Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 1038

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 1038
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 capital planning processes that account for their unique risks.

Stress capital buffer requirement

The Federal Reserve Board’s Stress Capital Buffer (SCB) rule applies to the consolidated operations of US IHCs, including Santander Holdings USA.

The SCB rule subjects covered banking organizations to a firm-specific and dynamic stress capital buffer, which is calculated

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| Contents |     | Cross-reference to Form 20-F |     | Consolidated director's report |     | Consolidated financial statements |     | Supplemental information |

during each applicable supervisory stress testing cycle. For Santander Holdings USA, the SCB is equal to the greater of (i) the maximum decline in its CET1 Risk-Based Capital Ratio under the severely adverse scenario over the supervisory stress test measurement period, plus the sum of the ratios of the dollar amount of our planned common stock dividends to our projected risk-weighted assets for each of the fourth through seventh quarters of the supervisory stress test projection period, and (ii) 2.5%.

Santander Holdings USA’s current SCB, calibrated based on the results of the 2024 supervisory stress tests, is 3.5%. Santander Holdings USA’s SCB is next subject to recalibration based on the results of the 2026 supervisory stress tests.

The SCB rule also implemented related changes to capital planning and stress testing processes for the consolidated operations of US IHCs subject to the stress buffer requirements, including Santander Holdings USA. In particular, the rule limits projected capital actions to planned common stock dividends in the fourth through seventh quarters of the supervisory stress test projection period and assumes that the consolidated operations of IHCs maintain a constant level of assets and risk-weighted assets throughout the supervisory stress test projection period.

Total loss-absorbing capacity and long-term debt requirements

Santander Holdings USA is required, pursuant to the final total loss-absorbing capacity rule of the Federal Reserve Board, to comply with certain Total Loss Absorbing Capital (TLAC) requirements, including minimum long-term debt requirements, applicable to US IHCs of non-US G-SIBs. The main purpose of the minimum TLAC and LTD requirements is to ensure that covered US IHCs, such as Santander Holdings USA, will have enough loss-absorbing resources at the point of failure to be recapitalized through the conversion of eligible LTD to equity or otherwise by imposing losses on eligible LTD or other forms of TLAC. The minimum TLAC and LTD requirements for a