Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 441

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 441
---
 |     | Economic and financial review |     | Riskmanagement and compliance |

Once a year, we must submit a board-approved ILAAP assessment to supervisors that demonstrates our funding and liquidity structures will remain solid in all scenarios and our internal processes will ensure sufficient liquidity (based on analyses that each subsidiary conducts according to local liquidity management models). We believe that our governance structure is robust and suited to identify, manage, monitor and control liquidity risks. It rests on common frameworks, conservative principles, clearly defined roles and responsibilities, a consistent committee structure, effective local lines of defence and well-coordinated corporate supervision. We produce frequent, detailed liquidity monitoring reports for management, control and reporting purposes. We also regularly send the most relevant information to senior managers, the pertinent ALCOs, the executive committee and the board of directors. Over the last few years, Santander and each subsidiary have developed a comprehensive special situations management framework that centralizes our governance for such scenarios. It contains contingency funding plans that form part of our governance model, including feasible, pre-assessed actions that follow a defined timeline, are categorized and prioritized, and provide for sufficient liquidity and execution time to mitigate stress scenarios. For more details, see the '3.6 Special situations and resolution' section in this chapter. Funding strategy and liquidity in 2024 Funding strategy and structure Our funding strategy is focused on extending our management model to all subsidiaries. It is based on a model of autonomous subsidiaries that are responsible for covering their own liquidity needs. This enables us to better understand the advantages derived from our solid retail banking model to maintain sound liquidity positions in the Group and our core local units, even amid market stress. We have adapted our funding strategies to business trends, market conditions and new regulations. In 2024, we improved specific aspects, without significant changes in liquidity management or funding policies and practices. We believe this will enable us to start 2025 from a strong position and with no growth restrictions. Our subsidiaries continue to apply the same funding and liquidity management strategies to: • maintain sufficient and stable medium- and long-term wholesale funding levels;

• ensure the right volume of assets that can be discounted in central banks as part of the liquidity buffer; and • generate liquidity from the retail business. These developments provide Santander with a very strong funding structure with the following characteristics: • Customer deposits are our main funding source. At the end of December 2024, they represented just over two thirds of net liabilities (i.e. of the liquidity balance sheet). They are highly stable because they mainly arise