Company: BCDRF
Filing Date: 2025-03-03
Form Type: 6-K
Source: 0000891478-25-000057
Chunk: 66

Company: Banco Santander, S.A.
Filing Date: 2025-03-03
Form: 6-K
Chunk 66
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                                    | 1.5 |     | 16.91% |     |    1.5 |     | 8.20%  |     |                              1.5 |     | 45.00% |
|                                    | 1.0 |     | 25.18% |     |    1.0 |     | 12.02% |     |                              1.0 |     | 45.00% |

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:

2024 Pillar 3 Disclosures Report 121

| Index |     | Introduction |     | Capital |     | Risks |     | Risk taker's remunerations |     | Appendices |

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#### 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