Company: BCDRF
Filing Date: 2025-03-03
Form Type: 6-K
Source: 0000891478-25-000057
Chunk: 74

Company: Banco Santander, S.A.
Filing Date: 2025-03-03
Form: 6-K
Chunk 74
---
 in the EBA's guide on credit risk reduction are taken into consideration.

Implementation of mitigation techniques follows the minimum requirements established in the guarantee management policy: legal certainty (possibility of legally requiring the settlement of guarantees at all times); the lack of a substantial positive correlation between the counterparty and the value of the collateral; the correct documentation of all guarantees; the availability of the documented methodologies used for each mitigation technique; and appropriate monitoring, traceability and regular monitoring of the items or assets used for the guarantee.

The mitigation techniques can be grouped into the following categories:

#### Personal guarantees
This type of guarantee grants the creditor a personal right or entitlement affecting the equity of the guarantor. Examples include bonds, guarantees and stand-by letters of credit. Only personal guarantees provided by persons who meet the minimum requirements established by the supervisory authority can be recognised in capital calculations.

#### Hedging through credit derivatives
Credit derivatives are financial instruments that are mainly used to hedge credit risk. By buying protection from a third party, Banco Santander transfers the risk of the issuer of the underlying instrument. Credit derivatives are over-the-counter (OTC) instruments that are traded on non-organised markets. Hedging with credit derivatives is contracted with leading financial institutions, mainly using credit default swaps.

The distribution of personal guarantees and credit derivatives for the corporates, banks, non-financial institutions and sovereigns segments by rating grade is shown below, in compliance with one of the transparency recommendations originally issued by the Basel Committee:

2024 Pillar 3 Disclosures Report 125

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

| Table 47.Guarantees by external rating |     |                      |     |                          |
| EUR million                            |     |                      |     |                     2024 |
| Corporates                             |     |                      |     |                          |
| External Rating                        |     | Exposures in default |     | Exposures not in default |
| AAA/AA                                 |     |                    — |     |                    1,152 |
| A                                      |     |                    — |     |                    9,081 |
| BBB                                    |     |                    — |     |                   17,466 |
| BB                                     |     |                   21 |     |                    3,380 |
| B                                      |     |                    — |     |                      952 |
| Rest                                   |     |                    — |     |