Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 932

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 932
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 the exact impact these changes will have on our business, financial condition, results of operations and cash flows for a particular future period, further reforms could result in fines, loss of revenue, higher compliance costs, additional limits on our activities, constraints on our ability to enter into new businesses and other adverse effects on our businesses.

The full spectrum of risks that result from pending or future US financial services legislation or regulations cannot be fully known; however, such risks could be material and we could be materially and adversely affected by them. See section 10.'Supervision and regulation' for a summary of certain significant US financial regulations applicable to our business.

Enhanced prudential standards

As a large foreign banking organization ('FBO') with significant US operations, we are subject to enhanced prudential standards that require Banco Santander to, among other things, establish or designate a US intermediate holding company (an 'IHC') and to hold its entire ownership interest in substantially all of its US subsidiaries under such IHC. The Bank designated its wholly-owned subsidiary, Santander Holdings USA, as its US IHC. As a US IHC, Santander Holdings USA is subject to an enhanced supervision framework that includes enhanced risk-based and leverage capital requirements, liquidity requirements, risk management and governance requirements, stress-testing and capital planning requirements, and resolution planning requirements. Collectively, the enhanced prudential standards impose a significant regulatory burden on Santander Holdings USA, in particular with respect to capital and liquidity, which could limit its ability to distribute capital and liquidity to the Bank, thereby negatively affecting the Bank.

Banco Santander is classified as a Category IV FBO, and Santander Holdings USA is classified as a Category IV IHC, though this categorization may change depending on the scope

and composition of our activities. Category IV institutions are subject to the least exacting level of enhanced prudential standards. Both Banco Santander and Santander Holdings USA are now generally subject to less restrictive enhanced prudential standards and capital and liquidity requirements than under previously applicable regulations, as described in more detail in the relevant sections below. If the categorization for either firm changes, it would be subject to enhanced prudential standards tailored to its risk profile.

Resolution planning

We are required to prepare and submit periodically to the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) a plan, commonly called a living will (the 165(d) plan), for the orderly resolution of our subsidiaries and operations that are domiciled in the US in the event of