Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 935

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 935
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, which implement in the US the capital components of the Basel Committee’s international capital and liquidity standards known as Basel III. Under the Tailoring Rules, Santander Holdings USA is not subject to the liquidity coverage ratio (LCR) or the net stable funding ratio (NSFR) requirements, since it is a Category IV IHC with less than USD 50 billion in weighted short-term wholesale funding.

In July 2023, the US federal banking agencies proposed significant amendments to the Basel III capital rules (Basel III Endgame) that would apply to Santander Holdings USA and Santander Bank. Basel III Endgame generally would require Category I-IV banking organizations, including Santander Holdings USA and Santander, to calculate risk-weighted assets under both the current standardized approach and a new, more

risk sensitive, approach referred to as the 'Expanded Risk-Based Approach.' Total risk-weighted assets under the Expanded Risk-Based Approach would include standardized approaches for credit risk, operational risk and credit evaluation adjustment risk, as well as a new approach for market risk that would be based on internal models and standardized supervisory models. Under Basel III Endgame, Santander Holdings USA and Santander Bank would be subject to the lower of the two resulting capital ratios from the current standardized approach and the Expanded Risk-Based Approach. Due to the changing political environment in the US, it remains uncertain if or when the US federal banking agencies will finalize Basel III Endgame or any similar amendments to the US Basel III capital rules.

Banco Santander will continue to monitor developments related to Basel III Endgame and will assess the impacts of the proposal on its operations.

Total Loss-Absorbing Capacity and Long-Term Debt requirements

In addition to the above-mentioned capital and liquidity requirements, Santander Holdings USA is subject to the Federal Reserve Board’s final rule implementing the FSB’s international Total Loss Absorbing Capital (TLAC) standard, which establishes certain TLAC, long-term debt (LTD) and clean holding company requirements for US IHCs of non-US G-SIIs, including Santander Holdings USA. Santander Holdings USA is compliant with all applicable requirements. Compliance with the final TLAC rule has resulted in increased funding expenses for Santander Holdings USA and, indirectly, the Bank.

In August 2023, the US federal banking agencies released a proposal that would require certain US and foreign banking organizations to issue and maintain long-term debt and clean holding company requirements to improve resolvability (the Proposed LTD rule). The Proposed LTD rule would apply these