Company: BCDRF
Filing Date: 2025-07-31
Form Type: 6-K
Source: 0000891478-25-000113
Chunk: 174

Company: Banco Santander, S.A.
Filing Date: 2025-07-31
Form: 6-K
Chunk 174
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 profile, with a broadly diversified geographical footprint well-balanced between emerging and developed markets. In addition, our business diversification across customer segments is a key factor in maintaining resilience.

In the first half of 2025, Grupo Santander’s credit exposure was influenced by changes in the US trade policy, including tariffs, which affected both the US and Mexico, as well as by the deterioration of the macroeconomic environment in Brazil. While these factors did not significantly alter the overall risk profile of the Group’s loan portfolio, they prompted a reinforcement of our monitoring to ensure timely and effective risk management across the Group's various portfolios. Santander has implemented playbooks that are designed to provide guidance and enable proactive action as conditions evolve.

In addition to this enhanced oversight, some portfolios, due to their inherent business characteristics and risk profiles, require specific monitoring. This includes, for instance, the auto loans business in the US consumer subsidiary (SC USA), as well as other less material portfolios that are subject to explicit oversight under the Group’s risk appetite framework and applicable monitoring policies.

It should be noted that, at 30 June 20 25, c. 65% of the Group’s net customer loans are secured, mostly by real estate collateral.

Mortgages to individuals represent approximately 33% of the Group’s loan portfolio, with low risk profile and low non-performing ratios, along with appropriate provisions coverage. Among other factors, this is due to the fact that these are mainly first residence mortgage loans, which are subject to a rigorous assessment of credit risk and affordability. The admission process evaluates the current and future payment capacity of the customer, evaluating if the client’s disposable income will be sufficient to meet the loans’ instalments even in a more stressed but feasible scenario.

Mortgage portfolios that may present higher risks, such as interest-only loans, flexible loans, loans with LTVs greater than 100%, or buy-to-let lending, are managed under stricter lending policies. However, these represent a low percentage of the Group’s portfolio and are continuously monitored to ensure close and effective risk control.

#### Changes in Practices
In the first half of 2025, Grupo Santander conducted its business in an environment marked by persistent uncertainty, driven by geopolitical tensions, the ongoing conflicts in the Middle East and Ukraine, and trade tensions, resulting primarily from the imposition and increase of tariffs, as well as the implementation of retaliatory responses.

Faced with this challenging scenario, Grupo Santander strengthened its monitoring of all risks, especially economic developments and the behaviour of