Company: BCDRF
Filing Date: 2025-03-03
Form Type: 6-K
Source: 0000891478-25-000057
Chunk: 141

Company: Banco Santander, S.A.
Filing Date: 2025-03-03
Form: 6-K
Chunk 141
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. This internal ratio is very much in line with that which would be achieved by applying the approach followed until mid-2024, which did not include restrictions on the transfer of liquidity between subsidiaries. The consolidated LCR ratio as end of December 2024 was 153%, comfortably exceeding internal and regulatory requirements. This ratio is calculated, following the ECB requirement, using a consolidation methodology that does not take into account any excess liquidity in excess of 100% of the LCR outflows and that is subject to transferability restrictions (legal or operational) in third countries, even if such excess liquidity can be used to cover additional outflows within the country itself, which is not subject to any restrictions. However, since the Group manages liquidity in a decentralized manner, consolidated metrics are not considered a representative indicator of its liquidity position. Key to these levels was the size of the HQLA buffers upheld by all subsidiaries. The Group´s strong stable retail deposit base and low dependence on short-term funding make the movements in the commercial gap and the issuances maturities as key drivers of the LCR. Composition of the liquidity buffer The Group's liquidity buffer consists mainly of Level 1 assets (97%): cash and sovereign debt, with extensive diversification across issuers. In addition to the regulatory liquidity buffer,

the Group has an internal buffer that monitors the positions of other non-pledged liquid assets available to be used immediately as collateral to obtain additional funding. Concentration of funding and liquidity sources A diversified funding base is a key element in Santander´s liquidity risk management; and the principles listed below are established to achieve this objective: subsidiaries must have effective diversification in sources, products, and funding terms, limiting reliance on short-term wholesale funds. Additionally, the needs arising from medium-and long-term activities must be financed by medium-and long-term instruments. The Group has a set of additional metrics in order to identify and monitor those counterparties that are of such significance that withdrawal of the funding they are providing to the entity could trigger liquidity problems. During the first half of 2024, the Group levels of concentration risk were within management limits, ensuring diversity of wholesale funding at subsidiary level. Derivative exposures and potential collateral calls Most derivative transactions involving Group entities are subject to collateral contracts covering the market value of the transactions. Liquidity risk related to the impact of adverse market scenarios leading to changes in the market values of derivatives, which generate additional liquidity, needs due to the requirement to post collateral. Group units include liquidity risk in their LCR ratios using the historical