Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 1039

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 1039
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 covered US IHC under the rule vary depending on the home country resolution authority’s preferred resolution strategy. Because the competent authorities informed Banco Santander, S.A. that Santander Holdings USA would enter Chapter 11 proceedings under the resolution strategy for the Group, Santander Holdings USA is a resolution covered IHC and is required to maintain external and internal TLAC that collectively amount to at least 18% of risk-weighted assets (plus a TLAC buffer of an additional 2.5% composed solely of common equity tier 1 capital) and at least 9% of average total consolidated assets, as well as external and internal LTD that collectively amount to at least 6% of risk-weighted assets and at least 3.5% of average total consolidated assets. The final rule also established a clean holding company framework that imposes certain restrictions on the types of liabilities or arrangements that may be incurred or entered into by a covered US IHC. It also imposes a cap on the aggregate amount of certain unrelated liabilities of the covered US IHC equal to 5% of the covered US IHC’s TLAC.

In August 2023, the US federal banking agencies released a proposal that would require certain US and foreign banking organizations to issue and maintain long-term debt and clean holding company requirements to improve resolvability (the LTD rule). The proposed LTD rule would apply these requirements to

insured depository institutions (IDIs) with USD100 billion or more in total consolidated assets (excluding IDIs of U.S. G-SIBs), such as Santander Bank. Although Santander Holdings USA is already subject to TLAC, LTD and clean holding company requirements as an IHC of a non-US G-SIB, the proposed LTD rule may still affect Santander Holdings USA by, for example, reducing the amount of LTD with remaining maturities of less than two years that counts toward Santander Holdings USA’s TLAC requirement. It remains uncertain if or when the US federal banking agencies will finalize the proposed LTD rule.

Banco Santander will continue to monitor developments related to the proposed LTD Rule and will assess the impacts of the proposal on its operations.

Liquidity requirements

#### Liquidity coverage ratio
Under the Tailoring Rules, Santander Holdings USA is not subject to the liquidity coverage ratio (LCR) requirement since it is a Category IV IHC with less than USD 50 billion in weighted short-term wholesale funding. The LCR is one of the liquidity components of the international Basel III framework, and requires firms to