Company: BCDRF
Filing Date: 2025-01-08
Form Type: 424B5
Source: 0001193125-25-003514
Chunk: 109

Company: Banco Santander, S.A.
Filing Date: 2025-01-08
Form: 424B5
Chunk 109
---
 whether or not Banco Santander will cancel such Distributions.

Under CRD IV and CRR, institutions must comply with a number of capital
requirements. As discussed above, in accordance with Article 48 of Law 10/2014, Article 73 of Royal Decree 84/2015 and Rule 24 of Bank of Spain Circular 2/2016 (which implement Article 141 of CRD IV Directive), an entity not meeting its
“combined buffer requirement” must calculate its Maximum Distributable Amount and, until the Maximum Distributable Amount has been calculated and communicated to the Bank of Spain, that entity shall not make any discretionary payments.
Following such calculation, any discretionary payments by that entity (including the payment of any Distributions on the contingent convertible capital securities) will be subject to the Maximum Distributable Amount so calculated.

In accordance with Article 73 of Royal Decree 84/2015 and Rule 24 of the Bank of Spain Circular 2/2016, restrictions of discretionary payments
will be scaled according to the extent of the breach of the “combined buffer requirement” and calculated as a percentage of the profits of the institution generated since the last annual decision on the distribution of profits. Such
calculation will result in a Maximum Distributable Amount in each relevant period. As an example, the scaling is such that in the bottom quartile of the “combined buffer requirement”, no discretionary payments will be permitted to be made.
As a consequence, in the event of breach

26

of the combined buffer requirement (including where additional capital requirements are imposed that have the result of increasing the regulatory minimum required under CRD IV) it may be necessary to reduce discretionary payments (in whole or in part), including payments of Distributions in respect of the contingent convertible capital securities. There are a number of factors that make the determination and application of the Maximum Distributable Amount particularly complex, including the following:

| • |     | the Maximum Distributable Amount applies when the “combined buffer requirement” is not                                                                                                                                                            
 maintained. The “combined buffer requirement” represents the amount of capital that a financial institution is required to maintain beyond the minimum “Pillar 1” and (if applicable) “Pillar 2” capital requirements.                            
 However, there are several different buffers, some of which are intended to encourage countercyclical behaviour (with extra capital retained when profits are robust) and others of which are intended to provide additional capital cushions for 
 institutions whose failure would result in a significant systemic risk;