Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 845

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 845
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 origination and its current rating, setting absolute thresholds for the different rating bands that depend on each portfolio characteristics. Additionally, for each portfolio, a series of specific qualitative criteria are defined, which indicate that the exposure has experienced a significant increase in credit risk, regardless of the evolution of its PD since the initial recognition. Santander Bank, National Association, among other criteria, considers that a transaction presents a significant increase in credit risk when it has arrears positions for more than 30days or if it is determined based on a system of early warning indicators.

Santander Consumer USA Inc. Santander Consumer USA Inc. (SC USA) presents higher risk indicators than other Santander US units due to the nature of its business, which focuses on auto finance via loans and leasing. At 31 December 2024, lending amounted to EUR 30,669million (representing 3% of the Group) and presents an increase of 6.2%. As of December 2024, the cost of credit is following a normalization trend, from the artificially good situation of previous years, due to government support and stimulus programs. Regarding the NPL ratio, it increased to 18.68% (+ 42bp in the year); and the cost of credit stood at 6.61% (+ 20bp YoY). NPL coverage ratio fell to 62% (- 1pp in the year), in line with the percentages of transfers from default to bad debts, which are at historically low levels. The focus continues to be on managing the relationship between profitability and risk, via management of prices adjusted to the credit quality of the customer/transaction, while improving the dealers' experience. Information on the estimation of impairment losses The detail of Santander Consumer USA Inc. exposure and loan-loss reserves associated with each of the stages at 31 December 2024, 2023 and 2022, is shown below. In addition, the exposure is divided in fourtranches of the Standard & Poor's rating scale, according to their current credit quality:

| Exposure and loan-loss reserves by stage |     |      |        |         |     |       |         |     |       |         |     |        |       |
| EUR million                              |     |      |        |         |     |       |         |     |       |         |     |        |       |
|                                          |     | 2024 |        |         |     |       |         |     |       |         |     |        |