FIXED INCOME INVESTORS PRESENTATION - Here to help you prosper June 2021 - Banco Santander
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June 2021 FIXED INCOME INVESTORS PRESENTATION Here to help you prosper
Important information
Non-IFRS and alternative performance measures
This presentation contains, in addition to the financial information prepared in accordance with International Financial Reporting Standards (“IFRS”) and derived from our financial statements, alternative
performance measures (“APMs”) as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority (ESMA) on 5 October 2015
(ESMA/2015/1415en) and other non-IFRS measures (“Non-IFRS Measures”). These financial measures that qualify as APMs and non-IFRS measures have been calculated with information from Santander
Group; however those financial measures are not defined or detailed in the applicable financial reporting framework nor have been audited or reviewed by our auditors. We use these APMs and non-IFRS
measures when planning, monitoring and evaluating our performance. We consider these APMs and non-IFRS measures to be useful metrics for our management and investors to compare operating
performance between accounting periods, as these measures exclude items outside the ordinary course performance of our business, which are grouped in the “management adjustment” line and are
further detailed in Section 3.2 of the Economic and Financial Review in our Directors’ Report included in our Annual Report on Form 20-F for the year ended 31 December 2020. Nonetheless, these APMs
and non-IFRS measures should be considered supplemental information to, and are not meant to substitute IFRS measures. Furthermore, companies in our industry and others may calculate or use APMs
and non-IFRS measures differently, thus making them less useful for comparison purposes. For further details on APMs and Non-IFRS Measures, including its definition or a reconciliation between any
applicable management indicators and the financial data presented in the consolidated financial statements prepared under IFRS, please see the 2020 Annual Report on Form 20-F filed with the U.S.
Securities and Exchange Commission on 26 February 2021, as well as the section “Alternative performance measures” of the annex to the Banco Santander, S.A. (“Santander”) Q1 2021 Financial Report,
published as Inside Information on 28 April 2021. These documents are available on Santander’s website (www.santander.com). Underlying measures, which are included in this presentation, are non-IFRS
measures.
The businesses included in each of our geographic segments and the accounting principles under which their results are presented here may differ from the included businesses and local applicable
accounting principles of our public subsidiaries in such geographies. Accordingly, the results of operations and trends shown for our geographic segments may differ materially from those of such
subsidiaries.
Forward-looking statements
Santander advises that this presentation contains “forward-looking statements” as per the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements may be identified by
words like “expect”, “project”, “anticipate”, “should”, “intend”, “probability”, “risk”, “VaR”, “RoRAC”, “RoRWA”, “TNAV”, “target”, “goal”, “objective”, “estimate”, “future” and similar expressions. Found
throughout this presentation, they include (but are not limited to) statements on our future business development, economic performance and shareholder remuneration policy. However, a number of
risks, uncertainties and other important factors may cause actual developments and results to differ materially from our expectations. The following important factors, in addition to others discussed
elsewhere in this presentation, could affect our future results and could cause materially different outcomes from those anticipated in forward-looking statements: (1) general economic or industry
conditions of areas where we have significant operations or investments (such as a worse economic environment; higher volatility in the capital markets; inflation or deflation; changes in demographics,
consumer spending, investment or saving habits; and the effects of the COVID-19 pandemic in the global economy); (2) exposure to various market risks (particularly interest rate risk, foreign exchange
rate risk, equity price risk and risks associated with the replacement of benchmark indices); (3) potential losses from early repayments on our loan and investment portfolio, declines in value of collateral
securing our loan portfolio, and counterparty risk; (4) political stability in Spain, the United Kingdom, other European countries, Latin America and the US (5) changes in legislation, regulations, taxes,
including regulatory capital and liquidity requirements, especially in view of the UK exit of the European Union and increased regulation in response to financial crisis; (6) our ability to integrate successfully
our acquisitions and related challenges that result from the inherent diversion of management’s focus and resources from other strategic opportunities and operational matters; and (7) changes in our
access to liquidity and funding on acceptable terms, in particular if resulting from credit spreads shifts or downgrade in credit ratings for the entire group or significant subsidiaries.
2
Important information
Numerous factors could affect our future results and could cause those results deviating from those anticipated in the forward-looking statements. Other unknown or unpredictable factors could cause
actual results to differ materially from those in the forward-looking statements.
Forward-looking statements speak only as of the date of this presentation and are informed by the knowledge, information and views available on such date. Santander is not required to update or revise
any forward-looking statements, regardless of new information, future events or otherwise.
No offer
The information contained in this presentation is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document
published by Santander. Any person at any time acquiring securities must do so only on the basis of such person’s own judgment as to the merits or the suitability of the securities for its purpose and only
on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the
information contained in this presentation. No investment activity should be undertaken on the basis of the information contained in this presentation. In making this presentation available Santander gives
no advice and makes no recommendation to buy, sell or otherwise deal in shares in Santander or in any other securities or investments whatsoever.
Neither this presentation nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities. No offering of securities shall be made in the United
States except pursuant to registration under the U.S. Securities Act of 1933, as amended, or an exemption therefrom. Nothing contained in this presentation is intended to constitute an invitation or
inducement to engage in investment activity for the purposes of the prohibition on financial promotion in the U.K. Financial Services and Markets Act 2000.
Historical performance is not indicative of future results
Statements about historical performance or accretion must not be construed to indicate that future performance, share price or future (including earnings per share) in any future period will necessarily
match or exceed those of any prior period. Nothing in this presentation should be taken a profit forecast.
Third Party Information
In particular, regarding the data provided by third parties, neither Santander, nor any of its administrators, directors or employees, either explicitly or implicitly, guarantees that these contents are exact,
accurate, comprehensive or complete, nor are they obliged to keep them updated, nor to correct them in the case that any deficiency, error or omission were to be detected. Moreover, in reproducing these
contents by any means, Santander may introduce any changes it deems suitable, may omit partially or completely any of the elements of this document, and in case of any deviation between such a
version and this one, Santander assumes no liability for any discrepancy.
3Index
1 2 3 4 5 6 7
Santander Capital Asset Liquidity & ESG at Sustainable Glossary
Business Quality Funding Santander Funding
Model & Strategy
Strategy
4Our business model drives predictable and profitable growth
Our business model is based on three pillars
1 SCALE
Local scale and leadership.
Worldwide reach through our global businesses
2 CUSTOMER FOCUS
Unique personal banking relationships
strengthen customer loyalty
3 DIVERSIFICATION
Our geographic and business diversification
makes us more resilient under adverse circumstances
5Santander Business Model & Strategy
We have in-market scale in our core markets, with customers distributed 1
across geographies with high growth potential
Market shares Customers distributed across geographies
Mar-21
9%
Loans
1 Billion
7%
Deposits 12% Total Population
Loans
18% 11%
Loans
Deposits 148.6 mn
3% 15% Top 3
Total Customers
Loans Deposits
auto Digital
13% 2% 18% DC
finance Consumer
Deposits Digital Others, 1%1
Loans Loans BankB Consumer Spain, 9%
13% 18% Bank, 13%
Deposits Deposits
10% Argentina, 3% UK, 16%
Loans
Chile, 3%
10%
19% Deposits
Loans
17% 11% Poland, 4%
Deposits Loans
Portugal, 2%
11%
US, 3%
Deposits
Brazil, 33%
Mexico, 13%
Market share data: As at Dec-20 and the US, SCF and Argentina latest available. Spain: includes SAN Spain (public criteria) + Openbank + Hub Madrid + SC Spain. The UK: 6
includes London Branch. Poland: including SCF business in Poland. The US: in all states where Santander Bank operates. Brazil: deposits including debenture, LCA
(agribusiness notes), LCI (real estate credit notes), financial bills (letras financeiras) and COE (certificates of structured operations)Santander Business Model & Strategy
Our focus on increasing customer loyalty via unique personal banking 2
relationships...
Total customers Loyal customers Loyal / Active
148.6 mn (+2%) 23.4 mn (+9%) customers
Individuals (mn) Companies (k)
145 146 146
147 148 148,6 +9% +10% 30.7% 32.5%
142 144
139 141 1.987
21,4 1.808
19,6
Mar-20 Mar-21
Increased loyalty ratio
Mar-20 Mar-21 Mar-20 Mar-21
Note: Year-on-year changes 7Santander Business Model & Strategy
… together with an acceleration in digital adoption… 2
44.2 mn (+15% YoY) Steady growth in digital customers / active customers:
Digital customers1 60% in Q1’21 vs. 54% in Q1’20
Strong engagement and digital sales:
50% in Q1’21 +18% YoY +27% YoY
(41% in Q1’20)
Digital sales2 as % of total sales # Accesses3 # Transactions4
(online & mobile) (monetary & voluntary)
Digital customers: Strong mobile customer growth:
5.1 mn 6.4 mn
37.3 mn (+21% YoY) +6.5 mn YoY
5.3 mn 16.6 mn Mobile customers
(1) Every physical or legal person, that, being part of a commercial bank, has logged in its personal area of internet banking or mobile phone or both in the last 30 days
(2) Percentage of new contracts executed through digital channels during the period 8
(3) Private accesses. Logins of bank’s customers on Santander internet banking or apps. ATM accesses by mobile are not included
(4) Customer interaction through mobile or internet banking which resulted in a change of balance. ATM transactions are not includedSantander Business Model & Strategy
… improves operational excellence by helping to deliver resilient top line 2
performance and increased cost savings
Resilient revenue despite covid-19 crisis… …with one of the best cost-to-income among peers1
Total income, constant EUR mn Cost-to-income, Peer data FY2020, Santander 3M’21
45%
Peer 1 47%
12 pp
Peer 2 50%
11,4 better than
10,6
peer avg.
Peer 3 54%
Peer 4 57%
Peer 5 58%
Peer 6 60%
Mar-20 Mar-21 Peer 7 61%
Peer 8 61%
Peer 9 66%
(1) Peers included are: BBVA, BNP Paribas, Citibank, Credit Agricole, HSBC, ING, Itaú, Scotiabank and Unicredit. Santander calculations 9Santander Business Model & Strategy
Our geographic and business diversification, coupled with our 3
subsidiaries model…
Loans and advances to customers by country Loans and advances to customers by business
Breakdown of total gross loans excluding reverse repos, % of operating areas Mar-21 Breakdown of total gross loans excluding reverse repos, Mar-21
Other, 3%
Digital Consumer Bank, 13% CIB, 13%
Other S. Am., 1% Spain, 22%
Argentina, 0%
Chile, 5% Home
1 mortgages,
Corporates,
Brazil, 7% 13% 35%
Mexico, 3%
US, 10% UK, 27% SMEs, 11%
Other
Other Europe, 5% individuals, 9%
Poland, 3% Consumer, 16%
Portugal, 4%
Total gross loans excluding reverse repos: EUR 924 bn
RWAs2: EUR 567 bn 87% of loan portfolio is Retail, 13% Wholesale
(1) Corporates and institutions 10
(2) RWAs fully-loadedSantander Business Model & Strategy
… with balance sheet growth… 3
Loans and advances to customers in core markets Customer funds in core markets
EUR bn and YoY growth % (constant euros), Mar-21 YoY EUR bn and YoY growth % (constant euros), Mar-21 YoY
UK 244 +1% ES 322 +10%
ES 197 +3% UK 235 +8%
DCB
DC 116 -1% BR 94 +12%
1 1
US 91 -3% US 86 +12%
BR 67 +13% DCB
DC 54 +8%
CH 42 +1% PT 44 +5%
PT 39 +5% MX 42 +1%
MX 31 -6% PL 41 +19%
PL 29 -1% CH 40 +5%
AR 5 +47% AR 9 +52%
Group Group
Total 924 +2% 1.007 +10%
Total
WM 17.5 153.3
Global +9% Global
WM +13%
businesses CIB 117.7 businesses
-3% CIB 105.8 +6%
Note: Loans and advances to customers excluding reverse repos. Customer funds: customer deposits excluding repos + marketed mutual funds 11
Group Total includes Other Europe (mainly SCIB) with loans: EUR 48.2 bn (+5% YoY) and customer funds: EUR 32.5 bn (+28% YoY)
(1) If excluding disposal of Puerto Rico and Bluestem impact (EUR 3.5 bn in loans and EUR 3.5 bn in deposits): loans +1% and funds +17%.… support strong Group net operating income growth (+15%) … 3
Digital Customer Customer Net operating Underlying
customers loans deposits income RoTE
Q1’21 (vs. Q1’20) (mn) (EUR bn) (EUR bn) (EUR mn)
15.6 558 576 2,077 8%
Europe +9% +2% +7% +36% +6.6 pp
North 6.3 123 105 1,620 14%2
America +13% -1%1 +9%1 +4% +9.0 pp
South 21.6 120 103 2,320 19%
America +21% +10% +17% +12% +3.4 pp
Digital 0.7 116 53 703 12%
DCB Consumer +26% -1% +7% +1% +2.4 pp
Bank
Note: YoY changes in constant euros. Loans and advances to customers excluding reverse repos. Customer deposits excluding repos
(1) Excluding Puerto Rico and Bluestem disposal impact. Otherwise, loans -4% and deposits +5%
12
(2) RoTE adjusted for excess capital in the US: 22%Santander Business Model & Strategy
… which is resilient throughout the cycle 3
Resilient profit generation throughout the cycle PPP/Loans well above most European peers1
Group pre-provision profit, EUR bn %, Peers Dec-20, Santander data Mar-21
Peer 1 3.2
25,5 25,6 26,2
2.5
23,9 24,4 23,6 23,7 23,6
23,0 22,6 22,8
Peer 2 2.0
19,9
17,7
Peer 3 2.0
14,8
11,4 Peer 4 1.8
Peer 5 1.5
Peer 6 1.2
2006 07 08 09 10 11 12 13 14 15 16 17 18 19 20
(1) European peers include: BBVA, BNP Paribas, Credit Agricole, HSBC, ING and Unicredit. Santander calculations using publically available data. 13Santander Business Model & Strategy
Moreover, our results show long-term stable and predictable growth 3
Predictable results with the lowest volatility among peers coupled with growth in earnings
Quarterly reported EPS volatility1, 1999-Q4’20
668% 330%
118%
104%
84% 82%
75%
43% 41% 37%
12%
US IT CH CH FR FR US US NL US
(1) Source: Bloomberg, with GAAP Criteria. Note: Standard deviation of the quarterly EPS starting from the first available data since Jan-99 14Santander Business Model & Strategy
Adapting our reporting to the new organizational structure towards the
Santander of Tomorrow –3 priorities for profitable growth
1 One Santander 2 Digital Consumer Bank (DCB) 3 PagoNxt
New operating model leveraging our global Driving profitable growth in Europe and Our Group technology “backbone” solutions
scale to deliver a better customer experience, new markets. with payments at the core, providing
supported by common culture and higher Merchant, Trade and Consumer solutions
degrees of commonality, technology being one
3 regions: Europe, North America and Combining our consumer finance business
South America in Europe, and Openbank, our retail digital
bank.
Primary segments Secondary segment
These changes do not entail any alteration in Group figures
15Santander Business Model & Strategy
We will continue to allocate capital to higher growth opportunities
Disciplined capital allocation
1 2 3
EPS + TNAVps
High RoRWA Fee income Santander of growth
organic growth businesses Tomorrow
Primarily in Americas SCIB, Wealth
Management,
One Santander,
PagoNxt and Digital
Dividend growth
Payments Software Consumer Bank
16Index
1 2 3 4 5 6 7
Santander Capital Asset Liquidity & ESG at Sustainable Glossary
Business Quality Funding Santander Funding
Model & Strategy
Strategy
17Capital
Santander’s capital levels, both phased-in and fully loaded, exceed
minimum regulatory requirements
SREP capital requirements and MDA* Assumed capital requirements (fully-loaded)
Mar-21 Mar-21
16.16%
15.81%
2.26% T2 >14.5
13.01% +315 bps
1.60% AT1 13.01% +280 bps 2.37%
2.00% T2
T2 2.38% 1.55% AT1
T2 1.50%
2.38%
AT1 +345 bps +304 bps
1.781%
AT1 1.78%
G-SIB buffer 1.00%
G-SIB buffer 1.00%
CCyB,
CCoB 2.50% 0.01% 1 12.30% 2.50% CCyB,
CET1 CCoB
0.01% 11.89% 11-12%
0.84% CET1
Pillar 2 R 0.84%
Pillar 2 R
4.50% 4.50%
Pillar 1 Pillar 1
Regulatory Requirement Group ratios Mar-21 Assumed regulatory Group ratios Mar-21 Medium-term
2020 requirement 2020 target ratios
Following regulatory changes in March in response to the COVID-19 crisis, AT1 and T2 issuance are planned to be zero to target 1.5% and
the minimum CET1 to be maintained by the Group is 8.85% (was 9.69% 2% of RWAs respectively assuming constant RWAs
pre-changes)
As of Mar-21, the distance to the MDA is 315 bps2 and the CET1
management buffer is 345 bps
* The phased-in ratio includes the transitory treatment of IFRS 9, calculated in accordance with article 473 bis of the Regulation on Capital Requirements (CRR) and subsequent amendments
introduced by Regulation 2020/873 of the European Union. Additionally, the Tier 1 and total phased-in capital ratios include the transitory treatment according to chapter 2, title 1, part 10 of 18
the aforementioned CRR.
(1) Countercyclical buffer.
(2) MDA trigger = 3.45% - 0.18% - 0.12% = 3.15% (18 bps of AT1 and 12 bps of T2 shortfall is covered with CET1).Capital
Strong fundamentals for AT1 bond holders
Distance to trigger1
Santander Group’s CET1 levels are well above the minimum loss absorption trigger of 5.125%: >EUR 40 bn
The first line of defense is the Group’s strong pre-provision profitability providing a high capacity to absorb provisions during the crisis and
should continue to underpin the Group’s earnings generation capacity
MDA
As of Mar-21, the distance to the MDA is 3.15%2
Targeting a comfortable management buffer, in line with Santander’s business model and predictable results
ADIs
Santander Parent Bank has EUR 55 bn in Available Distributable Items, best-in-class.
This amount of ADI represents >120 times the full Parent AT1 cost budgeted for 2021
Santander has never been prohibited from making a Tier 1 payment or dividend due to insufficient ADIs. Santander has never cancelled the
payment of coupons of any of its Tier 1 securities
(1) CET1 level below which AT1 capital instruments must either convert into ordinary shares or have their principal about written down 19
(2) MDA trigger = 3.45% - 0.18% - 0.12% = 3.15% (18 bps of AT1 and 12 bps of T2 shortfall is covered with CET1).Capital
AT1 issuances distributed by call date
AT1 issuances outstanding at Mar-21
Reset
EUR mn Currency Nominal EUR Coupon Structure Next call date Spread
Banco Santander S.A. EUR 1,500 6.25% PNC7 11-Sep-21 564 bps
Banco Santander S.A. EUR 750 6.75% PNC5 25-Apr-22 680.3 bps
Banco Santander S.A. EUR 1,000 5.25% PNC6 29-Sep-23 499.9 bps
Banco Santander S.A. EUR 1,500 4.75% PNC7 19-Mar-25 409.7 bps
Banco Santander S.A. USD 1,048 7.50% PNC5 8-Feb-24 498.9 bps
Banco Santander S.A. EUR 1,500 4.38% PNC6 14-Jan-26 453.4 bps
1,500 Call date 1,500 1,500
1,000 1,048
750
2021 2022 2023 2024 2025 2026
20Capital
FX hedging policy on capital ratio and P&L…
Stable capital ratio hedge Our P&L Policy
Hedged
Exposure Group
CET1
12.30%1 Strategic management of the exposure to exchange rates on
equity and dynamic on the countervalue of the units’ annual
results in euros
Mitigate impact of FX volatility
Corporate Centre assumes all hedging costs
Managed to mitigate FX volatility in our CET1
ratio
Based on Group regulatory capital and RWAs by
currency
(1) Data calculated using the IFRS 9 transitional arrangements. 21Capital
… and interest rate risk hedging
Mostly positive interest rate sensitivity ALCO portfolios reflect our geographic diversification
Net interest income sensitivity* to a +/-100 bp parallel shift Distribution of ALCO portfolios by country
EUR mn, Feb-21 %, Mar-21
Other
Spain,
+100 bps -100 bps Chile,
S.Am., 3%
7% SCF,
+1,005 -499 10%
1
8%
Brazil, UK, 7%
19%
2
+419 -597
EUR 87 bn
o/w HTC&S EUR 72 bn
3
+115 -77 Poland,
15%
Mexico,
12% Portugal,
-96 +96 USA, 16%
2%
(1) Parent bank
(2) Ring-fenced bank 22
(3) SBNA. SC USA has positive sensitivity under a -100 bp shift scenario
*NOTE. Different criteria vs. Q4’20 presentation: -100 bps sensitivities affected by removal of management floors.Index
1 2 3 4 5 6 7
Santander Capital Asset Liquidity & ESG at Sustainable Glossary
Business Quality Funding Santander Funding
Model & Strategy
Strategy
23Asset Quality
Improved cost of credit driven by lower LLPs in most countries, particularly
in the US and Brazil
Credit quality ratios NPL ratios by country
% % Q1 2020 Q1 2021
Spain 6.88 6.18
4.08% UK 0.99 1.35
3.93%
NPL ratio Poland 4.29 4.82
3.73% Portugal 4.56 3.84
US 2.00 2.11
Mexico 2.07 3.21
3.32%
3.25% 3.26% 3.21% 3.20% Brazil 4.93 4.42
3.15%
Chile 4.63 4.74
Argentina 3.97 2.32
1
DCB 2.21 2.23
2016 2017 2018 2019 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21
Cost of credit ratios by country
Cost of credit 1.26% 1.27% 1.28% % Q1 2020 Q1 2021
1.18% 1.17% Spain 0.64 0.91
1.07% 1.08% UK 0.14 0.21
1.00% 1.00% Poland 0.88 1.02
Portugal 0.23 0.38
USA 3.13 2.12
Mexico 2.69 3.00
1
Brazil 4.43 3.79
2016 2017 2018 2019 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Chile 1.25 1.33
(1) Acquisition of Banco Popular in 2017
Argentina 5.48 4.55 24
DCB 0.63 0.69Asset Quality
86% of moratoria has expired, with only 5% in stage 3. From the 14%
still active, 73% is secured and most of it is in Europe
Distribution of loans subject to moratoria Main units
Active moratoria as of 31st March 21, EUR bn Active moratoria as of 31st March 21, EUR bn
Mortgages 9 9 69% 6
98% 2
Consumer 1 1
78% 6
SMEs &
Corporates
5 1 6
Secured Unsecured
Total 15 1 16 Portugal, Spain and UK represent
90% of active moratoria and 76% is secured
Europe South America North America
Note: Data aligned with EBA disclosure template 25Asset Quality
Breakdown of moratoria by segments, regions and main countries:
credit quality of expired moratoria remains solid
Expired
Total Expired as %
EUR bn, 31-Mar-21 moratoria % loan book (*) o/w: expired of Total % Stage 1 % Stage 2 % Stage 3
Total Group 112 12% 96 86% 75% 20% 5%
Detail by segments
Mortgages 71 22% 62 87% 84% 14% 3%
Consumer 19 8% 18 96% 47% 42% 11%
SMEs & Corporates 22 6% 16 73% 74% 20% 6%
Europe 75 11% 60 80% 80% 16% 4%
UK 45 19% 44 96% 80% 17% 3%
Spain 11 6% 5 46% 74% 16% 10%
SCF 4 4% 4 97% 86% 10% 4%
North America 20 16% 20 98% 50% 42% 9%
USA (SBNA & SC) 14 17% 13 97% 34% 55% 11%
Mexico 6 21% 6 99% 81% 15% 5%
South America 17 14% 16 97% 86% 9% 5%
Brazil 5 8% 5 94% 72% 19% 9%
Note: Data aligned with EBA disclosure template 26Index
1 2 3 4 5 6 7
Santander Capital Asset Liquidity & ESG at Sustainable Glossary
Business Quality Funding Santander Funding
Model & Strategy
Strategy
27Liquidity and Funding
The Group’s business model combines local knowledge with global best practices
through legally, financially and operationally autonomous subsidiaries…
Legal autonomy structure
Dec-20
Santander S.A.
Santander
Consumer Santander
Finance1 Holdings
USA Banco
Santander
UK Group Santander
Holdings Brasil
Santander Grupo
Bank Financiero
Banco Polska Mexico Banco
Santander Santander
Totta SGPS, Chile Banco
SA
Santander
Argentina
Legal autonomy: There are no legal commitments that entail financial support
Financial autonomy: Financial interconnections are limited and at market prices
Operational autonomy: Shared services are limited and carried out through autonomous factories. Access to FMIs through other Group
entities is very limited
(1) Spain Resolution Group headed by Santander S.A. Includes, among others, SCF 28Liquidity and Funding
… divided into different resolution groups that can be resolved separately
though multiple entry points
MPE resolution strategy
Dec-20, EUR bn
Banking Union European Union 3rd Countries
Spain1 Poland Brazil Mexico
Resolution Group PE PE PE PE
PE Point of Entry Portugal UK Chile Argentina
PE PE PE PE
USA
PE
Size of Resolution Groups (Total assets by geography)
156 139
727 Brazil USA
403
55 50 79 65 10
Spain1 Portugal United Kingdom Poland Mexico Chile Argentina
We have defined the Resolution Groups (RGs) mirroring the model of autonomous financial groups so that all entities have been assigned
to one RG
Each RG comprises the entity identified as the entry point in resolution and the entities that belong to it
(1) Spain Resolution Group headed by Santander S.A. Includes, among others, SCF 29Liquidity and Funding
Santander follows an autonomous capital and liquidity model
Capital ratios by country
Dec-20, %, local figures (phased-in)
US
UK
18.83
17.43 21.10
18.56
15.97
15.17
Portugal
25.10
Brazil 24.68
Poland
15.25
21.34 20.04
Mexico 14.06
18.01
19.01 12.87
15.59 Santander 18.01
S.A.
14.35
21.75
Argentina 19.18
Chile Total
18.76
15.37 17.17 T1
15.95
10.66
15.56 CET1
10.66
SCF: Total Capital Ratio: 16.53%; T1: 15.19% and CET 1: 13.21% 30Liquidity and Funding
Santander’s liquidity management is based on the following principles
Decentralised liquidity model
Needs derived from medium- and long-term activity must be financed by medium- and long-term instruments
High contribution from customer deposits, due to the retail nature of the balance sheet
Diversification of wholesale funding sources by instruments/investors, markets/currencies and maturities
Limited recourse to wholesale short-term funding
Availability of sufficient liquidity reserves, including the discount window / standing facility in central banks to be used in
adverse situations
Compliance with regulatory liquidity requirements both at Group and subsidiary level, as a new conditioning management
factor
31Liquidity and Funding
Stock of issuances shows diversification across instruments and entities
Debt outstanding by type Debt outstanding by issuer entity
EUR bn and %, Mar-21 EUR bn and %, Mar-21
Preference Brazil, 1.7, Other, 6.7,
shares, 9.1, 5% 1% 4%
US, 7.9, 5%
Sub debt, 14.1,
8% Chile, 8.6, 5%
Senior, 54.1,
31%
SCF, 20.6, 12%
Senior non- San S.A.,
preferred, 83.6, 48%
46.2, 27%
UK, 44.2, 25%
Covered bonds,
49.7, 29%
Note: preference shares also includes other AT1 instruments. 32Liquidity and Funding
Conservative and decentralized liquidity and funding model
EUR 8.4 bn1 issued in public markets in Q1’21 Very manageable maturity profile
EUR bn, Mar-21 EUR bn, Mar-21
48.4
Spain2 2.1
9.1 8.1 7.4 8.5
5.2
SCF 3.7 6.2 3.9
2.5 2.6 1.5
3.3
2021 2022 2023 2024 2025 2026+
1.7 10.7 12.2
UK 5.9 7.8
2 1.0 2.9 4.6
1.9 1.7 0.5
1.0 0.0 2021 2022 2023 2024 2025 2026+
0.5
Spain UK SCF USA Other USA 0.4 1.0 2.2 0.9 1.8 1.7
2021 2022 2023 2024 2025 2026+
3.2 2.5 3.1 5.2
Other includes issuances in Brazil, Chile, Argentina and Mexico 1.7 1.3
Other
2021 2022 2023 2024 2025 2026+
2021 2022 2023 2024 2025 2026+
(1) Data includes public issuances from all units with period-average exchange rates. Excludes securitisations. Two T2 instruments issued in Q4’20 as prefunding for 2021, totalling
33
EUR 2.3 billion, are not included.
(2) Includes Banco Santander S.A. and Santander International Products PLC Note: preference shares also includes other AT1 instruments.Liquidity and Funding
Issuances YTD against funding plan
2021 Funding plan and issuances
EUR bn, Mar-21
Snr Non-Preferred + Snr Hybrids Covered Bonds TOTAL
Plan Issued Plan Issued Plan Issued Plan Issued
1
Santander S.A 8-10 4.6 2-3 2.3 - - 10-13 6.9
SCF 3-4 1.0 - - 0-1 - 3-5 1.0
UK 2.5-3.5 1.7 - - - - 2.5-3.5 1.7
SHUSA 3-4 - - - - - 3-4 -
Other 2 2.5-3.5 0.5 0-0.5 - - - 2.5-4 0.5
2
TOTAL 19-25 7.8 2-3.5 2.3 0-1 - 21-29.5 10.1
o The Financial Plan is focused on covering TLAC/MREL requirements, with no secured
issuances, to:
Banco Santander S.A.’s 2021 o continue building up TLAC/MREL buffers.
funding plan contemplates the
o pre-finance senior non-preferred / senior preferred transactions which lose TLAC
following: eligibility due to entering in theLiquidity and Funding
Santander S.A. MREL requirement1
22.90%
28.60%
16.81% 24.35%
19.53%
11.48%
€114bn €109bn €74bn
2018 Total MREL 2019 Total MREL 2019
Requirement Requirement 2
Subordination 2018 Total MREL 2019 Total MREL 2019 2
Requirement Requirement Requirement Subordination
% Total Liabilities and Own Funds (TLOF) Requirement
Equivalent amount in EUR billion
Equivalent % in Risk Weighted Assets (RWAs)
The variation in the MREL requirement with respect to 2018 is accounted for mainly by two factors:
• A change in the scope of consolidation of the Resolution Group, which now includes new companies
• A modification in the calculation of capital consumption due to equity risk
According to our estimates, the Resolution Group complies with the new MREL requirement and the subordination requirement.
Future requirements are subject to ongoing review by the resolution authority
New MREL requirement based on BRRD II pending of formal communication by resolution authorities
Note: 2018 values as communicated 24/05/18, 2019 values as communicated 28/11/19.
(1) The Resolution Group comprises Banco Santander, S.A. and the entities that belong to the same European resolution group (Santander Consumer Finance. S.A.)
At 31 December 2017, the Resolution Group had risk-weighted assets amounting to EUR 379,835 million and TLOF amounting to EUR 646,233 million
(2) The SRB considers that the subordination requirement can be covered by non-subordinated instruments in an amount equivalent to 2.5% of risk-weighted assets, 1.47% in terms of 35
TLOF, having considered the absence of material adverse impact on resolvability. If this allowance were taken into account, the requirement that would have to be covered by
subordinated instruments would be 10.01% in terms of TLOF and 17.03% in terms of RWAs, using data as of December 2017 as a referenceTLAC ratios for the Resolution Group headed by Banco Santander, S.A.
TLAC Ratio
EUR mn 30 June 2020 30 September 2020 31 December 2020 31 March 2021 E
Own Funds 86,335 86,191 86,836 86,634
of which: Common Equity Tier 1 (CET1) capital 70,746 70,829 69,451 69,349
of which: Additonal Tier 1 (AT1) capital 7,794 7,740 7,723 7,591
of which: Tier 2 (T2) capital 7,796 7,621 9,662 9,693
Eligible Liabilities 30,998 30,650 30,437 32,550
Subordinated instruments 767 860 964 1,120
Non preferred senior debt 23,336 22,912 22,540 24,352
Preferred senior debt and instruments with the same insolvency ranking 6,894 6,878 6,933 7,079
TLAC BEFORE DEDUCTIONS 117,333 116,841 117,273 119,185
Deductions 53,652 52,622 51,025 48,878
TLAC AFTER DEDUCTIONS 63,681 64,219 66,248 70,307
Risk Weighted Assets (RWAs) 275,774 275,124 277,304 283,145
TLAC RATIO (% RWAs) 23.1% 23.3% 23.9% 24.8%
Leverage Exposure (LE) 735,543 635,439 632,303 689,349
TLAC RATIO (% LE) 8.7% 10.1% 10.5% 10.2%
• TLAC ratio increased in the first quarter of 2021 by 0.9% to 24.8% (compared with the fully-loaded TLAC requirement of 21.5% as of 1 January 2022 and the
current requirement of 16% as of 31 March 2021)
• The increase is mainly due to the rise in the TLAC before deductions (EUR 1.9bn) and to the drop in the deduction (EUR 2.1bn), as a result of the higher
surpluses in other resolution groups. This increase in TLAC ratio is partially offset by the higher RWAs (EUR 5.8bn)
• Between December 2020 and March 2021, TLAC before deductions increased due mainly to the SNP issuances carried out in the quarter (EUR 3.4bn) and dollar
appreciation (EUR 0.6bn), which were partially offset by EUR 2.0 bn of SNP issuances that have stopped meeting eligibility criteria during the quarter
36
December 20 figures show the Closing data, not the estimates shown in the fourth quarter earnings presentationLiquidity and Funding
Well-funded, diversified, prudent and highly liquid balance sheet (large % contribution from
customer deposits), actively reinforced already strong LCR ratios following covid-19 crisis
Liquidity Balance Sheet
EUR bn, Mar-21 Liquidity Coverage Net Stable Funding
1,246 1,246
Ratio (LCR) Ratio (NSFR)
Loans and Customer 1
advances to Mar-21 Dec-20 Dec-20
deposits
customers 883
940
Spain2 176% 175% 116%
UK2 138% 152% 129%
Portugal 131% 122% 123%
45 Securitisations and others
Financial assets 173 M/LT debt issuances Poland 222% 187% 150%
229 ST Funding
28
Fixed assets & other 118 Equity and other liabilities US 156% 129% 120%
78
Assets Liabilities
Mexico 195% 207% 132%
HQLAs3
Brazil 160% 167% 119%
EUR bn, Mar-21 HQLAs Level 1 256.0 Chile 136% 155% 120%
HQLAs Level 2 8.9 Argentina 271% 222% 174%
SCF 534% 314% 114%
Level 2A 4.5
Group 173% 168% 120%
Level 2B 4.3
Note: Liquidity balance sheet for management purposes (net of trading derivatives and interbank balances)
(1) Provisional data 37
(2) Spain: Parent bank, UK: Ring-fenced bank
(3) 12 month average, provisional dataLiquidity and Funding
The main metrics show the strength and stability of the Group’s liquidity
position
Evolution of key liquidity metrics1 LTD and MLT funding metrics by geography
Mar-21
(Deposits + M/LT funding)
LTD Ratio / Loans2
2017 2018 2019 2020 Mar-21
Spain2 77% 144%
2
Loans / net assets 75% 76% 77% 76% 75% UK 108% 110%
2 Portugal 95% 111%
Loan-to-deposit ratio (LTD) 109% 113% 114% 108% 106%
Poland 78% 134%
Customer deposits and medium-
115% 114% 113% 116% 117% USA 110% 124%
and long-term funding /2loans
Mexico 85% 129%
Short-term wholesale funding / net
2% 2% 3% 2% 2% Brazil 96% 116%
liabilities
Structural liquidity surplus / net Chile 134% 96%
15% 13% 13% 15% 16% Argentina 57% 176%
liabilities
3 DCB 212% 76%
Encumbrance 28% 25% 24% 27% 27%
GROUP 106% 117%
(1) Balance sheet for liquidity management purposes
(2) Loans and advances to customers 38
(3) Latest data 12M’’20
(4) Spain public management criteriaLiquidity and Funding
Santander Parent & Subsidiaries’ Senior Debt Ratings
Moody's S&P Fitch
Date last Direction Date last Direction Date last Direction
Rating Outlook Rating Outlook Rating Outlook
change last change change last change change last change
Group (P)A2 17/04/2018 ↑ STABLE A 06/04/2018 ↑ NEG A 17/07/2018 ↑ STABLE
San UK PLC A1 20/10/2020 ↑ STABLE A 09/06/2015 ↑ NEG A+ 01/03/2019 ↑ NEG
San UK Group Holding PLC (P)Baa1 16/09/2015 ↓ NEG BBB 10/04/2015 ↑ NEG A 20/12/2019 ↑ NEG
Santander Consumer Finance SA A2 17/04/2018 - STABLE A- 06/04/2018 - NEG A 28/10/2019 - STABLE
Banco Santander Totta SA Baa3 16/10/2018 ↓ STABLE BBB 18/03/2019 ↑ STABLE BBB+ 21/12/2017 ↑ STABLE
Santander Holding US Baa3 18/10/2016 ↓ STABLE BBB+ 06/04/2018 ↑ NEG BBB+ 17/11/2017 ↑ NEG
Banco Santander Mexico Baa1 22/04/2020 ↓ NEG - - - - BBB+ 13/06/2012 ↓ STABLE
Banco Santander Chile A1 27/07/2018 ↓ NEG A- 25/03/2021 ↓ NEG - - - -
Santander Bank Polska A3 03/06/2019 ↑ STABLE - - - - BBB+ 18/09/2018 Initial STABLE
Banco Santander Brasil Ba1 25/02/2016 ↓ STABLE BB- 12/01/2018 ↓ STABLE - - -
Kingdom of Spain* Baa1 18/09/2020 ↑ STABLE Au 20/09/2019 ↑ NEG A- 19/01/2018 ↑ STABLE
Note: Santander México decided to withdraw the S&P ratings 39Index
1 2 3 4 5 6 7
Santander Capital Asset Liquidity & ESG at Sustainable Glossary
Business Quality Funding Santander Funding
Model & Strategy
Strategy
40Responsible and sustainable governance
Everything we do should be Simple, Personal and Fair…
Challenges
Challenge I Challenge II
New business environment Inclusive and sustainable growth
Ensuring we have the right culture, skills, Supporting small businesses to create new jobs
governance, digital and business practices to and helping people access finance, supporting
meet stakeholders’ expectations. A bank that finance the low-carbon economy and fostering
aspires to be Simple,Personal and Fair. sustainable consumption. Delivering our purpose.
Governance
Management committee (twice a year)
Responsible Banking, Sustainability & Culture Board Committee (RBSCC) (four times a year)
Responsible Banking Forum (at least 6 per year)
Corporate responsible banking unit
Responsible Banking Network and Governance in Countries and Global Business areas
(One Santander, PagoNxt and Digital ConsumerBank)
41Corporate policies
Generalcode Corporate General Environmental, social Human rights
culture policy1 sustainability &climate change risk policy
of conduct policy management policy2
Sensitive Tax policy Consumer Financing of political Defence policy
sectors policy protection policy
parties policy
Corporate frameworks policies and principles3
(1) Includes the Group's Diversity & Inclusion Principles and the Corporate Volunteering Standard.
(2) It replaces the sectoral policies on energy, mining and metals and soft commodities. 42
(3) Employees can access all of the Group's internal regulations (corporate frameworks, models, policies and procedures) on our Internal Governance and Corporate
Regulations portal, ensuring consistency and sound governance across the Group.Being responsible is embedded in our culture
Our common standards.
Our Living our values
purpose
+
Our 4 key
stakeholders
To help people (people, customers,
shareholders and
and businesses
communities).
prosper.
Our With great Behaviours displayed
how
Show Truly Talk Keep
+
respect listen straight promises Governance
Our aim Our including LocalBoard
oversight of common
how minimum standards.
To be the best open
Actively Bring Suport Embrace
financial services
collaborate passion people change
platform, by acting
responsibly and
earning the lasting
+
loyalty of ourpeople, With great Leaders Effective
customers, communications
shareholders and Leading consistent across
Being Inspiring and Encouranging
communities. Open & Executing the team by the group.
Inclusive Transformation to prosper Example
By being SPF in all we do and helping people and business prosper we will be
responsible and earn people’s lasting loyalty
43Further embedding ESG to build a more responsible bank
We continue to help people and businesses prosper.
Environmental: supporting Social: building a more Governance: doing
the green transition inclusive society business the right way
Helping our customers gogreen Talented and diverse team A strong culture
Top 103 in 6 23.7%
EUR 33.8 bn EUR 6.9 bn geographies. Women in leadership
GreenFinance AUM Social positions.
since 2019. Responsible 86% TakingESG
Investment.
Financially empowering people
employees
proud to work
criteria
into accountwhen
at Santander. determining
Going green ourselves
4.9 mn EUR 469 mn remuneration
EUR 1 bn Carbon people⁴ credit to
Green Bond issued neutral since 2019. microentrepreneurs
(2nd since 2019).
in ourown
in 2020. An independent, diverse board
operations.
>60%independent directors.
Supporting society
Aligning with Paris targets
40% Governance
4 mn 225 k women on embedded
1st CCCA¹ 1st TCFD² people helped scholarships granted Group Board. to deliver on ESG.
since 2019. since 2019.
report. report.
(1) Collective Commitment to Climate Action.
(2) Task Force on Financial Climate Disclosure. 44
(3) Top 10 company to work for.
(4) People financially empowered through Santander initiativesChallenge I
New business environment.
Risk culture As a bank, managing all risks, including cyber, is an
93% of employees claim that they are
essential part of our daily business. We have a robust risk
management model and risk culture to ensure we operate able to identify and feel responsible for
in a prudent and responsible way. the risks they face in their daily work.1
Talented and motivated We manage talent to ensure thatwe have motivated
2020 Euromoney Worlds Best Bank for D&I.
team and prepared teams, and we encourage diversity to
provide the best solutions to our customers' needs.
D&I principles as minimum standards. Anonymous
ethical channels.
FlexiWorking.
Acting responsibly towards We develop our products and services responsibly, and
Top 3 in NPS in 6 countries.2
customers aspire to deliver excellent customer service. We have clear
policies on conduct and consumer practices: Consumer
protection principles and Corporate guidelines for good
practices on treatment of vulnerable customers.
Responsible procurement Our suppliers are assessed against our Principles of Responsible Behaviourfor Suppliers which
establish the minimum principles that we expect in the areas of ethics and conduct, social matters
and the environment. These principles are aligned with the ten principles of the Global Compact
and ensure we operate in a sustainable way throughout our operations.
Shareholder value We have clear and robust governance. Risks and opportunities are prudently managed; and
long-term strategy is designed to safeguard the interests of our shareholders and society at
large.
(1) Global engagement survey 2019. Next survey planned for May 2021.
(2) Customer Satisfaction internal benchmark of active customers audited by Stiga/Deloitte. NPS = Net Promoter Score 45Challenge II
Inclusive and sustainable growth.
Supporting the transition to ESG Investing in Wealth Analysis of
a green economy Management &Insurance environmental and social
Our target is to achieve net zero We promote Socially Responsible risks
carbon emissions across the Group Investment through the integration We take into account social and
by 2050. To do so: of ESG criteria in our wealth environmental issues that may arise
management, private banking and from our clients’ business
We aligned our power generation insurance products. operations.
portfolio with the Paris Agreement
for 2030, setting our first
decarbonisation targets.
Supporting communities Inclusion and financial
We support our customers in Through Santander Universities and empowerment
their transition to a low carbon Universia we have created a network Through Santander Finance for All
economy. We are leaders in of universities through which we help we help people to access financial
financing renewable energy people to get access to an education, services, to create or develop micro-
projects. and we support entrepreneurshipand enterprises through loans, and we
aim to help students gain a foothold make sure they have the necessary
We are working to reduce our in the job market. skills to manage their finances
emissions and environmental through financial education.
footprint, having achieved carbon We support communities through the
neutrality in our own operations. promotion of local initiatives and
social programmes that support early
pre-schooleducation, social welfare
and art, culture and knowledge.
46We have set the ambition to be net zero by 2050
Align Santander power generation
portfolio with the Paris
Agreement.
Stop providing
Using 100% of financial services to
electricity power generation
from renewable Eliminate clients with more
sources in all allexposure than 10% of revenues
Becoming carbon Set the decarbonisation targets for countries. tothermal dependent on
neutral in ourown other material sectors, including Oil &Gas, coalmining thermal coal.
operations. Transport, worldwide.
and Mining &Metals.
2020 2021 2022 2025 2030 2050
Remove unnecessary Raise or facilitate the Raise or facilitate the
single-use plastics. mobilisation of over mobilisation of over
EUR 120 billion in green EUR 220 billion in net zero.
finance since 2019. green finance since
2019.
We are a founding member of the Net Zero Banking Alliance (NZBA)
47Exposure of our portfolio to most concerning sectors
For the second year in a row, Banco Santander applied PACTA Power generation portfolio
methodology to measure SCIB power generation portfolio
alignment to a scenario compatible with the Paris Agreement. Production capacity across technologies (%)
Our power generation portfolio compares well against the 2020 2025
Corporate Economy, with a larger share of renewables and
hydro and a smaller percentage exposure to coal. 15% 21% 18% 27% 28%
To fulfil CCCA we will align our power generation portfolio 6%
5%
with Paris by 2030. To deliver on this, two first targets: 19% 12% 20%
8% 11%
1 Stop providing financial services to power generation clients 27% 29%
with a revenue dependency on thermal coal of over 10% by 26% 25%
26%
2030.
2 Reduce our exposure to thermal coal mining to zero by2030. 25%
5% 24% 23%
5%
29%
26%
Going forward: continue assessing alignment of the most
material sectors as regards climate (Mining &Metals, Oil & 3%
3% 3%
12% 10%
Gas, and Transport based on our Materiality). 9%
Corporate Santander Corporate Santander Paris Aligned
Economy(A) Economy(A) Pathway
Coal Oil Gas Hydro Nuclear Renowable
(A) Corporate Economy: represents the aggregate/combined production of all assets in the Asset Resolution's database, which captures approximately 70% of total world
CO2 emissions (CO2 is the largest greenhouse gas (GHG) contributor to human induced climate change). Considering the inclusion of other GHG (such as nitrous oxide and 48
methane – relevant in agriculture), the database captures approximately 60% of total GHG emissions. Based on data from the 2018 World Energy Outlook from the
International Energy Agency.Exposure of our portfolio to the most concerning sectors II
We have analyzed our exposure to climate SCIB1 exposure to climate most concerning
most concerning sectors (based on NACE
codes); that is exposure to those sectors that
sectors
concentrate possible climate transition or Data as of December 2020, EUR bn
physical risk exposure.
~EUR10 bn
Most of these sectors are concentrated in SCIB renewables
(around 90%) and corporate banking and Project
Finance
represents 10% of the whole portfolio. included 27 76
Mortgage and real state portfolio (EUR 338
bn) are considered moderate risk, and
represents 32% of the total portfolio. Retail
and SCF is not included in this exercise. 8
18
23
Power Oil & Mining & Transport Most concerning
Gas Metals
Scale of risk
Very High High Medium Moderate Low
Most concerning
1. Business in scope: SCIB (excluding Export Finance). Exposure = REC before provisions (on and off balance sheet lending + guarantees + derivatives PFE).
49Our commitments
2018 2019 2020 2021 2025
Top 10 company to work for1 4 5 6 6
Women on the board 33% 40% 40% 40% - 60%
Women in senior leadership positions2 20% 23% 23.7% 30%
Equal pay gap3 3% 2% 1.5% ~0%
Financially empowered people4 2.0 mn 4.9 mn 10 mn
Green finance raised and facilitated5 (EUR) 19 bn 33.8bn 120bn
Electricity used from renewable energy sources6 43% 50% 57% 60% 100%
Becoming carbon neutral in our own operations7 0%
Reduction of unnecessary single use plastic in 75% 98% 100%
corporate buildings and branches8
Scholarships, internships and entrepreneurship 69 k 225 k 200 k
programmes9
People helped through our community 1,6 mn 4,0 mn 4 mn
programmes10
From... to... Cumulative target Commitmentachieved
(1) 1. According to external indexes in each country (Great Place to Work, Top Employer, Merco, etc.) 2. Senior leadership positions make up 1% of the total workforce. 3. Equal pay gap based on same jobs, levels and
functions. 4. Unbanked, underbanked or financially vulnerable individuals receive tailored finance solutions and can increase their knowledge and resilience through financial education. 5. Includes Grupo Santander's
contribution to green finance: project finance; syndicated loans; green bonds; capital finance; export finance, advisory services, structuring and other products, to help customers transition to a low-carbon economy. EUR
220bn committed from 2019 to 2030. 6. In countries where we can confirm electricity from renewable sources at properties occupied by Grupo Santander. 7. In our core geographies (G10). 8. The reported percentage
takes our core geographies (G10) into account. Specific measures taken to cope with the covid-19 situation that might have involved use of plastics has not been penalized in the calculation of this percentage. 9.
50
Beneficiaries of Santander Universities (students given a Santander scholarship will do a work placement in an SME or take part in entrepreneurship programmes Grupo Santander endorses).
(2) 10. Beneficiaries of our community investment programmes (not including Santander Universities and financial education initiatives).Independent recognition for our progress
Banco Santander Banco Santanderis Santander’s ESG Santander is once Santander’s In 2020 Santander
included in the Dow also listed on the rating profile has again ranked in the sustainability received Top
Jones Sustainability FTSE4Good index shown a notable top 10 in the 2021 performance Employer 2020
Index since 2000. since 2003. improvement, moving Bloomberg Gender is also ratedby certification in
from a position of Equality Index, Sustainalytics, ISS- 4 geographies
The index assesses As of August 2020 22nd in the sector in where it achieved ESG, CDP, and and SCF, and Top
economic, absolute ESG soreof December 2016 to the top score inwage MSCI. Employer Europe.
environmental and 4.3 points (five being 8th in 2020. equality and gender This certification
social impact of over the maximum score), pay parity. acknowledges the
253 banks globally. above the banking Vigeo Eiris has working conditions
sector average of 2.9 recognised upward The index is focused companies create for
In 2020 Santander points. trends in four areas on several metricslike their employees.
achieved a total score of performance: equal pay & gender
of 83 points out of Environment,Human parity, inclusivity and We have also been
100 on the index,just Rights, Community female leadership & recognised as
six points below the Involvement and talent. one of the top 25
leader, placing us14th Corporate companies to work
in the ranking. Governance. for in the world by
Great Place toWork
and as one of the
Best Places to Work
in Latin America.
The use by Santander, s.a. of any MSCI ESG research LLC or its affiliates (“MSCI”) data, and the use of MSCI logos, trademarks, service marks or index names herein, do not
constitute a sponsorship, endorsement, recommendation, or promotion of Santander, s.a. by MSCI. MSCI services and data are the property of MSCI or its information
providers, and are provided ‘as-is’ and without warranty. MSCI names and logos are trademarks or service marks of MSCI.
FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that Santander, S.A. has been independently assessed according to the
FTSE4Good criteria, and has satisfied the requirements to become a constituent of the FTSE4Good Index Series. Created by the global index provider FTSE Russell, the 51
FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices. The FTSE4Good
indices are used by a wide variety of market participants to create and assess responsible investment funds and other products.Index
1 2 3 4 5 6 7
Santander Capital Asset Liquidity & ESG at Sustainable Glossary
Business Quality Funding Santander Funding
Model & Strategy
Strategy
52Santander’s Global Sustainable Bonds Framework
The Global Sustainable Bonds Framework constitutes our formal concept to govern all the potential Green, Social or Sustainable
bonds.
For each type of bond issuance, an specific Framework under the Global Framework’s guidelines will be published.
The Programme is aligned with the Green Bond Principles, the Social Bond Principles and the Sustainability Bond Guidelines; is
coherent with Santander’s sustainability strategy and contributes to achieve our sustainability commitments.
Under this Global Framework, the aim is to issue periodically sustainable, social or green bonds.
Santander´s Global Sustainable
Verification
Bonds Framework
Sustainable Bond Framework1 Social Bond Framework Green Bond Framework
Sustainable Bonds Social Bonds Green Bonds
(1) Proceeds will be exclusively applied to finance or re-finance a combination of both Green and Social Projects. 53Santander’s Global Sustainable Bonds Framework
Green eligible categories Social eligible categories
Category - SDG Description1 Category - SDG Description2
Energy efficiency Energy savings and consumption. Healthcare Hospitals financing, medical equipment and
Contribution to climate change mitigation. healthcare technologies.
Green buildings: In order for green building
financing to be included the asset must possess
environmental certification.
Renewable energy Renewable energy production, sources: wind, Education Education, primary and secondary schools,
solar, biogas, biomass, thermal, hydro. Universities, training programs, scholarships, etc.
Manufacture of components of renewable energy
technology: wind turbines, solar panels, etc.
Transmission and distribution projects when
connecting to defined energy assets.
Sustainable Water Manag. Contribute to access to safe and affordable SME financing Contribute to access to decent work and economic
drinking water. growth.
Recycling of water and pollution prevention and Facilitate job conservation or creation, revitalise
control. economically depressed areas and reduce poverty.
Aquatic biodiversity conservation. Access to banking in underserved populations.
Sustainable Waste Manag. Water collection, treatment, recycling, re-use, etc. Affordable housing
Contribute to hygiene and access to adequate and Access to adequate, safe and affordable housing
equitable sanitation. for excluded and/or marginalised population or
Recycling of waste and pollution prevention and communities.
control.
(1) Green eligible categories may include other projects in accordance with any update of the ICMA Green Bond Principles at any time. 54
(2) Social eligible categories may include other projects in accordance with any update of the ICMA Social Bond Principles at any time. Sustainable eligible categories may
include other projects in accordance with any update of the ICMA Sustainability Bond Guidelines.Green Bond Framework
Rationale to issue Green Bonds
The issuer is fulfilling its purpose acting in a responsible way
collaborating to address the climate change challenge, fulfilling its
mission, serving shareholders and benefiting society as a whole.
The issuance support Santander’s Responsible Banking agenda,
specifically contributes towards out green finance targets.
Enable private capital to help finance new and existing projects in the
renewable space.
Demonstrate our support to the transition to a lower carbon economy by
reporting the impact of the activities financed.
Diversify investor base and build valuable dialogue with green driven
investors, while optimising our pricing power.
Showcase our leadership in renewable financings.
55You can also read
