Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 835

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 835
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 strategic plans, budgets and recovery and resolution plans. In this sense, a prospective view of the sensitivity of each of the Group’s loan portfolio is created in relation to the possible deviation from the base scenario, considering both the macroeconomic developments in different scenarios and the three year evolution of the business. These tests include potentially adverse and favourable scenarios. 3.Detail of the main geographical areas Following is the risk information related to the most relevant geographies in exposure and credit risk allowances. This information includes sensitivity analysis, consisting on simulations of +/-100 bp in the main macroeconomic variables. A set of specific and complete scenarios is used in each geography, where different shocks that affect both the reference macroeconomic variable as well as the rest of the parameters is simulated, with different intensities. These shocks collect mainly the most relevant risks and may be originated by productivity, tax, wages or exchange and interest rates factors. Sensitivity is measured as the average variation on expected loss corresponding to the aforementioned movement of +/-100 bp. Following a conservative approach, the negative movements take into account one additional standard deviation in order to reflect the potential higher variability of losses. 3.1. United Kingdom Portfolio overview Credit risk with customers in the UK (excluding Santander Consumer UK and Santander London Branch) remained stable in EUR 248,061million. This credit risk represents 21% of Santander’s loan portfolio. At 1.33%, the NPL ratio decreased 9bps in comparison to the year end of 2023, due to the good performance in the mortgage portfolio. Mortgage portfolio Because of its size, Grupo Santander closely monitor Santander UK’s mortgage portfolio for the entity itself and the Group. As of 31 December 2024, the mortgage portfolio of Santander UK decreased by 4.6% in local currency to EUR 199,788million. It comprises residential mortgages granted to new and existing customers which are first lien mortgages. There are no second or more liens on mortgaged properties. Originations have increased in 2024 compared to 2023, a sign of a more active housing market due to lower interest rates and less pressure on households’ purchasing power. The housing market returned to growth in 2024, with a higher level of transactions and price increases compared to 2023. Customer payment increases are softening compared to 2023 and are below the conservative assessments of customers’ ability to pay when approving them for a mortgage. We implemented measures to help customers, including those under the UK Government’s 'M