvements are aligned with the global Risk strategy, which aims to drive responsible business growth, ensuring resilience and customer trust, as well as the continuous evolution of the Risk function by leveraging digitalisation and data-driven analysis to strengthen oversight and critical challenge capabilities, improving operational risk awareness and fostering a strong risk culture.

For more information, see the 'Risk management and compliance' chapter of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

Operational risk reporting should cover the following objectives:

•Provide the heads of business units and support functions with the data they need to manage operational risk within their area of responsibility and meet the set objectives and strategies.

•Provide senior management with the information it needs to establish, review and where appropriate, modify business strategies and risk profiles.

•Provide the operational risk function with the information necessary to efficiently discharge its duties.

•Comply with the information requests of supervisory and regulatory bodies.

The business and support functions of all group entities are responsible for identifying, assessing and communicating their operational risks. The Operational Risk function in each Group unit collects information from all business and support functions and reports on it in established local forums.

Subsequently, the corporate Operational Risk function consolidates the information available from each unit in order to provide a comprehensive and complete overview of the group's operational risk profile.

At the group level, the process of consolidating and reporting operational risk information is divided into the following phases:

•Reception of information: the local operational risk functions submit various types of information to the corporate operational risk function with the frequency that is specified in the related procedures and guidelines. Although information can be sent via various channels, the Heracles corporate tool is the primary tool for collecting and recording information.

•Consolidation and processing of the information: once all the information has been received, the corporate operational risk function conducts a qualitative analysis, checking the suitability and consistency of the data and the main deviations.

•Use of information: the consolidated information is used for reporting to external parties as well as to the group's senior management. The reports' content is updated and developed in response to the needs of the governing bodies.

Heracles is the golden source of the operational risk data of the Group. One of its main components is the database of events and losses for this risk, which is used in internal and regulatory reporting and in the calculation of economic capital. In addition, Heracles contains all the necessary tools for operational risk analysis and management: controls, risks, metrics, scenarios and mitigation measures. Its functionality integrates all these programs through the use of common taxonomies applied in the different control communities and common methodologies for assessing risks and the effectiveness of controls. Heracles is also the tool used to perform certifications related to various regulations such as SOX, Volcker and FATCA.

Operational risk management requires decisions on unacceptable risks following risk identification and assessment processes. The analysis of operational risk exposure may conclude with acceptance of that level of risk, implementation of action plans to mitigate it, transfer of the risk through insurance or other outsourcing mechanisms, or, alternatively, discontinuation of the related activity. This information is periodically escalated to the governing bodies for appropriate monitoring and control.

For Santander, insurance is also a key element in 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. The group constantly monitors the appropriate implementation of policies and procedures for managing insurable risks, in collaboration with the relevant group areas that contribute to their correct execution in the various units.

228    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

For further information on the specific management of the principal operational risks, as well as global insurance programs, please refer to the 'Risk, compliance & conduct management' of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

The operational risk management cycle is a comprehensive process in which relevant risks that could impact the Group’s operational risk profile are identified, assessed, reported and monitored. This process also promotes a preventative approach to risk management and provides the governing bodies with a clear understanding of the operational risks to which the Entity is exposed.

The following are the key operational risk management and control processes:

•Strategic planning: covers the activities necessary to define the Group's objective operational risk profile, including setting the risk appetite, estimating losses annually and reviewing the management perimeter.

•Operational risk identification and assessment: aims to determine the risks and factors that may give rise to operational risk in the entity and to estimate their potential impact, whether quantitatively or qualitatively. To this end, a set of quantitative and qualitative tools has been defined, such as RCSA (Risk and Control Self-Assessment), the KORs (Key Operational Risks) exercise, Scenario Analysis and the Internal and External Events database. Operational risk for relevant transformation initiatives must also be identified and assessed. The first lines of defence, which comprise all of the Group’s organisational units, are responsible for identifying and assessing operational risks within their scope of activity.

•Continuous monitoring of the OR profile: this process aims to regularly analyse available information on the nature and extent of the risks incurred in the development of the group's activities through an adequate alerts system, based on available tools such as indicators and escalation processes.

•Risk response decisions, including risk mitigation and risk transfer measures: operational risk management requires mitigation measures to be applied to risks that are not within acceptable levels. The outcome of the analysis may be acceptance of the level of risk, implementation of action plans for its management and mitigation, transfer of risk through insurance or other outsourcing mechanisms or, alternatively, discontinuation of the related activity. It is equally essential to establish business continuity plans that allow the entity to maintain its activity and limit losses in the event of severe disruptions. The bank must also leverage existing controls and the mitigation actions that can be implemented across the Group.

•Information: information includes obtaining, disseminating and making available the information necessary for decision-making to the relevant persons. The information processes are carried out in accordance with the standards and criteria established in each case. See the OVA and OVB tables for more information about this process.

The group has defined an organisational model with three lines of defence for the structure and organisation of operational risk management in order to meet regulatory requirements and in order to be in line with best practices in the banking sector:

•The first line of defence includes all business units and support functions. The first line of defence is responsible for managing the operational risk generated in its area. Its main function within the operational risk management and control model is to identify, assess, monitor, mitigate and report risks.

•The second line of defence consists of the non-financial risk, digital risk and compliance functions within the Risk and Compliance division. Its main responsibilities include: designing, maintaining and developing the operational risk management and control model, as well as the related processes and tools, promoting the development of a risk culture across the Group; ensuring that business units and support functions effectively oversee and manage identified risks in accordance with established limits; and ensuring that management bodies receive appropriate information on all relevant risks for decision-making.

•At Santander, the Internal Audit is the independent body that performs the functions of the third line of defence. Its functions include: verifying that the risks associated with the group's activities are adequately covered; monitoring the compliance, effectiveness and efficiency of the internal control systems of operational risk; assessing the state of implementation of the operational risk management and control model in the group; and making recommendations for continuous improvement to all functions involved in OR management.

The governance structure defined for operational risk management meets regulatory requirements and is aligned with the general risk framework. This structure provides for dialogue between the different lines of defence and interaction with senior management and the governing bodies. In addition to the executive risk committees (Board Risk Committee and Risk Control Committee), Santander has established a global Non-Financial Risk meeting responsible for overseeing the Group’s operational risk, managing it in line with the level of risk appetite, and monitoring the evolution of operational risk losses.

For more information on risk measurement and control tools and reporting of operational risk, please refer to the EU OVA table of this document, and the 'Risk compliance & conduct management' of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

2025 Pillar 3 Disclosures Report    229

Index Introduction l Capital l Risks l Remuneration l Appendices l

8.2. Capital requirements for Operational Risk

This section covers the letter (b) of the qualitative requirement ORA - Qualitative information on operational risk.

Applicable methodological framework (CRR3)

With the entry into force of the banking package implementing the finalisation of Basel 3 in the European Union, the prudential framework replaces the previous operational risk approaches with a single non-model-based method (the new standardised approach), with the aim of enhancing comparability and simplifying the calculation.

Own funds requirement for operational risk

Under CRR3, the own funds requirement for operational risk is equal to the Business Indicator Component (BIC).

Business Indicator (BI)

The Business Indicator (BI) is a measure of the institution’s level of activity, calculated as the sum of three components:

Where, in summary:

•ILDC (Interest, Leases and Dividends Component): mainly captures net interest income (plus lease/leasing result) and dividends, calculated in accordance with the definitions in CRR3.

•SC (Services Component): incorporates the fee and commission component and other operating income/expense, also as treated under CRR3.

•FC (Financial Component): captures results associated with financial activities, including components of the trading book and the banking book in accordance with the regulatory definitions.

The BI is calculated as the average of the amounts for each component over the last three financial years, after applying the above formula.

Business Indicator Component (BIC)

The BIC is obtained by applying marginal coefficients by bucket to the BI (expressed in € billions), in accordance with the revised standardised approach: Business Indicator Component (BIC).

The BIC is obtained by applying marginal coefficients by bucket to the BI (expressed in € billions), in accordance with the revised standardised approach:

•If BI ≤ 1: BIC = 12% · BI

•If 1 < BI ≤ 30: BIC = 0,12 + 15% · (BI − 1)

•If BI > 30: BIC = 4,47 + 18% · (BI − 30)

Santander Group calculates the business indicator amount from consolidated accounting information within the prudential scope of consolidation.

It is important to note that the standardised approach results in higher own funds requirements for those institutions operating in jurisdictions with high margins, which are typically associated with a high risk premium, but not necessarily with higher operational risk. To avoid unintended effects, regulation provides that institutions that had prior authorisation as at the date of entry into force of CRR3 may continue to use the Alternative Standardised Approach in the calculation of operational risk capital requirements for the affected business lines. This method uses a standardised indicator resulting from multiplying certain balance sheet items by 3.5%, providing a measure that is more closely aligned with the unit’s operational risk.

In this regard, on 3 February 2016 the European Central Bank authorised the use of the Alternative Standardised Approach for the calculation of consolidated operational risk capital requirements at Banco Santander Brasil S.A., and likewise on 12 July 2017 it authorised its use at Banco Santander México S.A.

230    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Detailed quantitative information on operational risk losses over the last 10 years is shown below.

			Table 88.OR1 - Operational risk losses
			EUR million
																																	2025
						a			b			c			d			e			f			g			h			i			j			k
						2025			2024			2023			2022			2021			2020			2019			2018			2017			2016			Ten-year average
Using €20,000 threshold
1			Total amount of operational risk losses net of recoveries (no exclusions)			1,643			1,915			1,264			1,132			1,093			869			1,309			1,084			1,547			1,388			1,324
2			Total number of operational risk losses			8,955			9,017			8,322			10,363			11,932			9,831			9,906			8,337			11,162			24,841			11,267
3			Total amount of excluded operational risk losses			—			—			—			—			—			—			—			—			—			—			—
4			Total number of excluded operational risk events			—			—			—			—			—			—			—			—			—			—			—
5			Total amount of operational risk losses net of recoveries and net of excluded losses			1,643			1,915			1,264			1,132			1,093			869			1,309			1,084			1,547			1,388			1,324
Using €100,000 threshold
6			Total amount of operational risk losses net of recoveries (no exclusions)			1,249			1,515			860			819			701			577			927			846			1,014			929			944
7			Total number of operational risk losses			417			521			632			906			863			967			1,016			1,203			1,569			5,759			1,385
8			Total amount of excluded operational risk losses			—			—			—			—			—			—			—			—			—			—			—
9			Total number of excluded operational risk events			—			—			—			—			—			—			—			—			—			—			—
10			Total amount of operational risk losses net of recoveries and net of excluded losses			1,249			1,515			860			819			701			577			927			846			1,014			929			944
Details of operational risk capital calculation
			not applicable
			not applicable
			not applicable

2025 Pillar 3 Disclosures Report    231

Index Introduction l Capital l Risks l Remuneration l Appendices l

As a major international financial institution whose ambition is to achieve sustained growth, while ensuring optimal control over our activity, we strive to continuously improve our operating model across the entire organisation. A key component of this model resides in the risk management and internal control framework. In a leading organisation such as Grupo Santander, it is therefore crucial that risk management and internal controls are constantly subject to improvement efforts. This is especially true in the area of operational risk, where new risk drivers appear periodically and have a tangible bearing across the banking industry over time. As such, and in terms of key trends and the profile of our losses, we would like to highlight the following points:

•The level of losses, and its evolution, is driven by our geographical footprint, with most OR losses occurring in non-EU geographies (e.g., significant presence in Latam and in the UK). Furthermore, the most relevant source of losses for Santander is 'trabalhistas', which is a specific labour cost resulting for making business in Brazil for any company.

•Another specificity of our Group is the legacy portfolios coming from past integrations and acquisitions (e.g., Kredyt Bank in Poland and Banco Popular in Spain), with losses resulting from previous control environments in other institutions, which have been improved to Santander standards afterwards.

•Losses derived from past malpractices (mainly mis-selling in Spain and UK) have been duly addressed through remediation plans, and therefore are not expected to be replicated in the future.

Santander will request the exclusion of some of these losses as provided for in Article 320 of Regulation (EU) No 575/2013 (the CRR), once the RTS on the exclusion of operational risk losses is published by the EBA (included in Phase 3 of the EBA Roadmap of regulations).

The comparison of absolute losses may not fully reflect the reality, as there are major differences in terms of size of the entities, their business models, footprint and growth trajectories. In our view, at a minimum, this information should be complemented by other metrics that take into account the financial evolution of the bank. In that respect, looking at the 'Net losses to gross margin' ratio or the 'Net losses to regulatory capital' offer a much more comparable view.

In this sense, the Group’s capital planning framework provides additional layers of protection. Regulatory operational risk capital has recently increased significantly after the implementation of CRR3, strengthening the Group’s capacity to absorb unexpected operational risk losses. The ratio of operational risk losses over regulatory capital YE2025 is 20%, when considering the 20k threshold, and 15% when considering the 100k threshold.

232    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Details of the evolution of the indicators and components are shown below.

Table 89.OR2 - Business Indicator, components and subcomponents
			EUR million
						2025
						a			b			c			d
			BI and its subcomponents			2025			2024			2023			Average value
1			Interest, lease and dividend component (ILDC)												31,075
EU 1			ILDC related to the individual institution/consolidated Group (excluding entities considered by Article 314(3)												31,075
1a			Interest and lease income			94,973			100,327			91,308			95,536
1b			Interest and lease expense			62,641			68,548			64,118			65,102
1c			Total assets/Asset component			1,488,804			1,462,341			1,326,756			1,425,967
1d			Dividend income/dividend component			693			687			543			641
2			Services component (SC)												12,485
2a			Fee and commission income			11,355			9,835			9,121			10,103
2b			Fee and commission expense			3,027			2,537			2,627			2,730
2c			Other operating income			488			—			—			163
2d			Other operating expense			2,070			3,139			1,935			2,381
3			Financial component (FC)												2,574
3a			Net profit or loss applicable to trading book (TB)			1,103			1,452			2,310			1,622
3b			Net profit or loss applicable to banking book (BB)			1,316			755			786			953
EU 3c			Approach followed to determine the TB/BB boundary (PBA or accounting approach)												Accounting approach
4			Business Indicator (BI)												46,134
5			Business indicator component (BIC)												7,374
6a			BI gross of excluded divested activities			46,134
6b			Reduction in BI due to excluded divested activities			—
EU 6c			Impact in BI of mergers/acquisitions			—

Over the last three financial years, there have been no exclusions relating to entities or activities disposed of from the Business Indicator.

2025 Pillar 3 Disclosures Report    233

Index Introduction l Capital l Risks l Remuneration l Appendices l

Details of the evolution of the own funds requirements are shown below.

Table 90.OR3 - Operational risk own funds requirements and risk exposure amounts
			EUR million
						2025
						a
1			Business Indicator Component (BIC)			7,374
EU1			Alternative Standardised Approach (ASA) Own Funds Requirements (OROF) under Article 314(4)			820
2			Not applicable
3			Minimum Required Operational Risk Own Funds Requirements (OROF)			8,194
4			Operational Risk Exposure Amounts (REA)			102,427

234    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2025 Pillar 3 Disclosures Report    235

Index Introduction l Capital l Risks l Remuneration l Appendices l

			9.1. Liquidity and funding risk			237
			9.1.1. Liquidity Coverage Ratio (LCR)			237
			9.1.2. Net Stable Funding Ratio (NSFR)			238
			9.1.3. Asset Encumbrance			239
			9. Liquidity risk

236    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

9. LIQUIDITY RISK

Liquidity risk entails the potential losses that may be incurred by an entity as a result of its inability to secure funding on the market and/or the higher borrowing costs of new sources of finance.

This section covers the LIQA – Liquidity risk management and LIQB – Qualitative information on LCR requirements, which complements template EU LIQ1. It also complies with sections (d), (e), (f) and (g) of OVA – Institution risk management approach.

Main figures
€ Million
			2025			2024
Liquidity Coverage Ratio
Total high-quality liquid assets (HQLA) (Weighted value - average)			299,005			330,492
Cash outflows - Total weighted value			281,191			275,509
Cash inflows - Total weighted value			77,400			73,682
Total net cash outflows (adjusted value)			203,792			201,827
Liquidity coverage ratio (%)			147%			158%
Net Stable Funding Ratio
Total available stable funding			1,217,021			1,198,180
Total required stable funding			968,518			954,260
NSFR ratio (%)			126%			126%

9.1. Liquidity and funding risk

Our structural liquidity management aims to optimize maturities and costs while avoiding undesired liquidity risks in funding Santander’s operations.

It follows these principles:

•Decentralised 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 compliance with regulatory liquidity requirements.

The requirements of the EU LIQA table are addressed in the 'Economic and financial review' chapter of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

9.1.1. Liquidity Coverage Ratio (LCR)

Description of the degree of centralisation of liquidity management and interaction among the Group's units.

The Group has adopted a decentralised funding model through a structure of autonomous subsidiaries that are self-sufficient in terms of liquidity.

Each subsidiary is responsible for covering the liquidity needs arising from its current and future business, either through deposits secured from its customers in its area of influence or through the wholesale markets in which it operates, within a management and supervision framework coordinated at the Group level. Therefore, each subsidiary manages and monitors its own LCR ratio, ensuring that it remains above the regulatory limits specifically established for that subsidiary at all times.

This funding model has proven itself to be highly effective during times of high market stress, as it prevents problems in one area from impacting the funding capacity of other areas and, therefore, of the Group as a whole, which can happen with centralised funding models.

The LCR detailed herein was calculated at the request of the ECB (Consolidated LCR), using a consolidation methodology that does not take into account any surplus liquidity exceeding 100% of the LCR outflows and is subject to restrictions (legal or operational) on transferability to third countries, including if the surplus liquidity can be used to cover additional outflows within the own country, which is not subject to any restrictions.

Additionally, the Group calculates a ratio (Group LCR) using an internal methodology that determines the minimum common percentage of simultaneous coverage in all the Group's jurisdictions, while considering all existing restrictions on the transfer of liquidity to third countries. This is the methodology

2025 Pillar 3 Disclosures Report    237

Index Introduction l Capital l Risks l Remuneration l Appendices l

that most accurately reflects the Group's resilience to liquidity risk.

Explanation of the main drivers and inputs that contribute to the LCR

The Group's consolidated ratio is largely determined by the individual ratios of its three main units: the parent company, Santander UK and Santander Brazil. These units acquire most of their funding from retail deposits, which are stable liabilities that generate fewer potential outflows from the LCR ratio. Most cash outflows from the LCR ratio stem from wholesale funding, which is considerably more unstable, although the Group typically minimises and diversifies these maturities. Moreover, the Group's stock of liquid assets is of very high quality; on average approximately 95% of the assets which form part of the LCR numerator are Level 1. This is due to the units' assets portfolio mainly comprising public debt of the countries where the Group is present or countries with a good credit rating.

The Pillar 3 data submitted for the LCR is calculated based on the annual average of end of month figures.

The Group LCR ratio as end of December 2025 was 155%. 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 that which would be achieved by applying the approach followed until mid-2024, which did not include restrictions on the transfer of liquidity between subsidiaries.

The consolidated LCR ratio as end of December 2025 was 145%, comfortably exceeding internal and regulatory requirements. This ratio is calculated, following the ECB requirement, 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, since the Group manages liquidity in a decentralised manner, consolidated metrics are not considered a representative indicator of its liquidity position.

Key to these levels was the size of the HQLA buffers upheld by all subsidiaries. The Group´s strong stable retail deposit base and low dependence on short-term funding make the movements in the commercial gap and the issuance maturities as key drivers of the LCR.

Composition of the liquidity buffer

The Group's liquidity buffer consists mainly of Level 1 assets (95%): cash and sovereign debt, with extensive diversification across issuers. In addition to the regulatory liquidity buffer, the Group has an internal buffer that monitors the positions of other non-pledged liquid assets available to be used immediately as collateral to obtain additional funding.

Concentration of funding and liquidity sources

A diversified funding base is a key element in Santander´s liquidity risk management; and the principles listed below are

established to achieve this objective: subsidiaries must have effective diversification in sources, products, and funding terms, limiting reliance on short-term wholesale funds. Additionally, the needs arising from medium-and long-term activities must be financed by medium-and long-term instruments.

The Group has a set of additional metrics in order to identify and monitor those counterparties that are of such significance that withdrawal of the funding they are providing to the entity could trigger liquidity problems. During the year 2025, the Group levels of concentration risk were within management limits, ensuring diversity of wholesale funding at subsidiary level.

Derivative exposures and potential collateral calls

Most derivative transactions involving Group entities are subject to collateral contracts covering the market value of the transactions. Liquidity risk related to the impact of adverse market scenarios leading to changes in the market values of derivatives, which generate additional liquidity needs due to the requirement to post collateral, is included by the Group units in their LCR ratios using the historical look-back approach, in which the most significant net change in 30 days over the preceding 24 months is calculated and then added as additional liquidity needs.

Currency mismatches in the LCR

The Group prepares its consolidated LCR ratio for each of its identified significant currencies, which reflect the geographic locations in which the Group's units operate: euro (EUR), US dollar (USD), pound sterling (GBP), Brazilian real (BRL), Mexican peso (MXN) and Chilean peso (CLP). Each of the entities also prepares its own LCR ratio in its significant currency. Units present a consistent position between the liquidity buffer and net outflows. Latin American countries have significant buffer positions in USD, so as to optimise the position and ensure high convertibility. The positions of foreign currencies are closely monitored, e.g. by conducting currency stress scenarios.

Other items in the LCR calculation not captured in the LCR disclosure template that the institution considers relevant for its liquidity profile

Contingent lines, which are the last driver of the LCR ratio, maintain a stable performance over time and line tracking and monitoring are performed daily.

For further details, see the 'Economic and financial review' chapter and the 'Risk management and compliance' chapter in the 2025 annual report.

Access 2025 annual report available on the Santander Group website

238    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

9.1.2. Net Stable Funding Ratio (NSFR)

The net stable funding ratio (NSFR) is a regulatory metric which represents required stable funding against available stable funding. This metric requires banks to maintain a solid balance sheet in which assets and off-balance sheet activities are funded with stable liabilities. The Group monitors this metric on a monthly basis, which goes beyond the regulatory requirement.

We benefit from a high weighting of customer deposits, which are more stable, from permanent liquidity needs deriving from commercial activity funded by medium- and long-term instruments and limited use of short-term funding. Combining them has enabled Santander to maintain a balanced liquidity structure, reflected in a NSFR higher than 100%, both at the Group level and at the level of our subsidiaries, at the end of December 2025.

For more information, see the LIQ2 table at the end of the chapter.

9.1.3. Asset Encumbrance

This section covers the qualitative requirements AE4 - Accompanying narrative information.

Following the guidelines laid down by the European Banking Authority (EBA), the concept of asset encumbrance includes both on-balance-sheet assets pledged as collateral in transactions to obtain liquidity and off-balance-sheet assets that have been received and re-used for similar purposes, in addition to other assets associated with liabilities other than for funding reasons.

The Disclosures on Grupo Santander required by Commission Delegated Regulation (EU) 2017/2295 are presented below.

The scope used for the disclosures in this report is the same as the liquidity management scope on a consolidated basis, as regulated in CRR3 2024/1623, which amends regulation CRR 575/2013.

There is a difference in the treatment of transactions which are pledged but not encumbered. These are treated as assets, which are pledged, due to them being delivered as collateral for financing transactions and are not considered to be encumbered (for all or part of the value of the asset) as these financing transactions are not fully drawn.

There are no cases of encumbered assets that do not lead to pledging or transfer.

The value of the exposure shown in the tables below was calculated as the median of the values disclosed in the regulatory information for the four quarters of the year, in line with European Banking Authority guidelines.

The vast majority of unencumbered assets are loans that could be pledged as collateral as presented in Table AE1.

2025 Pillar 3 Disclosures Report    239

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 91.AE1 - Encumbered and unencumbered assets
			EUR million																					2025
						10			30			40			50			60			80			90			100
						Carrying amount of encumbered assets						Fair value of encumbered assets						Carrying amount of unencumbered assets						Fair value of unencumbered assets
									of which notionally eligible EHQLA and HQLA						of which notionally eligible EHQLA and HQLA						of which EHQLA and HQLA						of which EHQLA and HQLA
10			Assets of the reporting institution			303,218			127,195									1,512,298			286,336
30			Equity instruments			11,168			7,482			11,168			7,482			11,956			7,776			11,956			7,898
40			Debt securities			113,219			104,261			113,900			104,033			160,873			115,053			159,398			113,557
50			of which: covered bonds			2,706			2,700			2,706			2,700			4,979			2,522			4,979			2,354
60			of which: securitisations			6,274			2,711			5,994			2,330			20,521			9,501			20,775			7,979
70			of which: issued by general governments			97,063			95,644			97,681			95,586			104,272			100,449			103,045			98,219
80			of which: issued by financial corporations			14,590			8,885			14,495			8,692			29,828			10,627			32,204			10,378
90			of which: issued by non-financial corporations			1,343			544			1,343			544			17,670			406			17,687			389
120			Other assets			181,860			15,858									1,347,321			162,360
			of which: loans			157,562			490									1,153,405			155,610

Table 92.AE2 - Collateral received and own debt securities issued
			EUR million												2025
						10			30						40			60
						Fair value of encumbered collateral received or own debt securities issued									Unencumbered
															Fair value of collateral received or own debt securities issued available for encumbrance
									of which notionally eligible EHQLA and HQLA									of which EHQLA and HQLA
130			Collateral received by the reporting institution			182,694			143,809						67,783			51,378
140			Loans on demand			—			—						11			—
150			Equity instruments			9,004			6,540						9,140			6,410
160			Debt securities			172,442			137,619						58,809			45,471
170			of which: covered bonds			9,463			8,800						3,010			2,576
180			of which: securitisations			14,162			13,084						9,224			4,146
190			of which: issued by general governments			142,057			115,522						42,463			39,699
200			of which: issued by financial corporations			26,846			21,251						9,285			3,149
210			of which: issued by non-financial corporations			2,765			676						1,512			167
220			Loans and advances other than loans on demand			452			—						22			—
230			Other collateral received			—			—						100			—
240			Own debt securities issued other than own covered bonds or securitisations			1,446			—						881			—
241			Own covered bonds and asset-backed securities issued and not yet pledged												36,863			—
250			Total assets, collateral received and own debt securities issued			487,799			224,554

240    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Where our own covered bonds and asset-backed securities are retained and used, the pledged asset is included in Table 88 under loans and the related liability in Table 90.

The main sources and types of encumbrances and the level of over-collateralisation are set out in the following table:

Table 93.AE3 - Sources of encumbrance
									2025
			EUR million			10			30
						Matching liabilities, contingent liabilities or securities lent			Assets, collateral received and own debt securities issued other than covered bonds and securitisations encumbered
10												Carrying amount of selected financial liabilities			308,742			384,368

The table below shows the amount of own covered bonds and asset-backed securities retained and not used as collateral and the value of the related underlying assets.

Table 94.Own covered bonds and asset-backed securities issued
EUR million						2025
			Non-encumbered
			Carrying amount of the underlying pool of assets			Fair value of debt securities issued available for encumbrance
Own covered bonds and asset-backed securities issued			43,552			36,863
Retained covered bonds issued			27,943			23,646
Retained asset-backed securities issued			15,757			13,007

The contribution to the group's level of asset encumbrance on a consolidated basis by the various units is uneven across geographic locations. The unit with the relatively highest level of encumbered assets is the United States (Santander Consumer USA), due to the high weight of consumer business. In the eurozone and the UK, both markets where covered bonds and securitisations are highly developed, the level of asset encumbrance is similar and close to the Group average.

Asset encumbrance is also significant in Mexico, which is very active in asset repurchase agreements. The South American and Poland units have a relatively low level of asset encumbrance. Moreover, intra-group asset encumbrance is not material.

The encumbered assets are denominated in each unit in the same currency as the encumbrance, which is usually the unit's functional currency.

2025 Pillar 3 Disclosures Report    241

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following table shows quantitative information on the liquidity coverage ratio divided by quarters:

Table 95.LIQ1 - Quantitative information of LCR
						a			b			c			d						e			f			g			h
			Scope of consolidation (consolidated)			Total unweighted value (average)															Total weighted value (average)
			Currency and units (Million euros)
EU 1a			Quarter ending on (DD Month YYY)			dec'25			sep'25			jun'25			mar'25						dec'25			sep'25			jun'25			mar'25
EU-1b			Number of data points used in the calculation of averages			12			12			12			12						12			12			12			12
			HIGH-QUALITY LIQUID ASSETS
1			Total high-quality liquid assets (HQLA), after application of haircuts in line with Article 9 of regulation (EU) 2015/61																		299,005			302,056			304,520			309,137
			CASH - OUTFLOWS
2			retail deposits and deposits from small business customers, of which:			634,158			632,207			629,084			627,219						44,399			43,971			43,451			43,066
3			Stable deposits			379,296			377,952			376,412			374,512						18,965			18,898			18,821			18,726
4			Less stable deposits			205,293			202,425			198,642			196,591						25,196			24,818			24,376			24,113
5			Unsecured wholesale funding			290,183			289,673			289,405			290,770						140,925			141,412			141,548			142,258
6			Operational deposits (all counterparties) and deposits in networks of cooperative banks			52,397			52,141			51,204			50,570						12,165			12,097			11,840			11,659
7			Non-operational deposits (all counterparties)			225,330			224,747			225,479			226,788						116,303			116,529			116,986			117,187
8			Unsecured debt			12,456			12,785			12,722			13,412						12,456			12,785			12,722			13,412
9			Secured wholesale funding																		12,829			11,935			11,096			10,765
10			Additional requirements			242,789			241,306			239,430			237,198						53,394			52,123			50,353			49,259
11			Outflows related to derivative exposures and other collateral requirements			25,582			24,897			23,780			22,920						24,882			24,168			22,994			22,128
12			Outflows related to loss of funding on debt products			—			—			—			—						—			—			—			—
13			Credit and liquidity facilities			217,207			216,409			215,649			214,279						28,512			27,956			27,359			27,132
14			Other contractual funding obligations			24,756			24,662			24,893			23,658						22,932			22,897			23,130			21,918
15			Other contingent funding obligations			184,428			181,430			174,092			170,675						6,712			6,979			7,110			7,307
16			TOTAL CASH OUTFLOWS																		281,191			279,316			276,687			274,574
			CASH - INFLOWS
17			Secured lending (e.g. reverse repos)			132,414			126,187			120,097			110,747						6,764			5,941			5,264			4,630
18			Inflows from fully performing exposures			62,125			62,451			63,157			63,648						45,482			45,308			45,864			46,467
19			Other cash inflows			28,209			27,981			28,206			27,670						25,154			24,809			24,791			24,050
EU-19a			(Difference between total weighted inflows and total weighted outflows arising from transactions in third countries where there are transfer restrictions or which are denominated in non-convertible currencies)			—			—			—			—						—			—			—			—
EU-19b			(Excess inflows from a related specialised credit institution)			—			—			—			—						—			—			—			—
20			TOTAL CASH INFLOWS			222,748			216,618			211,459			202,065						77,400			76,058			75,919			75,148
EU-20a			Fully exempt inflows			—			—			—			—						—			—			—			—

242    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 95.LIQ1 - Quantitative information of LCR
						a			b			c			d						e			f			g			h
			Scope of consolidation (consolidated)			Total unweighted value (average)															Total weighted value (average)
			Currency and units (Million euros)			Total unweighted value (average)															Total weighted value (average)
EU 1a			Quarter ending on (DD Month YYY)			dec'25			sep'25			jun'25			mar'25						dec'25			sep'25			jun'25			mar'25
EU-20b			Inflows subject to 90% cap			—			—			—			—						—			—			—			—
EU-20c			Inflows subject to 75% cap			220,681			214,565			209,471			200,008						77,400			76,058			75,919			75,148
			TOTAL ADJUSTED VALUE																		—
EU-21			Liquidity buffer																		299,005			302,056			304,520			309,137
22			Total net cash outflows																		203,792			203,259			200,769			199,426
23			Liquidity coverage ratio (%)1																		147%			149%			152%			155%
			TOTAL ADJUSTED VALUE (Internal Method)
			Liquidity buffer																		327,453			330,152			326,273			321,777
			Total net cash outflows																		206,932			205,159			201,722			199,887
			Liquidity coverage ratio (%)2																		158%			161%			162%			161%
			1 Liquidity coverage ratios are the average of 12 months and are calculated following the regulatory guidelines required by the ECB.
			2 Liquidity coverage ratio is the average of 12 months.

2025 Pillar 3 Disclosures Report    243

Index Introduction l Capital l Risks l Remuneration l Appendices l

Details of the qualitative information regarding the liquidity coverage ratio is shown below:

Table 96.LIQB on qualitative information on LCR, which complements template EU LIQ1
						2025
			Qualitative information - Free format
(a)			Explanations on the main drivers of LCR results and the evolution of the contribution of inputs to the LCR’s calculation over time			The Pillar 3 data presented for the LCR are calculated based on the annual averages of the monthly closing values of two metrics: Consolidated LCR and Group LCR. The Consolidated LCR ratio is calculated, at the request of the ECB, using a consolidation methodology that does not take into account any liquidity surplus above 100% of the LCR outflows of each subsidiary that is subject to transferability restrictions (whether legal or operational) under local regulations (including those of EU countries). This adjustment is made even if the surplus liquidity can be used to cover additional outflows within the same country, which is not subject to any legal restriction. The Consolidated LCR ratio as of the end of December 2025 was 145%, comfortably exceeding both internal and regulatory requirements. The Group LCR ratio is calculated using an internal methodology that determines the minimum common percentage of simultaneous coverage across all jurisdictions within the Group, taking into account all existing restrictions on liquidity transfer in any country. This methodology more accurately reflects the Group's resilience to liquidity risk. The Group LCR ratio as of the end of December 2025 was 155%. The key drivers of these two ratios are: the large size of the HQLA buffer maintained by all subsidiaries, the Group’s solid base of stable retail deposits, and the low reliance on short-term funding. All of this means that movements in the commercial gap and the maturity of issuances are the main drivers of the LCR.
(b)			Explanations on the changes in the LCR over time			Santander Group maintained the LCR at a stable and comfortable level during the year 2025, although a downward trend is observed due to the inclusion of transferability restrictions between Group subsidiaries, introduced in September 2024 for both the Group LCR and the Consolidated LCR. However, since the Group manages liquidity in a decentralized manner, the consolidated metrics are not considered a representative indicator of its liquidity position.
(c)			Explanations on the actual concentration of funding sources			A diversified funding base is a key element in Santander´s liquidity risk management; and the principles listed below are established to achieve this objective: subsidiaries must have effective diversification in sources, products, and funding terms, limiting reliance on short-term wholesale funds. Additionally, the needs arising from medium and long-term activities must be financed by medium and long-term instruments. The Group has a set of additional metrics in order to identify and monitor those counterparties that are of such significance that withdrawal of the funding they are providing to the entity could trigger liquidity problems. During the year 2025, the Group levels of concentration risk were within management limits, ensuring diversity of wholesale funding at subsidiary level.
(d)			High-level description of the composition of the institution`s liquidity buffer.			The total liquid assets of the Group as of the end of December, before applying transferability adjustments between entities, amount to EUR 309 bn and are composed mainly of Level 1 assets (95%). These liquid assets consist primarily of available central bank reserves and sovereign debt, well diversified across different issuers. In addition to the regulatory buffer, the Group holds an additional internal buffer of unencumbered liquid assets that are readily available to be used as collateral to obtain additional funding.
(e)			Derivative exposures and potential collateral calls			Most derivative transactions involving Group entities are subject to collateral contracts covering the market value of the transactions. Liquidity risk related to the impact of adverse market scenarios leading to changes in the market values of derivatives, which generate additional liquidity, needs due to the requirement to post collateral. Group units include liquidity risk in their LCR ratios using the historical look-back approach, in which the most significant net change in 30 days over the preceding 24 months is calculated and then added as additional liquidity needs.

244    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

(f)			Currency mismatch in the LCR			The Group prepares its consolidated LCR ratio for each of its identified significant currencies, which reflect the geographies locations in which the Group's units operate: euro (EUR), US dollar (USD), pound sterling (GBP), Brazilian real (BRL), Mexican peso (MXN) and Chilean peso (CLP). Each of the entities also prepares its own LCR ratio in its significant currency. Units present a consistent position between the liquidity buffer and net outflows. Latin American countries have significant buffer positions in USD, so as to optimise the position and ensure high convertibility. The positions of foreign currencies are closely monitored, e.g. by conducting currency stress scenarios.
(g)			Other items in the LCR calculation that are not captured in the LCR disclosure template but that the institution considers relevant for its liquidity profile			Contingent lines, which are the last driver of the LCR ratio, maintain a stable performance over time and line tracking and monitoring are performed daily.

2025 Pillar 3 Disclosures Report    245

Index Introduction l Capital l Risks l Remuneration l Appendices l

The following table shows the information on the stable funding ratio divided by residual maturity:

Table 97.LIQ2 - Net Stable Funding Ratio (NSFR)
						EUR million			a			b			c			d			e
						(in currency amount)			Unweighted value by residual maturity												Weighted value
									No maturity			< 6 months			6 months to < 1 year			1 year
1			Capital elements and instruments						114,922			—			—			17,485			132,407
2						Own funds			114,922			—			—			17,485			132,407
3						Other capital instruments						—			—			—			—
4			Retail deposits									627,883			10,870			12,086			607,631
5						Stable deposits						408,860			4,504			3,726			396,422
6						Less stable deposits						219,023			6,366			8,360			211,210
7			Wholesale financing:									607,969			58,873			259,547			443,238
8						Operational deposits						53,077			—			—			26,538
9						Other wholesale financing						554,892			58,873			259,547			416,700
10			Interdependent liabilities									3,270			101			1			—
11			Other passives:						18,697			121,167			5,453			31,018			33,744
12						Liabilities derived from the net stable financing ratio			18,697
13						All other liabilities and equity instruments not included in the above categories						121,167			5,453			31,018			33,744
14			Total stable financing available (FED)																		1,217,021
15			Total high-quality liquid assets (ALAC)																		11,894
EU-15a			Encumbered assets with a residual maturity of one year or more in a coverage pool									1,763			1,873			40,081			37,160
16			Deposits held in other financial institutions for operational purposes									2,087			86			1,009			2,096
17			Loans and securities executed:									370,932			105,373			723,105			714,025
18						Securities financing operations with financial clients guaranteed by ALAC level 1 subject to a 0% haircut.						140,726			3,464			3,750			7,329
19						Securities financing operations with financial clients guaranteed by other assets and loans to financial institutions						47,600			13,542			50,696			61,384
20						Loans to non-financial corporate clients, loans to retail clients and small businesses, and loans to sovereigns, and PSEs, of which:						126,280			72,017			324,291			600,257
21						With a risk weight of less than or equal to 35% according to the Basel 2 Standardized Approach to credit risk						19,737			10,997			53,223			253,361
22						Residential mortgages in foreclosure, of which:						7,499			6,713			307,091			—
23						With a risk weight of less than or equal to 35% according to the Basel 2 Standardized Approach to credit risk						5,842			5,385			282,505			—
24						Other loans and securities that are not in default and are not considered ALAC, including publicly traded stocks and on-balance sheet trade finance products						48,828			9,639			37,278			45,056
25			Interdependent assets									2,040			—			—			—
26			Other assets:									104,926			4,754			158,933			186,894
27						Physically traded commodities												226			192
28						Assets deposited as initial margin for derivative contracts and contributions to CCP default funds						528			119			11,609			10,418
29						Assets derived from the net stable financing ratio						19,351									655
30						NSFR derivative liabilities before deducting posted variation margin						29,847									1,492
31						All other assets not included in the above categories						55,200			4,634			147,098			174,137
32			Off-balance sheet items									386,027			4,927			28,203			16,450
33			Total RSF																		968,518
34			Net Stable Funding Ratio (%)																		126%

246    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

LIQ2 - Net Stable Funding Ratio (NSFR) (30.09.2025)
						EUR million			a			b			c			d			e
						(in currency amount)			Unweighted value by residual maturity												Weighted value
									No maturity			< 6 months			6 months to < 1 year			1 year
1			Capital elements and instruments						114,090			—			—			16,744			130,834
2						Own funds			114,090			—			—			16,744			130,834
3						Other capital instruments						—			—			—			—
4			Retail deposits									613,209			11,903			11,381			593,672
5						Stable deposits						389,405			4,414			3,138			377,266
6						Less stable deposits						223,804			7,489			8,243			216,406
7			Wholesale financing:									611,544			56,790			256,531			437,899
8						Operational deposits						53,047			—			—			26,524
9						Other wholesale financing						558,496			56,790			256,531			411,376
10			Interdependent liabilities									2,261			—			—			—
11			Other passives:						17,259			118,340			5,288			31,626			34,271
12						Liabilities derived from the net stable financing ratio			17,259
13						All other liabilities and equity instruments not included in the above categories						118,340			5,288			31,626			34,271
14			Total stable financing available (FED)																		1,196,676
15			Total high-quality liquid assets (ALAC)																		10,173
EU-15a			Encumbered assets with a residual maturity of one year or more in a coverage pool									1,714			1,989			41,063			38,050
16			Deposits held in other financial institutions for operational purposes									2,429			78			883			2,136
17			Loans and securities executed:									376,491			106,077			707,188			702,099
18						Securities financing operations with financial clients guaranteed by ALAC level 1 subject to a 0% haircut.						150,874			6,076			3,857			8,804
19						Securities financing operations with financial clients guaranteed by other assets and loans to financial institutions						43,772			12,729			48,673			58,582
20						Loans to non-financial corporate clients, loans to retail clients and small businesses, and loans to sovereigns, and PSEs, of which:						126,793			71,569			314,939			590,681
21						With a risk weight of less than or equal to 35% according to the Basel 2 Standardized Approach to credit risk						20,821			10,409			50,501			249,528
22						Residential mortgages in foreclosure, of which:						7,338			6,714			302,735			—
23						With a risk weight of less than or equal to 35% according to the Basel 2 Standardized Approach to credit risk						5,759			5,323			278,596			—
24						Other loans and securities that are not in default and are not considered ALAC, including publicly traded stocks and on-balance sheet trade finance products						47,714			8,988			36,984			44,032
25			Interdependent assets									2,261			—			—			—
26			Other assets:									138,557			3,911			159,795			188,467
27						Physically traded commodities												213			181
28						Assets deposited as initial margin for derivative contracts and contributions to CCP default funds						765			1			11,970			10,825
29						Assets derived from the net stable financing ratio						18,302									1,043
30						NSFR derivative liabilities before deducting posted variation margin						28,883									1,444
31						All other assets not included in the above categories						90,607			3,910			147,612			174,974
32			Off-balance sheet items									385,874			4,510			18,009			15,738
33			Total RSF																		956,664
34			Net Stable Funding Ratio (%)																		125%

2025 Pillar 3 Disclosures Report    247

Index Introduction l Capital l Risks l Remuneration l Appendices l

LIQ2 - Net Stable Funding Ratio (NSFR) (30.06.2025)
						EUR million			a			b			c			d			e
						(in currency amount)			Unweighted value by residual maturity												Weighted value
									No maturity			< 6 months			6 months to < 1 year			1 year
1			Capital elements and instruments						111,423			—			—			16,930			128,353
2						Own funds			111,423			—			—			16,930			128,353
3						Other capital instruments						—			—			—			—
4			Retail deposits									612,525			15,164			11,264			595,921
5						Stable deposits						388,627			6,120			3,087			378,096
6						Less stable deposits						223,897			9,044			8,177			217,825
7			Wholesale financing:									578,011			60,899			258,703			435,934
8						Operational deposits						52,383			—			—			26,191
9						Other wholesale financing						525,629			60,899			258,703			409,743
10			Interdependent liabilities									2,408			—			—			—
11			Other passives:						14,537			114,413			5,447			32,711			35,435
12						Liabilities derived from the net stable financing ratio			14,537
13						All other liabilities and equity instruments not included in the above categories						114,413			5,447			32,711			35,435
14			Total stable financing available (FED)																		1,195,643
15			Total high-quality liquid assets (ALAC)																		9,654
EU-15a			Encumbered assets with a residual maturity of one year or more in a coverage pool									1,737			1,981			40,303			37,418
16			Deposits held in other financial institutions for operational purposes									2,602			115			754			2,113
17			Loans and securities executed:									347,200			101,765			710,717			700,156
18						Securities financing operations with financial clients guaranteed by ALAC level 1 subject to a 0% haircut.						131,853			4,126			3,745			7,880
19						Securities financing operations with financial clients guaranteed by other assets and loans to financial institutions						40,386			12,054			43,528			53,072
20						Loans to non-financial corporate clients, loans to retail clients and small businesses, and loans to sovereigns, and PSEs, of which:						126,609			70,483			320,302			597,000
21						With a risk weight of less than or equal to 35% according to the Basel 2 Standardized Approach to credit risk						27,696			12,564			57,452			260,312
22						Residential mortgages in foreclosure, of which:						7,454			6,860			306,600			—
23						With a risk weight of less than or equal to 35% according to the Basel 2 Standardized Approach to credit risk						5,841			5,491			281,218			—
24						Other loans and securities that are not in default and are not considered ALAC, including publicly traded stocks and on-balance sheet trade finance products						40,896			8,242			36,543			42,203
25			Interdependent assets									2,408			—			—			—
26			Other assets:									95,401			3,651			157,417			185,128
27						Physically traded commodities												205			174
28						Assets deposited as initial margin for derivative contracts and contributions to CCP default funds						714			—			10,558			9,581
29						Assets derived from the net stable financing ratio						14,740									203
30						NSFR derivative liabilities before deducting posted variation margin						26,364									1,318
31						All other assets not included in the above categories						53,582			3,651			146,655			173,851
32			Off-balance sheet items									383,638			4,013			17,915			15,872
33			Total RSF																		950,340
34			Net Stable Funding Ratio (%)																		126%

248    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

LIQ2 - Net Stable Funding Ratio (NSFR) (31.03.2025)
						EUR million			a			b			c			d			e
						(in currency amount)			Unweighted value by residual maturity												Weighted value
									No maturity			< 6 months			6 months to < 1 year			1 year
1			Capital elements and instruments						112,977			—			—			17,944			130,921
2						Own funds			112,977			—			—			17,944			130,921
3						Other capital instruments						—			—			—			—
4			Retail deposits									617,049			17,894			9,801			601,208
5						Stable deposits						392,238			6,940			2,517			381,736
6						Less stable deposits						224,811			10,954			7,283			219,472
7			Wholesale financing:									589,894			69,605			254,362			439,064
8						Operational deposits						50,248			—			—			25,124
9						Other wholesale financing						539,646			69,605			254,362			413,940
10			Interdependent liabilities									2,276			—			—			—
11			Other passives:						12,929			125,921			5,464			32,126			34,858
12						Liabilities derived from the net stable financing ratio			12,929
13						All other liabilities and equity instruments not included in the above categories						125,921			5,464			32,126			34,858
14			Total stable financing available (FED)																		1,206,050
15			Total high-quality liquid assets (ALAC)																		9,361
EU-15a			Encumbered assets with a residual maturity of one year or more in a coverage pool									1,734			2,028			42,410			39,247
16			Deposits held in other financial institutions for operational purposes									2,330			115			752			1,974
17			Loans and securities executed:									365,035			97,777			720,086			707,250
18						Securities financing operations with financial clients guaranteed by ALAC level 1 subject to a 0% haircut.						135,235			4,774			3,656			8,065
19						Securities financing operations with financial clients guaranteed by other assets and loans to financial institutions						47,575			11,290			39,182			48,837
20						Loans to non-financial corporate clients, loans to retail clients and small businesses, and loans to sovereigns, and PSEs, of which:						136,425			68,248			321,254			606,958
21						With a risk weight of less than or equal to 35% according to the Basel 2 Standardized Approach to credit risk						33,381			12,299			54,506			265,421
22						Residential mortgages in foreclosure, of which:						3,669			3,981			317,306			—
23						With a risk weight of less than or equal to 35% according to the Basel 2 Standardized Approach to credit risk						2,110			2,533			291,618			—
24						Other loans and securities that are not in default and are not considered ALAC, including publicly traded stocks and on-balance sheet trade finance products						42,131			9,484			38,689			43,390
25			Interdependent assets									2,276			—			—			—
26			Other assets:									86,327			3,790			163,209			188,077
27						Physically traded commodities												199			169
28						Assets deposited as initial margin for derivative contracts and contributions to CCP default funds						707			—			11,606			10,467
29						Assets derived from the net stable financing ratio						12,579									—
30						NSFR derivative liabilities before deducting posted variation margin						23,952									1,198
31						All other assets not included in the above categories						49,089			3,790			151,404			176,244
32			Off-balance sheet items									391,027			5,298			14,393			15,141
33			Total RSF																		961,050
34			Net Stable Funding Ratio (%)																		125%

2025 Pillar 3 Disclosures Report    249

Index Introduction l Capital l Risks l Remuneration l Appendices l

[THIS PAGE INTENTIONALLY LEFT BLANK]

250    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2025 Pillar 3 Disclosures Report    251

Index Introduction l Capital l Risks l Remuneration l Appendices l

			10.1. Environmental risk			253
			10.1.1. Business strategy and processes			253
			10.1.2. Governance			258
			10.1.3. Risk management			261
			10.2. Social risk			275
			10.2.1. Business strategy and processes			275
			10.2.2. Governance			283
			10.2.3. Risk management			283
			10.3. Governance risk			285
			10.4. Credit quality of exposures			287
			10.5. Energy efficiency of the collateral			296
			10.6. Alignment metrics			285
			10.7. Exposure to the top 20 polluting companies			299
			10.8. Exposures subject to physical risk			300
			10. ESG risk

252    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

10. ESG RISK

10.1. Environmental risks

10.1.1. Business strategy and processes

This section covers the requirements on qualitative information on environmental risk, specifically, the point on business strategy and processes, for questions (a), (b) and (c)

This is a summary of the overall climate strategy integrated into the strategies of our five global businesses. For further detail, please refer to our annual report, available in our corporate website.

Our approach

Santander has identified material impacts, risks and opportunities in the double materiality assessment linked to climate. As required by the European Corporate Sustainability Reporting Directive (CSRD), below we disclose our transition plan, based on three pillars. 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 work to the align our portfolios, consistent with local law and regulation:

1

Supporting our customers in their transition goals

We support our customers in the transition to a sustainable economy. We’re making headway with our target of raising or facilitating EUR 220 billion in green finance between 2019 and 2030, after having achieved our EUR 120 billion target eighteen months early. We offer our customers guidance, advice and specific solutions, as well as a wide range of products to invest in according to their sustainability preferences. Additionally, in March 2025, we reached our target of EUR 100 billion in assets under management (AUM) in socially responsible investment (SRI) nine months early.

2

Embedding ESG in risk management

We embed climate, environmental and social aspects in risk management from a regulatory and control perspective, including a materiality assessment that feeds into our double materiality assessment and sustainability strategy.

3

Aiming to align our activity with the Paris Agreement Goals

We work to align our portfolio with the Paris Agreement goals to help limit global warming. We either set sector portfolio alignment targets or portfolios under monitoring. We closed 2025 with six targets in five sectors, additional portfolios under monitoring and an alignment approach for our asset management activity. The management of these targets and portfolios under monitoring, in line with the rest of the IROs, is carried out in accordance with local law and regulation in the markets where we operate and creating value for our customers and shareholders. Their update and evolution reflect the present and expected performance of the economies and customers we serve.

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 in our core markets.

2025 Pillar 3 Disclosures Report    253

Index Introduction l Capital l Risks l Remuneration l Appendices l

Environmental aspects are considered in financial planning through the Group's strategic exercises, which have different time horizons. Materiality assessment is relevant in defining our strategy, risk appetite, and other stress tests such as ICAAP.

The climate scenarios used consider the different drivers of vulnerability to transition, to environmental events such as floods that cause disruptions in the supply chain or droughts that lead to shortages of resources such as water, as well as the impact on the demographic evolution of populations in different geographical areas.

In addition, the Group has set a number of climate and environmental goalsA:

			2019			2020			2021			2022						2023			2024			2025						2025/2030 target
Green finance raised and facilitated (accumulated EUR bn)B			19.0			33.8			65.7			94.5						115.3			139.4			174.0						120 bn by 2025			ü
																														220 bn by 2030
AuM in Socially Responsible Investments (accumulated EUR bn)									27.1			53.2						67.7			88.8			129.9						100 bn by 2025			ü
Thermal coal-related power & mining phase out (EUR bn)																		4.4			4.2			2.3						0 by 2030
Emissions intensity of power generation portfolioC																		149			88									102 - 124 kgCO2e/MWh in 2030
Emissions intensity of oil & gas portfolioC,D,D																		3.08			3.15									2.31 - 3.03 tCO2e/TJ in 2030
Emissions intensity of steel portfolioC																		1.47			1.51									1.17 - 1.28 tCO2e/tS in 2030
Emissions intensity of auto-manufacturing portfolioC																		135			128									80 - 98 gCO2/vkm in 2030
Emissions intensity of auto-lending portfolioC,E												137						133			129									70 - 109 gCO2e/vkm in 2030
Electricity from renewable sourcesF			50		%	57		%	75		%	88		%				97%			96		%	100		%				100% by 2025			ü

A.The efforts to meet these targets are in accordance with local law and regulation

B.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.

C.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), 2022.

D.It includes scope 1 and 2 emissions from the upstream oil & gas portfolio. Scope 3 is considered in the primary energy mix index monitoring metric.

E.Consumer lending for the purchase of passenger cars in Europe.

F.In countries where we can verify electricity from renewable sources at Banco Santander properties. It considers the 10 core markets where we operate.

Our ambition

Our approach is to help our customers transition to a low carbon economy by offering finance and advice, while we continue working towards net-zero carbon emissions by 2050.

The transition will depend on a number of factors beyond our control, including public policy frameworks and incentives that accelerate alignment in the real economy, as well as continued technological developments supportive of the energy transition. Capital will flow to markets where risk-return and demand for sustainable technologies work. Policy and regulation are key enablers for this to happen: and this, in turn, is reflected in our performance and the annual review.

Investment targets towards environmental objectives

As a bank, our main lever is to support customers' transition. We continue to enhance our sustainable finance and advisory proposition in our global businesses by:

1. identifying trends and needs in the economies and customer segments we serve;

2. having commercial teams in place with the skills required to meet these needs, and

3. developing the support structure for these skills, including our value proposition, standards, governance, and systems.

In Corporate & Investment Banking (CIB), we have reached EUR 174 billion in green finance raised and facilitated since 2019, achieving our EUR 120 billion by 2025 target, and are working towards reaching EUR 220 billion by 2030. In 2025, Wealth reached EUR 129.9 billion in assets under management (AuM) in socially responsible investment (SRI), reaching our EUR 100 billion target nine months early.

Limits for assessing and addressing environmental risk

This section covers the requirement on limits for financing projects or counterparties in relation to environmental risks (q)

Our E&S risk management policy is structured around a set of principles that reflect our support for a just and sustainable transition, driven by growth, while recognizing the specific realities of each region and complying with applicable local laws and regulations.

254    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

This policy, which is reviewed annually and is publicly available, defines the criteria applicable to investing in entities and providing financial products and services to clients in the oil and gas, electricity generation and distribution, and mining and metallurgy sectors, as well as to activities related to agricultural commodities. In compliance with applicable local laws and regulations, it also pays special attention to biodiversity conservation, focusing on the potential risks of deforestation with clients in the agro-industrial sector in the Amazon biome and on the degradation of nature. The policy thus establishes criteria for restriction and special attention for various activities within the aforementioned sectors.

Taking into account the principles and criteria set out in our policy, analysts evaluate clients and projects on a case-by-case basis, taking into account applicable local regulations and the specific risks associated with both the client and the transaction.

In addition, it is worth mentioning that the limits for addressing environmental risk are integrated into our risk appetite limits, which define the metrics (limits and alerts) for managing exposure to environmental sectors in line with the Group's strategy. Local units develop management metrics and indicators tailored to their business models and geographic exposures, including metrics that monitor energy efficiency in mortgage portfolios and concentrations of exposures subject to high physical risk.

These metrics are subject to a governance and escalation model, specifically for the Group through the Risk Control Committee (RCC), the Board Risk Committee (BRC), and ultimately the board of directors, with quarterly reviews under normal circumstances and monthly monitoring in the event of non-compliance, as well as locally approved governance models in each of the units. For further details, see section 10.1.3 Risk Management.

Policies and procedures relating customer engagement on their strategies to mitigate and reduce environmental risks

This section covers the requirement on qualitative information on environmental risk, specifically, the point on business strategy and processes, for question (d)

CIB implementation strategy entails several actions to support our customers in their climate objectives and to achieve our sectoral alignment targets. These actions include an assessment of our customers’ transition plans, customer engagement, segmenting customers based on a climate tiering approach, and dedicated portfolio steering governance. We also collect additional data to supplement the risk analysis process; and conduct E&S policy reviews. Given our actions relate directly to our customers’ activity, it is not practical to make quantitative estimates of how each action contributes to achieving 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, which we align with local government laws and policies. The outcome of this tiering approach is an assessment of our customers’ current and expected progress to align with our climate sector objectives. Over the last few years, we have implemented this approach for all sectors with alignment targets (automotive

manufacturing, power, oil & gas and steel) 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 alignment targets and to develop a strong understanding of our customers’ transition strategies towards low-carbon business models. We take a business approach and to not apply any individual customer exclusions solely based on customer climate tiering. This framework is supported by governance processes, involving various internal stakeholders, such as front office teams, risk 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 several internationally recognized references 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. We also seek to source reliable and consistent information from credible third parties to complement our understanding.

We collect and update this information both at the customer onboarding stage, and as part of the regular business and risk assessment review with each customer, which we perform 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 pillar: This focuses on the quality and ambition of the customer’s quantitative GHG emissions targets. Where possible, we assess both short- and long-term, as well as absolute and intensity reduction targets.

2.Action plan pillar: This considers the credibility of the customer’s implementation strategy to achieve its alignment targets. We assess the business strategic integration of climate change risks and opportunities; the existence of climate scenario planning; planned capital expenditure (CAPEX) for climate solutions; and time-bound action plans to achieve targets.

3.Disclosure pillar: This focuses on the transparency of reporting on historical emissions performance across all relevant scopes, the level of assurance, and the degree of reporting alignment with leading reporting frameworks such as TCFD.

4.Governance pillar: This 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, and board committee oversight of climate change issues.

2025 Pillar 3 Disclosures Report    255

Index Introduction l Capital l Risks l Remuneration l Appendices l

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 comprises four categories (Leader, Strong, Moderate and Weak).

Two step tiering system
GHG emissions profile alignment						•Current GHG emissions profile •Future targeted GHG emissions trajectory •Assessment of alignment with Santander’s pathway
↓
Transition plan quality assessment						•Internal methodology to assess perceived quality of transition plans •Developed using established transition plan assessment methodologies

Transition pillar						Overview
1. Targets						Quality and ambition of quantitative targets to reduce GHG emissions
2. Action plan						Depth of alignment strategy to achieve GHG emissions reduction targets
3. Disclosure						Transparency on GHG emissions reporting across relevant scopes
4. Governance						Management oversight and governance of transition strategy

Tier categories

Description

Tier 1

Leader

•Emissions profile fully aligned with Santander’s pathway •Strong transition plan

Tier 2

Strong

•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

Tier 3

Moderate

•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

Tier 4

Weak

•Emissions profile not aligned with Santander’s pathway •Weak transition plan

Senior experts from our ESCC, Portfolio Alignment and Sustainability Solutions teams delivered internally-organised briefings to sector- specific relationship managers and ESCC analysts. These focused on gathering information to complete the transition plan quality assessment (the second step in our customer climate tiering system).

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, consistent with their transition or business strategies.

In 2025, we continued to focus our customer engagement efforts on lower-tiered customers. We use internal transition assessment dashboards for relationship managers, designed to help identify of customer-level priority areas, industry benchmarking, and opportunities to support our customers in financing their transition. Of all the customers that are in scope of our targets, approximately two-thirds included sustainability-related discussions in 2025.

Review: Our relationship managers perform the customer transition plan assessment in cooperation with ESCC risk analysts. Our Sustainability Solutions and Portfolio Alignment teams then carry out portfolio level reviews to determine final tierings. This 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.

We completed initial assessments for both steps for all sectors where targets have been set. Subsequently, we reviewed and enhanced transition plan quality assessments, drawing on updated reference methodologies and sector-specific research. This led to improved guidance and a more focused set of questions that include sector-specific questions to assess 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 2025. See sections below for further details on each sector’s portfolio composition and evolution.

Climate tiering aggregated for the sectors for which we had set targetsA

A. Based on 2025 year-end drawn exposure, according to portfolio alignment methodology, and including project finance, both in operation and under construction.

Among our corporate customers with drawn exposure and a transition plan assessed in 2025, around two-thirds have set quantitative emissions-reduction targets for sector-material GHG scopes. These companies’ targets cover both the 2030–2039 period and longer-term ambitions towards 2040–2050. The same proportion have established absolute reduction targets.

Approximately four-fifths have adopted time-bound action plans to align their business with a low-carbon pathway, while a similar share conduct climate-scenario analysis and have implemented the TCFD recommendations.

Over half report or commit to align future CAPEX with low-carbon solutions. More than four-fifths have obtained third-party verification of their scope 1 and 2 emissions and have

256    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

assigned board- or management-level responsibility for climate oversight.

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.

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. We comply with fair access laws and policies where they are applicable.

In addition, Santander’s E&S 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. For all sectors with alignment targets, we’re embedding customer climate tiering and engagement considerations in annual credit risk reviews. For one-off transactions (e.g. project finance), we assess a transaction’s impact on financed emissions targets for the relevant sector portfolio.

Contributing to integrity in transition finance

We contribute to furthering industry knowledge of transition finance as an enabler towards net zero. As part of our long-standing support for education, employability and entrepreneurship, we have collaborated with the University of Oxford, funding the development of the Transition Finance Centre of Excellence for the last three years. 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. Research has focused on multiple angles of transition finance, including developing a deeper understanding of assessing companies’ transition plans in emission-intensive sectors,

exploring external dependencies in corporate transition plans and assessing transition plans with more granular asset-based approaches as well as equity principles. Research has also included corporate net zero transition plan implications for loan pricing, the development of tools to assess sustainability-linked bond pricing, and other topics such as the economics of critical minerals and climate transition policy. For more details about this collaboration and published research outputs, please visit smithschool.ox.ac.uk.

2025 Pillar 3 Disclosures Report    257

Index Introduction l Capital l Risks l Remuneration l Appendices l

10.1.2. Governance

This section covers the requirement on qualitative information on environmental risk, specifically, the point on governance, for questions (e), (h), and (g)

Governance bodies and frequency

The Group's board of directors is responsible, among other things, for approving the sustainability strategy.

The responsible banking, sustainability and cultural committee assists, among other matters, in the development and implementation of the Group's sustainability strategy and responsible business policies, in support of the board of directors, through monitoring, supervision and evaluation of these. The committee works in coordination with other board committees which also analyse specific sustainability topics. The audit committee is responsible for supervising and

reviewing the financial and non-financial information process, as well as the internal control systems. In turn, the risk supervision, regulation and compliance committee supports and advises the board of directors in defining and assessing the Group’s risk policies and in determining the risk appetite — current and forward-looking — as well as the strategy and culture in this area. For more information on the composition, operation and activities undertaken in 2025 by these committees, see the ‘Corporate governance’ chapter.

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:

Santander Group board of directors Sets the sustainability strategy and prepares annual accounts and management report, which shall include sustainability statement, in compliance with local law and regulation

é

é

é é

Risk supervision, regulation and compliance committeeA Support the board of directors in determining the risk appetite. Oversee the integration of environmental, social and governance risks into management, in coordination with the responsible banking, sustainability and culture committee.

Audit committee Reviews Banco Santander and Group financial statements and non financial information, monitor legal requirements compliance and assesses information and internal control systems. Assess the process for preparing and presenting non-financial information, including sustainability information, in coordination with the responsible banking, sustainability and culture committee.

Responsible banking, sustainability and culture committee Advise the board of directors on the design of the responsible banking and sustainability strategy and policies. Oversee the integration of environmental, social and governance (ESG) risks into management, in coordination with the risk supervision, regulation and compliance committee. Assess the process for preparing and presenting non-financial information, including sustainability information, in coordination with the audit committee.

é

é

é

Executive & management level (main bodies & functions)

Risk control committee

Accounting, financial management and sustainability information corporate committee

Sustainability, risk, ESG Reporting and ESG businesses function

Defence lines:

1st line of defence (Business owners, general accounting and management and sustainability function)

2nd line of defence (Risk & compliance)

3rd line of defence (Internal Audit)

¢ Overall responsibility ¢ Supervisory oversight é Reporting é Risk é Impact é Opportunities

A. This committee works with the RBSCC (Responsible Banking, Sustainability and Cultural Committee) to review ESG-related conduct risk, reputational issues, risk policies and how business units adopted these policies.

258    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Management body's integration of environmental risks, organizational structure both within business lines and internal control functions

This section covers the requirement on qualitative information on environmental risk, specifically, the point on governance, for question (f)

In 2025 we continued to embed climate management in business as usual across different areas such as business, risk and sustainability. For instance, CIB has a team that works on portfolio alignment with the relevant governance, while Wealth continued to reinforce and update the working groups and policies that oversee and coordinate its SRI strategy. Consumer has several working groups that meet monthly to address sustainability projects and matters, and quarterly to review progress with the sustainability agenda.

Beyond these global businesses, numerous local units engage in a process that the Group Sustainability area coordinates. The aim is to make headway with the alignment agenda, promote the sharing of knowledge and expertise, and seek synergy in the design of reliable transition plans. These local units comply with fair access laws and other relevant local laws and regulations.

Other corporate-level initiatives and groups that support governance meet regularly to implement our climate change agenda and report on regulation updates. For instance, our sustainability public policy working group updates on upcoming climate and sustainability regulation; a regulatory radar governance working group meets quarterly to monitor the status of implementation of sustainability regulations; an environmental footprint working group measures our footprint and reviews ways to reduce it; and a sustainable bonds working group oversees the sustainable bonds that the Group and its subsidiaries issue.

The Internal Control and Finance Execution team, 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. In 2025, the team worked, together with each responsible area, to strengthen the process for gathering information and the governance and control of disclosed information. The emission reduction objectives of our own operations emissions (scopes 1 & 2) have been reviewed in the Group’s ESG Reporting Forum.

As part of the assessment and tagging of transactions under sustainability criteria, we hold global and local classification meetings to provide additional scrutiny and validation, and coordination across the Group; agree on labelling transactions as environmental, social or sustainable; and make sure that we use the same standards and procedures across our footprint. We ensure that these classification meetings comply with all applicable local laws and regulations. The panels are led by the risk function and/or sustainable business, and are also attended by compliance, sustainability and other business areas.

The internal audit function reviews climate risk, for more details see the section '10.2.2 Governance'.

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.

Santander integrates short-term, medium-term and long-term effects of environmental risks for the purposes of risk

management through the integration of climate-related and environmental risk in our main strategic financial planning, which comprises annual budgeting, our three-year financial plan and the Group’s long-term strategic plan.

2025 Pillar 3 Disclosures Report    259

Index Introduction l Capital l Risks l Remuneration l Appendices l

Alignment of the remuneration policy with environmental risk-related objectives

This section covers the requirement on qualitative information on environmental risk, specifically, the point on governance, for questions (i)

Grupo Santander’s remuneration policy reflects our strategic and long-term sustainability objectives and is aligned with the regulations in the markets in which we operate. Variable pay is based on pre- determined, specific and quantifiable financial, sustainability-based and value-creation targets, except where to do so for local employees would be in conflict with local laws.

Our remuneration scheme integrates sustainability metrics consistent with Santander strategy, in accordance with local law and regulation.

The long-term incentives (LTI) scheme applies to our top Groups' executives, including the Executive Chair and the CEO.

Sustainability has formed part of the LTI schemes since 2022, with a 20% weighting.

In 2025, 7% of the variable remuneration received by the Chairwoman and the CEO has been linked to sustainability (vs. 8% in 2024), while 2% of their total remuneration has been linked to climate actions as last year.

The sustainability component of short-term variable remuneration is evolving consistently with ESG risk management. Therefore, we are incorporating environmental and social risk management indicators, within the qualitative risk modifier of the Group’s short-term incentive framework for 2026 (see section 6. Remuneration in annual report for further details).

The board of directors approve these sustainability incentives schemes on the basis of the proposal made by the responsible banking, sustainability and cultural committee and the remuneration committee.

The proposal for 2026-2028 will be subject to vote at the General Meeting in 2026, in accordance with local Law and regulation (see section 6. Remuneration in annual report for further details).

In 2025, the sustainability metrics consistent with our objectives for long-term incentives for senior executives for the 2025–27 period were approved at the Annual General Meeting, with a weighting of 20%). 50% of the sustainability scorecard is linked to supporting the transition to a low-carbon economy through green financing raised and facilitated by the Group, 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.

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 (2027) based on the target bonus amount and subject to compliance with the annual objectives.

•40% of the incentive will be paid immediately once the final amount has been set, and 60% will be deferred and 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 2028 and 2029 on the condition that no malus clauses are triggered.

◦The amount deferred over the next three years (40% of the total) will be paid in 2030, 2031 and 2032, on the condition that no malus clauses are triggered and long-term targets. Deferred incentive subject to long-term performance objectives– are met. The long-term targets, described in the annual report, are:

A.Relative performance of Banco Santander's total shareholder return (TSR)

B.Banco Santander’s consolidated Return on tangible equity (RoTE)

C.Sustainability metrics, with a weighting of 20% of the total

The sustainability metrics are designed to support delivery of the Group’s sustainability goals, while contributing to a simplified and focused long-term incentive structure.

More specifically, for the 2026 incentive, the sustainability portion of the long-term incentive will be 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.

Regarding environmental aspects, these targets cover:

•Sustainable business. This goal includes how we support our customers' business through sustainable finance:

Finance raised and facilitatedB between 2026 and 2028 (EUR bn)			Coefficient
≥ 240			1.25
≥ 192 but < 240			1 – 1.25A
≥ 140 but < 192			0 - 1
< 140			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’ sustainable business: CIB green finance raised and facilitated and Retail & Commercial sustainable finance finance and Digital Consumer Bank green finance.

As regards the overall assessment of these ESG metrics, they will be measured jointly with the social risk targets set out in the section on Remuneration policy for social aspects objectives. Each ESG goal has a different weighting:

•Women in executive positions: 20%

•Financial inclusion: 20%

•Sustainable business: 60%

This information can be found in the 6.4 'Directors' remuneration policy for 2026, 2027 and 2028' section in the annual report.

Access 2025 annual report available on the Santander Group website

260    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

10.1.3. Risk management

This section covers the requirement on qualitative information on environmental risk, specifically, the point on risk management, for questions (j), (l), (m), (n) and (q)

Integration of environmental factors in the risk framework: management, setting of limits and tools 6

At Grupo Santander, we manage the environmental and social factors of our global portfolio by considering all risk types and prioritizing the most material ones. Below we describe how we embed these factors in the risk management cycle.

Risk management cycle

1. Identification

We conduct regular risk identification exercises to assess events that could threaten the Group's strategic plan. These exercises consider environmental risk factors beyond climate, such as nature and biodiversity, as well as social factors.

Risk identification enables us to understand the internal and external threats that the environment and climate change pose to our business model, profitability, solvency and strategy.

We use tools such as the internal risk taxonomy, heatmaps and materiality assessments, which provide the basis for identifying and classifying material environmental and social risks across our portfolios.

In 2025, we determined the social factors that will apply to Grupo Santander’s loan portfolio and will embed them in our materiality assessment in 2026, including an assessment of social factors that may have a potential impact based on regulatory requirements, international standards and market best practices (EBA7 , EBRD8 , World Bank, and others). This will be done in a way that at all times complies with local law and takes into account local policy where appropriate.

2. Planning

We include E&S risk management in strategic planning, which spans several time horizons in addition to 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).

•Over five years for the long term (strategic plan).

Specifically, we challenge the strategic plan to identify potential threats that could prevent us from achieving our objectives.

3. Assessment

At Grupo Santander, we assess how ESG factors may increase risk over the short, medium and long term. Our assessment of the ESG factors that could be material due to their potential impact on the Group’s risk profile considers these aspects:

6 Risk management follows a global approach while aligning to local regulatory and legal requirements.

7 European Banking Authority.

8 European Bank for Reconstruction and Development.

2025 Pillar 3 Disclosures Report    261

Index Introduction l Capital l Risks l Remuneration l Appendices l

1

Review of E&S drivers

We use a variety of references (TCFDA, TNFDB, UNEP FI, ENCOREC, SBTND, NGFSE) and analytical toolsF to identify and monitor environmental and social risk factors across risk types.

2

Analysis of transmission channels

We analyse how the factors identified in the previous stage could impact on the risk types included in our risk management framework.

3

Assessment of potential impact on the main risks

We analyse the potential impacts should the risk factors previously identified through the transmission channels materialize, based on qualitative and/or quantitative approaches.

4

Consolidated materiality

We aggregate impact results by risk type in a consolidated materiality using a five-point RAGG scale across short, medium and long-term horizons.

A. Task Force on Climate-related Financial Disclosures.

B. Taskforce on Nature-related Financial Disclosures.

C.Exploring Natural Capital Opportunities, Risks and Exposure (a materiality database of dependencies between production processes and ecosystem services).

D. Science Based Targets Network.

E. Network for Greening the Financial System.

F. Heatmaps, sectoral and environmental materiality, historical information, scenarios and customer assessments.

G. Red, amber and green (RAG).

The following table shows the consolidated results of the materiality assessment by risk type and time horizon9 as at year-end 2025:

Consolidated materiality assessment

Transition Risk

Physical Risk

ST

ST

Climate / Nature

MT

LT

Climate / Nature

MT

LT

Credit riskA

CIB

l

l

l

l

l

l

l

l

Corporate & SME

l

l

l

l

l

l

l

l

Individuals

l

l

l

l

l

l

l

l

Auto Consumer

l

l

l

l

l

l

l

l

Operational riskB

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): <2030 | Medium term (MT): 2030-2040 | Long term (LT): >2040-2050. A. Assessment as of September 2025. B. Assessment as of November 2025

9 The need to assess a longer time period for the short and medium term is intended to adequately reflect the impact of physical and transition risks. Additionally, scenarios have been considered to calculate the different time horizons.

262    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

In 2025, we continued to enhance our materiality assessment by embedding regulatory requirements, industry best practices and greater harmonization across risk factors, particularly with regard to information sources, thresholds and scenarios. Moreover, we embedded nature-related materiality alongside climate-related materiality.

The table above shows the consolidated results of the materiality assessments by risk factor. These assessments use specific tools and methodologies to assess the potential impact of climate- and natural capital-related factors. We use this risk factor materiality assessment to underpin climate risk identification and assessment as part of our double materiality procedure.

The materiality assessment's rationale for each risk type is as follows:

•3.1 Credit risk:

We conduct regular materiality assessments to identify, assess and monitor the Group’s environmental credit risks by sector and geography. This assessment includes both a current-state review and a forward-looking analysis using scenario analysis techniques for climate risks.

Internally-developed scenario analysis and climate stress testing models enable us to calculate impacts and monitor climate sensitivity across key credit risk metrics, such as probability of default (PD), across different time horizons, scenarios and with granular detail by geography and sector.

We complement the materiality assessment with these initiatives:

–Customer assessment for the corporate portfolios that analyse the key aspects of transition, physical, social and environmental risk. Our subsidiaries conduct this assessment locally.

–Sector focus, through specific analyses of key sectors such as real estate or consumer auto financing.

–Geographical assessment of physical risk, which includes analyses of acute and chronic physical risks based on external expert models and considering different scenarios and time horizons.

The materiality assessment plays a key role in setting our strategy, risk appetite and other resilience exercises, such as ICAAP (Internal Capital Adequacy Assessment Process).

Klima

Klima is our internal management tool for identifying, assessing and monitoring climate and environmental risks at both Group and subsidiary level.

It collects and processes the information required for materiality assessments, including risk exposures and vulnerabilities, with a granular breakdown by sector, subsector, segment and geography. The tool supports specific portfolio analyses carried out for physical risk, consumer auto and real estate, among others, and enables the monitoring of sensitivities through scenario analysis. We continue to develop new functionalities to enhance credit risk management, in line with market best practices.

3.1.1 Climate and nature materiality:

Climate change and the loss of nature and biodiversity are inextricably linked. Climate change represents one of the main drivers of nature loss, affecting ecosystem resilience and limiting their capacity to regulate the climate and act as carbon sinks. That’s why we’ve embedded nature-related analysis in our materiality assessment, using various tools as references (ENCORE and SBTN). This approach has enabled us to identify the sectors most exposed to transition risk (impacts) and physical risk (dependencies) across our portfolio.

The results of our 2025 credit risk materiality assessment by sector are in the table below. For the first time, the assessment includes nature-related materiality, as well as the wholesale and retail trade sector within the risk taxonomy, which shows a moderate risk assessment.

Overall, climate-related materiality follows a similar trend to that observed in 2024, as the Group’s exposure remains largely concentrated in sectors that are not highly vulnerable to climate transition risk. Although the highest risks10 are concentrated in CIB, they do not represent a significant weight of the Group’s overall exposure. Our portfolios continue to show low vulnerability to physical risk, as they are predominantly located in areas with lower risk levels. The increase observed in the agriculture sector under the forward-looking view reflects improvements in data granularity and updates to the models and scenarios we use for these forecasts.

With respect to nature-related materiality, we did not identify high risk levels. However, the assessment shows medium risks, with agriculture and water and waste management standing out as the most affected sectors in terms of both dependencies and impacts.

10 Sectors such as Power - Electricity (conventional) and Mining & Metals do not distinguish activities that do contribute to the transition, due to the NACE classification typology on which the environmental taxonomy is based.

2025 Pillar 3 Disclosures Report    263

Index Introduction l Capital l Risks l Remuneration l Appendices l

Materiality assessment – Environmental risk portfolio analysis11

September 2025 (pre-mitigation) - EUR billion									Nature Risks						Climate Risks						Climate Risks
																					Transition												Physical
			CIBA			OthersC			TR			PR			TR			PR			Orderly						Disorderly						HHW
			Bn€			Bn€			Current			Current			Current			Current			2040			2050			2040			2050			2040			2050
Oil & Gas			21			1
Mining & Metals			12			7
Power - Electricity (Conventional)			28			2
Power - Electricity (Renewables)			15			0
Wholesale and retail trade			17			40
Transport			27			12
Auto ConsumerB			0			159
Agriculture			2			8
Manufacturing			44			24
Water and Waste			3			1
Construction			16			16
Real Estate			6			374
Total Environmental Sectors			191			645
Others SectorsD			58			176
Total			249			821
Risk level: ¢ Very high ¢ High ¢ Medium ¢ Moderately low ¢ Low
TR: transition risk (effects of the transition to a low-carbon economy, including changes in regulation, technology and market trends). PR: physical risk (it comprises acute and chronic). A. CIB: REC (on and off-balance sheet lending + guarantees + derivatives PFE: Potential Future Exposure). B. Auto Consumer: Auto SCF HQ + Auto US (Santander Bank N.A. + Santander Consumer USA). C. Other segments (drawn amount): Individuals + Private Banking + SCF HQ + Auto US and Corporates & SMEs. D. Other Sectors: CIB, Corporate & SMEs NACEs outside of risk taxonomy perimeter + cards and Other Consumer (Individuals and SCF) + Private Banking products (excl.mortgages). Exposure 0 represents exposure below EUR 500 million.

As the table above shows, we convey the assessment results through heatmaps that illustrate the vulnerability to environmental risks. These maps reflect the current view and we complement them with internal models that apply to credit portfolios to perform forward-looking analyses over the medium and long term. These analyses consider impacts based on probability, magnitude and duration.

Though we present Group level results with a breakdown by sector, our assessment is considering more granular level of detail within our portfolios (NACE 4 level). This analysis is intended to inform risk identification and portfolio monitoring.

11 It represents a consolidated view. Implications and management in each market are always informed and in compliance with local law and regulation.

264    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

3.1.2 Internal climate models

We use scenario analysis techniques to assess the potential impact of climate-related risks on the loan portfolio under different climate scenarios and time horizons. For this purpose, Santander has developed an internal climate risk model known as GEA, which enables us to quantify the financial impact12 of transition and physical risks, monitored through changes in probability of default (PD). The GEA model comprises these processes:

The model forecasts customers’ costs, revenues and profits by incorporating the impact of changes in the price of carbon and in demand patterns associated with transition risks, as well as productivity losses and asset impairment arising from physical risk. These are its main features:

A.Scenario set: Our Research function adapts scenarios based on NGFS13 scenarios. The climate scenarios we use (Orderly, Disorderly, Hot House World and Neutral) include country- and sector-level detail and provide a comprehensive view of key macroeconomic and environmental dynamics across the regions where the Group operates. These scenarios illustrate different pathways for the global transition towards a low-carbon economy and their implications in terms of financial impact on our corporate customers, primarily through two variables: Gross Value Added and the price of carbon.

B.Physical risk impact: This 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 NGFS scenarios and data from an expert insurance company and considering different scenarios and time horizons.

C.Transition risk impact: This uncovers changes in such factors as climate policies, technology, and investor and consumer sentiment that can affect demand. These factors affect customers individually.

D.Counterparty projections: These show 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.

12 According to Note 54 'Risk Management': the Group does not believe that additional environmental or climate change risk had a substantial impact on its equity, financial situation and results in 2025.

13 NGFS scenarios provide a 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. That's why we use them as a basis for showing impacts on our portfolios by calculating a range of outcomes.

2025 Pillar 3 Disclosures Report    265

Index Introduction l Capital l Risks l Remuneration l Appendices l

NGFS scenarios

RCP climate scenarios

Physical and transition risks

Physical risk

Orderly, assumes ambitious climate policies implemented early, which gradually become stricter. Therefore, both physical and transition risks are relatively moderate.

RCP 2.6: stringent mitigation scenario with the aim to keep global warming below 2ºC. This is associated with orderly scenarios.

Disorderly, climate policies are not introduced until 2030 and may differ between countries and sectors.

RCP 4.5: intermediate scenario where emissions reach their peak in 2040 and then decrease. This is associated with disorderly scenarios.

Hot house world (current policies), it is considering that some climate policies are implemented in some jurisdictions, but global efforts are insufficient to stop significant global warming. Serious physical risks and irreversible changes.

RCP 8.5: very high GHG emissions (keep increasing throughout the whole century). This is associated with Hot house world scenarios.

Neutral, a theoretical scenario constructed under the assumption that there are no transition or physical risk impacts.

3.1.3. Customer assessment

To strengthen our environmental risk factor management, we carry out qualitative assessments that we embed in corporate customer assessments within the CIB and Commercial Banking portfolios. Local teams perform these assessments and analyse each customer’s environmental and social situation. These teams comply with applicable local law and regulations.

We include the results of these assessments in credit decisions as part of the annual customer rating review. Subsidiaries may also include them in materiality assessments where they consider the impact to be significant. Moreover, Santander has developed tools to customize and store ESG questionnaires for customers. These tools support credit risk management.

CIB - PANGEA Project

In 2025, a strategic project was developed to review the corporate client assessment procedure, with the following objectives: •expand the scope of the assessment to the entire portfolio by adding screening and escalation criteria linked to the Group’s materiality assessment; •draw up approaches to due diligence and monitoring that are proportionate to each customer’s risk level; •introduce new data-driven risk identification tools, including artificial intelligence and controversy screening; •embed E&S factors in credit rating and in credit limit approval; •strengthen infrastructure, systems, processes and enhance reporting capabilities; and •optimise roles and responsibilities across the three lines of defence, as well as within global and local environmental, social and climate change (ESCC) teams. The project will enter into force gradually in 2026. It will remain consistent with local law and regulation.

3.1.4. Specific portfolio analyses

We complement portfolio-level materiality assessments with specific analyses of key portfolios:

Consumer Auto

Given our exposure to this segment, and considering its specific characteristics and regulations, a more granular analysis is carried out considering key risk factors and drivers including residual value risk, portfolio maturity, changes in market sentiment, technological developments, regulation, and variables such as the type of product, the type of engine (internal combustion, hybrid or electric vehicle), among others.

266    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Physical risk

To assess physical risk by geographical location, we work with an insurance provider, which enables us to assess physical risks (acute and chronic). We analyse the markets where we operate, with a breakdown by postcode for Europe and municipality for the rest of the Group’s subsidiaries, and cover all economic activities in our Risk Taxonomy, as well as the business lines (such as mortgages and automobiles).

For more detail, see section 10.8. Exposures subject to physical risk

Real estate

Our real estate portfolio accounts for a significant portion of the Group’s balance sheet. That’s why we have developed a dedicated module within the Klima tool that provides a detailed view of associated transition and physical risks.

Regarding transition risk, we have enhanced both the quality and quantity of data related to energy performance certificates (EPCs) across the portfolio and boosted data capture. Where actual data is not available, we use estimates based on internal models or external providers.

For more detail, see section 10.5 Energy efficiency of the collateral.

•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.

We consider transition risk exposure as low across all time horizons since we have no evidence of a medium- or long-term increase in legal and compliance risk upon adapting to new environmental regulations. We continue to monitor these factors to be able to spot a potential rise in the level of risk.

In 2025, we added a qualitative operational materiality assessment on nature-related risks. As part of this, we assess the potential impact of physical risk by combining natural capital dependency scores by location with the location of the bank's main premises. We assess the potential impact of transition risk through nature impact assessment tools, which we supplement with a review of external events.

This assessment found that the materiality of nature-related operational risks is low. The predominantly urban location and financial activity of our buildings and offices back this conclusion, not to mention the current regulatory

and penalty framework, which does not foresee a significant increase in penalties or legal action in the short term.

•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 assessment 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.

In 2025, we introduced dedicated monitoring of market risk within the banking book by analysing the impact of climate stress scenarios on positions measured at fair value, primarily ALCO portfolios (Asset Liability Committee). We also embedded nature-specific scenarios. Given the time horizon over which these impacts materialize, we assessed them as low materiality for market risk purposes.

•3.4 Liquidity risk:

To assess the potential impact of climate factors, we compare 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.

2025 Pillar 3 Disclosures Report    267

Index Introduction l Capital l Risks l Remuneration l Appendices l

In 2025, we embedded new nature-related scenarios. Given the time horizon over which liquidity impacts would materialize, we assessed these scenarios as low materiality.

•3.5 Reputational risk:

We conduct specific materiality assessments on the potential reputational impact of climate and environmental factors in the short, medium and long term under various scenarios. As with our strategy, policies and management models, we consider the environment holistically. Thus, our materiality assessment includes identifying and assessing climate change and other environmental impacts.

Certain economic agents whose activities are subject to regulations aimed at promoting sustainable development, or which are directly affected by the objectives set out in international agreements or institutions on climate change, may see their activities or their ability to generate income impacted, either directly or indirectly. This should be taken into account when assessing the associated credit risk. Indirect impact refers, in particular, to public perception that a company is carrying out activities that are inconsistent with applicable regulations, international objectives, or generally accepted trends.

In 2025, we updated our reputational risk materiality assessment approach based on official reports and studies from renowned organizations. Moreover, we continue working on further homogenization and synergy between risks in terms of information sources, thresholds and scenarios, among others.

4. Monitoring

In addition to the processes described above, we continuous monitor ESG factors:

•At Grupo Santander, we constantly monitor the risk profile and our compliance with risk appetite limits through control functions that report to the board. In 2025, we updated and harmonized risk appetite metrics (limits and alerts) in line with the Group’s strategy. We also strengthened our risk appetite statement by embedding new specific metrics for material sectors.

•In 2025, we worked on drawing up and designing a Group-level ESG dashboard to monitor the main ESG risks across our portfolio to strengthen control through metrics (particularly concentration metrics).

•We are in permanent contact with our customers to monitor their transition plans and support implementation.

•We continue to embed ESG risk factors in the credit granting and monitoring process through our operating model (The Climate Race) to comply with EBA guidelines across the Group’s subsidiaries and adapt them at local level. We align this process at all time with applicable laws and regulations in the markets we operate.

•Our Sustainability Regulatory Radar enables us to monitor regulatory and other changes in this area and to assess the potential efforts and financial impacts associated with their implementation.

•The Risk and Compliance functions monitor ESG factors in corporate development transactions presented to the investment forum, acting under delegated authority from the Board's Executive Committee, as well as in new

products and services submitted to the Corporate Product Governance Forum.

268    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

5. Mitigation

Grupo Santander uses several levers to mitigate the risks associated with environmental and social factors, ensuring compliance at all times with local laws and regulations:

•Policies, frameworks and internal procedures that embed environmental and social factors in risk management and play a key role in mitigation and adaptation. Our E&S risk management policy sets out the standards for investing in entities and providing financial products and services to customers in sectors with E&S risks identified as material.

•Use of the internal taxonomy (SFICS), which enables us to monitor our sustainable activity, support product development, and mitigate greenwashing.

•We consider ESG aspects in customer assessments to determine whether they have an impact on credit quality. Against this backdrop, we have launched several projects: (i) sector guidelines to identify the main transition and physical risks that each subsector faces and how to identify them in customer interaction; (ii) ESG assessments with varying depth depending on risk level, including enhanced contextual assessments for more material cases and automated assessments for others. We are rolling out this assessment model across commercial banking portfolios in several subsidiaries; (iii) questionnaires and assessments library (EQAL), through which we continue to enhance ESG questionnaire management capabilities. EQAL enables us to embed ESG customer assessments in risk management workflows and to collect historical ESG data. These data may support aggregated analysis under varying criteria and serve multiple risk management purposes, such as metric setting or model impacts. EQAL operates in Argentina, Portugal and Spain, and will become available in CIB and Brazil in the near future.

•Customer engagement for sectors identified as the most material through environmental materiality assessments. This enables us to support customers in their transition to a more sustainable economy, offer them tailor-made solutions, and create business opportunities. Moreover,

obtaining and verifying data directly from customers also helps mitigate ESG risk factors.

•Credit committees, which embed environmental, social and climate change factors in transaction reviews.

•CIB customer ratings, including qualitative environmental, social and climate change assessments for material sectors.

•Monitoring and management of real estate collateral, which considers environmental factors that may affect collateral from transaction inception and throughout its life cycle, such as energy performance certificates and physical and nature-related risks. Where we identify material risk levels, we apply management, adaptation and/or mitigation measures to align exposures with acceptable risk levels.

•Appropriate documents to support the assessment of environmental factors in transaction management, customer assessments and real estate collateral valuation according to local regulatory frameworks.

•Mandatory insurance coverage in which the bank appears as beneficiary and which includes coverage for material risks, including those arising from environmental events.

•CIB due diligence to assess and manage the environmental and social factors of corporate customers and embed them in credit approval. We assess customers in applicable sectors through a questionnaire that the first line of defence completes before a team of analysts reviews it to perform an overall environmental risk factor assessment. The findings of these assessments are escalated to the bank’s risk approval committees and considered in decision-making. The reputational risk assessment also forms part of decision-making, with particular focus on greenwashing. Due diligence consists of assessing the CIB's project finance transactions according to the Equator Principles.

•A multidisciplinary working group (Legal, Sustainability, Risk and Compliance) that assesses controversies, including ESG factors.

ESG classification meetings

To mitigate greenwashing, we assigned local and global marketing committees and ESG classification meetings to act as the governing bodies responsible for the assessment, classification and monitoring of ESG-focused products and transactions. This governance model operates fully across all global businesses and Group subsidiaries. The corporate centre oversees these bodies through quarterly follow-ups and annual assessments.

Their aim is to check that these bodies rely on expert input to interpret and demonstrate the applicable criteria, in accordance with local law and regulation. They also draw on centres of excellence and involve Business, Risk and Sustainability teams. Moreover, we regularly update the sustainable classification model and ensure that sustainable products remain aligned with it.

2025 Pillar 3 Disclosures Report    269

Index Introduction l Capital l Risks l Remuneration l Appendices l

6. Reporting

Transparent and regular disclosure of information (both internally to senior management and externally to stakeholders) supports the management and control of environmental and social factors. It also ensures compliance with regulatory requirements and supervisory expectations. We work to ensure that our information remains complete and consistent and accurately reflects Santander’s sustainability strategy and management, while mitigating potential risks.

Our main reports include key information on how we manage environmental and social factors. Alongside financial results, the annual report sets out our sustainability policies and actions, as well as progress against E&S indicators. Moreover, the ICAAP exercise embeds the assessment of ESG risks — including physical and transition risks related to climate change — and analyses their potential impact on solvency and strategic planning.

The Pillar 3 disclosure report further strengthens transparency by publishing prudential information related to these factors. It shows our exposure to environmental and social risks and explains how we embed them in internal risk management frameworks.

270    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

International standards on which the environmental risk management framework is based

This section covers the requirement on qualitative information on environmental risk, specifically, the point on risk management, for questions (k)

The E&S risk management policy, which is reviewed annually and make publicly review, sets out the criteria that we apply to investment in entities and the provision of financial products and services14 to customers in the oil and gas, electricity generation and distribution, mining, and metallurgy sectors, as well as to activities that relate to agricultural commodities. In compliance with applicable local laws and regulations, it also pays special attention to biodiversity conservation, focusing on the potential risks of deforestation with clients in the agro-industrial sector in the Amazon biome and on the degradation of nature. The policy thus establishes criteria for restriction and special attention for various activities within the aforementioned sectors.

As disclosed on the E&S risk management policy, we are part of the main and most important local and global initiatives to support the inclusive and sustainable growth. Some examples are:

•UN Global Compact.

•Equator Principles.

The Group establishes ESG policies, procedures and guidelines that apply to all units, adapted to comply with local regulations. We review systematically the scope of the policies to adopt ESG standards in accordance with international best practices. The main ones are the E&S risk management policy and the Responsible banking and sustainability policy.

Additionally, 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.

Impact of environmental risk on capital and liquidity risk

This section covers the requirement on qualitative information on environmental risk, specifically, the point on risk management, for question (o)

The environmental and climate-related risk drivers are considered as factors that could impact the existing risks in the different time horizons. These elements include, on the one hand, those derived from the physical effects of climate change, generated by one-off events as well as by chronic changes in the environment 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 effects that could have material

relevance to its consolidated equity, financial situation and results.

According to market consensus and our materiality assessment, exposure in the sectors where environmental factors may have the most impact mainly relate to wholesale customers. Our management of these customers considers environmental aspects in the preliminary assessment, credit origination and the preparation and review of their credit ratings, which influence the parameters we use to calculate their probability of default (PD). Thus, we embed the most material climate factors in our assessments and in capital loss and provisions calculations.

Additionally, within the regulatory capital adequacy exercises (ICAAP) and liquidity stress testing (a component of the ILAAP), environmental risk scenarios and factors have been included covering both physical and transition events. These contribute to the estimation of potential impacts on the occurrence of one or more environmental risk events on the Group's position in these scenarios.

Likewise, Grupo Santander has participated in the various climate stress regulatory exercises carried out, which have been classified as learning exercises in the industry. Results showed that the Group’s coverage for potential losses would be sufficient in view of portfolio maturity over time.

In light of the above and based on the best information available at the date of the last consolidated annual financial statements, we also assessed the potential additional impact of climate and environmental risks on the Group’s equity, financial situation and results in 2025. We did not identify any significant or material impacts.

Still, given the continuous evolution of environmental factors, and, like other banks, the Group keeps working on developing more methodologies and information models to better measure potential loan loss in line with new management needs, best practice, and regulators’ and supervisors’ requirements.

a

Data availability, quality and accuracy

This section covers the requirement on qualitative information on environmental risk, specifically, the point on risk management, for question (p)

As stated by the regulatory and supervisory bodies on management and supervision of ESG risks for credit institutions and investment firms, one of the main challenges faced by financial institutions in the integration of ESG risks is insufficient data. While we continue to work on increasing granularity and quality, Santander Group already has the relevant information and data to manage environmental risks, including activity codes, customer and collateral location, EPC certificates and emissions.

The main challenges in terms of data availability, quality and accuracy include the following elements:

•The availability of energy efficiency certificates, especially in those geographies where there is no specific regulation or requirement.

14 Transactions that entail credit risk, insurance, advisory services, equity, and asset management

2025 Pillar 3 Disclosures Report    271

Index Introduction l Capital l Risks l Remuneration l Appendices l

•The collection and availability of customers' financed emissions, information that will improve in Europe with the entry into force of the CSRD regulation.

•Improving the granularity and accuracy of the information needed to assess physical risks. In this regard, as explained in Template 5, the Group has continued to work on increasing the granularity to postcode level in Europe or equivalent in other countries. In addition, the number of countries for which physical risk information is available has been increased.

In order to achieve the above, the following lines of work are being carried out:

•Enhance the internal ESG information available.

•Strengthen the customer registration and risk admission process.

•Supplement the information available through external providers.

•Assess the development of models and proxies to be able to estimate the information not available.

Link between environmental risks with other risks in the management framework

This section covers the requirement on qualitative information on environmental risk, specifically, the point on risk management, for questions (r)

Embedding ESG factor in our risk management framework is essential to ensure the resilience and sustainability of Grupo Santander in a complex and highly regulated environment.

ESG factors are cross-cutting and may affect different risk types. We manage them by prioritizing environmental and social aspects according to their relevance and materiality for the Group, and always in accordance with local law and regulation.

We assess governance risk from a dual perspective Grupo Santander internal governance and our customers governance evaluation, applying proportionality and materiality criteria.

Environmental and social factors comprise the following categories:

Transition risk (TR)

Market sentiment Changes in the supply and demand of certain commodities, products and services insofar as climate-related risks and opportunities.

Policy action Laws and regulations mandating carbon pricing mechanisms to reduce greenhouse gas emissions; use of energy sources with lower emissions; energy efficient solutions; and 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.

Physical Risk (PR)

Acute Intense extreme weather events, such as wildfires, hurricanes or floods.

Chronic Changes in rainfall patterns as well as, extreme weather variability, average temperature rises, severe heatwaves, drought, and rising sea levels.

Nature risk (NR)

Dependencies Negative effects on economies, financial institutions and financial systems owing to nature degradation, including biodiversity loss and the decline of ecosystem services.

Impacts The misalignment of companies’ strategies and operations with regulatory, social and market changes that drive the protection and restoration of ecosystems, particularly those related to land and sediments, water and biodiversity.

Social factors (SF)

Negative economic impacts arising from restricted access to key resources and services due to environmental events or conflict with communities, as well as the respect of human rights, labor policies, or health security; affecting on the consumer sentiment and companies’ productivity.

272    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

At Santander, we assess the impact of environmental factors on each risk type across several time horizons and based on the average maturity of the portfolios analysed. At all times, we strive to remain in accordance with local law and regulation in the markets where we operate. In the table below we set out how we do this, as well as our key achievements in 2025.

Risk type

Environmental driversA

Time horizon analysed

Potential impact of environmental factors

What we’re doing to manage climate and environmental risk

Credit

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 income, harm agriculture, and increase insurance coverage and premiums. The degradation of nature can affect productivity in the agricultural sector. This may increase loan repayments and early asset 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 collateral. •The failure of borrowers to adapt their business models to a low-carbon economy could drive up operational costs, heighten credit risk and, therefore, raise the risk of a drop in income or activity that may increase default or lead to a loss of business value. •Stricter disclosure requirements. •The loss of natural resources (water, fertile soil, etc.) can disrupt economic activity in dependent sectors and reduce borrowers' income and ability to repay.

•Conducting materiality assessments to identify physical and transition climate change and nature risk in our portfolios. •Monitoring of climate concentration risks by sector and region in the short, medium and long term. •Creating vulnerability heatmaps to assess climate risks in the present day and 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. Monitoring risk appetite limits and alerts to manage climate-related sectors. •Conducting scenario analyses and measuring sensitivities to forecast changes in credit ratings, the probability of default (PD) and loss given default (LGD) based on physical and transition risk. •Monitoring portfolios through metrics to control environmental factors in business as usual processes. •Assessing environmental and social factors in customer and transaction analysis and embedding them in ratings.

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.

•Reviewing climate stress scenarios and the subsidiaries that apply them regularly. •Conducting stress testing using physical and transition risk scenarios. •Analysing trading portfolios for current exposure to climate-sensitive business activities. •Adapting stress testing to best market practices.

Liquidity

Short term

•Market impact 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.

•Conducting qualitative and quantitative climate scenario analyses of impacts on highly liquid assets (HQLAs) and financing of exposed companies. •Analysing higher outflows due to changes in market perception of corporations in climate-sensitive business activities. •Adapting stress testing to best market practices, including new liquidity scenarios to measure their impact.

2025 Pillar 3 Disclosures Report    273

Index Introduction l Capital l Risks l Remuneration l Appendices l

Operational

Short - medium - long term

•Severe climate events can cause damage to our assets, including branches, data centres, headquarters and other owned or rented properties. Impacts on our own or our suppliers’ premises can also affect business continuity. •Climate and environmental factors can also lead to operational risk losses from litigation, claims due to inadequate sales or non-compliance with ESG standards.

•Conducting self-assessments and operational risk control that include ESG-related risks to weigh up 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. •Conducting preliminary analysis on the link between nature and operational risk. •Reviewing local coverage of environmental incidents with Insurance teams. •Updating documentation on embedding of environmental factors in operational risk management.

Reputational

Short - medium - long term

•Customers, investors and other stakeholders could believe that banks aren't doing enough to meet low emissions 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. •Possible misinterpretation by customers, investors and other stakeholders of institutional disclosures or statements, actions and policies. •Perceived failure to support the climate transition, including insufficient financing of transition-enabling activities. •Risk that our sustainability policies are considered as preventing the provision of financial services to individuals or enterprises based on ideological reasons, or any other reasons deemed improper.

•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 entail environmental factors. •Monitoring reputational issues and disputes regularly (including environmental matters) via working groups that involve functions such as legal, sustainability, investor relations, public policy, supervisory and regulatory affairs, risk, and others. •Monitoring the implementation of guides to manage and prevent greenwashing, which define the roles and responsibilities of the key processes, and subsequently establish specific training programmes. •Implementing appropriate materiality assessments to measure relevant risk and developing a methodology to quantify it, which remains in compliance at all times with applicable local law, policy, and regulations. •Our policies aim to identify how these risks may affect the creditworthiness of potential borrowers, and therefore pose a credit risk issue.

Strategic

Short - medium - long term

•Our strategy could be affected if we fail to achieve our environmental and social targets, including those related to the activities we finance and to our own operations. •Regulatory divergence between ESG requirements in the markets where we operate.

•Challenging ESG targets in strategic planning. •Monitoring the Group’s ESG indicators regularly. •Monitoring ESG indicators as part of our regular competitor analysis. •Identifying emerging risks that include ESG risk factors and analysing their potential impact under stressed scenarios on the Group’s strategic targets to draw up action plans. •Monitoring ESG-related proposals for the corporate product governance forum (CPGF) and investments forum.

A. Though all climate drivers impact on risk factors, we have only included the key ones in this table.

Chronic Acute Market sentiment Policy action
Technology Dependencies Impacts

274    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

10.2. Social risk

10.2.1. Business strategy and processes

This section covers the requirement on qualitative information on social risk, specifically, the point on business strategy and processes, for question (a)

Integration of social factors on the business strategy

According to the annual report, our sustainability strategy focuses on issues that present opportunities, risks, and material impacts and is aligned with our double materiality analysis, informed by human rights due diligence. In the social sphere, this translates into support for our employees, communities, and customers and ongoing work to respect and protect human rights. We set out below our strategy and how we integrate social risks for each of these groups.

As regards our employees, our strategy focuses on offering an attractive employee value proposition that offers real opportunities, promoting the respect of their rights and welfare. The Group's approach is based on:

•Talent and skills development: Grupo Santander promotes a culture of continuous learning and development of employees and their personal growth. From senior executives, with the Elevate programme, to the youngest workers, with initiatives such as Young Leaders or BeTech& Business.

•Working conditions: the main pillars are health, well-being and protection of employees, with good work-life balance and well-being programmes such as BeHealthy. In addition, we strive to offer adequate, competitive and equitable remuneration, accompanied by corporate benefits adapted to local conditions.

•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. Related matters are discussed at the highest level, the Group board cannot delegate these discussions and our executive committee reviews progress. Our main lines of action are gender equality, effective inclusion of people with disabilities, visibility of the LGTBIQ+ community, ethnic and cultural diversity, and anti-bullying training.

•Employee feedback and experience: we follow a regular listening strategy to gather employee feedback, called ‘Your Voice’, and analyse identified material impacts and employee concerns. 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.

The Group also integrates social risks and opportunities related to our communities and their sustainable development into its strategy. The aim is to drive growth and job creation in the regions where we operate through:

•Responsible investment and social finance: Santander's financing activity supports social activities such as the construction of hospitals, universities and housing for

vulnerable groups. During 2025, more than 1.8 million microentrepreneurs benefited from this financing. We also continued to make progress in offering investment proposals that promote ESG factors in both Santander Asset Management and Wealth Management & Insurance.

•Environmental and social management: to address potential negative impacts on society or the environment arising from our financing, the Group's strategy adheres to our environmental and social (E&S) risk management policy, the Equator Principles, and the management of major adverse incidents (PIAS). In particular, in applying the Equator Principles and always in accordance with applicable local laws and regulations, Santander assesses and ensures that the project correctly identifies and manages environmental and social risks/impacts, and that the project maintains good relations with local communities, in accordance with international standards.

•Community support: at Santander, we develop support programs in the communities where we operate to respond to their main needs and challenges. We focus our community support on education, employability, and entrepreneurship, complemented by specific support in financial education and for vulnerable people. In addition, we have a strong track record of supporting areas such as culture and other social initiatives, including responding to humanitarian crises.

Finally, our customer focus is a fundamental lever in integrating social factors into business strategy. We focus on:

•Conduct with customers: based on the conduct risk management model approved by the compliance and conduct committee. The main processes and instruments encompass the design and marketing of products and services, and the management of complaints and fraud. A key pillar of the Group's strategy in this area is also the identification and management of vulnerable households and businesses, as well as the prevention of over-indebtedness.

•Financial inclusion and financial health: this aspect is essential to contribute to social progress, which is why it is at the top of Santander's agenda. We have the ambition to reach 5 million people targeted by financial inclusion measures between 2023 and 2025.

•Privacy, data protection and cybersecurity: the Group is strongly committed to compliance with personal data protection regulations throughout its life cycle. In this regard, we have a cybersecurity framework, approved by the board of directors, which includes a Chief Information Security Officer (CISO).

Moreover, the Group's ambition and strategic pillars in the social domain (e.g. contribution to society/community, financial inclusion...) are incorporated in the conduct of strategic exercises such as financial planning. In particular, social risks are indirectly taken into account in our strategic exercises (e.g. ICAAP) by incorporating social factors such as technology developments, the political framework or market sentiment in the climate scenarios used.

2025 Pillar 3 Disclosures Report    275

Index Introduction l Capital l Risks l Remuneration l Appendices l

Some examples of social factors analysed in the ICAAP: projections of gross value added affecting at sector country level in the value of goods and services, productivity, industrials and manufacturing processes; change in demand is also affected under each scenario, as it determines the costs and the profitability of production as well as the demand of consumers and products; technological change applies also to affecting the demand for the sectors due to growth in the low-carbon technologies and market sentiment.

Objectives, targets and limits to assess and address social risk

This section covers the requirement on qualitative information on social risk, specifically, the point on business strategy and processes, for question (b)

We analysed our agenda’s contribution to the SDGs and determined the most relevant goals to Banco Santander’s business and strategy. For more details, see the ´Banco Santander and the SDGs´ brochure on our corporate website.

Primarily, the Group has a number of ESG objectives. Among the objectives related to social risk, we find some purposes such as fostering a diverse workforce, contributing to social development through our financing activities, promoting education and entrepreneurship, or ensuring compliance with human rights.

In terms of the targets related to these objectives, the targets related to diversity stand out. Therefore, we have progressed towards equality, achieving a greater representation of women in senior positions, from 22.7% in 2019 to 38.5% in 2025.

In 2025, we financially included nearly 1 million people through access initiatives; and 1 million people through finance initiatives.

People subject to inclusion measuresA						Target
						+5 mnB
1.8 m			4.3 m			6.3 m
2023			2024			2025

A.A.Based on our internal financial inclusion methodology. This 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.

The management of vulnerable customers is a pillar of Grupo Santander's strategy and contributes to strengthening performance, trust and sustainable growth. We identify and take into account the difficulties and vulnerabilities of customers through specific standards and dedicated processes, with the aim of preventing and mitigating possible harm to these customers. In 2025, we are advancing the Group's approach to vulnerable customers, including the prevention of over-indebtedness in all markets, to ensure common 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.

Policies and procedures to manage social risks

This section covers the requirement on qualitative information on social risk, specifically, the point on business strategy and processes, for question (c)

Grupo Santander oversees ethical factors are properly considered when conducting business.

We therefore adhere to several policies, codes and internal rules inspired by the best practices, international conventions and protocols, codes of conduct and guides that are applicable in every area.

Our compliance with these policies is a process of continuous improvement. Santander undertakes an annual review of its corporate sustainability policies, which apply to the whole Group. These policies are approved by the Group's board of directors, indicating in the policy the date of the last update.

Among the most relevant policies relating to social aspects, are the following:

•Responsible banking and sustainability policy

It defines Santander's general principles for responsible banking and sustainability, as well as the objectives that the Group voluntarily undertakes with its main stakeholders, including Santander's position on the protection of human rights. This policy includes the main recommendations of the CNMV's Code of Good Governance in this area.

The responsible banking and sustainability policy sets out the main processes for making progress in the management and monitoring of the objectives in this area.

The policy approved by the board of directors merges the general sustainability policy and the human rights policy to better integrate the objectives of both policies into existing processes. It also facilitates implementation and understanding in a single, simpler and more operational document.

•E&S risk management policy

This policy, which we review annually and make publicly available, sets out the criteria that we apply to investment in entities, and the provision of financial products and services to customers in the oil & gas, electricity generation and distribution, mining, and metallurgy sectors, as well as to activities that relate to agricultural commodities.

276    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

•Policy on donations

This document summarizes the application criteria for Santander Group granting of donations, as set out in its internal regulation.

•Principles of responsible behaviour for suppliers

This document establishes the minimum principles of ethical, social and environmental conduct that Banco Santander expects from all its suppliers; these are aligned with the ten principles of the Global Compact.

10.2.2. Governance

Responsibilities of the management body for setting the risk framework, supervising and managing the implementation of the objectives, strategy and policies in the context of social risk management

This section covers the requirement on qualitative information on social risk, specifically, the point on governance, for questions (d), (e) and (f)

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).

Our policy on the selection, suitability assessment and succession of directors promotes a robust balance of technical skills, experience and diversity in terms of gender, age, geographic origin, career path and knowledge. It also ensures that selection procedures are free from implicit biases that could result in 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%.15 In terms of geographical origin/ international track record, 93% of the directors come from or studied in continental Europe, 93% in the US/UK, 60% in Latin America, and 33% in other regions. The Board also has extensive international tr, 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.

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, among others, the following functions:

(i) advise the board on the design of the strategy and policies on responsible business and sustainability, in particular environmental and social matters, and supervise the monitoring and evaluation of them;

(ii) advise the board of directors on formulating the Group’s strategy for its relationships with stakeholders, and oversee stakeholder engagement and corporate reputation, analysing and reporting to the board on social, environmental and sustainability matters, as well as responsible and ethical conduct;

(iii) ensure that adequate control processes are in place for responsible banking practices, and that sustainability-related risks and opportunities are identified and managed, in coordination with the other board committees, as appropriate;

(iv) to report regularly to the board 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 2025, the committee held four meetings, and, among others, the following topics were discussed.

Environmental issues:

•Reviewed the Group's climate strategy and constructively challenged it to ensure our objective of supporting our clients in achieving their transition goals, assessing their climate risks in order to manage the impact on both their business and our operations, and progress in the alignment of our portfolios, in accordance with applicable local regulation.

15 The diversity ratio is calculated by dividing the number of women by men. The percentage of each gender vs. total membership is 40% women and 60% men.

2025 Pillar 3 Disclosures Report    277

Index Introduction l Capital l Risks l Remuneration l Appendices l

•Reviewed the plans of the global businesses to ensure their alignment with market, regulatory and supervisory context, as well as with the commercial strategy.

•Reviewed the ongoing work to develop the prudential transition plan required under Directive 2013/36/EU on access to the activity of credit institutions and the prudential supervision of credit institutions, and under the EBA Guidelines (2025/01) on ESG risk management, in coordination with the risk supervision, regulation and compliance committee.

•Monitored the progress made in embedding climate-related and environmental risks in line with supervisory expectations, and monitored the implementation of controls and processes to mitigate ESG risks.

•Reviewed the specific internal controls and risk management measures applied to Santander Brasil’s relationships with certain companies operating in the Amazon.

•Reviewed the sustainable finance strategy across global businesses and its execution, including priorities related to socially responsible investment.

•Oversaw the sustainability strategy, including support to our customers in their transition and financial inclusion and health solutions.

Social issues:

•Oversaw progress on the implementation of our community support model, to reinforce the Group's contribution to key areas such as education, including financial education, employability, entrepreneurship and support to vulnerable groups, as well as the resulting impact from associated initiatives, assessing their scope and relevance.

•Received information on about corporate communication initiatives on social matters.

Governance issues:

•Verified that the proposed sustainability agenda and targets remained aligned with the Group's strategy.

•Assisted the board in ensuring that sustainability targets and metrics were embedded in the Group's remuneration schemes and reviewed, in coordination with the remuneration committee, the proposed sustainability element of the long-term incentives for 2026-2028.

•Reviewed engagement with stakeholders such as investors, proxy advisors, ESG rating agencies and NGOs.

•Reviewed the priority areas for action based on the outcomes of the double materiality exercise and the associated impacts, risks and opportunities (IROs), including progress on their integration into management and governance to facilitate their monitoring, in coordination with the audit committee.

•Reviewed progress made towards the objectives announced at the 2023 Investor Day under its remit and discussed sustainability targets for the next three years in the areas of green financing, investment in education, employment and entrepreneurship initiatives, and financial inclusion.

•Supported the audit committee on the supervision and assessment of the process to prepare and present non-

financial information according to applicable regulation and international standards.

•Reviewed this 2025 Group statement on non-financial information.

•Reviewed the Green Bond Report in coordination with the audit committee prior to its submission to the board for approval.

•Reviewed the main European and international financial regulatory and supervisory initiatives and priorities related to sustainability and how they impacted the Group, including legislative proposals promoted by the European Commission aimed at streamlining sustainability-related disclosure, due diligence, and taxonomy.

•Reported favourably to the board on the update of internal regulation within its remit, in coordination with risk supervision, regulation and compliance committee, as required.

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 2025' 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 2025, the committee held 15 meetings, including four joint sessions with the risk supervision, regulation and compliance committee and one with the nomination 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.

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 2025' 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 directors, out of which 40% are women, all of them external with three independent members, including its chair. All of them have been appointed by the

278    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

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 2025, the committee held 14 meetings, including four joint sessions with the audit committee and one joint session with the remuneration committee. It reviewed relevant topics on customer data protection, 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 2025' 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 sections 4.6 'Nomination committee activities in 2025' and 4.7 'Remuneration committee activities in 2025' 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 the disclosure in the areas where it applies, as well as the overall style and tone of the narrative within regulatory reporting.

•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 CCR is composed of senior management members in the functions of risk, compliance and conduct, financial and general intervention, among others.

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.

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 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 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), 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

2025 Pillar 3 Disclosures Report    279

Index Introduction l Capital l Risks l Remuneration l Appendices l

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).

The most material risks have been identified, and the operation of the established controls has been monitored, ensuring compliance with sustainability disclosure requirements.

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.

280    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

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.

Risk Assessment (RCSA)

Dynamic process of evaluating the risks associated with achieving the organization's objectives.

Control Activities

Actions established by policies and procedures that help that management instructions are carried out to mitigate identified risks.

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.

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.

Alignment of the remuneration policy with social risk-related objectives

This section covers the requirement on qualitative information on social risk, specifically, the points on governance, for question (g)

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

2025 Pillar 3 Disclosures Report    281

Index Introduction l Capital l Risks l Remuneration l Appendices l

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, 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, 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.

As previously mentioned in section 10.1.2 Governance, we measure our progress in ESG against these lines of action and their related metrics: (1) women in executive positions, (2) financial inclusion, (3) Sustainable business.

Regarding social aspects, these targets cover

•Women in executive positionsB (%)

Women in executive positionsB (%)			Coefficient
≥ 39.4%			1.25
≥ 38.8% but < 39.4%			1 – 1.25A
≥ 37.8% but < 38.8%			0 – 1A
< 37.8%			0

A. Increase of the coefficient is proportional to its position on this line of the scale.

B. Executive positions make up 15% of the total workforce.

•Financial inclusionB (millions of people)

Financial inclusion B (million)			Coefficient
≥ 6.5			1.25
≥ 5 but < 6.5			1 – 1.25A
≥ 3.5 but < 5			0 – 1A
< 3.5			0

A. Increase of the coefficient is proportional to its position on this line of the scale.

B. Average annual total 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.

This information can be found in the '6.4 Directors' remuneration policy for 2026, 2027 and 2028' section in the annual report.

Access 2025 annual report available on the Santander Group website

282    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

10.2.3. Risk management

This section covers the requirement on qualitative information on social risk, specifically, the point on risk management, for question (h)

International standards on which the social risk management framework is based

Our social risk management framework draws up on international industry guidelines and principles. Thus, the four policies covered previously on 'Policies and procedures to manage social risks', have been established in accordance with international standards:

•The responsible banking and sustainability policy is based on standards such as the agreements reached at the 2015 COP21 summit on climate change in Paris, or the UNESCO World Heritage list, the 2011 United Nations Guiding Principles on Business and Human Rights, the Universal Declaration of Human Rights, Fundamental conventions of the International Labour Organization, among others.

•Our E&S risk management policy, follows the Equator Principles, the standards for social and environmental performance and the explanatory notes of the International Finance Corporation (IFC), the United Nations Global Compact, the Universal Declaration of Human Rights, the International Labour Organization Declaration, the Convention on the Rights of the Child, the Rio Declaration on Environment and the United Nations Convention against corruption.

•In the policy of donations, contributions must have, among other purposes, the defence of human rights, as proclaimed by the UN's Universal Declaration of Human Rights.

•Principles of responsible behaviour for suppliers: Banco Santander expects its suppliers to work to support and respect the protection of human rights in accordance with the United Nations Universal Declaration of Human Rights, the Fundamental Conventions of the International Labour Organization (ILO) and the United Nations Guiding Principles on Business and Human Rights.

In addition, the SFICS in the aspects related to social risk, draws on international industry guidelines, standards and principles such as the ICMA’s social and green bond principles, LMA’s principles or the UNEP FI framework among others.

Integration of social factors in the risk framework: management, setting of limits, tools and link with other risks

This section covers the requirement on qualitative information on social risk, specifically, the point on risk management, for question (i), (j), (k), (l) and (m)

The integration of social factors into the risk framework can be summarised as follows:

•CIB due diligence to assess and manage the environmental and social factors of corporate customers and embed them in credit approval. We assess customers in applicable sectors through a questionnaire that the first line of defence completes before a team of analysts reviews it to perform an overall environmental risk factor

assessment. The findings of these assessments are escalated to the bank’s risk approval committees and considered in decision-making. The reputational risk assessment also forms part of decision-making, with particular focus on greenwashing. Due diligence consists of assessing the CIB's project finance transactions according to the Equator Principles.

In this regard, and as indicated in the E&S risk management policy, the questionnaires assessed in the customer discharge include the analysis of social aspects such as: child labour, forced labour, discrimination at work, freedom of association, working conditions, etc. grievance mechanism for workers or impact on communities, with respect to its own operations and its supply chain.

•Our E&S risk management policy sets establishes the standards for investing, and providing financial products and services to companies and customers in oil and gas, power generation and distribution, mining and metals, and soft commodities.

•The E&S risk and compliance departments delve deeper into cases that uncover red flags. 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.

•As stated in our E&S risk management policy, we enhance responsible investments that align with our sustainability goals and support the Paris Agreement Goals. Therefore, will not directly invest in, or provide financial products and services to projects that fail to meet our social responsibility standards, including projects requiring Free, Prior and Informed Consent (FPIC) under IFC Performance Standard 7 - Indigenous Peoples. Such projects must demonstrate adherence to IFC Performance Standard 7 and have a credible plan to achieve compliance.

Moreover, we conduct a detailed analysis on CIB clients that operate in sectors subject to the E&S policy, including any activity that entails the resettlement of indigenous populations and/or other vulnerable groups.

Additionally, in the process of qualitative assessment of social risks of clients and/or projects in CIB's portfolio, compliance with the Equator Principles and other factors such as the availability of internal policies for the protection of human rights, labour rights, protection of communities where the client and its suppliers operate, among others, are assessed.

•The Group reviewed and refined its ABC framework to strengthen its practical application and ensure clear accountability within the relevant functions, reinforcing a culture of integrity and responsible conduct. The Group conducts regular Risk and Control Self-Assessments (RCSA) across all units to identify and evaluate residual financial crime risks within the organization. This process assesses the inherent risks of business activities — including those related to money laundering, terrorist financing, bribery, corruption, and others — and the suitability of the controls in place to mitigate them. In 2025, the Group continued to strengthen its awareness and training strategy through its Global Mandatory Training Programme, which ensures consistent coverage of all Financial Crime Compliance (FCC) risk areas, including Anti-Bribery and Corruption (ABC). This programme combines foundational training for all

2025 Pillar 3 Disclosures Report    283

Index Introduction l Capital l Risks l Remuneration l Appendices l

employees with tailored sessions for specific functions and risk profiles.

•Among the tools for integrating social factors, we run surveys and speak-up channels for employees and customers. We assess externalities to identify risks and opportunities and to appraise our impact on the community. We respond to demands from analysts, investors and ratings and NGOs; keep pace with new regulation and best practices worldwide; and take part in consultations with authorities, trade bodies and other organizations that influence policymaking on sustainable development.

•As discussed in section 10.1.3. Risk management, the methodologies and/or tools used for social risk management include the indirect consideration of the social factors in the climate scenarios and the qualitative assessment of relevant corporate customers, which allow compliance with the Group's criteria set out in its E&S risk management policy, as in the various procedures, which take into account international and/or national standards on labor and human rights, as also indicated in our risk framework. In addition, these tools are complemented by a comprehensive due diligence exercise, explained in section 10.2.1 Business strategy and processes.

•The integration of social aspects within the credit risk management is carried out on the basis of due diligence questionnaires during the process of granting of financing and monitoring. With regard to market and liquidity risk, social risks are indirectly considered in our strategic exercises such as ICAAP and ILAAP, by incorporating social factors such as the evolution of technology, the political framework or changes in market sentiment in the climate scenarios used. For operational risk, we continue working on the integration of social factors within the framework of management tools.

284    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

10.3.Governance risk

This section covers the requirement on qualitative information on risks derived from governance, specifically questions (a), (b), (c) and (d)

The management of risks derived from governance is a relevant aspect in two facets: on the one hand, in the internal governance of Grupo Santander, and on the other, in the evaluation we make of the governance of our customers.

Grupo Santander has corporate frameworks for matters considered to have a material impact on its risk profile, such as risk, capital, liquidity, compliance, financial crime compliance, technology, auditing, accounting, finance, strategy, people and culture, outsourcing, cybersecurity, data & AI, special situations management, communications and branding, and responsible banking. These frameworks, which are mandatory and principle-based, specify:

•how the Group should supervise and exert control over subsidiaries;

•the Group’s involvement in subsidiaries’ decision-making (and vice versa).

In relation to the analysis of our clients' governance, it is assessed in:

1.Clients' credit ratings. In the development of CIB's client credit ratings, we assess aspects of our clients' governance such as the application of good governance codes on our stakeholders like Sarbanes-Oxley and their involvement in management issues.

2.In customer tiering: phasing it progressively in accordance with our ambition of net zero carbon emissions by 2050, beginning with power generation (more detail in the annual report).

3.In the screening and assessment process of the E&S of clients' activities in sectors (subject to the E&S Policy) such as oil and gas, power, soft commodities, mining and metals.

In the qualitative client assessment processes for portfolios such as CIB, specific issues associated with the governance model and those responsible for climate management (e.g. Sustainability Committees, assignment of oversight responsibility for climate change policies to the board of directors, integration of climate objectives into executive remuneration frameworks, etc.) are included.

Throughout this process, questionnaires are updated annually to assess aspects of our clients' governance and risk management:

•The ethical considerations and inclusiveness assessment includes, among others, actions and policies on non-discrimination at work, working conditions, populations requiring special attention, human rights.

•The strategy and risk management assessment includes the analysis of the quality and ambition of the customer’s quantitative GHG emissions targets and the credibility of the customer’s strategy to achieve their emissions reduction targets (e.g. policies on climate change action; business strategy consideration of climate change risks and opportunities; and action plans).

•The disclosure assessment focuses on the transparency of the customer’s reporting on past emissions performance across all relevant scopes, the level of assurance, as well as the degree of reporting alignment with the TCFD. Where possible, it may also include assessment as to whether or not previous greenhouse gas (GHG) emission targets were achieved.

•In relation to conflict of interest, Santander evaluates whether both its customers and their suppliers may have activities in prohibited areas according to the Group's regulations and whether there is any process to mitigate this.

Additionally, it analyses whether its costumer's policies evaluate aspects of non-discrimination at work, working conditions, populations requiring special attention, human rights of its suppliers. The impact of the production chains of customers and suppliers on their respective communities is also considered.

•Regarding the internal communication of critical concerns, we evaluate how internal client communication works, for example, in terms of grievance mechanisms for workers.

In addition, a governance assessment is conducted considering 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. Having a executive manager responsible for climate-related issues and a responsible board member facilitates internal communication of critical climate issues throughout the organisation.

A financial manager completes a questionnaire before a team of analysts conducts an overall assessment of the customer's E&S risks in the applicable sectors.

The E&S risk and compliance departments delve deeper into cases that uncover red flags. They submit the findings of their analysis (and its impact on credit and other risks) to the bank’s risk approval committees, who use them in decision-making.

2025 Pillar 3 Disclosures Report    285

Index Introduction l Capital l Risks l Remuneration l Appendices l

4. As part of the customer due diligence process, the Group analyses publicly available information to assess the financial crime risk of our potential or existing customers (public media screening). If a relevant risk is identified during this process, it is escalated to the Financial Crime Prevention function for review and determination of mitigating actions.

5. In addition, the compliance function is embedded in the process of reviewing ESG labelled transactions. Consideration of Governance related risk factors is embedded in the broader client lifecycle. Reviews for transactions being labelled ESG are subject to escalation where risk factors are identified. Where the escalation includes governance risk factors an assessment will be performed based on the minimum social safeguards under the EU Taxonomy which focuses on corruption, competition and taxation considerations.

286    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

10.4 Credit quality of exposures

This template provides information on exposures to non-financial companies operating in sectors that significantly contribute to climate change, including, among other things, information on the credit quality of the exposures and on financed emissions.

ESG disclosure in Pillar 3 follows the implementing technical standards on prudential disclosures on ESG risks defined by the EBA for this purpose. Therefore, the ESG information disclosed in this template of Pillar 3 is not necessarily aligned with other Group´s ESG management reports.

The perimeter includes exposures in the banking book, including loans and advances, debt securities and equity instruments to non-financial corporations, other than those held for trading.

Santander has an exposure of €330 billion, distributed between those sectors identified by the EBA as major climate change contributors (72% – NACE A–I and L) and other less polluting sectors (27% – NACE K, J, M–U).

The template also requires the identification of exposures excluded from benchmarks aligned with the Paris Agreement. To this end, we have applied sections d) through g) of Article 12.1, and Article 12.2 of Commission Delegated Regulation (EU) 2020/1818. Companies are identified based on the following criteria:

•1% or more of their revenue derive from exploration, mining, extraction, distribution or refining of hard coal and lignite.

•10% or more of their revenue derive from the exploration, extraction, distribution or refining of oil fuels.

•50% or more of their revenue derive from the exploration, extraction, manufacturing or distribution of gaseous fuels.

•At least 50% of its revenue comes from electricity generation with a greenhouse gas emission intensity of more than 100g CO2 equivalent/kWh.

•It has a high risk of not meeting the Do No Significant Harm criteria under the EU Taxonomy regulation.

In order to apply these criteria to our portfolio, we have used the list of companies excluded from the Paris Agreement provided by a new external supplier. Taking a conservative approach, all exposures of subsidiaries are reported as excluded when the group is excluded.

The resulting list has been complemented with those companies not included in the information provided by external providers but included in sectors with climate targets by the Group.

Regarding the publication of financed emissions, the calculation is based on the PCAF standard:

•Using the actual emissions of the counterparties when available, which are obtained from Carbon Disclosure Project (CDP) database, JATO (for Automotive sector) and Wood Mackenzie (for Oil & Gas sector).

•Supplementing the rest of the portfolio with the latest available average emission factors from PCAF database.

Different methodologies have been used depending on the type of asset (loans to companies, real estate, and motor vehicle loans).

Larger volumes of emissions of the non financial corporations portfolio have been identified in the manufacturing and wholesale and retail trade sectors.

In August 2025, the EBA published a non-action letter regarding the implementing technical standards on amended disclosures requirements for ESG risks. The publication of the GAR templates was suspended until December 2026. Therefore, the 'Of which environmentally sustainable (CCM)' column of this template will also not be reported.

Due to the sale of Santander Bank Polska S.A. by Santander Group, the exposure pertaining to this unit is classified as non-current assets and disposal groups classified as held for sale for accounting purposes. As a result, this exposure is no longer part of the Pillar 3 ESG perimeter, as in the June 2025 report, and is excluded from what is reported in this and the following templates.

2025 Pillar 3 Disclosures Report    287

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 98.ESG 1 - Banking book- Climate Change transition risk: Credit quality of exposures by sector, emissions and residual maturity
			Sector/subsector			a			b			c			d			e
									Gross carrying amount (Mln EUR)
									Of which exposures towards companies excluded from EU Paris-aligned Benchmarks in accordance with points (d) to (g) of Article 12.1 and in accordance with Article 12.2 of Climate Benchmark Standards Regulation			Of which environmentally sustainable (CCM)			Of which stage 2 exposures			Of which non-performing exposures
1			Exposures towards sectors that highly contribute to climate change*			238,495			10,830			—			21,824			8,174
2			A - Agriculture, forestry and fishing			7,454			—			—			606			466
3			B - Mining and quarrying			10,813			5,558			—			377			157
4			B.05 - Mining of coal and lignite			—			—			—			—			—
5			B.06 - Extraction of crude petroleum and natural gas			3,190			1,822			—			160			16
6			B.07 - Mining of metal ores			2,530			397			—			65			4
7			B.08 - Other mining and quarrying			504			18			—			123			17
8			B.09 - Mining support service activities			4,589			3,322			—			30			120
9			C - Manufacturing			45,989			1,233			—			3,591			1,453
10			C.10 - Manufacture of food products			11,091			—			—			627			346
11			C.11 - Manufacture of beverages			2,007			—			—			123			54
12			C.12 - Manufacture of tobacco products			826			—			—			—			—
13			C.13 - Manufacture of textiles			584			—			—			57			44
14			C.14 - Manufacture of wearing apparel			489			—			—			52			74
15			C.15 - Manufacture of leather and related products			367			—			—			39			62
16			C.16 - Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials			782			—			—			60			51
17			C.17 - Manufacture of pulp, paper and paperboard			1,430			—			—			120			22
18			C.18 - Printing and service activities related to printing			413			—			—			65			32
19			C.19 - Manufacture of coke oven products			1,331			869			—			42			9
20			C.20 - Production of chemicals			4,718			314			—			717			69
21			C.21 - Manufacture of pharmaceutical preparations			882			—			—			17			14
22			C.22 - Manufacture of rubber products			1,521			—			—			148			61
23			C.23 - Manufacture of other non-metallic mineral products			1,301			—			—			97			57
24			C.24 - Manufacture of basic metals			2,867			17			—			354			62
25			C.25 - Manufacture of fabricated metal products, except machinery and equipment			2,606			—			—			271			146

288    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

26			C.26 - Manufacture of computer, electronic and optical products			1,915			—			—			68			21
27			C.27 - Manufacture of electrical equipment			2,020			—			—			73			64
28			C.28 - Manufacture of machinery and equipment n.e.c.			2,002			12			—			153			67
29			C.29 - Manufacture of motor vehicles, trailers and semi-trailers			3,787			13			—			226			33
30			C.30 - Manufacture of other transport equipment			862			—			—			108			33
31			C.31 - Manufacture of furniture			480			—			—			49			42
32			C.32 - Other manufacturing			889			7			—			63			45
33			C.33 - Repair and installation of machinery and equipment			821			—			—			62			46
34			D - Electricity, gas, steam and air conditioning supply			14,400			1,433			—			1,635			238
35			D35.1 - Electric power generation, transmission and distribution			13,748			1,054			—			1,629			237
36			D35.11 - Production of electricity			9,100			769			—			1,200			159
37			D35.2 - Manufacture of gas; distribution of gaseous fuels through mains			628			379			—			3			1
38			D35.3 - Steam and air conditioning supply			25			—			—			2			1
39			E - Water supply; sewerage, waste management and remediation activities			1,536			18			—			243			62
40			F - Construction			18,562			576			—			2,060			800
41			F.41 - Construction of buildings			10,622			—			—			722			345
42			F.42 - Civil engineering			3,340			—			—			484			100
43			F.43 - Specialised construction activities			4,600			576			—			854			354
44			G - Wholesale and retail trade; repair of motor vehicles and motorcycles			71,743			1,855			—			6,470			2,715
45			H - Transportation and storage			16,101			158			—			1,457			779
46			H.49 - Land transport and transport via pipelines			8,086			133			—			561			334
47			H.50 - Water transport			2,056			24			—			321			99
48			H.51 - Air transport			1,515			—			—			9			228
49			H.52 - Warehousing and support activities for transportation			4,139			1			—			556			105
50			H.53 - Postal and courier activities			306			—			—			10			11
51			I - Accommodation and food service activities			10,612			—			—			968			508
52			L - Real estate activities			41,285			—			—			4,416			996
53			Exposures towards sectors other than those that highly contribute to climate change*			91,513			3,834			—			6,261			3,646
54			K - Financial and insurance activities			—			—			—			—			—
55			Exposures to other sectors (NACE codes J, M - U)			91,513			3,834			—			6,261			3,646
56			TOTAL			330,008			14,664						28,084			11,820
			* In accordance with Commission Delegated Regulation (EU) 2020/1818, supplementing Regulation (EU) 2016/1011 with regard to minimum standards applicable to EU climate transition benchmarks and EU benchmarks aligned with the Paris Agreement (Regulation on climate transition benchmarks), recital 6: Sectors listed in sections A to H and section L of Annex I to Regulation (EC) No 1893/2006

2025 Pillar 3 Disclosures Report    289

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 98.ESG 1 - Banking book- Climate Change transition risk: Credit quality of exposures by sector, emissions and residual maturity
			Sector/subsector			f			g			h
						Accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions (Mln EUR)
									Of which Stage 2 exposures			Of which non-performing exposures
1			Exposures towards sectors that highly contribute to climate change*			-4,787			-977			-3,393
2			A - Agriculture, forestry and fishing			-255			-37			-194
3			B - Mining and quarrying			-80			-35			-40
4			B.05 - Mining of coal and lignite			—			—			—
5			B.06 - Extraction of crude petroleum and natural gas			-7			-2			-2
6			B.07 - Mining of metal ores			-8			-5			-1
7			B.08 - Other mining and quarrying			-37			-27			-10
8			B.09 - Mining support service activities			-28			—			-26
9			C - Manufacturing			-909			-165			-676
10			C.10 - Manufacture of food products			-195			-25			-156
11			C.11 - Manufacture of beverages			-24			-4			-18
12			C.12 - Manufacture of tobacco products			—			—			—
13			C.13 - Manufacture of textiles			-22			-4			-17
14			C.14 - Manufacture of wearing apparel			-36			-3			-31
15			C.15 - Manufacture of leather and related products			-28			-2			-25
16			C.16 - Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials			-38			-3			-33
17			C.17 - Manufacture of pulp, paper and paperboard			-12			-2			-7
18			C.18 - Printing and service activities related to printing			-15			-2			-12
19			C.19 - Manufacture of coke oven products			-4			-1			-2
20			C.20 - Production of chemicals			-89			-59			-26
21			C.21 - Manufacture of pharmaceutical preparations			-6			-1			-3
22			C.22 - Manufacture of rubber products			-34			-5			-26
23			C.23 - Manufacture of other non-metallic mineral products			-29			-4			-23
24			C.24 - Manufacture of basic metals			-36			-8			-26
25			C.25 - Manufacture of fabricated metal products, except machinery and equipment			-112			-10			-97
26			C.26 - Manufacture of computer, electronic and optical products			-14			-4			-8
27			C.27 - Manufacture of electrical equipment			-45			-2			-41
28			C.28 - Manufacture of machinery and equipment n.e.c.			-41			-4			-34
29			C.29 - Manufacture of motor vehicles, trailers and semi-trailers			-37			-8			-21

290    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

30			C.30 - Manufacture of other transport equipment			-19			-1			-17
31			C.31 - Manufacture of furniture			-23			-3			-20
32			C.32 - Other manufacturing			-24			-4			-15
33			C.33 - Repair and installation of machinery and equipment			-24			-4			-18
34			D - Electricity, gas, steam and air conditioning supply			-169			-77			-77
35			D35.1 - Electric power generation, transmission and distribution			-168			-77			-76
36			D35.11 - Production of electricity			-144			-74			-59
37			D35.2 - Manufacture of gas; distribution of gaseous fuels through mains			-1			—			—
38			D35.3 - Steam and air conditioning supply			—			—			—
39			E - Water supply; sewerage, waste management and remediation activities			-35			-11			-23
40			F - Construction			-476			-71			-367
41			F.41 - Construction of buildings			-241			-42			-180
42			F.42 - Civil engineering			-50			-9			-34
43			F.43 - Specialised construction activities			-185			-20			-152
44			G - Wholesale and retail trade; repair of motor vehicles and motorcycles			-1,752			-319			-1,290
45			H - Transportation and storage			-331			-56			-249
46			H.49 - Land transport and transport via pipelines			-203			-32			-153
47			H.50 - Water transport			-6			-3			-2
48			H.51 - Air transport			-43			—			-42
49			H.52 - Warehousing and support activities for transportation			-73			-19			-47
50			H.53 - Postal and courier activities			-6			-1			-4
51			I - Accommodation and food service activities			-311			-58			-232
52			L - Real estate activities			-469			-149			-247
53			Exposures towards sectors other than those that highly contribute to climate change*			-2,236			-297			-1,709
54			K - Financial and insurance activities			—			—			—
55			Exposures to other sectors (NACE codes J, M - U)			-2,236			-297			-1,709
56			TOTAL			-7,023			-1,275			-5,102

2025 Pillar 3 Disclosures Report    291

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 98.ESG 1 - Banking book- Climate Change transition risk: Credit quality of exposures by sector, emissions and residual maturity
			Sector/subsector			i			j
						GHG financed emissions (scope 1, scope 2 and scope 3 emissions of the counterparty) (in tons of CO2 equivalent)
									Of which Scope 3 financed emissions
1			Exposures towards sectors that highly contribute to climate change*			169,299,285			129,643,738
2			A - Agriculture, forestry and fishing			10,000,729			3,283,268
3			B - Mining and quarrying			34,743,077			29,831,791
4			B.05 - Mining of coal and lignite			85			29
5			B.06 - Extraction of crude petroleum and natural gas			7,051,674			5,244,930
6			B.07 - Mining of metal ores			18,282,004			16,458,484
7			B.08 - Other mining and quarrying			785,429			331,162
8			B.09 - Mining support service activities			8,623,886			7,797,185
9			C - Manufacturing			57,743,261			47,107,611
10			C.10 - Manufacture of food products			11,581,136			9,787,862
11			C.11 - Manufacture of beverages			1,306,361			1,124,788
12			C.12 - Manufacture of tobacco products			154,463			126,561
13			C.13 - Manufacture of textiles			339,221			277,238
14			C.14 - Manufacture of wearing apparel			337,276			287,496
15			C.15 - Manufacture of leather and related products			215,355			174,350
16			C.16 - Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials			353,901			273,869
17			C.17 - Manufacture of pulp, paper and paperboard			570,829			431,017
18			C.18 - Printing and service activities related to printing			179,490			129,972
19			C.19 - Manufacture of coke oven products			2,142,690			1,713,029
20			C.20 - Production of chemicals			8,220,345			5,801,722
21			C.21 - Manufacture of pharmaceutical preparations			867,452			485,607
22			C.22 - Manufacture of rubber products			2,144,984			1,440,815
23			C.23 - Manufacture of other non-metallic mineral products			1,829,755			966,386
24			C.24 - Manufacture of basic metals			3,797,270			2,476,835
25			C.25 - Manufacture of fabricated metal products, except machinery and equipment			2,740,912			1,716,199
26			C.26 - Manufacture of computer, electronic and optical products			8,659,632			8,496,124
27			C.27 - Manufacture of electrical equipment			3,789,682			3,641,832

292    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

28			C.28 - Manufacture of machinery and equipment n.e.c.			1,872,454			1,770,875
29			C.29 - Manufacture of motor vehicles, trailers and semi-trailers			3,496,914			3,208,074
30			C.30 - Manufacture of other transport equipment			2,064,584			2,031,624
31			C.31 - Manufacture of furniture			304,488			188,652
32			C.32 - Other manufacturing			443,853			328,480
33			C.33 - Repair and installation of machinery and equipment			330,213			228,205
34			D - Electricity, gas, steam and air conditioning supply			11,792,889			5,003,102
35			D35.1 - Electric power generation, transmission and distribution			10,593,171			4,269,495
36			D35.11 - Production of electricity			6,081,556			2,362,756
37			D35.2 - Manufacture of gas; distribution of gaseous fuels through mains			1,164,296			723,787
38			D35.3 - Steam and air conditioning supply			35,422			9,820
39			E - Water supply; sewerage, waste management and remediation activities			1,274,218			433,016
40			F - Construction			7,288,653			6,585,277
41			F.41 - Construction of buildings			1,926,276			1,656,349
42			F.42 - Civil engineering			1,464,843			1,366,123
43			F.43 - Specialised construction activities			3,897,534			3,562,805
44			G - Wholesale and retail trade; repair of motor vehicles and motorcycles			37,897,143			32,820,131
45			H - Transportation and storage			5,360,848			2,907,456
46			H.49 - Land transport and transport via pipelines			2,833,917			1,535,511
47			H.50 - Water transport			869,639			485,549
48			H.51 - Air transport			360,513			170,048
49			H.52 - Warehousing and support activities for transportation			1,246,640			678,489
50			H.53 - Postal and courier activities			50,138			37,859
51			I - Accommodation and food service activities			1,878,991			1,362,414
52			L - Real estate activities			1,319,476			309,673
53			Exposures towards sectors other than those that highly contribute to climate change*
54			K - Financial and insurance activities
55			Exposures to other sectors (NACE codes J, M - U)
56			TOTAL			169,299,285			129,643,738

2025 Pillar 3 Disclosures Report    293

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 98.ESG 1 - Banking book- Climate Change transition risk: Credit quality of exposures by sector, emissions and residual maturity
			Sector/subsector			k			l			m			n			o			p
						GHG emissions (column i): gross carrying amount percentage of the portfolio derived from company-specific reporting			<= 5 years			> 5 year <= 10 years			> 10 year <= 20 years			> 20 years			Average weighted maturity
1			Exposures towards sectors that highly contribute to climate change*			11.3		%	196,523			24,403			10,604			6,964			2.91
2			A - Agriculture, forestry and fishing			0.7		%	6,051			1,024			306			73			3.16
3			B - Mining and quarrying			17.1		%	8,889			1,005			838			80			2.59
4			B.05 - Mining of coal and lignite			—		%	—			—			—			—			2.61
5			B.06 - Extraction of crude petroleum and natural gas			2.2		%	2,765			243			153			29			2.43
6			B.07 - Mining of metal ores			54.3		%	2,495			33			—			2			0.67
7			B.08 - Other mining and quarrying			9.3		%	419			43			2			41			2.26
8			B.09 - Mining support service activities			7.8		%	3,209			687			684			9			3.78
9			C - Manufacturing			13.2		%	39,836			4,563			881			708			2.14
10			C.10 - Manufacture of food products			7.2		%	10,387			554			72			78			1.79
11			C.11 - Manufacture of beverages			27.0		%	1,519			324			32			131			1.99
12			C.12 - Manufacture of tobacco products			62.3		%	763			62			—			1			0.71
13			C.13 - Manufacture of textiles			—		%	536			27			18			3			2.29
14			C.14 - Manufacture of wearing apparel			0.3		%	449			18			4			17			2.10
15			C.15 - Manufacture of leather and related products			—		%	327			31			3			6			2.05
16			C.16 - Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials			1.9		%	699			66			10			6			2.61
17			C.17 - Manufacture of pulp, paper and paperboard			14.9		%	1,203			151			65			11			2.94
18			C.18 - Printing and service activities related to printing			—		%	365			32			11			5			2.74
19			C.19 - Manufacture of coke oven products			—		%	976			352			—			2			3.80
20			C.20 - Production of chemicals			23.3		%	3,780			620			247			71			2.33
21			C.21 - Manufacture of pharmaceutical preparations			8.4		%	781			72			—			28			1.82
22			C.22 - Manufacture of rubber products			3.7		%	1,396			93			17			15			1.99
23			C.23 - Manufacture of other non-metallic mineral products			5.8		%	1,222			56			5			18			1.85

294    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

24			C.24 - Manufacture of basic metals			7.6		%	2,263			322			259			24			2.53
25			C.25 - Manufacture of fabricated metal products, except machinery and equipment			6.4		%	2,307			222			38			40			2.28
26			C.26 - Manufacture of computer, electronic and optical products			24.1		%	1,829			78			1			6			1.17
27			C.27 - Manufacture of electrical equipment			24.5		%	1,494			510			5			11			2.74
28			C.28 - Manufacture of machinery and equipment n.e.c.			9.7		%	1,881			85			14			22			1.69
29			C.29 - Manufacture of motor vehicles, trailers and semi-trailers			21.9		%	3,329			437			2			20			1.61
30			C.30 - Manufacture of other transport equipment			22.4		%	546			253			57			6			3.82
31			C.31 - Manufacture of furniture			—		%	435			32			9			4			2.19
32			C.32 - Other manufacturing			5.9		%	688			20			4			178			1.83
33			C.33 - Repair and installation of machinery and equipment			11.3		%	663			146			8			5			3.01
34			D - Electricity, gas, steam and air conditioning supply			26.2		%	9,248			2,491			1,223			1,439			4.55
35			D35.1 - Electric power generation, transmission and distribution			27.0		%	8,728			2,376			1,207			1,436			4.64
36			D35.11 - Production of electricity			24.7		%	5,268			1,814			904			1,114			4.85
37			D35.2 - Manufacture of gas; distribution of gaseous fuels through mains			10.0		%	497			114			15			2			2.90
38			D35.3 - Steam and air conditioning supply			—		%	23			1			—			—			2.29
39			E - Water supply; sewerage, waste management and remediation activities			5.9		%	1,036			304			138			58			4.32
40			F - Construction			3.6		%	15,646			1,457			1,147			312			3.43
41			F.41 - Construction of buildings			0.8		%	9,497			677			231			218			2.76
42			F.42 - Civil engineering			13.6		%	2,644			518			129			48			3.62
43			F.43 - Specialised construction activities			2.7		%	3,505			263			787			45			4.47
44			G - Wholesale and retail trade; repair of motor vehicles and motorcycles			17.1		%	65,565			2,516			1,232			2,431			1.84
45			H - Transportation and storage			7.9		%	11,601			3,159			1,146			196			4.27
46			H.49 - Land transport and transport via pipelines			3.3		%	6,827			936			170			152			3.31
47			H.50 - Water transport			29.1		%	769			992			294			1			6.31
48			H.51 - Air transport			0.8		%	1,274			194			45			2			3.50
49			H.52 - Warehousing and support activities for transportation			9.6		%	2,618			1,032			450			40			4.53
50			H.53 - Postal and courier activities			—		%	113			5			186			1			9.79
51			I - Accommodation and food service activities			1.0		%	6,676			2,480			1,135			321			4.94
52			L - Real estate activities			1.6		%	31,976			5,404			2,558			1,347			3.41
53			Exposures towards sectors other than those that highly contribute to climate change*						65,996			8,229			2,612			14,675			2.97
54			K - Financial and insurance activities						—			—			—			—			—
55			Exposures to other sectors (NACE codes J, M - U)						65,996			8,229			2,612			14,675			2.97
56			TOTAL			11.3		%	262,520			32,633			13,216			21,640			2.92

2025 Pillar 3 Disclosures Report    295

Index Introduction l Capital l Risks l Remuneration l Appendices l

10.5 Energy efficiency of the collateral

The purpose of this template is to measure the energy efficiency of the loans collateralized with commercial and residential immovable property and of repossessed real estate collaterals, in terms of their consumption as expressed in kWh/m2 and/or their energy performance certificates (EPCs).

ESG disclosure in Pillar 3 follows the implementing technical standards on prudential disclosures on ESG risks defined by the EBA for this purpose. Therefore, the ESG information disclosed in this template of Pillar 3 is not necessarily aligned with other Group’s ESG management reports.

With the aim of promoting the energy efficiency of buildings, the Energy Performance of Buildings Directive (2010/31/EU) and the Energy Efficiency Directive (2012/27/EU) introduced EPCs in Europe. Following their entry into force, these certificates are compulsory for the sale and rent of immovable property in the European Union.

However, when analysing the information provided, the following should be considered:

•Transactions (sales/renting) prior to the date of entry into force of the directive were not subject to the obligation of providing an EPC.

•The directive is applicable across the European Union and, as such, does not cover all jurisdictions where Santander operates.

•Even at the European Union level, as recognised by the European Banking Authority (EBA) in the Implementing Technical Standards on Prudential Disclosures on ESG risks, application of the Directive is not standardised.

•Depending on the legal provisions in each country, an EPC's obligation to carry out the transaction does not always imply that the financial institution involved in the transaction has access to such information.

Given that the directive is applicable in the European Union, the Group has worked to obtain EPCs for the main collateralized portfolios in this region (Spain, Portugal and Germany), as well as the UK, since it has a EPC system that is similar to that of the European Union. For these regions, the Group is currently collecting information of new originations or has initiatives in place to obtain it.

For these countries, work has been done to obtain EPCs and energy consumption (in kWh/m2), drawing from various sources of information:

•Firstly, information already available internally has been used.

•Additionally, in Spain, the UK and Portugal, this has been supplemented by information obtained by external suppliers (Gloval, Landmark, and Energy Savings Trust).

•In regard to immovable property for which real data was not available, for those immovable properties subject to EPCs this has been modelled both internally (in the case of Spain), as well as by an external supplier (in the case of Portugal and the UK), in order to cover a large percentage of the portfolio and allowing us to cover almost the entire portfolio in both countries.

As per EBA guidelines, whereas in the report on exposure by energy certificate (EPC label) only actual energy certificates were considered, the report by energy consumption (kWh/ m2) used real consumption in addition to estimated consumption. Given this, energy consumption has been estimated for both the portion of the portfolio for which no EPC label was available, and for the part of the portfolio with EPC label where real consumption information was not available.

In the case of the UK, Spain, Portugal and Germany, actual EPCs have been reported for 72% of the portfolio, with estimated EPCs available for a further 25%.

In countries where EPC labels above A are issued, they are categorised under EPC label A (column H). Likewise, EPC labels below G are placed in EPC label G (column N).

For the remaining regions, such as the US and Latin America, given the current lack of European Union equivalent regulations in this respect, the exposure of these geographies are being reported as not having EPCs.

However, the portfolios collateralized by immovable property in countries without EPC schemes or an equivalent in place represent less than 22% of the Group's total portfolio.

296    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 99.ESG 2 - Banking book - Climate change transition risk: Loans collateralised by immovable property - Energy efficiency of the collateral
						a			b			c			d			e			f			g
			Counterparty sector			Total gross carrying amount amount (in MEUR)
									Level of energy efficiency (EP score in kWh/m² of collateral)
									0; <= 100			> 100; <= 200			> 200; <= 300			> 300; <= 400			> 400; <= 500			> 500
1			Total EU area			124,817			36,246			52,477			14,747			3,268			910			586
2			Of which Loans collateralised by commercial immovable property			19,442			5,936			6,794			1,854			364			141			137
3			Of which Loans collateralised by residential immovable property			101,353			30,271			45,660			12,891			2,904			768			450
4			Of which Collateral obtained by taking possession: residential and commercial immovable properties			4,023			39			23			2			—			—			—
5			Of which Level of energy efficiency (EP score in kWh/m² of collateral) estimated			63,207			21,090			37,067			4,855			191			3			2
6			Total non-EU area			289,298			25,544			55,721			84,226			25,682			5,923			3,238
7			Of which Loans collateralised by commercial immovable property			24,269			223			992			705			570			175			550
8			Of which Loans collateralised by residential immovable property			264,546			25,321			54,729			83,521			25,113			5,748			2,688
9			Of which Collateral obtained by taking possession: residential and commercial immovable properties			482			—			—			—			—			—			—
10			Of which Level of energy efficiency (EP score in kWh/m² of collateral) estimated			27,161			362			4,661			18,043			3,518			356			221
			*Energy consumption in kWh/m² of the actual guarantee

Table 99.ESG 2 - Banking book - Climate change transition risk: Loans collateralised by immovable property - Energy efficiency of the collateral
						h			i			j			k			l			m			n			o			p
			Counterparty sector			Total gross carrying amount amount (in MEUR)
						Level of energy efficiency (EPC label of collateral)																					Without EPC label of collateral
						A			B			C			D			E			F			G						Of which level of energy efficiency*
1			Total EU area			7,755			6,378			6,532			9,018			18,936			3,756			3,923			68,520			75		%
2			Of which Loans collateralised by commercial immovable property			1,062			1,424			1,071			849			916			224			219			13,677			66		%
3			Of which Loans collateralised by residential immovable property			6,693			4,955			5,461			8,168			18,020			3,531			3,704			50,821			83		%
4			Of which Collateral obtained by taking possession: residential and commercial immovable properties			—			—			—			—			—			—			—			4,022			2		%
5			Of which Level of energy efficiency (EP score in kWh/m² of collateral) estimated			—			—			—			—			—			—			—			51,134			100		%
6			Total non-EU area			1,106			27,057			48,111			67,814			23,418			4,639			1,028			116,125			23		%
7			Of which Loans collateralised by commercial immovable property			—			744			714			470			74			6			126			22,135			5		%
8			Of which Loans collateralised by residential immovable property			1,106			26,313			47,397			67,344			23,344			4,632			902			93,507			28		%
9			Of which Collateral obtained by taking possession: residential and commercial immovable properties			—			—			—			—			—			—			—			482			—		%
10			Of which Level of energy efficiency (EP score in kWh/m² of collateral) estimated			—			—			—			—			—			—			—			27,161			100		%
			*Energy consumption in kWh/m² of the actual guarantee

2025 Pillar 3 Disclosures Report    297

Index Introduction l Capital l Risks l Remuneration l Appendices l

10.6 Alignment metrics

The purpose of this template is to provide information on the emissions of our customers classified according to the climate sector to which they belong, and the alignment metrics defined by the International Energy Agency (IEA) for the various sectors.

To maintain consistency, the portfolio alignment methodology and the underlying assumptions in this template (including exposure, the reference year, and emissions by scope) adhere to the same decision criteria used to define the objectives for each sector. Further information on the applied decision criteria can be found in our 2025 annual report and the 2022–2023 Climate Finance Report.

In 2025, we reviewed our sectoral targets and the underlying scenarios. For all sectors with published decarbonization objectives, our primary reference scenario is the IEA's Net Zero Emissions by 2050 (NZE) scenario.

The IEA recently updated the quantitative information on the NZE scenarios in the October 2025 World Energy Outlook. We use this update to calculate the distance to the scenario; however, the 2030 data point is not published in this version. Therefore, we interpolated between 2023 and 2035 data to obtain a 2030 metric. The sole exception is the oil and gas sector, where we derived the reference scenario from Emissions from Oil and Gas Operations in Net Zero Transitions framework (2023).

For the first time this year, all of our targets are defined based on physical intensity of emissions according to attributed production, i.e. the intensity of the emissions of the company or Project Finance weighted by the attribution factor, following the methodology defined by PCAF. In each sector, the parameters are defined according to different factors:

• For the Power generation sector, the scope is limited to companies and project finance in the electricity generation segment, which is responsible for most of the emissions. The chosen alignment parameter is physical intensity (kilograms of CO2 equivalent/MWh), including scope 1 emissions of our credit portfolio.

• For the Energy (oil and gas) sector, we assess upstream companies, as well as integrated companies that undertake

their own upstream oil and gas production. We assess physical emission intensity for operational emissions in Scopes 1 and 2. The implementation of this new target is based on operational feasibility, data traceability and effective control over the emission sources.

• In the steel sector, the objective is to reduce the intensity of CO2 equivalent emissions (scope 1 and 2) of our credit portfolio for steel manufacturers, measured in tonnes of CO2 equivalent for every tonne of steel produced.

•The initial target established for the aviation sector has been reclassified as a monitoring metric. It is no longer considered a formal target and has therefore been removed from this template. This decision follows our annual portfolio alignment materiality assessment, which is based on dynamic criteria including financed emissions, exposure, portfolio management capacity and strategic relevance. Given the sector’s evolving materiality and its strong dependency on external policy and technology developments, monitoring now provides a more appropriate management approach.

• Finally, the target for the automotive sector focuses 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.

The NACE code provided in the template refers to the part of the value chain of each sector that is considered in the emissions calculation.

Various sources are used for these calculations, including S&P Trucost, Global Data, Wood Mackenzie, JATO as well as companies’ official disclosures for production data, Carbon Disclosure Project or Wood Mackenzie for emissions. To obtain emissions intensities, we refer to the Transition Pathway Initiative (TPI) or we calculate them based on data reported by the companies.

298    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 100.ESG 3 - Banking book - Climate change transition risk: Alignment metrics
			a			b			c			d			e			f			g
			Sector			NACE Sectors			Portfolio gross carrying amount (Mn EUR)			Alignment metric			Year of reference			Distance to IEA NZE2050 in %			Target (year of reference + 3 years)
1			Power			D351			12,162			88 KgCOe/MWh			2024			-36			Not Available
2			Fossil fuel combustion			B6			5,436			3.15 tCO2e/TJ			2024			36			Not Available
3			Automotive			C291			3,646			128 grCO2/vkm			2024			54			Not Available
4			Aviation			—			—			—			—			—
5			Maritime transport
6			Cement, clinker and lime production
7			Iron and steel, coke, and metal ore production			C241			1,475			1.51 tCO2e/ton steel			2024			18			N/A
8			Chemicals
9			Iron and steel, coke, and metal ore production (Steel)

Regarding the 'Distance to IEA NZE 2050 in %' column, the reported criteria was modified in June 2023 Pillar 3 report compared to the December 2022 Pillar 3 report. The template reported in December 2025 maintains the criteria of the June 202316 report.

10.7. Exposure to the top 20 polluting companies

The objective of this template is to show aggregate exposure of Santander to the 20 most carbon-intensive firms globally.

The scope includes loans and advances, debt securities and equity instruments, classified in the accounting portfolios of

the banking book, excluding financial assets held for trading and assets held for sale.

As stated in previous reports, Santander is continuing to report this template based on the list published by Carbon Majors. In March 2025, Carbon Majors published an update of this list, which has been used to complete this template.

According to EBA’s guidelines, the disclosure of the field 'of which environmentally sustainable (CCM)' has been discontinued until end of 2026.

Table 101.ESG 4 - Banking book - Climate change transition risk: Exposures to top 20 carbon-intensive firms

EUR millon

a

b

c

d

e

Gross carrying amount (aggregate)

Gross carrying amount towards the counterparties compared to total gross carrying amount (aggregate)*

Of which environmentally sustainable (CCM)

Weighted average maturity

Number of top 20 polluting firms included

1

6,901

0.54%

N/A

3.1

9

*For counterparties among the world's twenty largest carbon emitters

16 From June 2023 onwards, the Pillar 3 report is calculated as [(Base year metric - IEA scenario metric in 2030)/IEA metric in 2030 * 100].

2025 Pillar 3 Disclosures Report    299

Index Introduction l Capital l Risks l Remuneration l Appendices l

10.8. Exposures subject to physical risk

The purpose of this template is to identify exposures subject to acute and chronic physical risk, including exposures collateralized by immovable property, exposures by business sector and foreclosed assets.

ESG disclosure in Pillar 3 follows the implementing technical standards on prudential disclosures on ESG risks defined by the EBA for this purpose. Therefore, the ESG information disclosed in this template of Pillar 3 is not necessarily aligned with other Group's ESG management reports.

The perimeter includes exposures in the banking book, including loans and advances, debt securities and equity instruments not held-for-trading and not held-for-sale. Physical risk are defined as risks which arise from the physical effects of climate change and environmental degradation. They can be categorised either as acute - if they arise from climate and weather-related events and an acute destruction of the environment, or chronic - if they arise from progressive shifts in climate and weather patterns or a gradual loss of ecosystem services.

In order to assess the physical risk of its portfolio, Santander has requested information on acute and chronic physical risk from a specialised insurer. With regard to the previous report, the Group has continued to work on increasing the granularity of physical risk information by conducting assessments based on the location of collateral, as well as customers' main offices for unsecured loans, at the postcode level for Europe or equivalent for the rest of the Group's subsidiaries. In addition, the number of geographical areas provided by the supplier for physical risk assessment has been increased.

The methodology applied by the vendor follows the basis developed by the UNEP-FI working teams, it incorporates rating levels for the 13 threats identified and 8 vulnerability factors to adjust these hazards' impact on various economic activities in each geography. Including vulnerabilities in models allows us to identify the main physical events that each economic activity may be affected.

For each one of the regions ) and selected sectors (activities added to level 2 of the NACE codes), the vendor has provided an assessment of the risks (8 acute and 5 chronic) identifying the risk associated with each one on a scale of 1 to 5, from lowest to highest risk, respectively. This analysis has been performed for the main climate-related scenarios (RCP 2.6, RCP 4.5 and RCP 8.5) and the following time horizons: current, 2030, 2040, 2050 and 2100.

The template requires determining which exposures are sensitive to the impact of physical risk, but the instructions of the European Banking Authority do not set forth under which specific metric or threshold this determination should be made. To this end, using the scale mentioned earlier, Santander has applied the conservative criteria suggested by the provider, deeming that an activity in a geography is sensitive to the impact of physical risks when at least one hazard provided by the external supplier is assessed as four or higher.

The scenario used for this assessment is RCP 4.5, which is deemed appropriate as it serves as a middle ground between the scenario that achieve the Paris Agreement target (RCP 2.6) and a scenario more typical of stress exercise (RCP 8.5).

The chosen time horizons have been deemed consistent with the average portfolio maturities, with conservative criteria. As such, for unsecured exposures, a time horizon of 2030 has been taken into account, which comfortably covers the average maturity of these portfolios. Moreover, for the longer-term secured portfolios, a time horizon of 2050 has been taken into account.

In relation to the location used for physical risk assessment, the Group is working to consider the location of wholesale customers' most relevant production centres in its physical risk assessment.

300    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 102.ESG 5 - Banking book - Climate change physical risk: Exposures subject to physical risk
			a			b			c			d			e			f			g			h			i			j			k			l			m			n			o
			Europe			Gross carrying amount (Mln EUR)
									of which exposures sensitive to impact from climate change physical events
									Breakdown by maturity bucket															of which exposures sensitive to impact from chronic climate change events			of which exposures sensitive to impact from acute climate change events			of which exposures sensitive to impact both from chronic and acute climate change events			Of which Stage 2 exposures			Of which non-performing exposures			Accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions
									<= 5 years			> 5 year <= 10 years			> 10 year <= 20 years			> 20 years			Average weighted maturity																					of which Stage 2 exposures			Of which non-performing exposures
1			A - Agriculture, forestry and fishing			3,060			1,371			319			23			6			3			1,657			24			38			177			82			-43			-8			-33
2			B - Mining and quarrying			5,329			23			—			—			—			1			23			—			—			10			3			—			—			—
3			C - Manufacturing			25,159			7,913			735			16			29			2			8,599			74			20			747			396			-180			-20			-153
4			D - Electricity, gas, steam and air conditioning supply			8,487			2,529			1,596			425			346			6			3,248			1,648			—			426			69			-47			-7			-34
5			E - Water supply; sewerage, waste management and remediation activities			1,042			4			—			—			—			2			—			4			—			—			—			—			—			—
6			F - Construction			13,449			1,519			97			32			50			3			415			123			1,158			116			135			-55			-4			-48
7			G - Wholesale and retail trade; repair of motor vehicles and motorcycles			44,324			362			12			—			1			1			106			241			28			34			6			-4			-1			-3
8			H - Transportation and storage			9,317			2			1			—			—			4			—			1			2			—			—			—			—			—
9			L - Real estate activities			21,858			96			16			—			38			4			—			150			—			—			—			-1			—			—
10			Loans collateralised by residential immovable property			302,991			278			561			1,692			2,565			20			—			5,096			—			459			67			-7			-3			-3
11			Loans collateralised by commercial immovable property			27,893			209			19			3			40			4			—			271			—			3			2			-2			—			-1
12			Repossessed collaterals			4,023			—			—			—			—			—			—			—			—			—			—			—			—			—
13			Other relevant sectors (breakdown below where relevant)

2025 Pillar 3 Disclosures Report    301

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 102.ESG 5 - Banking book - Climate change physical risk: Exposures subject to physical risk
			a			b			c			d			e			f			g			h			i			j			k			l			m			n			o
			North America			Gross carrying amount (Mln EUR)
									of which exposures sensitive to impact from climate change physical events
									Breakdown by maturity bucket															of which exposures sensitive to impact from chronic climate change events			of which exposures sensitive to impact from acute climate change events			of which exposures sensitive to impact both from chronic and acute climate change events			Of which Stage 2 exposures			Of which non-performing exposures			Accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions
									<= 5 years			> 5 year <= 10 years			> 10 year <= 20 years			> 20 years			Average weighted maturity																					of which Stage 2 exposures			Of which non-performing exposures
1			A - Agriculture, forestry and fishing			965			539			10			—			5			2			190			23			341			41			10			-10			-3			-5
2			B - Mining and quarrying			1,610			19			—			—			—			2			19			—			—			—			—			—			—			—
3			C - Manufacturing			6,920			908			—			—			31			2			637			92			210			60			5			-12			-6			-2
4			D - Electricity, gas, steam and air conditioning supply			3,985			2,316			422			—			20			3			6			2,532			220			316			2			-24			-20			—
5			E - Water supply; sewerage, waste management and remediation activities			201			3			—			—			2			9			2			2			2			2			—			—			—			—
6			F - Construction			2,396			96			35			—			7			4			26			16			96			5			3			-4			-1			-2
7			G - Wholesale and retail trade; repair of motor vehicles and motorcycles			11,773			2,187			4			—			34			2			699			1,489			37			353			4			-22			-9			-2
8			H - Transportation and storage			2,545			90			57			—			4			4			99			30			21			10			1			-2			-1			—
9			L - Real estate activities			16,630			—			—			—			—			—			—			—			—			—			—			—			—			—
10			Loans collateralised by residential immovable property			29,280			—			—			1			—			16			—			1			—			—			—			—			—			—
11			Loans collateralised by commercial immovable property			8,037			—			—			—			—			—			—			—			—			—			—			—			—			—
12			Repossessed collaterals			174			—			—			—			—			—			—			—			—			—			—			—			—			—
13			Other relevant sectors (breakdown below where relevant)

302    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 102.ESG 5 - Banking book - Climate change physical risk: Exposures subject to physical risk
			a			b			c			d			e			f			g			h			i			j			k			l			m			n			o
			South America			Gross carrying amount (Mln EUR)
									of which exposures sensitive to impact from climate change physical events
									Breakdown by maturity bucket															of which exposures sensitive to impact from chronic climate change events			of which exposures sensitive to impact from acute climate change events			of which exposures sensitive to impact both from chronic and acute climate change events			Of which Stage 2 exposures			Of which non-performing exposures			Accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions
									<= 5 years			> 5 year <= 10 years			> 10 year <= 20 years			> 20 years			Average weighted maturity																					of which Stage 2 exposures			Of which non-performing exposures
1			A - Agriculture, forestry and fishing			3,428			1,645			68			7			—			2			749			772			199			80			97			-61			-3			-46
2			B - Mining and quarrying			3,874			433			32			—			—			1			464			—			—			1			2			-2			—			-1
3			C - Manufacturing			13,910			3,145			156			152			—			2			3,245			—			207			201			154			-85			-7			-73
4			D - Electricity, gas, steam and air conditioning supply			1,929			873			119			—			—			2			590			327			75			33			55			-5			—			-3
5			E - Water supply; sewerage, waste management and remediation activities			293			41			1			—			—			1			28			—			13			2			2			-2			—			-1
6			F - Construction			2,718			573			30			6			—			2			495			—			114			38			44			-30			-3			-26
7			G - Wholesale and retail trade; repair of motor vehicles and motorcycles			15,646			1,901			40			—			—			1			1,481			172			288			198			226			-152			-17			-135
8			H - Transportation and storage			4,239			200			2			4			—			2			177			—			29			20			18			-11			-1			-10
9			L - Real estate activities			2,796			—			—			—			—			—			—			—			—			—			—			—			—			—
10			Loans collateralised by residential immovable property			33,628			—			—			—			—			—			—			—			—			—			—			—			—			—
11			Loans collateralised by commercial immovable property			7,781			—			—			—			—			—			—			—			—			—			—			—			—			—
12			Repossessed collaterals			309			—			—			—			—			—			—			—			—			—			—			—			—			—
13			Other relevant sectors (breakdown below where relevant)

2025 Pillar 3 Disclosures Report    303

Index Introduction l Capital l Risks l Remuneration l Appendices l

In general, and by following the methodology described, there was limited exposure affected by (acute and/or chronic) physical risk in the Grupo Santander's total portfolio. The results obtained have been aggregated by regions (Europe/ North America/ South America). The most exposed regions to physical risk are Europe for acute and chronic events in relation to the total exposure of Santander Group.

The highest concentration of physical risk is identified in the following sectors: manufacturing, electricity, gas, steam and air conditioning supply and wholesale/retail trade and repair of vehicles. Despite in some cases immovable property are subject to chronic risks, the effect associated with these events is limited, with acute risks being the most significant.

304    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2025 Pillar 3 Disclosures Report    305

Index Introduction l Capital l Risks l Remuneration l Appendices l

			11.1. Compliance risk			307
			11.2. Model risk			307
			11.2.1. Introduction			307
			11.2.2. Model Risk Management			307
			11.2.3. Main activities in 2025			309
			11.3. Capital risk			309
			11.4. Overview of digital assets			310
			11.4.1. Categorized crypto-asset activities			310
			11.4.1.1. Digital financial instruments (including digital Securities)			310
			11.4.1.2. Digital Cash			310
			11.4.1.3. Crypto			310
			11.4.2. Risk management and compliance			311
			11. Other risks

306    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

11. OTHER RISKS

This chapter focuses on different types of risk, such as compliance risk, model risk, capital risk and crypto-assets risk.

11.1. Compliance risk

Under the current configuration of the three lines of defense, Compliance is a second line of defense organizationally placed under the Group Chief Risk Officer (GCRO) which independently oversees and challenges risk management of the first line of defense. Both the GCRO and the Group Chief Compliance Officer (GCCO) are responsible for the second line of defense and have direct access to the board of directors.

The Compliance function covers all matters related to corporate compliance, financial crime compliance (FCC), conduct, and reputational risk.

The main responsibility for Compliance risks lies with the first lines of defense, which identify, assess and manage these risks. The Compliance function is responsible for monitoring and overseeing these risks and assessing the impact on our risk appetite and risk profile.

To this effect, the Compliance function fosters Santander's adherence to rules, supervisory requirements, ethical principles and values of good conduct by setting standards, risk evaluation and control mechanisms, and discussing, advising and reporting, in the interests of employees, customers, shareholders and society in general.

Grupo Santander's risk appetite in this area takes the form of a declaration of no tolerance for any material weaknesses, acknowledging inherent Compliance risk from daily activities of the Bank, which is managed through strong oversight, robust control frameworks and effective mitigation (as defined in the Internal Control System Model). Santander is committed to promoting an adequate awareness in the monitoring and execution of any necessary remediation plans. To pursue this, Compliance Risk performs consistent management of this area, using a common methodology and taxonomy, which is fully aligned with the Risk function's principles, and setting a series of compliance risk indicators, assessment matrices and qualitative statements.

In 2025, as in previous years, the annual process of shaping the risk appetite was completed towards the end of the year, with the aim of verifying that the current model is appropriate for measuring the Compliance function's risk appetite and thus ensuring that it is aligned with the Group's risk appetite.

To this end, the composition of the indicators and their corporate thresholds were reviewed for the purpose of providing a true picture of the function's strategy, the financial sector environment and its risk tolerance. The definition of the indicators and the setting of their thresholds

were approved by the relevant committees and communicated to the various subsidiaries.

For further details on Compliance risk, see the 'Risk, management and compliance' chapter on the 2025 annual report.

Access 2025 annual report available on the Santander Group website

11.2. Model risk

11.2.1. 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 in credit origination (scoring/rating) and credit behaviour, for capital and provisioning calculations, to measure market, structural, liquidity, operational and compliance risk, and for accounting and financial control, among other purposes.

The use of models gives rise to model risk, which is the potentially adverse consequences of decisions based on poorly developed, inadequately implemented or incorrectly used models. Model risk may lead to financial losses, inappropriate business or strategic decisions, or harm to Grupo Santander’s operations.

11.2.2. Model risk management

At Santander Group we have been measuring, managing and controlling model risk for years. The Model Risk area, which covers both the parent company and the main subsidiaries, focuses on the control, management and oversight of this risk.

To manage model risk properly, we have clear internal regulations that set out the principles, responsibilities and processes to organise, approve, manage and govern models throughout their life cycle.

We classify models according to their relevance, taking into account both a global and a local perspective of materiality and recognizing the diversity of circumstances and regulatory requirements across geographies and business lines. The intensity of model risk management and oversight depends on this classification and on other factors such as technical

2025 Pillar 3 Disclosures Report    307

Index Introduction l Capital l Risks l Remuneration l Appendices l

complexity or the level of risk each model represents for Grupo Santander. Given their particular importance to the Group, regulatory models follow the most intensive monitoring and management standards.

Grupo Santander follows these stages of the model life cycle:

1. Identification

We include all identified models within the scope of model risk control and, therefore, in the Group’s centralised inventory, a single platform based on a uniform taxonomy for all models used in the business units. This inventory is a key element for effective management of this risk as it contains detailed information on each model and enables close monitoring in line with its significance.

2. Planning

This is an internal annual exercise that the subsidiaries’ governance bodies approve and that we review on an aggregated basis. It sets out a strategic action plan and identifies the needs related to the models within the scope of the function to be developed, validated, and implemented during the year.

Subsidiaries’ management bodies, including the local executive risk committee (ERC) or an equivalent body, approve the model plan for their remit. At corporate level, the subsidiaries’ plans, together with the global model plan, are submitted to the model approval forum for review and to the ERC for approval.

3. Development

The models unit, both at corporate and local level, is responsible for developing models according to the specific needs of each subsidiary, while adhering to the Group’s common methodological standards that ensure model quality. Development by a specialised team guarantees a more efficient execution.

4. Validation

Independent model validation is a regulatory requirement and a key pillar of model risk management and control. A specialist team that operates fully independently from developers or users issues technical opinions on the suitability of internal models. These validation opinions result in a rating that summarizes the model risk associated with each model. We clearly define the intensity and frequency of validation activities and follow a risk-based approach.

We have set up a supervisory framework within the internal validation function to strengthen control and safeguard the traceability, integrity, consistency and homogeneity of validation results. Under this framework, we apply ex ante and ex post checks before formally publishing the outcome, depending on the relevance and complexity of the model, and promote standardized practices at Group level in line with internal policies and standards.

5. Approval

Before the model´s implementation and use, internal governing bodies have to approve it through a governance circuit in place for our model inventory, based on its level of importance.

Models will be approved by the ERC, the model approval forum, local model governance bodies or model owners, depending on such factors as: model type or use (regulatory or non-regulatory), whether the model is local or global, the type of model change, model classification, and/or the powers delegated to each subsidiary.

6. Implementation and use

We integrate newly developed models into IT systems, which can also pose model risk. Technical teams and model owners run tests to confirm that implementation matches the methodological design and delivers the expected results.

7. Monitoring and control

Model control and monitoring aims to review whether models operate properly and remain fit for purpose. Otherwise, we adapt or redesign them. Control teams also work to keep model risk management aligned with the principles and rules set out in the overarching model risk framework and related internal policies.

This recurring process seeks to keep the entity’s model risk at appropriate levels and, more specifically, within the defined risk appetite limits.

308    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

11.2.3. Main activities in 2025

To strengthen model risk culture across the Group and position Santander as a leading bank in this area, we focused our strategy in 2025 on:

•technological transformation and process redesign towards a more efficient, integrated and global operating model that enhances agility and consistency in validation by incorporating new technologies and tools;

•ongoing enhancement of regulatory IRB models to align them with supervisory expectations, implementation of the Group’s IRB strategy and adaptation to the new FRTB regulatory framework. We created a global regulatory office to coordinate regulatory initiatives and promote consistent and coherent management in all of the Group’s markets; and

•expansion of the model risk scope to cover artificial intelligence systems by adapting and evolving internal processes to support sound and responsible management of these models. We promote compliance with regulatory requirements, particularly the EU AI Act, and with industry good practice.

11.3. Capital risk

The Group includes, within the scope of structural risk, the risk arising from the bank not having sufficient capital to absorb losses from its operations and meet internal business objectives, regulatory requirements or market expectations.

As part of the second line of defence, we control and supervise the capital activities carried out by the first line, verifying that capital adequacy and coverage are in line with our risk profile and the Group's strategy. We also supervise and monitor operations considered to be risk transfer initiatives, reviewing significant risk transfer (SRT) in structured securitisations aimed at capital optimisation.

Capital activities are encompassed within the Group's capital framework and model and bring together different processes such as capital planning and adequacy within the strategic plan and the internal capital adequacy assessment process (ICAAP), as well as the subsequent execution and monitoring of the budget, together with the continuous measurement, reporting and disclosure of capital information.

We independently monitor the capital activities carried out by the front line through four key processes aimed at maintaining a solid level of capital and its efficient use, complying with internal solvency objectives and regulatory requirements, in line with our risk profile.

•Capital Planning: development of a capital plan consistent with the strategic plan, setting out solvency targets and identifying the measures necessary for its implementation.

The control function analyses the feasibility of the plan by identifying, assessing and measuring the risks that could affect its fulfilment.

•Assessment of capital adequacy to ensure that, even in a stress scenario, capital levels are commensurate with the risks assumed, based on the risk identification and assessment process and the risk appetite framework.

•Oversee the effective transfer of risk for those securitisations which, in accordance with current regulatory criteria, allow for the release of risk-weighted assets.

The function aims to provide complete and regular monitoring and control of capital risk by verifying that capital coverage and adequacy reflect the Group's risk profile.

Main initiatives in 2025

During 2025, we continued to strengthen the ongoing monitoring of compliance with the capital contribution targets of subsidiaries, so that risks can be identified in terms of the various risks and/or opportunities involved in achieving the capital targets for the year. We also monitored the impact of market variables on capital levels. In this regard, the Group continues to apply hedging policies to mitigate exchange rate volatility in the CET1 ratio.

At the same time, and within the framework of risk appetite, solvency appetite limits were established in conjunction with the first line of defence, maintaining a calibration in line with a medium-low overall risk and resilient to stress conditions.

In this context, in 2025 a new risk appetite metric was introduced that extended the scope of the SRTs metric to all Risk Transfer, thereby strengthening a metric that is essential for preserving the robustness of capital ratios under normal and stressed conditions.

A new Economic Solvency metric was also introduced to ensure that our capital base covers the requirements established by our economic capital model, which considers all the risks to which the Group is exposed (Pillar 1 and Pillar 2).

As far as planning exercises are concerned, this year has seen the continued review of the Recovery Plan, both for the Group and its subsidiaries, promoting certain areas for improvement in terms of measures and assumptions.

With regard to the supervision of securitisations with SRT, improvements have continued to be made in reporting and corporate governance at the origination stage, with a greater degree of standardisation. Likewise, the monitoring of transactions has continued to be strengthened thanks to greater involvement of subsidiaries in periodic analysis exercises and improved automation of the process through the use of a corporate tool.

For further details on capital risk, see the 'Risk management and compliance' chapter of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

2025 Pillar 3 Disclosures Report    309

Index Introduction l Capital l Risks l Remuneration l Appendices l

11.4. Overview of digital assets

Banco Santander Group has maintained an active presence in the evolving digital assets ecosystem (also known as crypto-assets) since 2019, when it issued its first digital bond. Santander is committed to being one of the leading banks in the development of the new digital assets market in order to serve its customers. An example of this commitment is its role as Joint Lead Manager (JLM) in 2021 and 2022, supporting the European Investment Bank (EIB) in the issuance of its first digital bonds.

In 2025, Openbank obtained MiCA authorisation in Spain from the CNMV and provides crypto-asset order execution and custody services in Spain and Germany.

Santander leverages innovation to meet the needs of its customers while maintaining a robust risk management framework. Its involvement spans multiple internal domains, including participation in industry and regulatory consultations, while remaining aligned with regulatory expectations and emerging industry best practices.

Santander has a Group-wide digital assets governance model, with coordinated teams operating under a global domain that work to develop products and services across the Group’s different geographies and global business lines.

11.4.1. Categorized crypto-asset activities

To reflect the diversity of our crypto-asset activities, Santander has categorized its engagements as follows:

11.4.1.1. Digital financial instruments (including digital Securities)

Santander is actively engaged with other banks, central securities depositories (CSDs) and custodians to explore the benefits of tokenising traditional financial instruments, using blockchain technology to enhance transparency, improve liquidity and reduce operational risk. Currently, in addition to the primary issuance of digital bonds, the Group’s main areas of focus include early-stage analysis of the mobility of digital collateral, incorporating programmability and 24/7 availability into traditional capital markets activities (e.g. repo transactions).

In 2025, Santander launched in Brazil two products that tokenise traditional financial assets using DLT technology:

a.NCotas: a marketplace for the purchase and sale of rights in Consórcio contracts (a product specific to the Brazilian market that enables collective purchasing arrangements).

b.Precatórios tokenisation: tokenisation of credit rights against the public sector (Federal Government, States, Municipalities, etc.) that are recognised by a final court judgment and recorded in the public budget for payment.

11.4.1.2. Digital Cash

Santander is actively exploring the full spectrum of innovation in the digital money space. This includes central bank digital currencies (CBDCs), reserve-backed digital currencies (e.g. Fnality International), stablecoins, and tokenised bank deposits. Some specific examples include the following:

a.Fnality International: Santander is a founding member and minority shareholder of Fnality

International, a wholesale, multi-currency digital payment system. The first phase of the Fnality Payment System (FnUK) went live in December 2023 under the supervision of the Bank of England, and Santander, together with other banks, is already using the system to execute real-value payments. In addition to its wholesale banking office in London, Santander began sterling operations from its main wholesale banking office in Madrid in 2025. The launch of the US dollar Fnality Payment System is expected in 2026.

b.Project Agora: Since 2024, Santander, together with 41 other financial institutions, has participated in Project Agora, led by the Bank for International Settlements (BIS), which aims to reimagine correspondent banking and cross-border payments through tokenisation.

Santander has also joined other industry initiatives, including:

a.GBTD: a collaborative financial industry project in the UK, launched by UK Finance, contributing to the global discussion on the future of money.

b.Pontes: an initiative led by the European Central Bank (ECB) aimed at delivering a DLT-based solution within the Eurosystem, connecting market DLT platforms with TARGET Services to enable settlement of transactions in central bank money.

11.4.1.3. Crypto

During the year, Openbank obtained MiCA authorisation in Spain from the CNMV and commenced the provision of crypto-asset order execution and custody services in Spain and Germany, the latter through its branch in that country. These services are available to all customers, subject to the completion of a product-specific suitability/appropriateness test, and provide access to an initial offering of five crypto-assets. The operating model incorporates the applicable regulatory requirements relating to custody, governance and asset safeguarding, as well as the compliance and risk management controls necessary to ensure a secure service offering aligned with the prevailing regulatory framework.

Santander Private Banking International, a division of Banco Santander, has since 2023 offered its private banking clients in Switzerland the opportunity to purchase and invest in Bitcoin (and other cryptocurrencies). The service is available upon client request only and is operated through the client’s assigned relationship manager within the entity.

310    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

11.4.2. Risk management and compliance

Each digital asset activity has a very different risk profile. For example, the perceived risks associated with digital assets and other digital forms of traditional financial instruments differ significantly from those associated with cryptocurrencies (e.g. Bitcoin). To address these differing risks, Santander applies robust controls commensurate with the risks assumed and has a crypto-assets policy formally implemented at Group level in 2024.

In addition, a robust governance framework has been established for the approval of products involving digital asset activities. This includes the implementation of advanced transaction monitoring tools (specifically in the case of cryptocurrencies), supported by dedicated surveillance teams. To enable the effective implementation of this risk framework—particularly with respect to engaging with third-party providers in this space—several policies and procedures have been drafted and approved governing the authorisation to commence activities with Crypto-Asset Service Providers (CASPs). A dedicated Digital Assets Compliance team is responsible for the oversight of all digital asset activities.

Overall, Santander does not consider digital assets to give rise to operational risk issues that are materially different from those arising in its ordinary business activities. For example, the custody of cryptographic keys is not materially different from the Group’s established practices for the custody of digital certificates for other purposes. Hardware Security Modules (HSMs) and the associated access control policies have been well understood and implemented for many years. Business continuity plans are applied in the same manner as in other areas of the Group’s operations. In addition, code audits are performed where deemed necessary.

			Table 103.CAE1 - Exposures to crypto-assets
			EUR million
												2025
						Exposure value			Risk weighted exposures amounts (RWEA)			Own funds requirements
			Type of exposures			a			b			c
1			Tokenised traditional assets			0			0			0
2			Asset referenced tokens			0			0			0
3			Exposures to other crypto-assets			0			0			0
4			Total			0			0			0
			Memorandum item
5			Exposures to other crypto-assets expressed as a percentage of the institutions's T1 capital			—%
			We do not have this case study on crypto-assets as of 31 December 2025.

2025 Pillar 3 Disclosures Report    311

Index Introduction l Capital l Risks l Remuneration l Appendices l

[THIS PAGE INTENTIONALLY LEFT BLANK]

312    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

2025 Pillar 3 Disclosures Report    313

Index Introduction l Capital l Risks l Remuneration l Appendices l

			12.1. Relevant information contained in other documents			315
			12.2. Remuneration policy applicable to categories of staff that may have a material impact on the risk profile of Grupo Santander			316
			12.3. Main characteristics of the identification criteria for Material Risk Takers of Grupo Santander			316
			12.4. Specific features of the remuneration policy applicable to the Identified Staff			317
			12.5. Application of the remuneration policy for the Identified Staff in 2025			317
			12.6. Total remuneration of the Identified Staff in 2025			319
			12.7. Remuneration policy for 2026 and following years			324
			12. Remuneration policy

314    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

12. Remuneration policy

This chapter presents various information on Grupo Santander's Remuneration Policies, including the total remuneration of the group in 2025 and the remuneration policy for 2026 and subsequent years (2027-2028).

12.1. Relevant information contained in other documents

This section covers the qualitative requirement REMA - Remuneration policy.

The 'Corporate governance' chapter in the 2025 annual report, which was published together with the call to the 2026 General Shareholders’ Meeting, describes:

•The functions of the remuneration committee regarding the remuneration of directors, members of senior management and other executives whose work could have a material impact on the Group’s risk profile at consolidated level.

•The composition of the remuneration committee, directors’ attendance at meetings, the involvement of board members on other committees, the approximate time dedicated to each task and how the committee operates.

•The principles of the remuneration policy of directors, in their capacity as such or for their performance of executive duties, and the corporate governance principles regulating remuneration.

•The 2025 remuneration policy for directors and senior management, focusing especially on variable remuneration and how it was applied in the year.

•And the changes in the principles or in the composition of the Board Members' remuneration in terms of the performance of their supervisory tasks and collective decision-making, with respect to those established in 2025, for the years 2026, 2027 and 2028.

The board of directors is responsible for approving the remuneration of directors and senior management, as well as the core payment terms of other executives and employees who, while not belonging to senior management, take on risks, carry out control functions (i.e. Internal Audit, Risk Management and Compliance) or receive total remuneration that places them in the same remuneration bracket as senior management, and employees who take on risk and whose professional activities may have a material impact on the Group’s risk profile. All of these, together with the senior management and the Company’s board of directors, are known as 'Corporate Identified Staff' or Corporate Material Risk Takers).

The 'Corporate governance' chapter of the annual report also includes the following relevance information from a prudential perspective:

•The decision-making process for setting the remuneration policy of directors, senior management and the core elements of the remuneration of Identified Staff.

•The basic features of the remuneration components.

•Information on the criteria applied for assessing the metrics that determine the variable remuneration of directors and senior management and their adjustment according to risk, as well as the results of the metrics for directors.

•The deferral policy and other conditions linked to the payment of variable remuneration, including the application of malus and clawback provisions.

2025 Pillar 3 Disclosures Report    315

Index Introduction l Capital l Risks l Remuneration l Appendices l

12.2. Remuneration policy applicable to categories of staff that may have a material impact on the risk profile of Grupo Santander

Santander has specific guidelines in its remuneration policy for those professionals qualified internally as Corporate Identified Staff or     Corporate Material Risk Takers. These guidelines contain:

•The principles and criteria used to determine which individuals may significantly influence the Group’s risk profile at consolidated level, in accordance with Commission Delegated Regulation (EU) 2021/923 of 25 March 2021 as explained in the section below.

•The specificities applicable to the group within the general remuneration policy, as well as under the current regulations and European Banking Authority (EBA) guidelines.

•The mandate to apply the corporate remuneration policy of Grupo Santander, incorporating the necessary adaptations to comply with local regulatory requirements or the recommendations issued by supervisory bodies.

The remuneration of Corporate Identified Staff in 2025 is in line with the criteria in the Group’s remuneration policy, which is reviewed annually to ensure that it is aligned with the long-term interests of shareholders, the Group’s strategic targets and regulatory requirements.

The subsidiaries formally adhere to the Group's corporate remuneration policy, which implies the alignment of their practices with the principles it contains.

12.3. Main characteristics of the identification criteria for Material Risk Takers of Grupo Santander

The Corporate Identified Staff (or Identified Staff) is defined in accordance with the provisions of Law 10/2014, of 26 June, on the restructuring, supervision and capital adequacy of credit institutions, (Law 10/2014 or LOSS), which transposes Directive 2013/36/EU of the European Parliament and Council of 26 June 2013 (CRD6) and its subsequent update, CRD5, incorporated by Royal Decree-Law 7/2021, of 27 April.V, is transposed through Royal Decree-Law 7/2021, of 27 April.

In accordance with the CRD5, professionals considered to have a significant impact on the Bank’s risk profile (at consolidated level) are:

•senior management,

•employees who assume risks,

•staff who perform control functions

•and employees whose total remuneration places them within a remuneration bracket comparable to that of senior management and risk takers.

Furthermore, Commission Delegated Regulation (EU) 2021/923, 25 March 2021, supplementing CRD5 as regards the regulatory technical standards in relation to the qualitative and quantitative criteria to be applied in the identification process.

Grupo Santander implements the quantitative and qualitative criteria in the regulation to determine the members of Identified Staff and has further supplemented these criteria with additional internal criteria. Based on these criteria, the following generally form part of the Identified Staff :

•Based on qualitative criteria, staff members who work at a material business unit, such as:

◦Members of the management body and senior management.

◦Members of staff with managerial responsibilities with regard to the entity's control functions or material business units.

◦Heads of key areas as legal affairs, accounting, finance, including taxation and budgeting, economic analysis, anti-money laundering, human resources, remuneration policy, information technology, information security and outsourcing arrangements for essential or important functions.

◦Members of top-level risk committees and executives with the authority to initiate, approve or veto relevant credit and market risk proposals.

◦Traders authorised to take substantial positions in market risk.

◦Members of the new products committee.

•Based on quantitative criteria:

◦Staff who received significant remuneration in the previous financial year.

◦Executives whose total remuneration exceed €750 thousand in 2024.

◦Executives in EU entities with more than 1,000 employees whose remuneration falls within the top 0.3% in their entity.

•Based on internal criteria:

◦Executives of EU entities with a given level of credit or market risk responsibility at certain non-material units.

◦Heads of business units holding a banking license.

◦Managers of the executives identified under qualitative criteria.

Additional criteria have been established to identify and classify the units to which these principles apply. These criteria are based on objectives and commonly used indicators such as capital, gross income, profit before taxes, franchise value or asset under management and reflect the relevance of each unit in relation to the Group's risk profile.

Proportionality criteria have also been defined, aligned with current regulations, best practices and market trends, considering both the relative importance of units and the different levels of responsibility of the positions analysed, in order to facilitate the application.

316    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

The identification of the Identified Staff is essential to ensuring that remuneration policies are properly aligned with sound and effective risk management, thereby strengthening the robustness of the Grupo Santander's corporate governance framework.

As of year-end 2025, this group comprised 1,336 executives across Grupo Santander, representing approximately 0.67% of the workforce.

Finally, it should be noted that the entity has applied the exception established in Article 94, Section 3 b), of Directive 2013/36/EU. This exception applies to those whose annual variable remuneration does not exceed EUR 50,000 and does not represent more than one third of the total annual remuneration.

12.4. Specific features of the remuneration policy applicable to the Identified Staff

In general:

•Fixed remuneration must represent a significant proportion of total compensation.

•Variable remuneration for the year shall not exceed 100% of the fixed remuneration, in any event, of the members of the independent control functions, and generally for other employees that are part of the Identified Staff, unless the General Shareholders’ Meeting has authorised a higher percentage for these, which may not exceed 200%. In this respect, the General Shareholders' Meeting, held on 4 April 2025, authorised an increase up to 200% of the maximum percentage permitted, for a maximum of 899 members of the Identified Staff in 2025 and up to 50 additional beneficiaries, up to a maximum of 949 people in total.

Variable remuneration typically comprises:

•An incentive to be received partly in cash and partly in instruments. Payment of this incentive is deferred for a period of four to five years. Performance measurement elements in line with the strategy and long-term interests of shareholders. These elements take into consideration quantitative metrics and qualitative criteria that reflect the entity’s profitability and capital performance, customer growth, cost per active customer, recurrence ratio and other important matter such as risk and compliance management and performance vs. market.

•Malus and clawback clauses, which are triggered in situations in which there is poor financial performance by the Bank as a whole, specific divisions or areas, or the exposure generated by the staff, attributable to the management of the person(s) in charge, based on the presence of, at least, some of the following factors:

◦Significant failures in risk management by the Bank, a business or a risk control unit.

◦Increases in capital requirements in the Bank or one of its business units that were not planned at the time that exposure was generated.

◦Regulatory penalties or legal convictions for events that might be attributable to the unit or staff responsible for them. Failure to comply with the Bank’s internal codes of conduct.

◦Improper conduct, whether individual or collective. Negative effects deriving from the marketing of unsuitable products and the 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 board of directors of Banco Santander approved an addendum to our remuneration policy to comply with new SEC (US Securities and Exchange Commission) regulations relating to 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 federal securities laws. This addendum to our remuneration policy is entitled 'Financial Statement Restatement Compensation'.

•Prohibition on hedging deferred or retained shares or instruments and on transferring these in the twelve months following their delivery.

For control functions, the total remuneration package must be competitive within the market to attract sufficiently qualified and experienced employees. The individual objectives of these positions must be linked to the performance of the control function rather than business results. Performance of the control function must be assessed by staff members who are independent of the business units being supervised.

12.5. Application of the remuneration policy for the Identified Staff in 2025

The remuneration policy and the essential remuneration conditions of individuals belonging to the Identified Staff have been approved by Banco Santander’s board of directors at the proposal of the remuneration committee. The human resources function and the risk and compliance functions in each Grupo Santander company have duly confirmed that this policy and the remuneration practices comply with applicable law and regulations.

2025 Pillar 3 Disclosures Report    317

Index Introduction l Capital l Risks l Remuneration l Appendices l

This is confirmed by the third independent report issued in application of article 33.2 of Act 10/2014 of 26 June on the ordering, supervision and solvency of credit institutions. The risk supervision, regulation and compliance committee supervises the remuneration policy and remuneration schemes with the greatest impact to ensure that they are suitably aligned with risk management.

The essential elements with regard to variable remuneration include:

•The metrics used to determine the variable remuneration of senior management and other top executives, which have

also been used to determine the variable remuneration of other members of the Identified Staff. These metrics are described in section 6.3.B ii) of the 'Corporate governance' chapter of the 2025 annual report.

•Deferral percentages and periods for the Identified Staff based on their category:

◦For the Group's executive directors and Promontorio executives:

Immediate Payment Percentage

Deferred Percentage (**)

Deferral Period (**)

Deferred Portion Subject to Objectives (**)

Executive Directors, members of senior management(*) whose target total variable remuneration is ≥ €2.7 mill. or those beneficiaries of the Award whose target total variable remuneration is ≥ €2.7 mill.

40%

60%

5 years

Last 3 years of the Deferral Period

Remaining members of senior management(*) or those beneficiaries of the Award whose target total variable remuneration is ≥ €1.7 mill. (< €2.7 mill.).

50%

50%

5 years

Last 3 years of the Deferral Period

Rest of Beneficiaries.

60%

40%

4 years

Last 2 years of the Deferral Period

(*) For the purposes of these Regulations, senior management comprises all the members included in Banco de España’s Register of senior officers.

(**) In certain countries, the deferral percentage and the deferral period may also be different to comply with applicable local regulations or with the requirements of the competent authority in each case. Similarly, the deferred part subject to objectives can be applied to years that are not the last ones, but not before the third year.

◦For the other members of the Identified Staff:

			Immediate Payment Percentage			Deferred Percentage (*)			Deferral Period (*)
Beneficiaries of the Award whose target total variable remuneration is ≥ €2.7 mill.			40%			60%			5 years
Beneficiaries of the Award whose target total variable remuneration is ≥ €1.7 mill. (< €2.7 mill.).			50%			50%			5 years
Other Beneficiaries of the Award.			60%			40%			4 years

(*) In certain countries, the deferral percentage and the deferral period may also be different to comply with applicable local regulations or with the requirements of the competent authority in each case.

Note: Reference variable remuneration for standard compliance (100% of the objectives).

•Linking a part of the deferred amounts to fulfilment of multi-year objectives for executive directors, senior management and other executives based on their category. These metrics are described in section 6.3.B (ii.D) of the 'Corporate governance' chapter of the 2025 annual report.

•The suitability of financial instruments used for the portion of deferred remuneration in financial instruments: use of shares in Banco Santander S.A. or in any of its listed subsidiaries (such as Brazil and Poland) or equivalent instruments (Chile); and the ratio between these instruments.

•Defining the events that might trigger the application of a malus and clawback provisions on the variable remuneration accruing in 2025. These events are described in the previous section and apply to all the Identified Staff.

•No discount is applied to deferred variable remuneration when calculating the ratio of variable to fixed components.

318    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

In addition to the general scheme of variable remuneration metrics, the corporate and investment banking business (Santander Corporate & Investment Banking, SCIB) follows a model that is widely applied across all geographies where the business carries out its activities. The model provides remuneration for achieving results using a pay-out system, linking variable remuneration to the business’s ordinary net profit, the cost of capital of RWAs consumed in that profit generation, the business budget objectives and the Group's results, ensuring alignment with it.

The model includes the same categories of metrics – including capital, risks and customers – as used for senior management, although they may be adapted for the needs and requirements of the individual business. For further details, see the 'Corporate governance' chapter of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

12.6. Total remuneration of the Identified Staff in 2025

With figures available at the date of release of this report, the data corresponding to the Identified Staff of Grupo Santander are presented in a preliminary basis. The following table shows the total remuneration of the Identified Staff in 2025, distinguishing between the supervisory function of the management body, the management function of the management body, other senior management and other Identified Staff:

Table 104.REM1 - Remuneration awarded for the financial year
			EUR Thousands
			2025
									a			b			c			d
									MB Supervisory function			MB Management function			Other senior management			Other identified staff
1			Fixed remuneration			Number of identified staff			13			2			15			1,306
2						Total fixed remuneration			8,768			10,291			29,461			570,089
3						Of which: cash-based			8,768			6,984			22,039			475,597
EU-4a						Of which: shares or equivalent ownership interests			—			—			—			—
5						Of which: share-linked instruments or equivalent non-cash instruments			—			—			—			—
EU-5x						Of which: other instruments			—			—			—			—
7						Of which: other forms			—			3,307			7,422			94,491
9			Variable remuneration			Number of identified staff			13			2			15			1,306
10						Total variable remuneration			—			17,947			41,164			700,871
11						Of which: cash-based			—			6,774			20,135			368,943
12						Of which: deferred			—			3,387			10,490			138,065
EU-13a						Of which: shares or equivalent ownership interests			—			10,161			19,945			329,095
EU-14a						Of which: deferred			—			6,774			10,765			147,294
EU-13b						Of which: share-linked instruments or equivalent non-cash instruments			—			—			—			—
EU-14b						Of which: deferred			—			—			—			—
EU-14x						Of which: other instruments			—			—			275			2,312
EU-14y						Of which: deferred			—			—			275			1,831
15						Of which: other forms			—			1,012			810			520
16						Of which: deferred			—			1,012			810			520
17			Total remuneration						8,768			28,238			70,625			1,270,959

2025 Pillar 3 Disclosures Report    319

Index Introduction l Capital l Risks l Remuneration l Appendices l

The detail in the following table (REM2) includes the special payments to personnel whose professional activities have a material impact on institutions' risk profile (Identified Staff):

			Table 105.REM2 - Special payments to staff whose professional activities have a material impact on institutions’ risk profile (Identified Staff)
			EUR Thousands			2025
						a			b			c			d
						MB Supervisory function			MB Management function			Other senior management			Other identified staff
			Guaranteed variable remuneration awards
1			Guaranteed variable remuneration awards - Number of identified staff			—			—			1			27
2			Guaranteed variable remuneration awards -Total amount			—			—			465			18,004
3			Of which guaranteed variable remuneration awards paid during the financial year, that are not taken into account in the bonus cap			—			—			465			12,916
			Severance payments awarded in previous periods, that have been paid out during the financial year
4			Severance payments awarded in previous periods, that have been paid out during the financial year - Number of identified staff			—			—			—			14
5			Severance payments awarded in previous periods, that have been paid out during the financial year - Total amount			—			—			—			3,647
			Severance payments awarded during the financial year
6			Severance payments awarded during the financial year - Number of identified staff			—			—			—			49
7			Severance payments awarded during the financial year - Total amount			—			—			—			36,339
8			Of which paid during the financial year			—			—			—			36,068
9			Of which deferred			—			—			—			271
10			Of which severance payments paid during the financial year, that are not taken into account in the bonus cap			—			—			—			35,949
11			Of which highest payment that has been awarded to a single person			—			—			—			8,323

320    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

The table REM5 refers to the information on the remuneration of personnel whose professional activities have a material impact on the institution's risk profile (Identified Staff). The Investment Banking area includes members of Identified Staff who belong to businesses related to corporate and investment banking (Santander Corporate & Investment Banking). The Retail and Commercial Banking area covers all customer banking businesses, including all the people who provide support in the geographies, whether they are local senior executives or other categories.

			Table 106.REM5 - Information on remuneration of staff whose professional activities have a material impact on institutions’ risk profile (Identified Staff)
			EUR Thousands			2025
						a			b			c			d			e			f			g			h			i			j
						Management body remuneration									Business areas
						MB Supervisory function			MB Management function			Total MB			Investment banking			Retail banking			Asset management			Corporate functions			Independent internal control functions			All other			Total
1			Total number of identified staff																														1,336
2			Of which: members of the MB			13			2			15
3			Of which: other senior management												1			2			1			8			3			—
4			Of which: other identified staff												418			557			49			57			225			—
5			Total remuneration of identified staff			8,768			28,238			37,007			601,349			437,951			59,932			112,370			129,981			—
6			Of which: variable remuneration			—			17,947			17,947			370,422			219,431			33,380			64,562			54,239			—
7			Of which: fixed remuneration			8,768			10,291			19,060			230,927			218,520			26,552			47,809			75,742			—

The total amount of severance payments and other benefits associated with contract termination, including pre-retirement payments, awarded during the year to members of the Identified Staff amounted to €36 million for a total of 49 people with average seniority of 11 years. Out of that total, 9 people received an amount corresponding to more than two annual fixed remuneration payments, with a total vested value of severance payments of €17.7 million. The maximum amount of a single award was €8.3 million. The members of the collective of 'Other senior management' who held the position at some point in 2025, not being part of this group at the close of 31 December, are included for the purposes of this reporting in 'Other Identified Staff'. Only one of these members has received severance payments and other contract termination payments. The area of independent control functions includes risk management, internal audit and compliance functions. Corporate functions cover people belonging to the Identified Staff of corporate support areas (such as Human Resources, Technology and Operations, Intervention and management control, as well as other functions related to the control of regulatory capital, Communication, Executive Secretary, Strategy, Financial Planning, etc.). The sum of variable components in 2025 for each member of the Identified Staff did not exceed the limit established in each case for 2025 which was either 100% or 200%, as authorised by the General Shareholders’ Meeting. Specifically, the ratio of variable components of remuneration to fixed components for all the Identified Staff was 126% and the limits prescribed for each component were duly observed in all cases. The amounts of deferred and retained remuneration are shown in the following table:

2025 Pillar 3 Disclosures Report    321

Index Introduction l Capital l Risks l Remuneration l Appendices l

Table 107.REM3 - Deferred remuneration																		2025
			EUR Thousands			a			b			c			d			e			f			EU - g			EU - h
			Deferred and retained remuneration			Total amount of deferred remuneration awarded for previous performance periods			Of which due to vest in the financial year			Of which vesting in subsequent financial years			Amount of performance adjustment made in the financial year to deferred remuneration that was due to vest in the financial year			Amount of performance adjustment made in the financial year to deferred remuneration that was due to vest in future performance years			Total amount of adjustment during the financial year due to ex post implicit adjustments (i.e.changes of value of deferred remuneration due to the changes of prices of instruments)			Total amount of deferred remuneration awarded before the financial year actually paid out in the financial year			Total of amount of deferred remuneration awarded for previous performance period that has vested but is subject to retention periods
1			MB Supervisory function			9,804			1,482			8,321			(81)			50			1,570			1,482			754
2			Cash-based			2,637			728			1,909			(40)			44			—			728			—
3			Shares or equivalent ownership interests			2,225			624			1,601			(40)			(53)			1,570			624			624
4			Share-linked instruments or equivalent non-cash instruments			579			130			449			—			59			—			130			130
5			Other instruments			—			—			—			—			—			—			—			—
6			Other forms			4,362			—			4,362			—			—			—			—			—
7			MB Management function			45,069			11,739			33,330			(182)			279			12,518			11,739			5,805
8			Cash-based			19,349			5,934			13,415			(100)			199			—			5,934			—
9			Shares or equivalent ownership interests			17,477			5,526			11,951			(82)			(8)			12,518			5,526			5,526
10			Share-linked instruments or equivalent non-cash instruments			1,032			279			752			—			88			—			279			279
11			Other instruments			—			—			—			—			—			—			—			—
12			Other forms			7,212			—			7,212			—			—			—			—			—
13			Other senior management			74,468			23,723			50,746			(566)			(715)			24,737			23,723			13,155
14			Cash-based			29,672			10,568			19,104			(200)			(193)			—			10,568			—
15			Shares or equivalent ownership interests			34,606			12,498			22,108			(366)			(522)			24,737			12,498			12,498
16			Share-linked instruments or equivalent non-cash instruments			2,611			657			1,954			—			—			—			657			657
17			Other instruments			509			—			509			—			—			—			—			—
18			Other forms			7,072			—			7,072			—			—			—			—			—
19			Other identified staff			864,314			371,472			492,842			(716)			(367)			270,080			371,472			182,096
20			Cash-based			428,959			189,376			239,583			(348)			(140)			—			189,376			—
21			Shares or equivalent ownership interests			417,507			178,242			239,265			(368)			(228)			270,080			178,242			178,242
22			Share-linked instruments or equivalent non-cash instruments			15,092			3,731			11,361			—			—			—			3,731			3,731
23			Other instruments			421			122			299			—			—			—			122			122
24			Other forms			2,334			—			2,334			—			—			—			—			—
25			Total amount			993,655			408,416			585,239			(1,545)			(752)			308,906			408,416			201,810
			On each delivery of deferred cash amounts, a inflation adjustment has been paid (as appropriate in each case). In the financial year 2025, this adjustment amounted to a total of EUR 6,388 thousand (EUR 303 thousand in the case of Ana Botín, Héctor Grisi and José Antonio Álvarez).

322    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remuneration l Appendices l

Lastly, the breakdown of the remuneration by salary band of the members of the Identified Staff in the whole of Santander is shown below:

Table 108.REM4 - Remuneration of 1 million EUR or more per year
						2025
						a
			EUR			Identified staff that are high earners as set out in Article 450(i) CRR
1			1 000 000 to below 1 500 000			224
2			1 500 000 to below 2 000 000			96
3			2 000 000 to below 2 500 000			51
4			2 500 000 to below 3 000 000			16
5			3 000 000 to below 3 500 000			14
6			3 500 000 to below 4 000 000			15
7			4 000 000 to below 4 500 000			11
8			4 500 000 to below 5 000 000			5
9			5 000 000 to below 6 000 000			8
10			6 000 000 to below 7 000 000			9
11			7 000 000 to below 8 000 000			2
12			8 000 000 to below 9 000 000			3
13			9 000 000 to below 10 000 000			1
14			10 000 000 to below 11 000 000			—
15			11 000 000 to below 12 000 000			1
16			12 000 000 to below 13 000 000			1
17			13 000 000 to below 14 000 000			—
18			14 000 000 to below 15 000 000			—
19			15 000 000 to below 16 000 000			1
28			Total			458

Remuneration assigned in financial year 2025 including deferred variable remuneration subject to long-term objectives that will be paid in 2029, 2030 and, where applicable, 2031, depending on the level of achievement of the plan.

The number of people included in this table has increased to 458 in 2025 (418 in 2024), driven by the higher average bonuses paid in this year as a result of the entity’s very strong performance. Banco Santander reported an attributable profit of €14,101 million in 2025, up 12% year-on-year (or +16% in constant euros), marking another record year, with total customers reaching 180 million for the first time after adding eight million customers in the year.

It is worth noting that this chart includes an especially high concentration (more than a half) of US based and UK based executives (38% and 15%, respectively) for many reasons:

•the scale of their financial markets is considerably larger, resulting in considerably more competitive remuneration;

•a more flexible labour market;

•and divergent approaches to remuneration rules -where the absence of caps on variable compensation, both in the US and the UK, leads to higher bonuses in cases of strong business results, such as this year's, which can only be countered by EU entities by increasing fixed/structural salary costs.

In addition, a significant part of the employees who earn more than one million euros, both in these 2 geographies, and in the rest of the Group, belong to the Corporate and Investment Banking business, which reported a record attributable profit of €2,834 million (+7%), driven by solid revenue growth (+5%) supported by strong net interest income in Global Markets and fee income across all business units.

It is also important to consider the effect of staff turnover in this chart, as it includes severance payment and non-compete payments, as well as sign-on bonuses for new hirings. All of this leads to very high amounts for certain individuals that are not strictly related to their recurring remuneration in 2025 and may also be deferred.

2025 Pillar 3 Disclosures Report    323

Index Introduction l Capital l Risks l Remuneration l Appendices l

12.7. Remuneration policy for 2026 and following years

The 2026 remuneration policy for directors is described in section 6.4 of the 'Corporate governance' chapter of the annual report. The main principles of the policy, along with the fixed and variable remuneration components and the variable remuneration policy for members of the Identified Staff, will comply with the rules and procedures for executive directors set out in the report referred to above. In particular, as regards the variable remuneration policy:

•The existence of a single incentive, which will be determined by a set of quantitative and qualitative metrics.

•The quantitative metrics and a qualitative assessment which will include risk and compliance management and performance vs. market in the short-term incentive.

•Long-term metrics for senior managers: return on tangible equity (RoTE), relative performance of Banco Santander's total shareholder return (TSR) in relation to the weighted TSR of a reference group and metrics linked to environmental, social and corporate governance (ESG) criteria: percentage of women in executive positions, financial inclusion, and business raised and facilitated.

•Part payment in cash or other instruments.

•Continued employment, malus and clawback provisions

•Other conditions, such as the prohibition on hedging and transferring shares in the twelve months following their delivery (three years in the case of executive directors 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.

Delivery is conditional on the beneficiary remaining in the Group's employment and is subject to the deferral rules and other regulatory restrictions, such as malus and clawback provisions.

Likewise, the board of directors, upon recommendation of the remuneration committee, may approve a new incentive to boost the transformation process of Banco Santander, being part of the variable remuneration of Group’s employees, including members of Identified Staff.

For further details, see the 'Corporate governance' chapter of the 2025 annual report.

Access 2025 annual report available on the Santander Group website

324    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

2025 Pillar 3 Disclosures Report    325

Index Introduction l Capital l Risks l Remunerations l Appendices l

I. Glossary

327

II. Disclosures by Santander subsidiaries

333

III. Location of disclosure

335

IV. CRR3 Mapping

339

V. List of tables

353

VI. LI3 - Outline of the differences in the scopes of consolidation

356

VII. CC1 - Composition of regulatory own funds

362

Appendices available in the Santander website

VIII.

CCA - Main features of regulatory own funds instruments and eligible liabilities instruments

XII.

IRB parameter models by geographic area

IX.

CCyB1 - Geographical distribution of credit exposures relevant for the calculation of the countercyclical buffer

XIII.

List of SPPEs

X.

CCA - Capital and TLAC instruments main features - Own Funds

XI.

CCA - Capital and TLAC instruments main features - Eligible Liabilities

13. Appendices

326    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

Appendix I - Glossary

Advanced IRB approach: all the credit risk parameters are estimated internally by the entity, including the CCFs for calculating the EAD.

Alignment metrics: decarbonization targets to align a portfolio's emissions with the Paris Agreement targets.

ALM (Asset liability management): a series of techniques and procedures to ensure correct decision-making on investments and funding at the entity, taking into consideration the interrelation between the various on- balance-sheet and off-balance-sheet items.

AMA (Advanced Measurement Approach): an operational risk measurement technique set forth in Basel capital adequacy norms, based on an internal modelling methodology.

AQR (Asset Quality Review): asset quality review exercise performed by the European Central Bank.

Asset-backed commercial paper (ABCP) programme: a securitisation programme in which the securities issued predominantly take the form of commercial paper with an original maturity of one year or less.

AT1 (Additional Tier 1): capital which consists primarily of hybrid instruments.

Backtesting: the use of historical data to monitor the performance of the risk models.

Basel 3: a set of amendments to the Basel 2 regulations published in December 2010, scheduled to take effect in January 2013 and to be gradually implemented until January 2019.

Basic IRB approach: all the risk parameters are determined by the regulator except for the probability of default, which is estimated internally by the bank. The CCFs required to calculate EAD are determined by the regulator.

BCBS: Basel Committee on Banking Supervision.

BEI (banking environment initiative): group of global banks, convened by the University of Cambridge Institute for Sustainability Leadership (CISL), committed to pioneering actionable pathways towards a sustainable economy.

BIS: Bank for International Settlements.

BRRD (Bank Recovery and Resolution Directive): approved in 2014, the BRRD establishes the framework for the recovery and resolution of banks with the objective of minimising the costs for taxpayers.

CASP (Crypto-Asset Service Providers): a business that offers crypto wallets, crypto exchange services, and similar crypto-asset services professionally under the EU’s MiCA regulation. This term is part of a consistent approach to unifying compliance linked to digital assets.

CBDC (central bank digital currencies): is the digital form of a country’s fiat currency that is also a claim on the central bank.

CBE 2/2016: Banco de España Circular of 2 February 2016 on the supervision and solvency of credit institutions, which completes the adaptation to Spanish law of Directive 2013/36/EU and Regulation (EU) No 575/2013. The new Circular repeals Banco de España Circular 3/2008 to credit institutions on the determination and control of minimum

own funds (except the parts referred to in Circular 5/2008 regarding the regime established therein) and section 11 of Banco de España Circular 2/2014.

CBE 3/2008: Banco de España Circular of 22 May 2008 on the calculation and control of minimum capital requirements.

CBE 4/2004: Banco de España Circular of 22 December 2004 on public and confidential financial reporting standards and model financial statement forms.

CBE 9/2010: Banco de España Circular of 22 December 2010 amending Circular 3/2008.

CCAR (Comprehensive Capital Analysis Review): a framework introduced by the Federal Reserve to review the capital planning and adaptation processes of the main US financial institutions.

CCF (Credit conversion factor): a conversion factor used for converting off-balance-sheet credit risk balances into credit exposure equivalents. Under the AIRB approach Santander applies the CCFs in order to calculate the EAD value of the items representing contingent liabilities and commitments.

CCoB (Conservation Buffer): a capital buffer equal to 2.5% of risk-weighted assets (and comprised fully of high-quality liquid assets) to absorb losses generated from the business.

CCP (Central Counterparty Clearing House): entity defined in article 2.1 of Regulation (EU) no. 648/2012.

CCyB (Counter Cyclical Buffer): a buffer whose objective is to mitigate or prevent cyclical risks arising from excessive credit growth at aggregate level. Accordingly, the CCB is designed to build up capital buffers during expansionary phases with a dual objective: to enhance the solvency of the banking system and to stabilise the credit cycle.

CET1 (Common Equity Tier 1): the highest quality capital of a bank.

CoCos (Contingent Convertible Bonds): debt securities that are convertible into capital if a specified event occurs.

Common equity: A capital measure primarily including ordinary shares, share premium and retained earnings, excluding preferred shares.

Companies excluded from EU Paris-aligned Benchmarks: companies that have a certain percentage of their revenues derived from activities considered polluting are not included in the benchmarks aligned with the Paris agreements.

Concentration risk: the risk of loss due to large exposures to a small number of debtors to which the entity has lent money.

Confidence level: in the context of value at risk (VaR) and economic capital, this is the level of probability that the actual loss will not exceed the potential loss estimated by value at risk or economic capital.

COP 21: United Nations Climate Change Conference held in 2015.

Cost of capital: The minimum return required by investors (shareholders) as compensation for the opportunity cost and risk assumed when investing their capital in the entity. It represents a 'cut-off rate' or 'minimum return' to be achieved, enabling analysis of the activity of business units and evaluation of their efficiency

2025 Pillar 3 Disclosures Report    327

Index Introduction l Capital l Risks l Remunerations l Appendices l

Counterparty credit risk: the risk that a counterparty will default on a derivatives contract before its maturity. The risk could arise from derivatives transactions in the trading portfolio or the banking portfolio and, as with other credit exposures, it is subject to a credit limit.

Credit default swap: a derivatives contract that transfers the credit risk of a financial instrument from the buyer (who receives the credit protection) to the seller (who guarantees the solvency of the instrument).

Credit risk: the risk that customers are unable to meet their contractual payment obligations. Credit risk includes default, country and settlement risk.

Credit risk mitigation: a technique for reducing the credit risk of a transaction by applying coverage such as personal guarantees or collateral.

CRM (Comprehensive Risk Measure): the estimate of risk in the correlation trading portfolio.

CRR (Capital Requirements Regulation) and CRD4 (Capital Requirements Directive): directive and regulation transposing the Basel 3 framework into European Union law.

CSP: Commercial strategic plan.

CSRD (Corporate Sustainability Reporting Directive): EU directive that require large companies and listed companies to publish regular reports on the social and environmental risks they face and the impact of their activities.

CVA (Credit Valuation Adjustment): the difference between the value of the risk-free portfolio and the true portfolio value, taking into account counterparty credit risk.

DEBA: European Banking Authority. Created in 2010, it entered into operation in 2011. The EBA acts as a coordinator between the national entities responsible for safeguarding values such as the stability of the financial system, transparency of markets and financial products, and the protection of bank customers and investors.

Default risk: the risk that counterparties will not meet their contractual payment obligations.

Derivatives: financial instruments that derive their value from one or more underlying assets, e.g. bonds or currencies.

DLGD (Downturn LGD): the LGD estimated in adverse economic conditions.

DNSH (Do not significantly harm): principle that requires an assessment to ensure that the investment does not adversely affect one or more of the six environmental objectives defined in the EU Taxonomy.

DTA: deferred tax assets.

D-SIIs: Domestic Systemically Important Institutions.

EAD (Exposure at Default): the amount that the entity could lose in the event of counterparty default.

ECAI: External Credit Assessment Institution, such as Moody’s Investors Service, Standard & Poor’s Ratings Group and Fitch Group.

ECB Governing Council: the main decision-making body of the ECB, consisting of all members of the Executive Board and the governors of the national central banks of the Euro area countries.

ECB Supervisory Board: the body which undertakes the planning and execution of the ECB’s supervisory tasks, carrying out preparatory work and making proposals for decisions for approval by the ECB Governing Board.

Economic capital: the figure that demonstrates to a high degree of certainty the quantity of capital resources that Santander needs at a given point in time to absorb unexpected losses arising from its current exposure.

EDTF (Enhanced Disclosure Task Force): task force that issues recommendations to enhance the transparency of financial institution disclosures to the market.

EL (Expected loss): a regulatory calculation of the average amount expected to be lost on an exposure, using a 12-month time horizon. EL is calculated by multiplying probability of default (a percentage) by exposure at default (an amount) and LGD (a percentage).

Energy efficiency: energy consumption of a collateral in kWh/m².

EPC label: letter code representing the energy performance of the collateral, from A (the most efficient from the point of view of energy saving) to G (the least efficient).

EP score: energy consumption of a collateral in kWh/m².

EPS (earnings per share): an indicator used to measure a company’s profitability over a specified period of time. EPS is calculated by dividing the company’s profit for the period by the number of shares comprising its share capital.

Equator Principles: common baseline and risk management framework for financial institutions to identify, assess and manage environmental and social risks when financing projects.

E&S Policy (Environmental, Social & Climate Change): Grupo Santander’s criteria for (i) investing in entities, and/or (ii) providing financial products and/or services to customers involved in oil & gas, power generation and transmission, mining, metals and soft commodities activities.

ESG (Environmental, Social and Governance): is an evaluation of a firm's collective conscientiousness for social and environmental factors. It is typically a score that is compiled from data collected surrounding specific metrics related to intangible assets within the enterprise. It can be considered a form of corporate social credit score.

ESG risks: environmental, social and governance risks.

EU Taxonomy: Classification system, developed by the European Comission, that establishes a list of sustainable economic activities from an environmental point of view available to companies and investors.

Exposure: the gross amount that the entity could lose if the counterparty is unable to meet its contractual payment obligations, without taking into consideration any guarantees, credit enhancements or credit risk mitigation transactions.

Financed emissions: greenhouse gas emissions that are associated with a given loan or provision of financial services to a counterparty. It breaks down by three scopes:

•Scope 1: direct GHG emissions that occur from sources owned or controlled by the reporting company, such as emissions from combustion in owned or controlled boilers, furnaces, vehicles, etc.

328    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

•Scope 2: indirect GHG emissions from the generation of purchased or acquired electricity, steam, heating, or cooling consumed by the reporting company.

•Scope 3: all other indirect GHG emissions (not included in Scope 2) that occur in the value chain of the company.

First-loss tranche of a securitisation: the most subordinated tranche of a securitisation, which is the first tranche to bear losses on the securitised exposures and therefore provides protection for the second-loss tranche and, where applicable, the senior tranches.

FSB (Financial Stability Board): international institution that monitors and makes recommendations on the global el financial system.

FSC (forest stewardship council): global not-profit organization dedicated to promoting responsible and sustainable forest management.

Fully-Loaded: denotes full compliance with Basel 3 solvency requirements (which become mandatory in 2019).

GHG: greenhouse gas.

GHOS (Group of Governors and Heads of Supervision): supervisory body of the Basel Committee.

Greenwashing: the practice of gaining an unfair competitive advantage by marketing a financial product as environmentally friendly when, in fact, it does not meet basic environmental requirements.

Global rating tools: these assign a rating to each customer using a quantitative or automatic module.

G-SIB (Global Systemically Important Bank) or SIFI (Systemically Important Financial Institution): financial institutions which, because of their size, complexity and systemic interconnectedness, if allowed to fail could cause major disruptions to the financial system and economic activity.

HQLA: High Quality Liquid Assets.

HVCRE: High Volatility Commercial Real Estate.

ICAAP: internal capital adequacy assessment process.

IFRS: International Financial Reporting Standards.

ILAAP (Internal Liquidity Adequacy Assessment Process): process for the identification, measurement, management and control of liquidity implemented by the entity in compliance with article 86 of Directive 2013/36/EU.

Implicit LGD: this is used to back-test the regulatory LGD estimates. It is based on taking NPLMV as proxy for the Observed Loss, and then dividing the Observed Loss by the PD gives an implicit or observed LGD that can be compared to the regulatory LGD.

IMA: internal model approach

Interest rate risk: exposure of the bank’s financial position to adverse movements in interest rates. Acceptance of this risk is a normal part of the banking business and can be a source of significant returns and creation of shareholder value.

Internal ratings-based approach (IRB): an approach based on internal ratings for the calculation of risk-weighted exposures.

Internal validation: a pre-requisite for the supervisory validation process. A sufficiently independent specialised unit of the entity obtains an expert opinion on the adequacy of the internal models for the relevant internal and regulatory purposes, and issues a conclusion on their usefulness and effectiveness.

Investment entity of a securitisation: any institution or subject, other than the originator or sponsor institution, holding a securitisation position.

IRC (Incremental Risk Charge): an estimate of the credit risk associated with unsecuritised positions in the trading book.

IRP: This report, titled Pillar 3 Disclosures in the English version. (the acronym is for the Spanish Informe de Relevancia Prudencial).

IRRBB: Interest Rate Risk in the Banking Book.

ISDA (International Swaps and Derivatives Association): OTC derivative transactions between financial institutions are usually carried out under a master agreement established by this organisation which details the definitions and general terms and conditions of the contract.

ITS: Implementing Technical Standards.

JST (Joint Supervisory Team): one of the main forms of cooperation between the ECB and the national supervisors.

LCR (Liquidity Coverage Ratio): a ratio that ensures that a bank has an adequate stock of unencumbered high quality liquid assets that can be converted, easily and immediately, into cash in private markets, to meet its liquidity needs for a 30 calendar day liquidity stress scenario.

LDP: low-default portfolio.

Leverage Ratio: a complementary (non-risk based) regulatory capital measure that attempts to guarantee banks’ financial resilience. The ratio is calculated by dividing eligible Tier 1 capital by exposure.

LGD (Loss Given Default): the portion of EAD not recovered at the end of the loan recovery process. It is equal to 1 minus the recovery rate (i.e.: LGD = 1 - recovery rate). The definition of loss used to estimate LGD must be a definition of economic loss, not an accounting loss.

Liquidity risk: the risk that Santander might be unable to meet all its payment obligations when they fall due or might only be able to meet them at an excessive cost.

LTV (Loan to value): amount of credit extended / value of guarantees and collateral.

Mark-to-market approach: in regulatory terms, an approach for calculating the value of the credit risk exposure of counterparty derivatives (present market value plus a margin, i.e. the amount that takes into consideration the potential future increase in market value).

Market risk: the risk arising from uncertainty regarding changes in market prices and rates (including interest rates, share prices, exchange rates and commodity prices), the correlations between them and their levels of volatility.

MDA: Maximum Distributable Amount.

2025 Pillar 3 Disclosures Report    329

Index Introduction l Capital l Risks l Remunerations l Appendices l

Mezzanine tranche of a securitisation: a securitisation position that is subordinated to the senior securitisation position, senior to the first-loss tranche and subject to a risk weight of less than 1 250% and more than 25%.

MiCA (Markets in Crypto-Assets Regulation): is part of the EU’s strategy to regulate crypto-assets and digital financial services.

Model validation: the process of assessing the effectiveness of a credit risk model using a pre-defined set of criteria, such as the model’s discriminatory power, the appropriateness of the inputs and expert opinions.

MPE (Multiple Point of Entry): a resolution approach based on multiple points of entry.

MREL (Minimum Requirement of Eligible Liabilities): the final loss absorption requirement established in European legislation for institutions based on an assessment of their resolution plans.

MSS (Minimum Social Safeguards): due diligence to avoid any negative impacts and comply with the human and labour rights standards.

Netting: a bank’s ability to reduce its credit risk exposure by setting off the value of its rights against its obligations with the same counterparty.

Non-standardised customers: customers who have been assigned a risk analyst due to the risk assumed. This category includes wholesale banking customers, financial institutions and certain enterprises in retail banking.

NSFR (Net Stable Funding Ratio): a ratio designed to ensure a bank has a balanced balance sheet structure, in which stable funding requirements are funded by stable liabilities.

NZAMi (Net Zero Asset Management initiative): international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050.

NZBA (Net-Zero Banking Alliance): group of 43 of the world’s leading banks with a focus on delivering the banking sector’s ambition to align its climate commitments with the Paris Agreement goals.

Operational risk: the risk of incurring losses with regard to employees, contractual specifications and documentation, technology, infrastructure failures and disasters, projects, external influences and customer relations. This definition includes legal and regulatory risk but does not include business and reputational risk.

Originator institution of a securitisation: is an institution that:

•itself or through related entities was, directly or indirectly, involved in the original agreement that created the obligations or potential obligations of the debtor or potential debtor giving rise to the exposure being securitised; or

•purchases a third party's exposures for its own account and then securitises them.

Over-the-counter (OTC): off-exchange, that is, trading done between two parties (in derivatives, for example) without the supervision of an organised exchange.

Paris Agreement: international treaty on climate change. It stipulates that the involved parties will take the necessary actions to limit further increases in global average temperatures to well below 2°C and ideally to below 1.5°C.

PCAF (Partnership for Carbon Accounting Financials): initiative created in 2019 that aims to establish an international methodology for measuring and disclosing financed greenhouse gas emissions to financial institutions.

Phased-in: refers to compliance with current solvency requirements bearing in mind the transitional period for Basel 3 implementation.

Physical risk: risk of losses arising from any negative financial impact on the institution stemming from the current or prospective impacts of the physical effects of environmental factors on the institution’s counterparties or invested assets.

•Acute: physical risks that include harsh meteorological events such as cyclones, hurricanes or floods, as well as the increased severity of these.

◦Chronic: physical risks that include longer-term shifts in climate patterns (e.g., sustained higher temperatures) that may cause sea level rise or chronic heat waves.

Pillar 1 – Minimum Capital Requirements: the part of the New Basel Capital Accord that establishes the minimum regulatory capital requirements for credit, market and operational risk.

Pillar 2 - Supervisory Review Process: an internal capital adequacy assessment process reviewed by the supervisor with possible additional capital requirements for risk that are not included in Pillar 1 and the use of more sophisticated methodologies than Pillar 1.

Pillar 3 - Market Discipline: this pillar is designed to complete the minimum capital requirements and the supervisory review process and, accordingly, enhance market discipline through the regulation of public disclosure by the entities.

Point-in-time (PIT) PD: the probability of default at a particular point in time or in particular state of the economic cycle.

Probability of default (PD): this represents the likelihood that a customer or a transaction will fall into default. It is the probability that an event (the default) will occur within a given time horizon.

QIS (Quantitative Impact Study): ad-hoc requests by the EBA for studies analysing and calibrating the impact of new changes in regulation.

Qualifying central counterparty (QCCP): a central counterparty that has either been authorised under article 14 of Regulation (EU) no. 648/2012, or been recognised under article 25 of said Regulation.

Rating: the result of the objective assessment of the counterparties’ future economic situation based on current characteristics and assumptions. The methodology for assigning the ratings depends largely on the type of customer and the available data. A wide range of methodologies for assessing credit risk is applied, such as expert systems and econometric methods.

330    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

RCP (representative concentration pathways): climate change projection scenarios estimated by the Intergovernmental Panel on Climate Change (IPCC).

RDL: Royal Decree Law.

Regulatory Capital requirements: the minimum amount of capital the regulatory authority requires the entity to hold to safeguard its capital adequacy, based on the amount of credit, market and operational risk.

Eligible capital: the volume of capital the regulatory authority considers eligible to meet capital requirements. The main components of eligible capital are accounting capital and reserves.

Risk appetite: the amount and type of risks considered reasonable to assume in the execution of its business strategy, so that Santander can maintain its ordinary activity in the event of unexpected circumstances. Severe scenarios are taken into account that could have a negative impact on the levels of capital, liquidity, profitability and/or the share price.

Risk limits: approval tools for certain risk types and levels.

Risk-weighted assets (RWA): calculated by assigning a level of risk, expressed as a percentage (risk weighting), to an exposure in accordance with the relevant rules under the standardised approach or the IRB approach.

RoRAC: Return on Risk Adjusted Capital.

RoRWA: Return on Risk-Weighted Assets.

ROTA (Return On Total Assets): ratio between net income and total average assets, or the amount of financial and operational income a company receives in a financial year as compared to the average of that company's total assets. The ratio is considered to be an indicator of how effectively a company is using its assets to generate earnings.

RPK: revenue passenger-kilometer.

RSPO (roundtable on sustainable palm oil): established in 2004 with the objective of promoting the growth and use of sustainable palm oil products through global standards and multistakeholder governance.

RTS: Regulatory Technical Standards.

RWA density: ratio that compares institutions’ total weighted assets and their total balance sheet, and can be interpreted as an average relative risk measure -according to regulatory criteria- of a bank’s overall operations.

SDG (Sustainable Development Goals): universal set of goals, targets and indicators that UN member states will be expected to use to frame their agendas and policies over the next years.

Senior tranche of a securitisation: all tranches other than the first loss or mezzanine tranches. Within the senior tranche, the super senior tranche is the top tranche in the priority of payments, without taking into account for these purposes of any amounts owed under interest rate or currency derivatives, brokerage charges or similar payments.

Securitisation: a financial transaction or scheme whereby the credit risk associated with an exposure or pool of exposures is divided into tranches, with both of the following characteristics:

•Payments for the transaction or scheme are dependent upon the performance of the exposure or pool of exposures.

•The subordination of the tranches determines the distribution of losses during the ongoing life of the transaction or scheme

Securitisation position: exposures arising from securitisations. For these purposes, the providers of credit risk hedges for specific securitisation positions are considered to hold positions in the securitisation.

SFT (Securities Financing Transactions): any transaction where securities are used to borrow cash, or vice versa. They mostly include repurchase agreements (repos), securities lending activities and sell/buy-back transactions.

Slotting Criteria: an approach used for calculating risk weights for specialised lending exposures, which consists of mapping the internal ratings to five supervisory categories, each with its own specific risk weight.

Special-purpose vehicle (SPV): a company created for the sole purpose of acquiring certain assets or derivative exposures and of issuing liabilities that are associated solely with these assets or exposures.

Sponsor institution of a securitisation: an institution other than the originator that establishes and manages an asset-backed commercial paper programme, or other securitisation scheme, that purchases exposures from third-party entities and to which liquidity or credit facilities or other credit enhancements are generally granted.

SRB (Single Resolution Board): the single resolution authority, which is the second pillar of the Banking Union after the Single Supervisory Mechanism.

SRB: Systemic Risk Buffer.

SREP (Supervisory Review and Evaluation Process): a review of the systems, strategies, processes and mechanisms applied by credit institutions and of their risks.

SRF: Single Resolution Fund.

SRM: Single Resolution Mechanism.

SSM (Single Supervisory System): the system of banking supervision in Europe. It comprises the ECB and the competent supervisory authorities of the participating EU countries.

Standardised approach: an approach for calculating credit risk capital requirements under Pillar 1 of Basel 2. Under this approach, the risk weightings used in the capital calculation are determined by the regulator.

Standardized customers: customers which have not been expressly assigned a risk analyst. This category generally includes individuals, individual entrepreneurs and retail banking enterprises not classified as non-standardized customers.

Stress testing: used to describe various techniques for measuring the potential vulnerability to exceptional but plausible events.

Stressed VaR: measures the level of risk in stressed historical or simulated market situations.

2025 Pillar 3 Disclosures Report    331

Index Introduction l Capital l Risks l Remunerations l Appendices l

Sustainable Finance and Investment Classification System (SFICS): internal guide with harmonized criteria to classify green, social and sustainable assets in all the Group’s units and businesses.

Synthetic securitisation: transactions that involve a basket of credit swap agreements and bonds serving as collateral. They are called synthetic as rather than containing physical bonds, they carry credit derivatives, also known as synthetic contracts.

TCFD (Task Force on Climate-related Financial Disclosures): created by the Financial Stability Board to improve and increase reporting of climate-related financial information.

tCS: tonnes of crude steel.

Through-the-cycle (TTC) PD: probability of default adjusted to a full economic cycle. It may be taken as a long-term average of the point-in-time PD.

Tier 1: core capital less hybrid instruments.

Tier 2: supplementary capital instruments, mainly subordinated debt and general loan loss allowances, which contribute to the robustness of financial institutions.

TLAC (Total Loss Absorbency Capacity): an additional requirement to the minimum capital requirements set out in the Basel 3 framework for the absorption of total losses and effecting a recapitalisation that minimises any impact on financial stability, ensures the continuity of critical functions and avoids exposing taxpayers to losses. This requirement is applicable to all G-SIBs.

TLTRO: Targeted Longer-Term Refinancing Operations.

Traditional securitisations: a securitisation in which the economic interest in the securitized exposures is transferred by the transfer of ownership of those exposures from the originator to an SSPE (securitisation special purpose entity) or by sub-participation of an SSPE, where the securities issued do not represent payment obligations of the originator.

TPI (Transition Pathway Initiative): global initiative led by asset owners and supported by asset managers that assess the progress that companies are making on the transition to a low-carbon economy.

Transition risks: risk arising from political, legal, technological and market changes generated by the transition to a lower carbon economy.

TRIM: Targeted Review of Internal Models.

TSC (Technical screening criteria): specific requirements and thresholds that each activity covered in the EU Taxonomy will need to meet in order to be considered as significantly contributing to a sustainable objective.

TSR (Total Shareholder Return): relative performance of total shareholder returns. An indicator of the returns obtained by owners of a company over a period of one year on capital provided to the company.

UNEP FI: United Nations Environment Programme Finance Initiative.

Unexpected loss: unexpected losses (not covered by allowances) must be covered by capital.

VaR (Value at Risk): estimate of the potential losses that could arise in risk positions as a result of movements in market risk factors within a given time horizon and for a specific confidence level.

Value creation: Any profit generated above the cost of economic capital. Santander creates value when risk-adjusted returns (measured by RoRAC) exceed its cost of capital, and destroys value when the reverse occurs. It measures the risk-adjusted return in absolute terms (monetary units), supplementing the RoRAC result.

332    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

Appendix II - Disclosures by Santander subsidiaries

Overview of Santander

Santander is a Retail and Consumer global powerhouse and one of the largest banks in the eurozone. At 2025 year-end, we had EUR 1,867,515 million in assets and EUR 1,363,160 million in total customer funds. Santander was the first largest bank by market capitalization in the eurozone (EUR 147,921 million as of 31 December 2025).

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.

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.

Large subsidiaries within EU (according to CRR definition):

Santander Totta SGPS, S.A.

Banco Santander Totta, S.A. is almost fully owned by Banco Santander S.A. and is the parent company for Santander Totta sub-group. On individual basis, it is a financial institution that also has asset participations on other entities.

Banco Santander Totta’s main business is retail banking, taking deposits and granting credits to customers. The retail banking network originates most of Santander Totta’s business

Banco Santander Totta, S.A. is currently regulated by the ECB on both consolidated and individual basis.

Santander Bank Polska, S.A.

Santander Bank Polska S.A. is a universal bank which provides a full range of services for personal customers, SMEs, large companies, corporates and public sector institutions.

The Bank is a parent entity of Santander Bank Polska Group and forms a domestic bank holding group as defined in the Polish Banking Law Act together with its related entities, including Santander Consumer Bank S.A. (a domestic subsidiary bank). It is also registered as a foreign bank holding group with Spain-based Banco Santander S.A. as the ultimate parent entity.

Banco Santander S.A. remains a long-term majority shareholder in the company. As of 31 December 2024, Banco

Santander S.A. held a controlling stake of 62.20% in the registered capital of Santander Bank Polska S.A.

Santander Germany

Santander Germany relates to the business activities of the Santander Group in Germany (Legal entity identifier (LEI): 529900KRVTRP5RWP9K95) and contains information from Santander Consumer Holding GmbH as well as information on the direct and indirect shareholdings part of the German financial holding group. Within this, Santander Consumer Bank AG acts as the parent institution.

As a large subsidiary of an EU parent institution, SCGFG is supervised via the Single Supervisory Mechanism of the ECB. It discloses information annually in accordance with Article 13 (1) sentence 2 CRR and semi-annually in accordance with Article 433a (2) lit. b) CRR and Article 45i (3) BRRD.

Santander Consumer Finance, S.A.

Santander Consumer Finance, S.A. (the Bank) is a credit institution established in Spain, wholly owned by Banco Santander, S.A., which meets capital requirements on an individual and sub-consolidated basis.

It is the parent company of the Santander Consumer Finance sub-group, which specialises in consumer finance and operates in 16 European countries, Canada and China, where it offers a broad range of financial solutions through points of sale and direct-to-consumer channels, such as branches, call centres and online platforms. The Bank was incorporated in 1963 under the name «Banco de Fomento, S.A.», and, as the parent entity, manages and administers the shareholdings of its subsidiaries.

Other subsidiaries outside EU with local publications:

Santander UK

Santander UK Group Holdings plc (the Company) and its subsidiaries (collectively Santander UK or the Santander UK group) operate primarily in the UK and are part of Banco Santander (comprising Banco Santander SA and its subsidiaries). Santander UK plc and Santander Financial Services plc are regulated by the UK Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). Certain other companies within the Santander UK group are regulated by the FCA and the PRA.

Banco Santander (Brasil), S.A.

Banco Santander Brasil has established itself as the third-largest private bank in the country, distinguished as the only international financial institution operating at scale in the Brazilian retail market.

With comprehensive operations across retail and wholesale banking segments, the bank delivers high value-added solutions, offering a diversified portfolio of products and services that serve individuals, small and medium-sized enterprises, large corporations, and institutional investors.

As the leading subsidiary of Grupo Santander — a Spain-founded global conglomerate and one of the largest financial groups worldwide. The Brazilian operation combines the

2025 Pillar 3 Disclosures Report    333

Index Introduction l Capital l Risks l Remunerations l Appendices l

strength of a global network with deep local expertise. All its activities are strictly regulated and supervised by the Central Bank of Brazil.

Banco Santander (Chile), S.A.

Largest bank in Chile in terms of total loans. Santander Group holds a majority ownership stake in the company (67,18%).

Banco Santander Chile is a banking corporation organised under the laws of the Republic of Chile, supervised by the Financial Market Commission (FMC). The Bank provides its clients with a wide range of general banking services, from individuals to large corporations. In addition, Banco Santander Chile and its affiliates offer consumer and commercial banking services, as well as other services, including factoring, collection, leasing, securities and insurance brokerage, brokerage of mutual and investment fund and investment banking.

Banco Santander (Argentina), S.A.

Banco Santander Argentina S.A. is a private bank in the Argentine financial system. It is one of the leading banks in payment methods, foreign trade, transactional services and cash management, and also one of the main players in the stock, government securities and foreign exchange markets. It is a subsidiary of Banco Santander S.A. and is regulated by the Central Bank of the Argentine Republic (BCRA). In terms of consolidation, it includes Santander Valores S.A., Santander Tecnología Argentina S.A., Santander Consumer S.A. and Cartasur Cards S.A.U. (subsidiary companies).

Banco Santander (Uruguay), S.A.

Banco Santander S.A. is a public limited company that acts as a financial institution in Uruguay and carries out intermediation activities and related operations, such as exchanges, transfers, securities intermediation, credit cards and debit cards, among its main operations. It is almost entirely owned by Banco Santander S.A. and is supervised by the Central Bank of Uruguay.

Banco Santander (Mexico), S.A.

As of December 31, 2025, our principal subsidiaries are Santander Inclusión Financiera, S.A. de C.V., Sociedad Financiera de Objeto Múltiple, Entidad Regulada, and Santander Tecnología México, S.A. de C.V.

Grupo Financiero Santander México, S.A. de C.V., our holding company, directly owns 74.97% of our outstanding share capital. Banco Santander Matriz owns 99.99% of the share capital of Grupo Financiero Santander México, S.A. de C.V.

In addition, Banco Santander Matriz directly owns 24.93% of the Bank’s share capital, resulting in a total ownership interest of 99.9% in the Bank.

334    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

Appendix III - Location of disclosures

IMPLEMENTING TECHNICAL STANDARDS ON PUBLIC DISCLOSURES BY INSTITUTIONS UNDER PART EIGHT OF REGULATION (EU) NO 575/2013
Requirement						2025 Pillar 3 Location
Annex I. Disclosure of key metrics and overview of risk-weighted exposure amounts
Annex II. Disclosure of key metrics and overview of risk-weighted exposure amounts (instructions)
KM1			Key metrics template			Table 1
OV1			Overview of risk weighted exposure amounts			Table 9
INS1			Insurance participations			N/A1
INS2			Financial conglomerates - Information on own funds and capital adequacy ratio			N/A1
OVC			ICAAP information			Section 2.6
Annex III. Disclosure of risk management policies and objectives
Annex IV. Disclosure of risk management policies and objectives (instructions)
OVA			Institution risk management approach			Section 3.1, 3.2, 4.1, 5.1, 6.1, 7.1, 8.1, 9
OVB			Disclosure on governance arrangements			Section 3.2
Annex V. Disclosure of the scope of application
Annex VI. Disclosure of the scope of application (instructions)
LI1			Differences between accounting and regulatory scopes of consolidation and mapping of financial statement categories with regulatory risk categories			Table 2
LI2			Main sources of differences between regulatory exposure amounts and carrying values in financial statements			Table 3
LI3			Outline of the differences in the scopes of consolidation (entity by entity)			Appendix VI
LIA			Explanations of differences between accounting and regulatory exposure amounts			Section 1.4
LIB			Other qualitative information on the scope of application			Section 1.4
PV1			Prudent valuation adjustments (PVA)			Table 82
Annex VII. Disclosure of own funds
Annex VIII. Disclosure of own funds (instructions)
CC1			Composition of regulatory own funds			Appendix VII
CC2			Reconciliation of regulatory own funds to balance sheet in the audited financial statements			Table 4
CCA			Main features of regulatory own funds instruments and eligible liabilities instruments			Appendix VIII
Annex IX. Disclosure of countercyclical capital buffers
Annex X. Disclosure of countercyclical capital buffers (instructions)
CCyB1			Geographical distribution of credit exposures relevant for the calculation of the countercyclical buffer			Appendix IX
CCyB2			Amount of institution-specific countercyclical capital buffer			Table 13
Annex XI. Disclosure of the leverage ratio
Annex XII. Disclosure of the leverage ratio (instructions)
LR1			LRSum: Summary reconciliation of accounting assets and leverage ratio exposures			Table 16
LR2			LRCom: Leverage ratio common disclosure			Table 17
LR3			LRSpl: Split-up of on balance sheet exposures (excluding derivatives, SFTs and exempted exposures)			Table 18
LRA			Free format text boxes for disclosure on qualitative items			Section 2.5
Annex XIII. Disclosure of liquidity requirements
Annex XIV. Disclosure of liquidity requirements (instructions)
LIQA			Liquidity risk management			Section 9
LIQ1			Quantitative information of LCR			Table 95
LIQB			Qualitative information on LCR, which complements template EU LIQ1			Table 96
LIQ2			Net Stable Funding Ratio			Table 97
Annex XV. Disclosure of credit risk quality
Annex XVI. Disclosure of credit risk quality (instructions)
CRA			General qualitative information about credit risk			Section 4.1
CRB			Additional disclosure related to the credit quality of assets			Section 4.3
CR1			Performing and non-performing exposures and related provisions			Table 43
CR1-A			Maturity of exposures			Table 41

1 The exemption under Article 49.1 of the CRR is not used, so table INS1 and table INS2 on non-deducted holdings in insurance companies does not need to be published

2025 Pillar 3 Disclosures Report    335

Index Introduction l Capital l Risks l Remunerations l Appendices l

CR2			Changes in the stock of non-performing loans and advances			Table 42
CR2-A			Changes in the stock of non-performing loans and advances and related net accumulated recoveries			N/A2
CQ1			Credit quality of forborne exposures			Table 47
CQ2			Quality of forbearance			N/A3
CQ3			Credit quality of performing and non-performing exposures by past due days			Table 44
CQ4			Quality of non-performing exposures by geography			Table 45
CQ5			Credit quality of loans and advances by industry			Table 46
CQ6			Collateral valuation - loans and advances			N/A4
CQ7			Collateral obtained by taking possession and execution processes			Table 48
CQ8			Collateral obtained by taking possession and execution processes – vintage breakdown			N/A5
Annex XVII. Disclosure of the use of credit risk mitigation techniques
Annex XVIII. Disclosure of the use of credit risk mitigation techniques (instructions)
CRC			Qualitative disclosure requirements related to CRM techniques			Section 4.7
CR3			CRM techniques overview: Disclosure of the use of credit risk mitigation techniques			Table 51
Annex XIX. Disclosure of the use of the credit risk standardised approach
Annex XX. Disclosure of the use of the credit risk standardised approach (instructions)
CRD			Qualitative disclosure requirements related to standardised model			Section 4.2.4
CR4			Standardised approach – Credit risk exposure and CRM effects			Table 38
CR5			Standardised approach			Table 39
Annex XXI. Disclosure of the use of the IRB approach to credit risk
Annexo XXII. Disclosure of the use of the IRB approach to credit risk (instructions)
CRE			Qualitative disclosure requirements related to IRB approach			Section 4.2.3
CR6			IRB approach – Credit risk exposures by exposure class and PD range			Table 27, Table 28, Table 29
CR6-A			Scope of the use of IRB and SA approaches			Table 23
CR7			IRB approach – Effect on the RWEAs of credit derivatives used as CRM techniques			Table 53
CR7-A			IRB approach – Disclosure of the extent of the use of CRM techniques			Table 54
CR8			RWEA flow statements of credit risk exposures under the IRB approach			Table 24
CR9			AIRB Back-testing of PD per exposure class (fixed PD scale)			Table 55
CR9			AIRB Retail Back-testing of PF per exposure class (fixed PD scale)			Table 56
CR9			FIRB Back-testing of PD per exposure class (fixed PD scale)			Table 57
CR9.1			AIRB approach – Back-testing of PD per exposure class (only for PD estimates according to point (f) of Article 180(1) CRR)			Table 58
Annex XXIII. Disclosure of specialised lending and equity exposures
Annex XXIV. Disclosure of specialised lending and equity exposures (instructions)
CR10.1			Specialised lending and equity exposures under the simple riskweighted approach. Project financing			Table 30
CR10.2			Specialised lending and equity exposures under the simple riskweighted approach. Income-earning real estate and highly volatile commercial real estate			Table 31
CR10.3			Specialised lending and equity exposures under the simple riskweighted approach. Financing of assets			Table 32
CR10.4			Specialised lending and equity exposures under the simple riskweighted approach. Financing of raw materials			Table 33
CR10.5			Equity exposures under the simple risk-weighted approach			Table 34
Annex XXV. Disclosure of exposures to counterparty credit risk
Annex XXVI. Disclosure of exposures to counterparty credit risk (instructions)
CCRA			Qualitative disclosure related to CCR			Section 5.1
CCR1			Analysis of CCR exposure by approach			Table 61
CCR3			Standardised approach – CCR exposures by regulatory exposure class and risk weights			Table 62
CCR4			AIRB approach – CCR exposures by exposure class and PD scale			Table 63
CCR4			FIRB approach – CCR exposures by exposure class and PD scale			Table 64
CCR5			Composition of collateral for CCR exposures			Table 65
CCR6			Credit derivatives exposures			Table 66

2 Requirement CR2A of the EBA Disclosure ITS are not published because the NPL ration does not exceed 5%.

3 Requirement CQ2 of the EBA Disclosure ITS are not published because the NPL ration does not exceed 5%.

4 Requirement CQ6 of the EBA Disclosure ITS are not published because the NPL ration does not exceed 5%.

5 Requirement CQ8 of the EBA Disclosure ITS are not published because the NPL ration does not exceed 5%.

336    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

CCR7			RWEA flow statements of CCR exposures under the IMM			N/A6
CCR8			Exposures to CCPs			Table 60
Annex XXVII. Disclosure of exposures to securitisation positions
Annex XXVIII. Disclosure of exposures to securitisation positions (instructions)
SECA			Qualitative disclosure requirements related to securitisation exposures			Section 6.2, 6.4
SEC1			Securitisation exposures in the non-trading book			Table 68
SEC2			Securitisation exposures in the trading book			Table 69
SEC3			Securitisation exposures in the non-trading book and associated regulatory capital requirements - institution acting as originator or as sponsor			Table 74
SEC4			Securitisation exposures in the non-trading book and associated regulatory capital requirements - institution acting as investor			Table 75
SEC5			Exposures securitised by the institution - Exposures in default and specific credit risk adjustments			Table 73
List of SPPEs			List of SPPEs			Appendix XIV
Annex XXIX. Disclosure of the use of standardised approach and internal model for market risk
Annex XXX. Disclosure of the use of standardised approach and internal model for market risk (instructions)
MRA			Qualitative disclosure requirements related to market risk			Section 7.1
MR1			Market risk under the standardised approach			Table 80
MRB			Qualitative disclosure requirements for institutions using the internal Market Risk Models			Section 7.1
MR2-A			Market risk under the internal model approach (IMA)			Table 78
MR2-B			RWA flow statements of market risk exposures under the IMA			Table 79
MR3			IMA values for trading portfolios			Table 83
MR4			Comparison of VaR estimates with gains/losses			Table 86
Annex XXXI. Disclosure of operational risk
Annex XXXII. Disclosure of operational risk (instructions)
ORA			Qualitative information on operational risk			Section 8.1 and 8.2
OR1			Operational risk losses			Table 88
OR2			Business Indicator, components and subcomponents			Table 89
OR3			Operational risk own funds requirements and risk exposure amounts			Table 90
Annex XXXIII. Disclosure of remuneration policy
Annex XXXIV. Disclosure of remuneration policy (instructions)
REMA			Remuneration policy			Section 12.1
REM1			Remuneration awarded for the financial year			Table 104
REM2			Special payments to staff whose professional activities have a material impact on institutions’ risk profile (Identified Staff)			Table 105
REM3			Deferred remuneration			Table 107
REM4			Remuneration of 1 million EUR or more per year			Table 108
REM5			Information on remuneration of staff whose professional activities have a material impact on institutions’ risk profile (Identified Staff)			Table 106
Annex XXXV. Disclosure of encumbered and unencumbered assets
Annex XXXVI. Disclosure of encumbered and unencumbered assets (instructions)
AE1			Encumbered and unencumbered assets			Table 91
AE2			Collateral received and own debt securities issued			Table 92
AE3			Sources of encumbrance			Table 93
AE4			Accompanying narrative information			Section 9.1.3

6 Statement of flows of risk-weighted amounts of counterparty exposures subject to IMA is not included as Santander does not have an internal model to calculate counterparty risk EAD

2025 Pillar 3 Disclosures Report    337

Index Introduction l Capital l Risks l Remunerations l Appendices l

IMPLEMENTING TECHNICAL STANDARDS ON PUBLIC DISCLOSURES BY INSTITUTIONS UNDER PART EIGHT OF REGULATION (EU) NO 2024/1623
Requirement						2025 Pillar 3 Location
Annex XLI. Disclosure of credit valuation adjustment risk
Annex XLII. Disclosure of credit valuation adjustment risk (instructions)
CVA1			Credit valuation adjustment risk under the Reduced Basic Approach			N/A12
CVA2			Credit valuation adjustment risk under the Full Basic Aproach (FBA)			Table 59
CVA3			Credit valuation adjustement risk under the Standardised Approach			N/A12
CVA4			RWEA flow statements of credit valuation adjustment risk under the Standardised Approach			N/A12
Annex XLIII. Disclosure of exposures to crypto-assets
Annex XLIV. Disclosure of exposures to crypto-assets (instructions)
CAE1			Exposures to crypto-assets			Table 103

IMPLEMENTING TECHNICAL STANDARDS ON DISCLOSURE OF INFORMATION ON EXPOSURES TO INTEREST RATE RISK ON POSITIONS NOT HELD IN THE TRADING BOOK
Table			Table Title			2025 Pillar 3 Location
IRRBB1			Interest rate risks of non-trading book activities			Table 87
IRRBBA			IRRBB qualitative information			Section 7.4

IMPLEMENTING TECHNICAL STANDARDS ON DISCLOSURE AND REPORTING OF MREL AND TLAC
Table			Table title			2025 Pillar 3 Location
KM2			Key metrics – MREL and, where applicable, G-SII requirement for own funds and eligible liabilities			Table 19
TLAC1			Composition – MREL and, where applicable, the G-SII requirement for own funds and eligible liabilities			Table 20
TLAC3			Creditor ranking – resolution entity			Table 21
CCA - Own funds			Capital and TLAC instruments main features - Own Funds			Appendix X
CCA - Eligible Liabilities			Capital and TLAC instruments main features - Eligible Liabilities			Appendix XI

IMPLEMENTING TECHNICAL STANDARDS (ITS) ON PRUDENTIAL DISCLOSURES ON ESG RISKS IN ACCORDANCE WITH ARTICLE 449a CRR
Table			Table title			2025 Pillar 3 Location
ESG1			Banking book- Climate Change transition risk: Credit quality of exposures by sector, emissions and residual maturity			Table 98
ESG2			Banking book - Climate change transition risk: Loans collateralised by immovable property - Energy efficiency of the collateral			Table 99
ESG3			Banking book - Climate change transition risk: Alignment metrics			Table 100
ESG4			Banking book - Climate change transition risk: Exposures to top 20 carbon-intensive firms			Table 101
ESG5			Banking book - Climate change physical risk: Exposures subject to physical risk			Table 102
ESG6			Summary of GAR KPIs			N/A7
ESG7			Mitigating actions: Assets for the calculation of GAR			N/A8
ESG8			GAR (%)			N/A9
ESG9			Mitigating actions: BTAR			N/A10
ESG10			Other climate change mitigating actions that are not covered in the EU Taxonomy Page Size Break			N/A11

7 Disclosure obligations are suspended until end-2026

8 Disclosure obligations are suspended until end-2026

9 Disclosure obligations are suspended until end-2026

10 Disclosure obligations are suspended until end-2026

11 Disclosure obligations are suspended until end-2026

12 Not published as Santander does not have Standardised approach to calculate CVA

338    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

Appendix IV - CRR3 Mapping

The following table links the CRR’s articles on divulging information (Part 8) to the various sections of the document that provide the information required. The ‘Location’ column specifies the section of Pillar 3 or other public document in

which the information is dealt with, in whole or in part. This information may be distributed throughout the document on a piecemeal basis.

Article

Brief Description

2025 Pillar 3 Location

Tables

2025 annual report Location

431. Scope of disclosures requirements

431.1

Requirement to publish Pillar 3 disclosures.

Pillar 3 Report

431.2

Permission granted by the competent authorities under Part Three for the instruments and methodologies referred to in Title III shall be subject to the public disclosure by institutions of the information laid down therein.

Section 4.2.1.

431.3

Institution must have a policy covering the frequency of disclosures, their verification, comprehensiveness and appropriateness, as well as policies for assuring the overall comprehension of their risk profile by market participants.

Section 1.2.1.

431.4

All quantitative disclosures shall be accompanied by a qualitative narrative and any other supplementary information that may be necessary

Pillar 3 Report

431.5

Institutions should explain, upon request, their rating decisions to SMEs and other business loan applicants, providing a written explanation upon request. The administrative costs of the explanation should be proportionate to the amount of the loan.

Section 4.4.

432. Non-material, proprietary or confidential information

432.1

Institutions may omit information that is not material if certain conditions are respected.

Sections 1.2.1. and 1.2.3.

432.2

Institutions may omit information that is proprietary or confidential if certain conditions are respected.

Section 1.2.2.

432.3

Where 432.2 applies this must be stated in the disclosures, and more general information must be disclosed.

Section 1.2.2.

433. Frequency of disclosure

433

Institutions shall publish the disclosures required under Titles II and III in the manner set out in Articles 433a, 433b, 433c and 434

Section 1.2.2.

433a. Disclosures by large institutions

433a

Large institutions shall disclose the information outlined below with the following frequency:

Section 1.2.2.

433b. Disclosures by small and non-complex institutions

433b

Small and non-complex institutions shall disclose the information outlined below with the following frequency

N/A

433c. Disclosures by other institutions

433c

Institutions that are not subject to Article 433a or 433b shall disclose the information outlined below with the following frequency

N/A

434. Means of disclosure

434.1

Institutions other than small and non-complex institutions shall submit all information required under Titles II and III in electronic format to EBA. EBA shall publish that information, together with its submission date, on its website.

Pillar 3 Report

2025 Pillar 3 Disclosures Report    339

Index Introduction l Capital l Risks l Remunerations l Appendices l

Article

Brief Description

2025 Pillar 3 Location

Tables

2025 annual report Location

434.2

Institutions other than small and non-complex institutions shall submit the disclosures required under Articles 433a and 433c in electronic format to EBA no later than the date on which they publish their financial statements or financial reports for the corresponding period

Pillar 3 Report

434.3

By way of derogation from paragraphs 1 and 2 of this Article, institutions may submit to EBA the information required under Article 450 separately from the other information required under Titles II and III no later than two months after the date on which institutions publish their financial statements for the corresponding year.

Pillar 3 Report

434.4

EBA shall publish on its website the disclosures of small and non-complex institutions on the basis of the information reported by those institutions to competent authorities in accordance with Article 430.

N/A

434.5

Ownership of the data and the responsibility for their accuracy shall remain with the institutions that produce them. EBA shall provide for a single access point for institutions’ disclosures and shall make available on its website an archive of the information required to be disclosed in accordance with this Part. That archive shall be kept accessible for a period that shall be no less than the storage period set by national law for information included in the institutions’ financial reports.

N/A

434.6

EBA shall monitor the number of visits to its single access point for institutions’ disclosures and include the related statistics in its annual reports.

N/A

434a. Uniform disclosure formats

434a

EBA shall develop draft implementing technical standards specifying uniform disclosure formats, and associated instructions in accordance with which the disclosures required under Titles II and III shall be made.

N/A

434b. Accessibility of information on the European single access point

434b.1

From 10 January 2030, when making public any information referred to in Part Eight of this Regulation, the institutions shall submit that information at the same time to the relevant collection body

Section 1.2.1.

434b.2

For the purposes of paragraph 1, point (b)(ii), institutions shall obtain a legal entity identifier.

N/A

434b.3

For the purpose of making the information referred to in paragraph 1 of this Article accessible on ESAP, the collection body as defined in Article 2, point (2), of Regulation (EU) 2023/2859 shall be EBA.

N/A

434b.4

For the purpose of ensuring the efficient collection and management of information submitted in accordance with paragraph 1, EBA shall develop draft implementing technical standards

N/A

434b.5

Where necessary, EBA shall adopt guidelines to ensure that the metadata submitted in accordance with paragraph 4, first subparagraph, point (a), are correct.

N/A

434c. Report on the feasibility of the use of information reported by institutions other than small and non-complex institutions to publish an extended set of disclosures on the EBA website

434c

EBA shall prepare a report on the feasibility of using information reported by institutions other than small and non-complex institutions to competent authorities in accordance with Article 430 in order to publish that information on its website thereby reducing the disclosure burden for such institutions.

N/A

435. Risk management objectives and policies

435.1

Disclose information for each separate category of risk:

435.1.a

The strategies and processes to manage risks.

Chapters 3 to11

Risk management and compliance Chapter

340    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

Article

Brief Description

2025 Pillar 3 Location

Tables

2025 annual report Location

435.1.b

Structure and organization of the risk management function.

Chapters 3 to 11

Risk management and compliance Chapter

435.1.c

Risk reporting and measurement systems.

Chapters 3 to 11

Risk management and compliance Chapter

435.1.d

Hedging and mitigating risk - policies, strategies and processes.

Chapters 3 to 11

Risk management and compliance Chapter

435.1.e

A declaration of adequacy of risk management arrangements approved by the Board.

Section 3.1.3.

Risk management and compliance Chapter

435.1.f

Inclusion of a concise risk statement approved by the Board.

Sections 1.4.1. and 3.1.3.

Risk management and compliance Chapter

435.2

Information on governance arrangements, including information on Board composition and recruitment, and risk committees.

435.2.a

Number of directorships held by Board members.

Section 3.2.1.

Risk management and compliance chapter & Corporate governance Chapter

435.2.b

Recruitment policy for the selection of Board members, their actual knowledge, skills and expertise.

Section 3.2.1.1

Corporate governance Chapter

435.2.c

Policy on diversity of Board membership, objectives, and achievement status.

Section 3.2.

Corporate governance Chapter

435.2.d

Existence of a dedicated risk committee, and number of meetings during the year.

Section 3.2.2.

Risk management and compliance chapter & Corporate governance Chapter

435.2.e

Description of the information flow on risk to the Board.

Section 3.1.1

Risk management and compliance chapter & Corporate governance Chapter

436. Scope of application of the requirements

436

Institutions shall disclose the following information regarding the scope of application of the requirements of this Regulation in accordance with Directive 2013/36/EU:

436.a

Name of institution to which the requirements of this Regulation applies.

Section 1.2.1.

436.b

Difference in the basis of consolidation for accounting and prudential purposes, briefly describing entities that are: (i) fully consolidated (ii) proportionally consolidated (iii) deducted from own funds (iv) neither consolidated nor deducted

Section 1.4.2.

Table 2 (LI1) Table 3 (LI2) Appendix VI (LI3)

436.c

a breakdown of assets and liabilities of the consolidated financial statements prepared in accordance with the requirements on regulatory consolidation pursuant to Sections 2 and 3 of Title II of Part One

Section 1.4.2.

Table 2 (LI1)

436.d

a reconciliation identifying the main sources of differences between the carrying value amounts in the financial statements under the regulatory scope of consolidation as defined in Sections 2 and 3 of Title II of Part One

Section 1.4.2.

Table 2 (LI1) Table 3 (LI2)

436.e

a breakdown of the amounts of the constituent elements of an institution's prudent valuation adjustment, by type of risks, and the total of constituent elements separately for the trading book and non-trading book positions;

Section 7.2.1.

Table 82 (PV1)

436.f

Impediments to transfer of own funds between parent and subsidiaries.

Sections 1.3.1. and 2.3.3.

436.g

Capital shortfalls in any subsidiaries outside the scope of consolidation.

Section 2.4.1

436.h

The circumstance of making use of articles on derogations from: a) Prudential requirements b) Liquidity requirements for individual subsidiaries/entities.

Section 2.4.1

2025 Pillar 3 Disclosures Report    341

Index Introduction l Capital l Risks l Remunerations l Appendices l

Article

Brief Description

2025 Pillar 3 Location

Tables

2025 annual report Location

437. Disclosure of own funds

437.1

Institutions shall disclose the following information regarding their own funds:

437.1.a

A full reconciliation of Common Equity Tier 1 items, Additional Tier 1 items, Tier 2 items and filters and deductions applied pursuant to Articles 32 to 35, 36, 56, 66 and 79 to own funds of the institution and the balance sheet in the audited financial statements of the institution.

Tables 4, 5 and 6 Appendix VII (CC1) Appendix VIII (CCA)

437.1.b

Description of the main features of the Common Equity Tier 1 and Additional Tier 1 instruments and Tier 2 instruments issued by the institution.

Section 2.4.1.

Appendix VIII (CCA) Appendix VII (CC1)

437.1.c

Dull terms and conditions of all Common Equity Tier 1, Additional Tier 1 and Tier 2 instruments.

Section 2.4.1.

Appendix VIII (CCA) Appendix VII (CC1)

437.1.d

Disclosure of the nature and amounts of the following:

Sections 2.2. and 2.3.

Appendix VII (CC1)

437.1.d.i

Each prudential filter applied pursuant to Articles 32 to 35;

Sections 2.2. and 2.3.

Appendix VII (CC1)

437.1.d.ii

Each deduction made pursuant to Articles 36, 56 and 66;

Sections 2.2. and 2.3.

Appendix VII (CC1)

437.1.d.iii

Items not deducted in accordance with Articles 47, 51, 56, 66 and 79.

Sections 2.2. and 2.3.

Appendix VII (CC1)

437.1.e

Description of all restrictions applied to the calculation of own funds in accordance with this Regulation and the instruments, prudential filters and deductions to which those restrictions apply.

Section 2.4.1.

Appendix VII (CC1)

437.1.f

Explanation of the calculation basis of the disclosed capital ratios estimated using elements of own funds determined, on a basis other than that laid down in this Regulation.

2.2.3

437a. Disclosure of own funds and eligible liabilities

437a

Institutions that are subject to Article 92a or 92b shall disclose the following information regarding their own funds and eligible liabilities: (a) the composition of their own funds and eligible liabilities, their maturity and their main features; (b) the ranking of eligible liabilities in the creditor hierarchy; (c) the total amount of each issuance of eligible liabilities instruments referred to in Article 72b; (d) the total amount of excluded liabilities referred to in Article 72a(2).

Appendix VIII (CCA)

438. Capital requirements

438

Institutions shall disclose the following information regarding their compliance with Article 92 of this Regulation and with the requirements laid down in Article 73 and in point (a) of Article 104(1) of Directive 2013/36/EU:

438.a

a summary of their approach to assessing the adequacy of their internal capital to support current and future activities;

Section 2.6.

Economic and financial review Chapter

438.b

the amount of the additional own funds requirements

Sections 2.4.1, 2.4.3. and 2.7.

438.c

upon demand from the relevant competent authority, the result of the institution's internal capital adequacy assessment process;

Section 2.6.

Economic and financial review Chapter

438.d

the total risk-weighted exposure amount and the corresponding total own funds requirement determined in accordance with Article 92, to be broken down by the different risk categories set out in Part Three and, where applicable, an explanation of the effect on the calculation of own funds and risk-weighted exposure amounts that results from applying capital floors and not deducting items from own funds;

Section 2.4.2.

Table 9 (OV1), Table 11 (CMS1) and Table 12 (CMS2)

342    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

Article

Brief Description

2025 Pillar 3 Location

Tables

2025 annual report Location

438.da

where required to calculate the un-floored total risk exposure amount as calculated in accordance with Article 92(4), and the standardised total risk exposure amount as calculated in accordance with Article 92(5), to be broken down by the different risk categories or risk exposure classes, as applicable, set out in Part Three and, where applicable, an explanation of the effect on the calculation of own funds and risk-weighted exposure amounts that results from applying capital floors and not deducting items from own funds;

Section 2.4.2.

Table 9 (OV1), Table 11 (CMS1) and Table 12 (CMS2)

438.e

The on- and off-balance-sheet exposures, the risk-weighted exposure amounts

Section 2.4.2.

Tables 30 - 34 (CR10)

438.f

The exposure value and the risk-weighted exposure amount of own funds instruments held in any insurance undertaking, reinsurance undertaking or insurance holding company that the institutions do not deduct from their own funds

N/A

438.g

The supplementary own funds requirement and the capital adequacy ratio of the financial conglomerate

N/A

438.h

The variations in the risk-weighted exposure amounts of the current disclosure period compared to the immediately preceding disclosure period that result from the use of internal models, including an outline of the key drivers explaining those variations.

Table 24 (CR8) Table 79 (MR2-B)

439. Exposure to counterparty credit risk

439

Institutions shall disclose the following information regarding the institution's exposure to counterparty credit risk as referred to in Part Three, Title II, Chapter 6:

439.a

Description of process to assign internal capital and credit limits to CCR exposures.

Sections 5, 5.1. and 5.6.

Table 60 (CCR8)

439.b

Discussion of policies for securing collateral and establishing credit reserves.

Section 5.2.

Table 65 (CCR5)

439.c

Discussion of management of wrong-way risk exposures.

Section 5.3.

439.d

Disclosure of collateral to be provided (outflows) in the event of a ratings downgrade.

Section 5.4.

439.e

The amount of segregated and unsegregated collateral received and posted per type of collateral,

Table 65 (CCR5)

439.f

For derivative transactions, the exposure values before and after the effect of the credit risk mitigation

Table 61 (CCR1)

439.g

For securities financing transactions, the exposure values before and after the effect of the credit risk mitigation

Table 61 (CCR1)

439.h

The exposure values after credit risk mitigation effects and the associated risk exposures for credit valuation adjustment capital charge

Section 5.5.

Table 59 (CVA2)

439.i

The exposure value to central counterparties and the associated risk exposures

Section 5.6.

Table 60 (CCR8)

439.j

The notional amounts and fair value of credit derivative transactions;

Table 66 (CCR6)

439.k

The estimate of alpha where the institution has received the permission of the competent authorities to use its own estimate of alpha

Table 61 (CCR1)

439.l

Separately, the disclosures included in point (e) of Article 444 and point (g) of Article 452;

Table 61 (CCR1) Table 62 (CCR3) Tables 63 and 64 (CCR4) Table 65 (CCR5) Table 66 (CCR6)

439.m

For institutions using the methods set out in Sections 4 to 5 of Chapter 6 of Title II Part Three, the size of their on- and off-balance-sheet derivative business

Table 61 (CCR1)

440. Capital buffers

2025 Pillar 3 Disclosures Report    343

Index Introduction l Capital l Risks l Remunerations l Appendices l

Article

Brief Description

2025 Pillar 3 Location

Tables

2025 annual report Location

440

Disclosure of the following information in relation to its compliance with the requirement for a countercyclical capital buffer referred to in Title VII, Chapter 4 of Directive 2013/36/EU:

440.a

Geographical distribution of credit exposures relevant for the calculation of countercyclical capital buffer.

Section 2.4.3

Appendix IX (CCyB1)

440.b

Amount of the specific countercyclical capital buffer.

Section 2.4.3.

Table 13 (CCyB2)

441. Indicators of global systemic importance

441

Disclosure of the indicators of global systemic importance.

Section 2.4.3.

442. Credit risk adjustments

442

Institutions shall disclose the following information regarding the institution's exposure to credit risk and dilution risk:

442.a

The scope and definitions that they use for accounting purposes of ‘past due’ and ‘impaired’ and the differences, if any, between the definitions of ‘past due’ and ‘default’ for accounting and regulatory purposes;

Section 4.5.

Risk management and compliance Chapter

442.b

A description of the approaches and methods adopted for determining specific and general credit risk adjustments;

Table 68 (SEC1)

Risk management and compliance Chapter

442.c

Information on the amount and quality of performing, non-performing and forborne exposures for loans, debt securities and off-balance-sheet exposures, including their related accumulated impairment, provisions and negative fair value changes due to credit risk and amounts of collateral and financial guarantees received;

Table 46 (CQ5) Table 45 (CQ4) Table 47 (CQ1) Table 43 CR1) Table 48 (CQ7)

442.d

An ageing analysis of accounting past due exposures;

Table 44 (CQ3)

Risk management and compliance Chapter

442.e

The gross carrying amounts of both defaulted and non-defaulted exposures, the accumulated specific and general credit risk adjustments, the accumulated write-offs taken against those exposures and the net carrying amounts and their distribution by geographical area and industry type and for loans, debt securities and off balance-sheet exposures;

Table 43 (CR1) Table 46 (CQ5) Table 45 (CQ4)

Risk management and compliance Chapter

442.f

Any changes in the gross amount of defaulted on- and off-balance-sheet exposures, including, as a minimum, information on the opening and closing balances of those exposures, the gross amount of any of those exposures reverted to non-defaulted status or subject to a write-off;

Table 42(CR2)

Risk management and compliance Chapter

442.g.

The breakdown of loans and debt securities by residual maturity

Table 41 (CR1-A)

443. Unencumbered assets

443

Institutions shall disclose information concerning their encumbered and unencumbered assets. For those purposes, institutions shall use the carrying amount per exposure class broken down by asset quality and the total amount of the carrying amount that is encumbered and unencumbered.

Section 10.1.3.

Table 91 (AE1) Table 92 (AE2) Table 93 (AE3)

Economic and financial review Chapter

444. Use of ECAIs

444

For institutions calculating the risk-weighted exposure amounts in accordance with Part Three, Title II, Chapter 2, the following information shall be disclosed for each of the exposure classes specified in Article 112:

444.a

Names of the ECAIs used in the calculation of Standardised approach risk-weighted assets and reasons for any changes.

Section 4.2.3.

444.b

Exposure classes associated with each ECAI.

Section 4.2.3.

444.c

Description of the process used to transfer credit assessments to non-trading book items.

Section 4.2.3.

344    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

Article

Brief Description

2025 Pillar 3 Location

Tables

2025 annual report Location

444.d

Mapping of external rating to credit quality steps (CQS).

Section 4.2.3.

444.e

Exposure value pre and post-credit risk mitigation, by CQS.

Table 38 (CR4) Table 39 (CR5) Table 62 (CCR3)

445. Exposure to market risk

445.1

Institutions that have not been granted permission by competent authorities to use the alternative internal model approach as set out in Article 325az, and that use the simplified standardised approach in accordance with Article 325a or the alternative standardised approach in accordance with Part Three, Title IV, Chapter 1a, shall disclose an overview of their trading book positions.

Section 7.2.

Table 80 (MR1)

445.2

Institutions calculating their own funds requirements in accordance with Part Three, Title IV, Chapter 1a, shall disclose their total own funds requirements, own funds requirements for the sensitivities-based method, default risk charge and own funds requirements for residual risks. The disclosure of own funds requirements for the measures of the sensitivities-based method and for default risk shall be broken down into the following instruments:

Section 7.2.

445.2.a

financial instruments other than securitisation instruments held in the trading book, with a breakdown by risk class, and a separate identification of the own funds requirements for default risk;

Section 7.2.

Table 78 (MR2-A

445.2.b

securitisation instruments not held in the ACTP, with a separate identification of the own funds requirements for credit spread risk and of the own funds requirements for default risk;

Chapter 6

445.2.c

securitisation instruments held in the ACTP, with a separate identification of the own funds requirements for credit spread risk and of the own funds requirements for default risk.

Chapter 6

445. Disclosure of CVA risk

445a.1

Institutions subject to the own funds requirements for CVA risk shall disclose the following information:

445a.1.a

an overview of their processes to identify, measure, hedge and monitor their CVA risk;

Chapter 4

445a.1.b

whether institutions meet all of the conditions set out in Article 273a(2); where those conditions are met, whether institutions have chosen to calculate the own funds requirements for CVA risk using the simplified approach set out in Article 385; where institutions have chosen to calculate the own funds requirements for CVA risk using the simplified approach, the own funds requirements for CVA risk in accordance with that approach;

Chapter 4

445a.1.c

the total number of counterparties for which the standardised approach is used, with a breakdown by counterparty types.

Chapter 4

445a.2

Institutions using the standardised approach set out in Article 383 for calculating the own funds requirements for CVA risk shall disclose, in addition to the information referred to in paragraph 1 of this Article, the following information:

445a.2.a

the structure and the organisation of their internal CVA risk management function and governance;

Chapter 4

445a.2.b

their total own funds requirements for CVA risk under the standardised approach with a breakdown by risk class;

Chapter 4

445a.2.c

an overview of the eligible hedges used in that calculation, with a breakdown by type of instruments set out in Article 386(2).

Chapter 4

445a.3

Institutions using the basic approach set out in Article 384 for calculating the own funds requirements for CVA risk shall disclose, in addition to the information referred to in paragraph 1 of this Article, the following information:

445a.3.a

their total own funds requirements for CVA risk under the basic approach, and the components BACVAtotal and BACVAcsr-hedged ;

Chapter 4

445a.3.b

an overview of the eligible hedges used in that calculation, with a breakdown by type of instruments set out in Article 386(3).

Chapter 4

446. Operational risk

446.1

Institutions shall disclose the following information:

2025 Pillar 3 Disclosures Report    345

Index Introduction l Capital l Risks l Remunerations l Appendices l

Article

Brief Description

2025 Pillar 3 Location

Tables

2025 annual report Location

446.1.a

the main characteristics and elements of their operational risk management framework;

Chapter 8

446.1.b

their own funds requirement for operational risk equal to the business indicator component calculated in accordance with Article 313;

Chapter 8

Table 90 (OR3)

446.1.c

the business indicator, calculated in accordance with Article 314(1), and the amounts of each of the business indicator components and their sub-components for each of the three years relevant for the calculation of the business indicator;

Chapter 8

Table 89 (OR2)

446.1.d

the amount of the reduction of the business indicator for each exclusion from the business indicator in accordance with Article 315(2), as well as the corresponding justifications for such exclusions.

Chapter 8

Table 89 (OR2)

446.2

Institutions that calculate their annual operational risk losses in accordance with Article 316(1) shall disclose the following information in addition to the information referred to in paragraph 1 of this Article:

446.2.a

their annual operational risk losses for each of the last 10 financial years, calculated in accordance with Article 316(1);

Chapter 8

Table 88 (OR1)

446.2.b

the number of exceptional operational risk events and the amounts of the corresponding aggregated net operational risk losses that were excluded from the calculation of the annual operational risk loss in accordance with Article 320(1), for each of the last 10 financial years, and the corresponding justifications for those exclusions.

N/A

447. Disclosure of key metrics

447

Institutions shall disclose the following key metrics in a tabular format:

447.a

The composition of their own funds and their own funds requirements as calculated in accordance with Article 92;

Table 1 ( KM1)

447.aa

where applicable, the risk-based capital ratios as calculated in accordance with Article 92(2), by using the un-floored total risk exposure amount instead of the total risk exposure amount;

Table 1 ( KM1)

447.b

The total risk exposure amount as calculated in accordance with Article 92(3);

Table 1 ( KM1)

447.c

Where applicable, the amount and composition of additional own funds which the institutions are required to hold

Table 1 ( KM1)

447.d

Their combined buffer requirement which the institutions are required to hold

Table 1 ( KM1)

447.e

Their leverage ratio and the total exposure measure as calculated in accordance with Article 429

Table 1 ( KM1)

447.f

Information in relation to their liquidity coverage ratio

Table 1 ( KM1)

447.g

Information in relation to their net stable funding requirement

Table 1 ( KM1)

447.h

Their own funds and eligible liabilities ratios and their components, numerator and denominator

448. Exposure to interest rate risk on positions not included in the trading book

448.1

As from 28 June 2021, institutions shall disclose the following quantitative and qualitative information on the risks arising from potential changes in interest rates that affect both the economic value of equity and the net interest income of their non-trading book activities

448.1.a

The changes in the economic value of equity calculated under the six supervisory shock scenarios for the current and previous disclosure periods;

Sections 7.4. and 7.4.1.

Table 87 (IRRBB1)

Risk management and compliance Chapter

448.1.b

The changes in the net interest income calculated under the two supervisory shock scenarios for the current and previous disclosure periods;

Sections 7.4. and 7.4.1.

Table 87 (IRRBB1)

Risk management and compliance Chapter

448.1.c

A description of key modelling and parametric assumptions used to calculate changes in the economic value of equity and in the net interest income

Sections 7.4. and 7.4.1.

Table 87 (IRRBB1)

346    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

Article

Brief Description

2025 Pillar 3 Location

Tables

2025 annual report Location

448.1.d

An explanation of the significance of the risk measures disclosed under points (a) and (b) of this paragraph and of any significant variations of those risk measures since the previous disclosure reference date;

Sections 7.4. and 7.4.1.

Table 87 (IRRBB1)

448.1.e

The description of how institutions define, measure, mitigate and control the interest rate risk of their nontrading book activities for the purposes of the competent authorities' review

Sections 7.4. and 7.4.1.

Table 87 (IRRBB1)

448.1.e.i

A description of the specific risk measures that the institutions use to evaluate changes in their economic value of equity and in their net interest income;

Sections 7.4. and 7.4.1.

Table 87 (IRRBB1)

448.1.e.ii

A description of the key modelling and parametric assumptions used in the institutions' internal measurement systems that would differ from the common modelling and parametric assumptions referred to in Article 98(5a) of Directive 2013/36/EU for the purpose of calculating changes to the economic value of equity and to the net interest income, including the rationale for those differences;

Sections 7.4. and 7.4.1.

Table 87 (IRRBB1)

448.1.e.iii

A description of the interest rate shock scenarios that institutions use to estimate the interest rate risk

Sections 7.4. and 7.4.1.

Table 87 (IRRBB1)

448.1.e.iv

The recognition of the effect of hedges against those interest rate risks, including internal hedges that meet the requirements laid down in Article 106(3)

Sections 7.4. and 7.4.1.

Table 87 (IRRBB1)

448.1.e.v

An outline of how often the evaluation of the interest rate risk occurs

Sections 7.4. and 7.4.1.

Table 87 (IRRBB1)

448.1.f

The description of the overall risk management and mitigation strategies for those risks;

Sections 7.4. and 7.4.1.

Table 87 (IRRBB1)

448.1.g

Average and longest repricing maturity assigned to non-maturity deposits.

Sections 7.4. and 7.4.1.

Table 87 (IRRBB1)

448.2

By way of derogation from paragraph 1 of this Article, the requirements set out in points (c) and (e)(i) to (e) (iv) of paragraph 1 of this Article shall not apply to institutions that use the standardised methodology or the simplified standardised methodology referred to in Article 84(1) of Directive 2013/36/EU.

Sections 7.4. and 7.4.1.

Table 87 (IRRBB1)

449. Exposure to securitisation positions

449

Institutions calculating risk-weighted exposure amounts in accordance with Chapter 5 of Title II of Part Three or own funds requirements in accordance with Article 337 or 338 shall disclose the following information separately for their trading book and non-trading book activities:

449.a

A description of their securitisation and re-securitisation activities, including their risk management and investment objectives in connection with those activities

Sections 6.2.1, 6.2.2 and 6.2.3

449.b

The type of risks they are exposed to in their securitisation and re-securitisation activities by level of seniority of the relevant securitisation positions

Sections 6.2.3. and 6.3

449.c

Their approaches for calculating the risk-weighted exposure amounts that they apply to their securitisation activities

Section 6.5.

Table 74 (SEC3)

449.d

A list of SSPEs falling into any of the following categories, with a description of their types of exposures to those SSPEs, including derivative contracts.

N/A

449.e

A list of any legal entities in relation to which the institutions have disclosed that they have provided support

N/A

449.f

A list of legal entities affiliated with the institutions and that invest in securitisations originated by the institutions or in securitisation positions issued by SSPEs sponsored by the institutions;

N/A

449.g

A summary of their accounting policies for securitisation activity, including where relevant a distinction between securitisation and re-securitisation positions;

Section 6.4.

449.h

The names of the ECAIs used for securitisations and the types of exposure for which each agency is used;

Section 6.3.2.

449.i

A description of the Internal Assessment Approach as set out in Chapter 5 of Title II of Part Three,

N/A

2025 Pillar 3 Disclosures Report    347

Index Introduction l Capital l Risks l Remunerations l Appendices l

Article

Brief Description

2025 Pillar 3 Location

Tables

2025 annual report Location

449.j

Separately for the trading book and the non-trading book, the carrying amount of securitisation exposures,

Table 68 (SEC1) Table 69 (SEC2)

449.k

For the non-trading book activities, the following information:

Table 74 (SEC3) Table 75 (SEC4)

449.l

For exposures securitised by the institution, the amount of exposures in default and the amount of the specific credit risk adjustments made by the institution during the current period, both broken down by exposure type.

Table 73 (SEC5)

449a. Disclosure of environmental, social and governance risks (ESG risks)

449a.1

Institutions shall disclose information on ESG risks, distinguishing environmental, social and governance risks, and physical risks and transition risks for environmental risks.

Chapter 10

Table 98 (ESG 1) Table 99 (ESG 2) Table 100 (ESG 3) Table 101 (ESG 4) Table 102 (ESG 5)

449a.2

For the purposes of paragraph 1, institutions shall disclose information on ESG risks, including:

449a.2.a

the total amount of exposures to fossil fuel sector entities;

Chapter 10

449a.2.b

how institutions integrate the identified ESG risks in their business strategy and processes, and governance and risk management.

Chapter 10

449a.3

EBA shall develop draft implementing technical standards to specify uniform disclosure formats, as laid down in Article 434a, for ESG risks ensuring that they are consistent with and uphold the principle of proportionality

Chapter 10

449b. Disclosure of aggregate exposure to shadow banking entities

449b

Institutions shall disclose the information concerning their aggregate exposure to shadow banking entities, as referred to in Article 394(2), second subparagraph.

N/A

450. Remuneration policy

450

Remuneration disclosures (Material Risk Takers):

Chapter 12

Table 104 (REM1) Table 105 (REM2) Table 107 (REM3) Table 108 (REM4) Table 106 (REM5)

Corporate governance Chapter

451. Leverage

451.1

Institutions that are subject to Part Seven shall disclose the following information regarding their leverage ratio.

451.1.a

The leverage ratio and how the institutions apply Article 499(2);

Table 17 (LR2)

451.1.b

A breakdown of the total exposure measure referred to in Article 429(4), as well as a reconciliation of the total exposure measure with the relevant information disclosed in published financial statements;

Table 16(LR1) Table 17 (LR2) Table 18 (LR3)

451.1.c

Where applicable, the amount of exposures and the adjusted leverage ratio

Table 17 (LR2)

451.1.d

A description of the processes used to manage the risk of excessive leverage;

Section 2.5

Table 14 and 15

451.1.e

A description of the factors that had an impact on the leverage ratio during the period to which the disclosed leverage ratio refers.

Section 2.5

Table 14 and 15

451.1.f

the main parameters and rationale for any variable component scheme and any other non-cash benefits;

Section 2.5.

Table 14 and 15

348    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

Article

Brief Description

2025 Pillar 3 Location

Tables

2025 annual report Location

451.2

Public development credit institutions as defined in Article 429a(2) shall disclose the leverage ratio without the adjustment to the total exposure measure determined in accordance with point (d) of the first subparagraph of Article 429a(1).

Table 17 (LR2)

451.3

Large institutions shall disclose the leverage ratio and the breakdown of the total exposure measure.

Table 17 (LR2)

451a. Use of the IRB Approach to credit risk

451a.1

Institutions that are subject to Part Six shall disclose information on their liquidity coverage ratio, net stable funding ratio and liquidity risk management in accordance with this Article.

Sections 10.1.1. and 10.1.2.

451a.2

Institutions shall disclose the following information in relation to their liquidity coverage ratio as calculated in accordance with the delegated act referred to in Article 460(1)

451a.2a

The average or averages, as applicable, of their liquidity coverage ratio based on end-of-the-month observations over the preceding 12 months for each quarter of the relevant disclosure period

Section 10.1.1. and Section 10.1.2.

Table 95 (LIQ1)

451a.2b

The average or averages, as applicable, of total liquid assets, after applying the relevant haircuts, included in the liquidity buffer pursuant to the delegated act referred to in Article 460(1), based on end-of-the-month observations over the preceding 12 months for each quarter of the relevant disclosure period, and a description of the composition of that liquidity buffer

Table 95 (LIQ1)

451a.2c

the averages of their liquidity outflows, inflows and net liquidity outflows as calculated in accordance with the delegated act referred to in Article 460(1), based on end-of-the-month observations over the preceding 12 months for each quarter of the relevant disclosure period and the description of their composition

Table 95 (LIQ1)

451a.3

Institutions shall disclose the following information in relation to their net stable funding ratio as calculated in accordance with Title IV of Part Six

Table 97 (LIQ2)

451a.4

Institutions shall disclose the arrangements, systems, processes and strategies put in place to identify, measure, manage and monitor their liquidity risk in accordance with Article 86 of Directive 2013/36/EU.

Section 10.1.

Risk management and compliance Chapter

451b. Disclosure of crypto-asset exposures and related activities

451b.1

Institutions shall disclose the following information on crypto-assets and crypto-asset services as well as any other activities related to crypto-assets

Section 11.4

451b.2

Institutions shall not apply the exception laid down in Article 432 for the purposes of the disclosure requirements laid down in paragraph 1 of this Article.

Section 11.4

452. Use of the IRB Approach to credit risk

452

Institutions calculating the risk-weighted exposure amounts under the IRB Approach shall disclose the following information:

452.a

Permission for use of the IRB approach from the competent authority.

Section 2.4.2.1.

452.b

For each exposure class referred to in Article 147, the percentage of the total exposure value of each exposure class subject to the Standardised Approach or to the IRB Approach, as well as the part of each exposure class subject to a roll-out plan.

Table 23(CR6-A)

452.c

The control mechanisms for rating systems at the different stages of model development, controls and changes, which shall include information on:

Sections 3.3. and 4.5.

452.c.i

The relationship between the risk management function and the internal audit function;

Sections 3.3. and 4.5.

452.c.ii

The rating system review;

Sections 3.3. and 4.5.

452.c.iii

The procedure to ensure the independence of the function in charge of reviewing the models from the functions responsible for the development of the models;

Sections 3.3. and 4.5.

2025 Pillar 3 Disclosures Report    349

Index Introduction l Capital l Risks l Remunerations l Appendices l

Article

Brief Description

2025 Pillar 3 Location

Tables

2025 annual report Location

452.c.iv

The procedure to ensure the accountability of the functions in charge of developing and reviewing the models;

Sections 3.3. and 4.5.

452.d

The role of the functions involved in the development, approval and subsequent changes of the credit risk models;

Sections 3.3.2. and 10.3.

452.e

The scope and main content of the reporting related to credit risk models;

Sections 4.2.

Table(CRE)

452.f

A description of the internal ratings process by exposure class, including the number of key models used with respect to each portfolio and a brief discussion of the main differences between the models within the same portfolio, covering:

Sections 4.2.

Table(CRE)

452.f.i

The definitions, methods and data for estimation and validation of PD

Sections 4.2.

Table(CRE)

452.f.ii

Were applicable, the definitions, methods and data for estimation and validation of LGD

Sections 4.2.

Table(CRE)

452.f.iii

Where applicable, the definitions, methods and data for estimation and validation of conversion factors

Sections 4.2.

Table(CRE)

452.g

As applicable, the following information in relation to each exposure class referred to in Article 147:

Tables 27 - 29 (CR6) Table 38 (CR4)

452.g.i

Their gross on-balance-sheet exposure;

Tables 27 - 29 (CR6) Table 38 (CR4)

452.g.ii

Their off-balance-sheet exposure values prior to the relevant conversion factor;

Tables 27 - 29 (CR6) Table 38 (CR4)

452.g.iii

Their exposure after applying the relevant conversion factor and credit risk mitigation;

Tables 27 - 29 (CR6) Table 38 (CR4)

452.g.iv

Any model, parameter or input relevant for the understanding of the risk weighting and the resulting risk exposure amounts disclosed across a sufficient number of obligor grades (including default) to allow for a meaningful differentiation of credit risk;

Tables 27 - 29 (CR6) Table 38 (CR4)

452.g.v

Separately for those exposure classes in relation to which institutions have received permission to use own LGDs and conversion factors for the calculation of risk-weighted exposure amounts, and for exposures for which the institutions do not use such estimates, the values referred to in points (i) to (iv) subject to that permission;

Tables 27 - 29 (CR6) Table 38 (CR4)

452.h

Institutions' estimates of PDs against the actual default rate for each exposure class over a longer period

Table 55, Table 56 and Table 57(CR9)

453. Use of credit risk mitigation techniques

453

Institutions applying credit risk mitigation techniques shall disclose the following information:

453.a

Use of on and off-balance sheet netting.

Sections 4.7. and 5.7.

Table 51 (CR3), Table 53 (CR7), 54 (CR7-A) and Table 65 (CCR5)

Risk management and compliance Chapter

453.b

How collateral valuation is managed.

Section 4.7.

Risk management and compliance Chapter

453.c

Description of types of collateral used by the institution.

Section 4.7.

Risk management and compliance Chapter

453.d

Main types of guarantor and credit derivative counterparty, creditworthiness.

Sections 4.7. and 4.7.1.

Table 51 (CR3) Table 53 (CR7) Table 54 (CR7-A)

Risk management and compliance Chapter

453.e

Market or credit risk concentrations within risk mitigation exposures.

Section 4.7.

Table 49

350    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

Article

Brief Description

2025 Pillar 3 Location

Tables

2025 annual report Location

453.f

For institutions calculating risk-weighted exposure amounts under the Standardised Approach or the IRB Approach, the total exposure value not covered by any eligible credit protection and the total exposure value covered by eligible credit protection after applying volatility adjustments

Table 51 (CR3)

453.g

The corresponding conversion factor and the credit risk mitigation associated with the exposure and the incidence of credit risk mitigation techniques with and without substitution effect;

Table 38 (CR4) Table 54 (CR7-A)

453.h

For institutions calculating risk-weighted exposure amounts under the Standardised Approach, the on- and off-balance-sheet exposure value by exposure class before and after the application of conversion factors and any associated credit risk mitigation;

Table 38 (CR4)

453.i

for institutions calculating risk-weighted exposure amounts under the Standardised Approach, the riskweighted exposure amount and the ratio between that risk-weighted exposure amount and the exposure value after applying the corresponding conversion factor and the credit risk mitigation associated with the exposure

Table 38 (CR4)

453.j

For institutions calculating risk-weighted exposure amounts under the IRB Approach, the risk-weighted exposure amount before and after recognition of the credit risk mitigation impact of credit derivatives

Table 53 (CR7)

454. Use of the Advanced Measurement Approaches to operational risk

454

Description of the use of insurance or other risk transfer mechanisms to mitigate operational risk.

Chapter 8

Table 88 (OR1)

455. Use of Internal Market Risk Models

455.1

Institutions calculating their capital requirements in accordance with Article 325az shall disclose the following information:

455.1a

its objectives in undertaking trading activities and the processes implemented to identify, measure, monitor and control the market risk;

Sections 7.2, 7.3.1, 7.3.2. and 7.3.3.

455.1b

the policies referred to in Article 104(1) for determining which position is to be included in the trading book;

Sections 7.2, 7.3.1, 7.3.2. and 7.3.3.

455.1c

a general description of the structure of the trading desks covered by the internal models, including for each desk a broad description of the desk’s business strategy, the instruments permitted therein and the main risk types in relation to that desk;

Sections 7.2, 7.3.1, 7.3.2. and 7.3.3.

455.1d

an overview of the trading book positions not covered by the internal models, including a general description of the desk structure and of types of instruments included in the desks or in the desk categories in accordance with Article 104b;

Sections 7.3.4. and 7.3.5.

455.1e

the structure and organisation of the market risk management function and governance;

Section 7.3.6.

455.1f

the scope, the main characteristics and the key modelling choices of the different internal models used to calculate the risk exposure amounts for the main models used at the consolidated level, and a description of the extent to which those internal models represent the models used at the consolidated level

Section 7.2.

455.2

Institutions shall disclose on an aggregate basis for all trading desks covered by the internal models referred to in Article 325az the following components, where applicable:

Sections 7.3.1, 7.3.2. and 7.3.3.

455.2a

the most recent value as well as the highest, lowest and mean value for the previous 60 business days of: (i) the unconstrained expected shortfall measure referred to in Article 325bb(1); (ii) the unconstrained expected shortfall measure referred to in Article 325bb(1) for each regulatory broad risk factor category;

Section 7.3.1.

Table 80 (MR3)

2025 Pillar 3 Disclosures Report    351

Index Introduction l Capital l Risks l Remunerations l Appendices l

Article

Brief Description

2025 Pillar 3 Location

Tables

2025 annual report Location

455.2b

the most recent value as well as the mean value for the previous 60 business days of: (i) the expected shortfall risk measure referred to in Article 325bb(1);(ii) the stress scenario risk measure referred to in Article 325ba(1), point (b); (iii) the own funds requirement for default risk referred to in Article 325ba(2); (iv) the sum of the own funds requirements referred to in Article 325ba(3), including all components of the formula and the applicable multiplier factor;

Sections 2.4.2. and 7.2.

Table 9 (OV1) Table 78 (MR2-A)

455.2c

the number of back-testing overshootings over the most recent 250 business days at the 99th percentile as referred to in Article 325bf(6).

Section 7.2.2

455.3

Institutions shall disclose on an aggregate basis for all trading desks the own funds requirements for market risk that would be calculated in accordance with Part Three Title IV, Chapter 1a, had the institutions not been granted permission to use their internal models for those trading desks.

Section 7.3.5.

table 86 (MR4)

352    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

Appendix V - List of tables

Num.			Regulatory requirement			Name
CHAPTER 1. INTRODUCTION
Table 1			KM1			KM1 - Key metrics template
Table 2			LI1			Differences between accounting and regulatory scopes of consolidation and mapping of financial statement categories with regulatory risk categories
Table 3			LI2			Main sources of differences between regulatory exposure amounts and carrying values in financial statements
Table 4			CC2			CC2 - reconciliation of regulatory own funds to balance sheet in the audited financial statements
CHAPTER 2. CAPITAL
Table 5						Main capital figures and capital adequacy ratios.
Table 6						Reconciliation of accounting capital with regulatory capital
Table 7						Eligible capital
Table 8						Regulatory capital. Changes
Table 9			OV1			Overview of risk weighted exposure amounts
Table 10						RWAs by geographical region
Table 11			CMS1			Comparison of modelled and standardised risk weighted exposure amounts at risk level
Table 12			CMS2			Comparison of modelled and standardised risk weighted exposure amounts for credit risk at asset class level
Table 13			CCyB2			Amount of institution-specific countercyclical capital buffer
Table 14						Leverage ratio
Table 15						Leverage ratio details
Table 16			LR1			Summary reconciliation of accounting assets and leverage ratio exposures
Table 17			LR2			Leverage ratio common disclosure
Table 18			LR3			Split-up of on balance sheet exposures (excluding derivatives, SFTs and exempted exposures)
Table 19			KM2			Key metrics - G-SII requirement for own funds and eligible liabilities (TLAC)
Table 20			TLAC1			Composition - G-SII Requirement for own funds and eligible liabilities
Table 21			TLAC3a			creditor ranking - resolution entity
CHAPTER 4. CREDIT RISK
Table 22						Credit risk capital requirements movements
Table 23			CR6_A			Scope of the use of IRB and SA approaches
Table 24			CR8			RWEA flow statements of credit risk exposures under the IRB approach
Table 25						Exposures and parameters by segment and geography
Table 26						Credit risk exposures by exposure class and PD range (CR6)
Table 27			CR6_AIRB			AIRB approach - Credit risk exposures by exposure class
Table 28			CR6_AIRB_Retail			AIRB approach Retail - Credit risk exposures by exposure class and PD range
Table 29			CR6_FIRB			FIRB approach - Credit risk exposures by exposure class and PD range
Table 30			CR10_1			Specialised lending and equity exposures under the simple riskweighted approach. Project financing
Table 31			CR10_2			Specialised lending and equity exposures under the simple riskweighted approach. Income-earning real estate and highly volatile commercial real estate
Table 32			CR10_3			Specialised lending and equity exposures under the simple riskweighted approach. Financing of assets
Table 33			CR10_4			Specialised lending and equity exposures under the simple riskweighted approach. Financing of raw materials
Table 34			CR10_5			Equity exposures under the simple risk-weighted approach
Table 35						Equity instruments through other comprehensive income
Table 36						Equity instruments mandatory at fair value through profit and loss
Table 37						Equity instruments through other comprehensive income. Consolidated gross valuation adjustments
Table 38			CR4			Standardised approach - Credit risk exposure and CRM effects
Table 39			CR5			Standardised approach
Table 40						Exposures by geographic area

2025 Pillar 3 Disclosures Report    353

Index Introduction l Capital l Risks l Remunerations l Appendices l

Table 41			CR1_A			Maturity of exposures
Table 42			CR2			Changes in the stock of non-performing loans and advances
Table 43			CR1			Performing and non-performing exposures and related provisions
Table 44			CQ3			Credit quality of performing and non-performing exposures by past due days
Table 45			CQ4			Quality of non-performing exposures by geography
Table 46			CQ5			Credit quality of loans and advances by industry
Table 47			CQ1			Credit quality of forborne exposures
Table 48			CQ7			Collateral obtained by taking possession and execution processes
Table 49						Guarantees by external rating
Table 50						Credit risk mitigation techniques - IRB and SA
Table 51			CR3			CRM techniques overview: Disclosure of the use of credit risk mitigation techniques
Table 52						IRB approach. Credit risk mitigation techniques: credit derivatives and personal guarantees
Table 53			CR7			IRB approach - Effect on the RWEAs of credit derivatives used as CRM techniques
Table 54			CR7_A			IRB approach - Disclosure of the extent of the use of CRM techniques
Table 55			CR9_AIRB			AIRB approach - Back-testing of PD per exposure class (fixed PD scale)
Table 56			CR9_AIRB_Retail			AIRB approach Retail - Back-testing of PD per exposure class (fixed PD scale)
Table 57			CR9_FIRB			FIRB approach - Back-testing of PD per exposure class (fixed PD scale)
Table 58			CR9_1_FIRB			FIRB approach - Back-testing of PD per exposure class (only for PD estimates according to point (f) of Article 180(1) CRR)
CHAPTER 5. COUNTERPARTY CREDIT RISK
Table 59			CVA2			Credit valuation adjustment risk under the Full Basic Approach (F-BA)
Table 60			CCR8			Exposures to CCPs
Table 61			CCR1			Analysis of CCR exposure by approach
Table 62			CCR3			Standardised approach - CCR exposures by regulatory exposure class and risk weights
Table 63			CCR4_AIRB			AIRB approach - CCR exposures by exposure class and PD scale
Table 64			CCR4_FIRB			FIRB approach - CCR exposures by exposure class and PD scale
Table 65			CCR5			Composition of collateral for CCR exposures
Table 66			CCR6			Credit derivatives exposures
CHAPTER 6. SECURITISATIONS
Table 67						Securitisation positions purchased and retained with risk transfer by exposure type in the banking book
Table 68			SEC1			Securitisation exposures in the non-trading book
Table 69			SEC2			Securitisation exposures in the trading book
Table 70						Breakdown of repurchased positions in SSPEs with risk transfer, distributed by function and approach used
Table 71						Aggregate amount of securitisation positions purchased and retained. Trading book
Table 72						Securitisation structures with risk transfer
Table 73			SEC5			Exposures securitised by the institution - Exposures in default and specific credit risk adjustments
Table 74			SEC3			Securitisation exposures in the non-trading book and associated regulatory capital requirements - institution acting as originator or as sponsor
Table 75			SEC4			Securitisation exposures in the non-trading book and associated regulatory capital requirements - institution acting as investor
CHAPTER 7. MARKET RISK
Table 76						Regulatory capital requirements for market risk
Table 77						Capital requirements for market risk. Internal model
Table 78			MR2_A			Market risk under the internal model approach (IMA)
Table 79			MR2_B			RWA flow statements of market risk exposures under the IMA
Table 80			MR1			Market risk under the standardised approach
Table 81						Capital requirements for market risk. Standardised approach
Table 82			PV1			Prudent valuation adjustments (PVA)
Table 83			MR3			IMA values for trading portfolios
Table 84						Stress scenario: Maximum volatility (worst case)
Table 85						Exceptions at units with internal model
Table 86			MR4			Comparison of VaR estimates with gains/losses
Table 87			IRRBB1			Interest rate risks of non-trading book activities

354    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

CHAPTER 8. OPERATIONAL RISK
Table 88			OR1			Operational risk losses
Table 89			OR2			Business Indicator, components and subcomponents
Table 90			OR3			Operational risk own funds requirements and risk exposure amounts
CHAPTER 9. LIQUIDITY AND FUNDING RISK
Table 91			AE1			Encumbered and unencumbered assets
Table 92			AE2			Collateral received and own debt securities issued
Table 93			AE3			Sources of encumbrance
Table 94						Own covered bonds and asset-backed securities issued
Table 95			LIQ1			Quantitative information of LCR
Table 96			LIQB			Qualitative information on LCR, which complements template EU LIQ1
Table 97			LIQ2			Net Stable Funding Ratio
CHAPTER 10. ESG RISK
Table 98			ESG1			Banking book- Climate Change transition risk: Credit quality of exposures by sector, emissions and residual maturity
Table 99			ESG2			Banking book - Climate change transition risk: Loans collateralised by immovable property - Energy efficiency of the collateral
Table 100			ESG3			Banking book - Climate change transition risk: Alignment metrics
Table 101			ESG4			Banking book - Climate change transition risk: Exposures to top 20 carbon-intensive firms
Table 102			ESG5			Banking book - Climate change physical risk: Exposures subject to physical risk
CHAPTER 11. CRYPTO-ASSETS
Table 103			CAE1			Exposures to crypto-assets
CHAPTER 12. REMUNERATION POLICIES
Table 104			REM1			Remuneration awarded for the financial year
Table 105			REM2			Special payments to staff whose professional activities have a material impact on institutions’ risk profile (Identified Staff)
Table 106			REM5			Information on remuneration of staff whose professional activities have a material impact on institutions’ risk profile (Identified Staff)
Table 107			REM3			Deferred remuneration
Table 108			REM4			Remuneration of 1 million EUR or more per year

2025 Pillar 3 Disclosures Report    355

Index Introduction l Capital l Risks l Remunerations l Appendices l

Appendix VI.LI3 - Outline of the differences in the scopes of consolidation (entity by entity)

2025

a

b

c

d

e

f

g

h

Name of the entity

Method of accounting consolidation

Method of regulatory consolidation

Description of the entity

Full consolidation

Proportional consolidation

Equity method

Neither consolidated nor deducted

Deducted

Universia Holding, S.L.

Full consolidation

X

HOLDING COMPANY

Universia España Red de Universidades, S.A.

Full consolidation

X

INTERNET

Santander Totta Seguros, Companhia de Seguros de Vida, S.A.

Full consolidation

X

INSURANCE

Centro de Capacitación Santander, A.C.

Full consolidation

X

NON-PROFIT INSTITUTE

Universia Brasil S.A.

Full consolidation

X

INTERNET

Universia Chile S.A.

Full consolidation

X

INTERNET

Universia Perú, S.A.

Full consolidation

X

INTERNET

Universia México, S.A. De C.V.

Full consolidation

X

INTERNET

Portal Universia Argentina S.A.

Full consolidation

X

INTERNET

Universia Colombia S.A.S.

Full consolidation

X

INTERNET

Portal Universia Portugal, Prestação de Serviços de Informática, S.A.

Full consolidation

X

INTERNET

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

Full consolidation

X

INSURANCE

Laparanza, S.A.

Full consolidation

X

AGRICULTURAL AND LIVESTOCK OPERATIONS

Santander Capitalização S.A.

Full consolidation

X

INSURANCE

Santander Trust S.A.

Full consolidation

X

SERVICES

U.C.I., S.A.

Equity method

X

HOLDING COMPANY

Beyond Wealth, S.A.

Full consolidation

X

CONSULTING SERVICES

Darep Designated Activity Company

Full consolidation

X

REINSURANCE

Unión de Créditos Inmobiliarios, S.A., EFC

Equity method

X

MORTGAGE LOAN COMPANY

Retama Real Estate, S.A.

Equity method

X

REAL ESTATE

UCI Servicios para Profesionales Inmobiliarios, S.A.

Equity method

X

REAL ESTATE SERVICES

CCPT - ComprarCasa, Rede Serviços Imobiliários, S.A.

Equity method

X

REAL ESTATE SERVICES

356    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

Appendix VI.LI3 - Outline of the differences in the scopes of consolidation (entity by entity)

Appendix VI.LI3 - Outline of the differences in the scopes of consolidation (entity by entity)

2025

a

b

c

d

e

f

g

h

Name of the entity

Method of accounting consolidation

Method of regulatory consolidation

Description of the entity

Name of the entity

Method of accounting consolidation

Full consolidation

Proportional consolidation

Equity method

Neither consolidated nor deducted

Deducted

Description of the entity

Mata Alta, S.L.

Full consolidation

X

AGRICULTURAL AND LIVESTOCK FARMING

Universia Uruguay, S.A.

Full consolidation

X

INTERNET

UCI Mediação de Seguros, Unipessoal Lda.

Equity method

X

INSURANCE BROKERAGE

UCI Holding Brasil Ltda.

Equity method

X

HOLDING COMPANY

Companhia Promotora UCI

Equity method

X

FINANCIAL SERVICES

Fortune Auto Finance Co., Ltd

Equity method

X

FINANCE COMPANY

Punta Lima, LLC

Full consolidation

X

LEASING

Banco RCI Brasil S.A.

Equity method

X

BANKING

S3 Caceis Brasil Distribuidora de Títulos e Valores Mobiliários S.A.

Equity method

X

SECURITIES COMPANY

Evidence Previdência S.A.

Full consolidation

X

INSURANCE

Sancap Investimentos e Participações S.A.

Full consolidation

X

HOLDING COMPANY

S3 Caceis Brasil Participações S.A.

Equity method

X

HOLDING COMPANY

Rojo Entretenimento S.A.

Full consolidation

X

REAL ESTATE

Newcomar, S.L., en liquidación

Full consolidation

X

REAL ESTATE

Hyundai Capital UK Limited

Equity method

X

FINANCE COMPANY

Navigator Global Limited

Full consolidation

X

INTERNET

Fondo de Titulización de Activos UCI 14

Equity method

X

SECURITISATION

Fondo de Titulización de Activos UCI 15

Equity method

X

SECURITISATION

Fondo de Titulización de Activos UCI 16

Equity method

X

SECURITISATION

Fondo de Titulización de Activos UCI 17

Equity method

X

SECURITISATION

Venda de Veículos Fundo de Investimento em Direitos Creditórios

Equity method

X

SECURITISATION

HCUK Auto Funding 2017-2 Ltd

Equity method

X

SECURITISATION

2025 Pillar 3 Disclosures Report    357

Index Introduction l Capital l Risks l Remunerations l Appendices l

Appendix VI.LI3 - Outline of the differences in the scopes of consolidation (entity by entity)

Appendix VI.LI3 - Outline of the differences in the scopes of consolidation (entity by entity)

2025

a

b

c

d

e

f

g

h

Name of the entity

Method of accounting consolidation

Method of regulatory consolidation

Description of the entity

Name of the entity

Method of accounting consolidation

Full consolidation

Proportional consolidation

Equity method

Neither consolidated nor deducted

Deducted

Description of the entity

Isar Valley S.A.

Full consolidation

X

SECURITISATION

Evolve SPV S.r.l.

Equity method

X

SECURITISATION

Fondo de Titulización, RMBS Prado VIII

Equity method

X

SECURITISATION

Fondo de Titulización, RMBS Prado IX

Equity method

X

SECURITISATION

Portland SPV S.r.l.

Equity method

X

SECURITISATION

Fondo de Titulización, RMBS Prado X

Equity method

X

SECURITISATION

HCUK Auto Funding 2022-1 Limited

Equity method

X

SECURITISATION

RMBS Belém No.2

Equity method

X

SECURITISATION

Fondo de Titulización, RMBS Green Prado XI

Equity method

X

SECURITISATION

Axle 2023-1 Ltd

Equity method

X

SECURITISATION

HCUK Auto Funding 2025-1 LTD

Equity method

X

SECURITISATION

Electrolyser, S.A. de C.V.

Full consolidation

X

SERVICES

VCFS Germany GmbH

Equity method

X

MARKETING

UCI Greece Credit and Loan Receivables Servicing Company Single Member Societe Anonyme

Equity method

X

FINANCIAL SERVICES

Banco S3 Caceis México, S.A., Institución de Banca Múltiple

Equity method

X

BANKING

S3 CACEIS Colombia S.A. Sociedad Fiduciaria

Equity method

X

FINANCE

Open Digital Market, S.L.

Full consolidation

X

COMMERCE

Santander Caceis Latam Holding 2, S.L.

Equity method

X

HOLDING COMPANY

Santander Caceis Latam Holding 1, S.L.

Equity method

X

HOLDING COMPANY

Solar Maritime Designated Activity Company

Equity method

X

LEASING

Innohub, S.A.P.I. de C.V.

Full consolidation

X

IT SERVICES

Autodescuento, S.L.

Full consolidation

X

ONLINE VEHICLE SALES

358    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

Appendix VI.LI3 - Outline of the differences in the scopes of consolidation (entity by entity)

Appendix VI.LI3 - Outline of the differences in the scopes of consolidation (entity by entity)

2025

a

b

c

d

e

f

g

h

Name of the entity

Method of accounting consolidation

Method of regulatory consolidation

Description of the entity

Name of the entity

Method of accounting consolidation

Full consolidation

Proportional consolidation

Equity method

Neither consolidated nor deducted

Deducted

Description of the entity

Santander Assurance Solutions, S.A.

Equity method

X

INSURANCE BROKERAGE

Allane SE

Full consolidation

X

RENTING

Volvo Car Financial Services UK Limited

Equity method

X

LEASING

NeoAuto S.A.C.

Full consolidation

X

ONLINE VEHICLE SALES

Abent 3T, S.A.P.I de C.V.

Full consolidation

X

ELECTRICITY GENERATION

Tabasco Energía España, S.L. (Sociedad Unipersonal)

Full consolidation

X

HOLDING COMPANY

Allane Schweiz AG

Full consolidation

X

RENTING

Allane Mobility Consulting AG

Full consolidation

X

CONSULTING SERVICES

Allane Leasing GmbH

Full consolidation

X

RENTING

Allane Mobility Consulting GmbH

Full consolidation

X

CONSULTING SERVICES

Autohaus24 GmbH

Full consolidation

X

INTERNET

Allane Location Longue Durée S.a.r.l.

Full consolidation

X

RENTING

Allane Services GmbH & co. KG

Full consolidation

X

SERVICES

Allane Mobility Consulting B.V.

Full consolidation

X

CONSULTANCY SERVICES

Allane Services Verwaltungs GmbH

Full consolidation

X

PORTFOLIO MANAGEMENT

Allane Mobility Consulting Österreich GmbH

Full consolidation

X

CONSULTANCY SERVICES

Allane Mobility Consulting S.a.r.l

Full consolidation

X

CONSULTANCY SERVICES

Alma UK Holdings Ltd

Equity method

X

HOLDING COMPANY

Santander Green Investment, S.L.

Full consolidation

X

HOLDING COMPANY

Elcano Renovables, S.L.

Full consolidation

X

PORTFOLIO COMPANY

Liquetine, S.L.

Full consolidation

X

RENEWABLE ENERGIES

Santander MAPFRE Hipoteca Inversa, E.F.C., S.A.

Equity method

X

FINANCIAL

2025 Pillar 3 Disclosures Report    359

Index Introduction l Capital l Risks l Remunerations l Appendices l

Appendix VI.LI3 - Outline of the differences in the scopes of consolidation (entity by entity)

Appendix VI.LI3 - Outline of the differences in the scopes of consolidation (entity by entity)

2025

a

b

c

d

e

f

g

h

Name of the entity

Method of accounting consolidation

Method of regulatory consolidation

Description of the entity

Name of the entity

Method of accounting consolidation

Full consolidation

Proportional consolidation

Equity method

Neither consolidated nor deducted

Deducted

Description of the entity

Energias Renovables Gladiateur 45, S.L.

Full consolidation

X

RENEWABLE ENERGIES

Energias Renovables de Ormonde 30, S.L.

Full consolidation

X

RENEWABLE ENERGIES

Energias Renovables Prometeo, S.L.

Full consolidation

X

RENEWABLE ENERGIES

Energias Renovables de Titania, S.L.

Full consolidation

X

RENEWABLE ENERGIES

Santander Leasing B.V.

Full consolidation

X

LEASING

Carmine D - Services, Unipessoal Lda.

Full consolidation

X

SOFTWARE

One Mobility Management GmbH

Full consolidation

X

SERVICES

Taxos Luz, S.L.U.

Full consolidation

X

RENEWABLE ENERGIES

FrauDfense, S.L.

Equity method

X

TECHNOLOGICAL SERVICES

Santander Insurance, S.L.

Full consolidation

X

HOLDING COMPANY

AMS Auto Markt Am Schieferstein GmbH

Full consolidation

X

VEHICLE PURCHASE AND SALE

Midata Service GmbH

Full consolidation

X

IT SERVICES

San Pietro Solar PV, S.r.l.

Full consolidation

X

RENEWABLE ENERGIES

Grafite New Energy, S.r.l.

Full consolidation

X

RENEWABLE ENERGIES

Cianite New Energy, S.r.l.

Full consolidation

X

RENEWABLE ENERGIES

Santander New Business, S.A.

Full consolidation

X

TRADE INTERMEDIARY

SC Mobility AS

Full consolidation

X

RENTING

SC Mobility AB

Full consolidation

X

RENTING

Moon GC&P Investments, S.L.U.

Full consolidation

X

HOLDING COMPANY

Santander Leasing AB

Full consolidation

X

LEASING AND RENTING

Generación de Energía Villahermosa, S.A.P.I. de C.V.

Full consolidation

X

ELECTRICITY EXPLOITATION

Santander Compara Holding, S.L.

Full consolidation

X

HOLDING COMPANY

Santander Real Estate Equity I, F.C.R.

Full consolidation

X

VENTURE CAPITAL FUND

360    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

Appendix VI.LI3 - Outline of the differences in the scopes of consolidation (entity by entity)

Appendix VI.LI3 - Outline of the differences in the scopes of consolidation (entity by entity)

2025

a

b

c

d

e

f

g

h

Name of the entity

Method of accounting consolidation

Method of regulatory consolidation

Description of the entity

Name of the entity

Method of accounting consolidation

Full consolidation

Proportional consolidation

Equity method

Neither consolidated nor deducted

Deducted

Description of the entity

Forgepoint Capital International Management Limited

Equity method

X

CONSULTANCY SERVICES

Auto-Interleasing AG

Full consolidation

X

RENTING

CLM Fleet Management Ltd

Full consolidation

X

VEHICLE RENTAL

Factum Information Technologies, S.L.

Full consolidation

X

IT CONSULTANCY

Comparanet, S.A. de C.V.

Full consolidation

X

INSURANCE BROKERAGE

Tresmares Growth Fund III, S.C.R., S.A.

Full consolidation

X

HOLDING COMPANY

Tresmares Growth Fund II, S.C.R., S.A.

Full consolidation

X

HOLDING COMPANY

Diamante New Energy S.r.l.

Full consolidation

X

RENEWABLE ENERGY

Andromeda Principal Investments, S.L.U.

Full consolidation

X

HOLDING COMPANY

Servicios Inmobiliarios Residencial en Venta JV2, S.L.

Full consolidation

X

REAL ESTATE

Flexliving Valdemarín, S.L.

Full consolidation

X

REAL ESTATE

Pinle SPV 2024, S.L.

Full consolidation

X

REAL ESTATE

Redoto SPV 2025, S.L.

Full consolidation

X

REAL ESTATE

Mascor SPV 2025, S.L.

Full consolidation

X

REAL ESTATE

Inverlur Aguilas I, S.L.

Equity method

X

REAL ESTATE

Inverlur Aguilas II, S.L.

Equity method

X

REAL ESTATE

Sociedad Conjunta para la Emisión y Gestión de Medios de Pago, E.F.C., S.A.

Equity method

X

PAYMENT SERVICES

Hyundai Corretora de Seguros Ltda.

Equity method

X

INSURANCE BROKERAGE

Solution 4Fleet Consultoria Empresarial S.A.

Full consolidation

X

VEHICLE RENTAL

FIT Economia de Energia S.A.

Full consolidation

X

ELECTRICITY GENERATION

América Gestão Serviços em Energía S.A.

Full consolidation

X

ELECTRICITY GENERATION

Fundo de Investimento em Direitos Creditórios Multisegmentos NPL Ipanema X Responsabilidade Limitada

Equity method

X

INVESTMENT FUND

2025 Pillar 3 Disclosures Report    361

Index Introduction l Capital l Risks l Remunerations l Appendices l

Appendix VII.CC1 - Composition of regulatory own funds
			EUR million
									2025
						a			b
						(A) Amounts			(B) Explanatory notes
			Common Equity Tier 1 (CET1) capital: instruments and reserves
1			Capital instruments and the related share premium accounts			44,136
			of which: Instrument type 1
			of which: Instrument type 2
			of which: Instrument type 3
2			Retained earnings			92,205
3			Accumulated other comprehensive income (and other reserves)			(46,843)
EU-3a			Funds for general banking risk			—
4			Amount of qualifying items referred to in Article 484 (3) and the related share premium accounts subject to phase out from CET1			—
5			Minority interests (amount allowed in consolidated CET1)			9,037
EU-5a			Independently reviewed interim profits net of any foreseeable charge or dividend			9,959
6			Common Equity Tier 1 (CET1) capital before regulatory adjustments			108,494
			Common Equity Tier 1 (CET1) capital: regulatory adjustments
7			Additional value adjustments (negative amount)			(647)
8			Intangible assets (net of related tax liability) (negative amount)			(15,037)
9			Empty set in the EU
10			Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability where the conditions in Article 38 (3) are met) (negative amount)			(1,447)
11			Fair value reserves related to gains or losses on cash flow hedges of financial instruments that are not valued at fair value			(528)
12			Negative amounts resulting from the calculation of expected loss amounts			(765)
13			Any increase in equity that results from securitised assets (negative amount)			—
14			Gains or losses on liabilities valued at fair value resulting from changes in own credit standing			31
15			Defined-benefit pension fund assets (negative amount)			(585)
16			Direct and indirect holdings by an institution of own CET1 instruments (negative amount)			(1,892)
17			Direct, indirect and synthetic holdings of the CET 1 instruments of financial sector entities where those entities have reciprocal cross holdings with the institution designed to inflate artificially the own funds of the institution (negative amount)			—
18			Direct, indirect and synthetic holdings by the institution of the CET1 instruments of financial sector entities where the institution does not have a significant investment in those entities (amount above 10% threshold and net of eligible short positions) (negative amount)			—
19			Direct, indirect and synthetic holdings by the institution of the CET1 instruments of financial sector entities where the institution has a significant investment in those entities (amount above 10% threshold and net of eligible short positions) (negative amount)			—
20			Empty set in the EU
EU-20a			Exposure amount of the following items which qualify for a RW of 1250%, where the institution opts for the deduction alternative			(610)
EU-20b			of which: qualifying holdings outside the financial sector (negative amount)			—
EU-20c			of which: securitisation positions (negative amount)			(607)
EU-20d			of which: free deliveries (negative amount)			(3)
21			Deferred tax assets arising from temporary differences (amount above 10% threshold, net of related tax liability where the conditions in Article 38 (3) are met) (negative amount)			(990)
22			Amount exceeding the 17.65% threshold (negative amount)			—

362    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

Appendix VII.CC1 - Composition of regulatory own funds
			EUR million
									2025
						a			b
						(A) Amounts			(B) Explanatory notes
23			of which: direct, indirect and synthetic holdings by the institution of the CET1 instruments of financial sector entities where the institution has a significant investment in those entities			—
24			Empty set in the EU
25			of which: deferred tax assets arising from temporary differences			—
EU-25a			Losses for the current financial year (negative amount)			—
EU-25b			Foreseeable tax charges relating to CET1 items except where the institution suitably adjusts the amount of CET1 items insofar as such tax charges reduce the amount up to which those items may be used to cover risks or losses (negative amount)			—
26			Empty set in the EU
27			Qualifying AT1 deductions that exceed the AT1 items of the institution (negative amount)			—
27a			Other regulatory adjusments			(1,284)
28			Total regulatory adjustments to Common Equity Tier 1 (CET1)			(23,754)
29			Common Equity Tier 1 (CET1) capital			84,739
			Additional Tier 1 (AT1) capital: instruments
30			Capital instruments and the related share premium accounts			8,962
31			of which: classified as equity under applicable accounting standards			—
32			of which: classified as liabilities under applicable accounting standards			9,284
33			Amount of qualifying items referred to in Article 484 (4) and the related share premium accounts subject to phase out from AT1 as described in Article 486(3) of CRR			—
EU-33a			Amount of qualifying items referred to in Article 494a(1) subject to phase out from AT1			—
EU-33b			Amount of qualifying items referred to in Article 494b(1) subject to phase out from AT1			—
34			Qualifying Tier 1 capital included in consolidated AT1 capital (including minority interests not included in row 5) issued by subsidiaries and held by third parties			708
35			of which: instruments issued by subsidiaries subject to phase out			—
36			Additional Tier 1 (AT1) capital before regulatory adjustments			9,670
			Additional Tier 1 (AT1) capital: regulatory adjustments
37			Direct and indirect holdings by an institution of own AT1 instruments (negative amount)			(25)
38			Direct, indirect and synthetic holdings of the AT1 instruments of financial sector entities where those entities have reciprocal cross holdings with the institution designed to inflate artificially the own funds of the institution (negative amount)			—
39			Direct, indirect and synthetic holdings of the AT1 instruments of financial sector entities where the institution does not have a significant investment in those entities (amount above 10% threshold and net of eligible short positions) (negative amount)			—
40			Direct, indirect and synthetic holdings by the institution of the AT1 instruments of financial sector entities where the institution has a significant investment in those entities (net of eligible short positions) (negative amount)			—
41			Empty set in the EU
42			Qualifying T2 deductions that exceed the T2 items of the institution (negative amount)			—
42a			Other regulatory adjustments to AT1 capital			—
43			Total regulatory adjustments to Additional Tier 1 (AT1) capital			(25)
44			Additional Tier 1 (AT1) capital			9,645
45			Tier 1 capital (T1 = CET1 + AT1)			94,385
			Tier 2 (T2) capital: instruments
46			Capital instruments and the related share premium accounts			11,159

2025 Pillar 3 Disclosures Report    363

Index Introduction l Capital l Risks l Remunerations l Appendices l

Appendix VII.CC1 - Composition of regulatory own funds
			EUR million
									2025
						a			b
						(A) Amounts			(B) Explanatory notes
47			Amount of qualifying items referred to in Article 484 (5) and the related share premium accounts subject to phase out from T2 as described in Article 486 (4) CRR			—
EU-47a			Amount of qualifying items referred to in Article 494a (2) subject to phase out from T2			—
EU-47b			Amount of qualifying items referred to in Article 494b (2) subject to phase out from T2			—
48			Qualifying own funds instruments included in consolidated T2 capital (including minority interests and AT1 instruments not included in rows 5 or 34) issued by subsidiaries and held by third parties			6,560
49			of which: instruments issued by subsidiaries subject to phase out			—
50			Credit risk adjustments			—
51			Tier 2 (T2) capital before regulatory adjustments			17,720
			Tier 2 (T2) capital: regulatory adjustments
52			Direct and indirect holdings by an institution of own T2 instruments and subordinated loans (negative amount)			(235)
53			Direct, indirect and synthetic holdings of the T2 instruments and subordinated loans of financial sector entities where those entities have reciprocal cross holdings with the institution designed to inflate artificially the own funds of the institution (negative amount)			—
54			Direct and indirect holdings of the T2 instruments and subordinated loans of financial sector entities where the institution does not have a significant investment in those entities (amount above 10% threshold and net of eligible short positions) (negative amount)			—
54a			Empty set in the EU
55			Direct and indirect holdings by the institution of the T2 instruments and subordinated loans of financial sector entities where the institution has a significant investment in those entities (net of eligible short positions) (negative amount)			(25)
56			Empty set in the EU
EU-56a			Qualifying eligible liabilities deductions that exceed the eligible liabilities items of the institution (negative amount)			—
56b			Other regulatory adjusments to T2 capital			—
57			Total regulatory adjustments to Tier 2 (T2) capital			(260)
58			Tier 2 (T2) capital			17,460
59			Total capital (TC = T1 + T2)			111,845
60			Total risk exposure amount			629,430
			Capital ratios and requirements including buffers
61			Common Equity Tier 1 (as a percentage of total risk exposure amount)			—
62			Tier 1 (as a percentage of total risk exposure amount)			—
63			Total capital (as a percentage of total risk exposure amount)			—
64			Institution CET1 overall capital requirements			—
65			of which: capital conservation buffer requirement			—
66			of which: countercyclical buffer requirement			—
67			of which: systemic risk buffer requirement			—
EU-67a			of which: Global Systemically Important Institution (G-SII) or Other Systemically Important Institution (O-SII) buffer			—
EU-67b			of which: additional own funds requirements to address the risks other than the risk of excessive leverage			—
68			Common Equity Tier 1 available to meet buffer (as a percentage of risk exposure amount)			—
69			[non relevant in EU regulation]
70			[non relevant in EU regulation]
71			[non relevant in EU regulation]
			Amounts below the thresholds for deduction (before risk weighting)

364    2025 Pillar 3 Disclosures Report

Index Introduction l Capital l Risks l Remunerations l Appendices l

Appendix VII.CC1 - Composition of regulatory own funds
			EUR million
									2025
						a			b
						(A) Amounts			(B) Explanatory notes
72			Direct and indirect holdings of own funds and eligible liabilities of financial sector entities where the institution does not have a significant investment in those entities (amount below 10% threshold and net of eligible short positions)			7,779
73			Direct and indirect holdings by the institution of the CET1 instruments of financial sector entities where the institution has a significant investment in those entities (amount below 17.65% thresholds and net of eligible short positions)			1,075
74			Empty set in the EU
75			Deferred tax assets arising from temporary differences (amount below 17.65% threshold, net of related tax liability where the conditions in Article 38 (3) are met)			8,651
			Applicable caps on the inclusion of provisions in Tier 2
76			Credit risk adjustments included in T2 in respect of exposures subject to standardised approach (prior to the application of the cap)			—
77			Cap on inclusion of credit risk adjustments in T2 under standardised approach			—
78			Credit risk adjustments included in T2 in respect of exposures subject to internal ratings-based approach (prior to the application of the cap)			—
79			Cap for inclusion of credit risk adjustments in T2 under internal ratings-based approach			1,148
			Capital instruments subject to phase-out arrangements (only applicable between 1 Jan 2014 and 1 Jan 2022)
80			Current cap on CET1 instruments subject to phase out arrangements			—
81			Amount excluded from CET1 due to cap (excess over cap after redemptions and maturities)			—
82			Current cap on AT1 instruments subject to phase out arrangements			—
83			Amount excluded from AT1 due to cap (excess over cap after redemptions and maturities)			—
84			Current cap on T2 instruments subject to phase out arrangements			—
85			Amount excluded from T2 due to cap (excess over cap after redemptions and maturities)			—

2025 Pillar 3 Disclosures Report    365

IMPORTANT INFORMATION

Non-IFRS and alternative performance measures

In addition to the financial information prepared in accordance with the International Financial Reporting Standards (IFRS) and derived from our financial statements, this document includes certain Alternative Performance Measures (APMs), as defined in the Guidelines on Alternative Performance Measures published by the European Securities and Markets Authority (ESMA) on October 5, 2015, as well as certain non-IFRS financial indicators. The financial measures contained in this consolidated management report that are considered APMs and non-IFRS financial indicators have been prepared based on the financial information of Grupo Santander but are not defined or detailed within the applicable financial reporting framework and have not been audited or reviewed by our auditors.

We use these APMs and non-IFRS financial indicators to plan, monitor, and assess our performance.

We believe that these APMs and non-IFRS financial indicators are useful in enabling the management team and investors to compare operational performance across periods.

However, these APMs and non-IFRS financial indicators are considered supplementary information and are not intended to replace IFRS measures. Furthermore, other companies, including some in our sector, may calculate such measures differently, which reduces their usefulness for comparative purposes. APMs that use sustainability-related designations are not calculated in accordance with the Taxonomy Regulation or the SFDR adverse impact indicators. For more information on the APMs and non-IFRS financial indicators used, including their definition or a reconciliation between the applicable management indicators and the financial information presented in the consolidated financial statements prepared under IFRS, please refer to Section 6-"Alternative Performance Measures (APMs)" in the "Economic and Financial Report" chapter, and Note 9: "Alternative Performance Measures (APMs)" in the "Sustainability Report" chapter, both of which are included in the 2025 Annual Report, published on February 25, 2026 (https://www.santander.com/en/shareholders-and-investors/financial-and-economic-information/annual-report).The ordinary measures included in this document are non-IFRS measures.

Sustainability information

This document contains sustainability-related information, including metrics, statements, objectives, commitments, goals, targets, and opinions regarding environmental, social, and governance matters, which complement the sustainability information included in the "Sustainability Report" chapter of the aforementioned Annual Report. The sustainability information in this document has not been audited or reviewed by external auditors. The data, statistics, and metrics included are not necessarily prepared in accordance with IFRS, continue to evolve, and may be based on assumptions deemed reasonable at the time of preparation but which may be subject to revision. Sustainability information is prepared following various reporting frameworks, guidelines, and measurement, collection, and verification practices, both external and internal, which differ substantially from those applicable to financial information and, in many cases, are emerging or still in development. Sustainability information relies on various estimates, assumptions, judgments, and data obtained internally and from third parties. As a result, sustainability information is subject to significant measurement uncertainties, may not be comparable to the sustainability information of other companies or across periods, and its inclusion does not imply that the information is suitable for a specific purpose or material to us under mandatory reporting standards. Therefore, sustainability information should be considered for informational purposes only, and no liability is assumed for its content, except where such liability cannot be limited under mandatory legal provisions.

Forward-looking statements

Santander hereby warns that this document may contain '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 mentioned in this document), 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, the uncertainties following the ceasefire agreement in the Middle East or the outbreak of public health emergencies in the global economy) in areas where we have significant operations or investments;

•exposure to operational risks, including cyberattacks, data breaches, data losses and other security incidents;

•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;

•changes in monetary, fiscal and immigration policies and trade tensions, including the imposition of tariffs and retaliatory responses;

366    2025 Pillar 3 Disclosures Report

•legislative, regulatory or tax changes (including regulatory capital and liquidity requirements) and greater regulation prompted by financial crises;

•acquisitions, integrations, divestitures and challenges arising from deviating management’s resources and attention from other strategic opportunities and operational matters;

•climate-related conditions, regulations, targets and weather events;

•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 potential conflicts and inconsistencies among governmental standards and regulations. Important factors affecting sustainability information may materially differ from those applicable to financial information. 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;

•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 this document 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.

Not a securities offer

Neither this document nor the information contained herein constitutes an offer to sell or a solicitation of an offer to purchase securities.

Past performance does not indicate future outcomes

Statements regarding historical performance or growth rates are not intended to imply that future performance, stock price, or future results (including earnings per share) for a given period will necessarily match or exceed those of a previous period. Nothing in this document should be construed as a profit forecast.

Third Party Information

In this document, Santander references and relies on certain information and statistical data obtained from publicly available sources and third parties, which it considers to be reliable. Neither Santander nor its directors, management, or employees have independently verified the accuracy or completeness of such information, nor do they guarantee its quality, adequacy, legality, accuracy, or completeness, nor do they assume any obligation to update such information after the date of this document. Santander shall not be held liable under any circumstances for the use of such information, for any decision or action taken by any party based on such information, or for any errors, inaccuracies, or omissions in such information. The publicly available sources and third parties referenced or cited in this document retain all rights with respect to such information, and the use of such information should not be construed as granting any license to any third party.

2025 Pillar 3 Disclosures Report    367

santander.com

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			Banco Santander, S.A.
Date:    26 February 2026			By:			/s/ José García Cantera
			Name:			José García Cantera
			Title:			Chief Financial Officer

FAQ

How did Banco Santander (SAN) perform financially in 2025?

Banco Santander delivered attributable profit of €14.1 billion in 2025, a 12% increase. Revenue reached €62.4 billion, while return on tangible equity improved to 16.3%. The efficiency ratio fell to 41.2%, reflecting structural cost improvements and the impact of the ONE Transformation program.

What are Banco Santander’s key capital ratios in the 2025 Pillar 3 report?

Santander reports a Common Equity Tier 1 ratio of 13.46%, Tier 1 ratio of 15.00% and total capital ratio of 17.77%. Risk‑weighted assets total €629.4 billion. These figures, calculated under CRR3 transitional rules, sit above regulatory and buffer requirements disclosed in the report.

What major divestment did Banco Santander (SAN) complete after 2025 year-end?

On 9 January 2026, Santander completed the sale of 49% of Santander Bank Polska and 50% of Santander TFI to Erste Group Bank for about €7,000 million. The deal is expected to generate a net capital gain of roughly €1,900 million in the 2026 consolidated income statement.

What acquisition has Banco Santander agreed with Webster Financial Corporation?

On 3 February 2026, Santander agreed to acquire Webster Financial Corporation for about $12.2 billion. Webster shareholders will receive $48.75 in cash plus 2.0548 Santander shares per Webster share, valuing each Webster share at $75, subject to shareholder and regulatory approvals.

How strong are Banco Santander’s liquidity and funding metrics in 2025?

Santander’s average liquidity coverage ratio stands at 147%, with total high‑quality liquid assets of €299,005 million. The net stable funding ratio is 126%, and the leverage ratio is 4.9%, indicating robust short‑term liquidity and stable structural funding positions.

What capital targets has Banco Santander (SAN) set around 2025–2026?

For 2023–2025, Santander targeted RoTE of 15–17%, an efficiency ratio around 42%, and a fully‑loaded CET1 ratio above 12%. For 2026, it plans to keep CET1 between 12–13% and end the year between 12.8–13%, factoring in the planned Webster acquisition.