Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 449

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 449
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., securitizations, guarantees, sales).

• Preparing internal capital reports, and reports for the supervisory authorities and the market (ICAAP, Pillar 3 reports and stress tests).

• Planning and managing other loss-absorbing instruments other than regulatory capital instruments (MREL and TLAC).

| Santander's capital function has the following aims:                                                                                                     |     |                                                                          |     |                                                           |     |                                                                                                                                                |
| Capital allocation                                                                                                                                       |     | Maximize profitability in the                                            
 economic cycle                                                           |     |                                                           |     | Shift towards a fee-based,                                                                                                                     
 capital-light model                                                                                                                            |
| Capital allocation based onshareholder value creationby measuring profitability on a full cost allocation basis                                          |     | Sustainprofitability improvementsin achanging macro-economic environment |     |                                                           |     | Embrace a fee-based,capital-lightmodel, given intense competition from peers operating withlighter capital modelswith more competitive pricing |
| Provide economic value to shareholders                                                                                                                   |     |                                                                          |     | Continue building a sound capital base                    |     |                                                                                                                                                |
| Improvefree capital generationbyincreasing profitability per unit of capitaldeployed as well as bymitigating impacts that hinder free capital generation |     |                                                                          |     | Continuously improve the Group’s capital base,            
 while cautiously following thenet zero RWA growth mandate |     |                                                                                                                                                |
| Santander’s goal is to generate capital growth and value creation for shareholders                                                                       |     |                                                                          |     |                                                           |     |                                                                                                                                                |

Annual report 2024 423

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

The main measures we took in 2024 were:

Issuances of capital hybrid and other loss-absorbing instruments

In 2024, Banco Santander, S.A. issued around EUR 5.7 billion in hybrid instruments, of which approximately EUR 2.8 billion was Tier 2 subordinated debt and approximately EUR 2.9 billion was contingently convertible preferred shares (CoCos). One EUR 1.5 billion CoCo issuance was to replace an AT1 issuance of the same amount that was called in a tender offer. The other CoCo, a USD 1.5 billion issuance, was to cover regulatory requirements.

Additionally, Banco Santander, S.A. issued around EUR 9.0 billion in senior non-preferred debt.