Company: BCDRF
Filing Date: 2025-03-03
Form Type: 6-K
Source: 0000891478-25-000057
Chunk: 52

Company: Banco Santander, S.A.
Filing Date: 2025-03-03
Form: 6-K
Chunk 52
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| 9 |     | Strategic riskis the risk of loss or damage arising from strategic decisions or their poor implementation, that impact the medium and long term interests of our key stakeholders, or from an inability to adapt to external developments.                                                                                                                                                                                                                        |

Given the cross-cutting impact that ESG (environmental, social and governance) risk factors can have on the different types of risks that exist in different time horizons, our ESG risk management requires a comprehensive view to be able to manage and control these risks correctly, align with the Group’s sustainability strategy and meet regulatory requirements and supervisory expectations.

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. The risk appetite is expressed through qualitative statements and quantitative limits and metrics representative of the bank’s risk profile. Those metrics cover all key risk types according to our corporate risk framework. We articulate them in five axes that provide us with a holistic view of all risks we incur in the development of our business model. The risk appetite framework (RAF) establishes its key elements, which define Santander's business model. These 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. • A conduct model that protects our customers and our Simple, Personal and Fair culture.

| Access 2024 Annual Report available on the Santander Group website |

Risk appetite is governed throughout the Group by the following principles:

• Risk appetite is part of the board's duties. It prepares the risk appetite statement (RAS) for the whole Group every year. In a cascading down process, each subsidiary's board also sets its own risk appetite. • Comprehensiveness and forward-looking approach. Our appetite includes of all material risks that we are exposed to and defines our target risk profile for the current and medium term with a forward-looking view considering stress scenarios. To promote that all material risks are adequately represented, we use corporate methodologies to identify and assess