Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 951

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 951
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 and, occasionally,

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

enactment of temporary taxes, the proceeds of which are earmarked for designated governmental purposes.

The effects of these changes and any other changes that result from enactment of additional tax reforms cannot be quantified and there can be no assurance that any such reforms would not have an adverse effect upon our business.

For example, Law 38/2022, of 27 December, established a temporary levy on financial credit institutions in Spain to be accrued in 2023 and 2024. The levy was calculated as 4.8% of the sum of interest income/charges and commission income/expenses derived from the business activities carried out in Spain. In 2024, Law 7/2024, of 20 December, established a new tax on interests and commissions to be accrued in 2025, 2026 and 2027. For more information see '10. Supervision and regulation - Spanish tax legislation'.

2.2 Credit risks

2.2.1 The credit quality of our loan portfolio may deteriorate, and our loan loss reserves could be insufficient to cover our loan losses, which could have a material adverse effect on us.

Risks arising from changes in credit quality and the recoverability of loans and amounts due from counterparties are inherent to a wide range of our businesses. Non-performing or low credit quality loans have in the past negatively impacted our results of operations and could do so in the future. In particular, the amount of our reported credit impaired loans may increase in the future as a result of growth in our total loan portfolio, including as a result of loan portfolios that we may acquire in the future (the credit quality of which may turn out to be worse than we had anticipated), or factors beyond our control, such as adverse changes in the credit quality of our borrowers and counterparties or a general deterioration in economic conditions in the regions where we operate or in global economic and political conditions, including as a result of the continuance or escalation of the wars in Ukraine and the Middle East. In certain markets, the combined pressure of economic downturn, high inflation and high interest rates may impact the ability of our customers to repay their debt. If we were unable to control the level of our credit impaired or poor credit quality loans, this could have a material adverse effect on us.

Our loan loss reserves are