Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 546

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 546
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. 5.5% of total credit risk (including loans to customers and off-balance-sheet risk) is with the 20 'large exposure' groups, according to regulation on credit exposure. While 8.4% o f total credit risk is with the 40 'large exposure' groups. Our Risk division works closely with the Finance division on actively managing credit portfolios with credit derivatives, securitizations and other techniques to reduce exposure concentration and optimize risk-reward. As indicated in the key metrics section of this chapter, our credit risk is diver sified among our core markets (Spain 25%, the UK 21%, the US 12%, Brazil 9%, etc.). Grup o Santander is enhancing our markets with global businesses that will help boost local performance to add value. In terms of sector diversification, 56% of our credit risk is with individuals, who are inherently highly diverse. It is also well distributed, with no significant concentration in a particular industry. The chart below shows credit risk by industry as at December 2024:

| Diversification by economic sectorA |

A. Includes total risk (gross) on balance for all clients with economic activity but excludes individuals and reverse repos. Sectors identification and management Grupo Santander conducts a quarterly review of exposure to customers operating in sectors that could be more affected by macroeconomic conditions (energy consumption, commodity prices, and key macroeconomic variables). This monitoring is complemented by the use of internal tools that allow projecting the behaviour and evolution of clients in each sector under different macroeconomic scenarios. It considers: • Market information: Industries’ stock market performance. • Analysts’ EBITDA forecasts for the coming years. • Internal information: Changes in credit exposure, defaults (in different timelines) and stagings. • Our industry experts’ opinion, based on specific details about our exposures and our relationships with customers. We continued to build up our analysis of potential losses to the highest level of granularity by enhancing our sector-level methodology and projection tool based on the resilience of each company’s financial statements to different macroeconomic scenarios. We considered their pledge to meet energy commitments through possible transition plans by quantifying impacts under the assumptions of an orderly, disorderly or non-existent transition to be able to keep our management of the portfolio one step ahead.

Annual report 2024 522

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

Country risk