Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 457

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 457
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 such intangible assets as DTAs and goodwill to retain value (even in a hypothetical resolution), owing to the geographic structure of our subsidiaries. Thus, we can value assets and estimate their unexpected loss and capital impact. Economic capital is an essential internal management tool that helps us develop our strategy, assess solvency and manage portfolio and business risk. As such, it is a key part of the Supervisory Review and Evaluation Process (SREP). Regarding Basel Pillar 2, we use our economic model for the internal capital adequacy assessment process (ICAAP). We plan business progression and capital needs under a baseline scenario and alternative stress scenarios to make sure we meet our solvency objectives, even in adverse scenarios. Economic capital-derived metrics help us assess risk-return objectives, price operations based on risk, determine how economically viable projects are, and value country units and business lines to fulfil our overriding objective of maximizing shareholder value. As a homogeneous risk measure, we can use economic capital to explain how we distribute risk throughout Santander, bringing together several activities and risk types under a single metric. Given its relevance to internal management, Santander includes several economic capital-derived metrics from both a capital needs and a risk-return point of view, within a conservative risk appetite framework established at both Group and subsidiary levels. Required economic capital in December 2024 amounted to EUR 69,984 million. Compared to the available economic capital base of EUR 96,342 million, this implies a capital surplus of EUR 26,358 million.

Annual report 2024 429

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

| Reconciliation of economic and regulatory capital |     |         |      |     |         |      |
| EUR million                                       |     |         |      |     |         |      |
|                                                   |     |         | 2024 |     |         | 2023 |
| Net capital and issuance premiums                 |     |  45,961 |      |     |  49,618 |      |
| Reserves and retained profits                     |     |  85,979 |      |     |  76,841 |      |
| Valuation adjustments                             |     | -38,323 |      |     | -34,484 |      |
| Minority interests                                |     |   8,485 |      |     |   6,908 |      |
| Prud