Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 592

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 592
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 to macroeconomic and geopolitical risk.

In addition, the constant reinforcement of mitigating measures helped reduce the potential severity of these risks. We performed these actions in 2024:

• Held frequent monitoring meetings, including special situation forums (where necessary) to review risk profile, with the spotlight on key indicators for its monitoring and control.

• Definition and implementation of playbooks to pursue a quick, forward-looking and proactive response to challenging circumstances.

• Adjusted limits and exposures in relation to our risk appetite (where necessary) and updated internal sovereign risk ratings.

• Continuous monitoring of the US’s, China's and the EU's decisions on international trade and tariffs.

• Held asset-liability committee (ALCO) and market committee meetings to monitor structural, interest rate and FX risk, including the coverage of our capital ratios in all major currencies and, where necessary, adjusting our limits and exposure so that we remain within our risk appetite.

Annual report 2024 552

| Contents |     | Business model and strategy |     | Sustainability statement |     | Corporate governance |     | Economic and financial review |     | Riskmanagementandcompliance |

Growing legislative and regulatory pressure An increase in requirements due to new laws and amendments or the extension of legislative measures in the markets where we operate could threaten our capitalization and solvency objectives, stymie profitability, and undermine our ability to extend credit. An example of this would be the potential extension of the windfall tax on banks in Spain. The key mitigation measures for this risk are: • Initiatives included under the capital plan such as mobilizing assets through securitization, portfolio sales and other means; and • Multidisciplinary working groups in cooperation with banking associations, regulators and other stakeholders to anticipate and mitigate the possible outcomes of these measures. Risks related to generative artificial intelligence (AI) AI is a technology that aims to create intelligent systems that can operate with certain autonomy to generate results (such as predictions, recommendations or decisions) with impact in both physical and virtual environments. The major AI risks relate to a potential decline in equality (algorithmic bias), privacy and data processing, design errors and cyber risk. We also consider climate risk due to the high computational intensity of these technologies. We are firmly committed to promoting the transformation of the financial sector through the responsible use of AI that prioritizes transparency and customer protection. That’s why we set potential AI use cases under our risk management framework. Moreover, we have an AI policy with clearly defined roles and responsibilities, which aligns with the Group