Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 852

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 852
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 central governments. Santander continues to track and manage transactions with sovereign risk based on available information, such as reports by rating agencies and international organizations. Grupo Santander monitors each country where the Group has cross-border 1 and sovereign risk. Santander analyses events that could affect the country’s political or institutional stability and assign its government or central bank a credit rating. This helps us set limits for transactions with sovereign risk.

At the end of December 2024, Grupo Santander´s local sovereign exposure, in currencies other than the official currency of the country of issuance, is not significant (EUR 4,459million, 1.1% of total sovereign risk) according to our management criteria. Furthermore, exposure to non-local sovereign issuers involving cross-border risk is even less significant 2 (EUR 11,494million, 2.8% of total sovereign risk). Sovereign exposure in Latin America is mostly in local currency, and is recognised in the local accounts and concentrated in short- term maturities. Over the past few years, total exposure to sovereign risk has remained in line with regulatory requirements and our strategy to manage this portfolio. The shifts observed in the different countries exposure is due to our liquidity management strategy and the hedging of interest and exchange rates risks. Santander's exposure spreads among countries with varied macroeconomic outlooks and dissimilar scenarios in terms of growth, interest and exchange rates.

Our investment strategy for sovereign risk considers country’s credit quality to set the maximum exposure limits. The following table shows the percentage of exposure by rating A :

|               |     |    | 2024 |     |    | 2023 |     |    | 2022 |
| AAA           |     | 21 |    % |     | 18 |    % |     | 27 |    % |
| AA            |     | 18 |    % |     | 19 |    % |     | 19 |    % |
| A             |     | 41 |    % |     | 41 |    % |     | 34 |    % |
| BBB           |     | 11 |    % |     | 12 |    % |     | 11 |    % |
| Less than BBB |     |  9 |    % |     | 10 |    % |     |  9 |    % |

A. Internal ratings are applied.

Sovereign exposure at the end of 31 December 2024 is shown in the table below