Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 921

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 921
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 credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor (the CRR III) and Directive (EU) 2024/1619 of the European Parliament and of the Council of 31 May 2024 amending Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks (the CRD VI) were published in the Official Journal of the European Union. The CRR III is generally applicable from 1 January 2025 (with some exceptions). The CRD VI must be transposed into national law by member states by 10 January 2026, and the way it will be implemented may vary depending on the relevant member state.

In addition, on 18 April 2023, the European Commission adopted a legislative package proposal to adjust and strengthen the EU’s existing bank crisis management and deposit insurance framework (CMDI Proposal), which had been under development for some time and was accelerated in light of recent bank failures. The package contains further amendments to the BRRD, the SRM Regulation and Directive 2014/49/EU of the European Parliament and of the Council on deposit guarantee schemes, which aim at further preserving financial stability, protecting taxpayers and depositors, and supporting the real economy and its competitiveness. As of the date of this annual report there is a high degree of uncertainty with regards to the adjustments to the CMDI Proposal and when they will be finally implemented in the EU.

Capital requirements

Credit institutions, such as the Bank, are required, on a standalone and consolidated basis, to hold a minimum amount of regulatory capital of 8% of risk weighted assets (of which at least 4.5% must be Common Equity Tier 1 (CET1) capital and at least 6% must be Tier 1 capital). In addition to the minimum regulatory capital requirements, the CRD IV also introduced five capital buffer requirements that must be met with CET1 capital: (1) the capital conservation buffer for unexpected losses, requiring additional CET1 of up to 2.5% of total risk weighted assets; (2) the institution-specific counter-cyclical capital buffer (consisting of the weighted average of the counter-cyclical

capital buffer rates that apply in the jurisdictions where the relevant credit exposures are located), which may require as much as additional CET1 capital of 2.5% of total risk weighted assets or higher pursuant to the requirements set by the competent authority; (3