Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 836

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 836
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ortgage Charter'. Its demand has been reduced, which also reflects the high credit quality of this portfolio.

Under Santander's risk management principles, a property must be appraised independently before we can approve a new mortgage. In line with market practices and the law, we get updated values of properties used as mortgage collateral from an independent agency's automatic appraisal system. Santander UK's wide range of mortgages include: • Interest-only loans ( 22%): Customers pay interest every month and repay the principal at maturity. These mortgages, which are common in the UK, require borrowers to have an appropriate repayment vehicle, such as a pension plan or an investment fund. To mitigate inherent risk, Santander UK has restrictive approval requirements, such a maximum loan-to-value (LTV) ratio of 50% and an assessment of the ability to pay both interest and capital. • Flexible loans ( 3%): Loan agreements allow borrowers to modify monthly payments or draw down additional funds up to a set limit under various conditions. • Buy-to-let ( 9%): Buy-to-let mortgages account for a small portion of the total portfolio and are subject to strict risk approval policies. Despite the challenging economic environment, the NPL ratio reflects the strength of the mortgage portfolio, which reduces to 1.07% at the end of December 2024 (- 9bps YoY). At 31 December 2024, 84% of the mortgage portfolio had an LTV lower than 70%. Information on the estimation of impairment losses The detail of Santander's UK exposure and loan-loss reserves associated with each of the stages at 31 December, 2024, 2023 and 2022, is shown below.

In addition, the exposure is divided in fourtranches of the Standard & Poor's rating scale, according to their current credit quality:

| Exposure and loan-loss reserves by stage |     |      |         |         |     |        |         |     |       |         |     |         |       |
| EUR million                              |     |      |         |         |     |        |         |     |       |         |     |         |       |
|                                          |     | 2024 |         |         |     |        |         |     |       |         |     |         |       |
| Credit qualityA                          |     |      |         | Stage 1 |     |        | Stage 2 |     |       | Stage 3 |     |         | Total |
| From AAA