Company: BCDRF
Filing Date: 2025-03-03
Form Type: 6-K
Source: 0000891478-25-000057
Chunk: 211

Company: Banco Santander, S.A.
Filing Date: 2025-03-03
Form: 6-K
Chunk 211
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 appetite was completed towards the end of the year, with the aim of verifying that the current model is appropriate for measuring the Compliance function's risk appetite and thus ensuring that it is aligned with the Group's risk appetite. To this end, the composition of the indicators and their corporate thresholds were reviewed for the purpose of providing a true picture of the function's strategy, the financial sector environment and its risk tolerance. The definition of the indicators and the setting of their thresholds

were approved by the relevant committees and communicated to the various subsidiaries. For further details on Compliance risk, see the 'Risk, management and compliance' chapter on the 2024 Annual report.

| Access 2024 Annual Report available on the Santander Group website |

11.2. Model risk 11.2.1. Introduction A model is a system, approach or a quantitative method that applies statistical, economic, financial or mathematical theories, techniques and assumptions to transform data into quantitative estimates. We use models mainly for credit scoring/rating, performance, capital and provisioning, market and structural risk, operational, compliance and liquidity risk, and financial accounting and control, among others. The use of models entails model risk, which is defined as the potential negative consequences of decisions based on poorly developed, poorly implemented or incorrectly used models. Model risk can lead to financial losses, inappropriate business or strategic decisions or damage to the Group's operations. 11.2.2. Model Risk Management At Santander Group we have been measuring, managing and controlling model risk for years. The Model Risk area, which extends to both the corporation and the main subsidiaries, seeks to manage and supervise this risk. For the proper management of model risk, specific internal regulations were created establishing the principles, responsibilities and processes to organise, approve, manage and govern models through their entire life cycle. The intensity of model risk management and monitoring is relative to the importance of each model for Santander Group. Through the tiering process, the level of importance of non-regulatory models is classified and summarized. The regulatory models, given their particular relevance for the Group, follow the most intense control and management standards. At Santander Group we define the following phases of the model's life cycle:

300 2024 Pillar 3 Disclosures Report

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

#### 1. Identification
The identified models have to be included in the scope of model risk control and, consequently, in