Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 505

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 505
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 from their current levels. The Fed and ECB rate cuts are widely discounted, while the new administration’s agenda puts upward pressure on US Treasury yields. Cyclical divergence between the US and the eurozone, geopolitical uncertainty and relatively higher interest rates in the US are tilting towards a more appreciated US dollar against the euro in 2025. Macroeconomic and geopolitical uncertainty are expected to continue to sustain demand for precious metals. In developing economies, a major hotspot of uncertainty remains with respect to the Chinese economy and the effect of the Chinese government's reaction to the new tariffs introduced by the US. In Latin America, markets are expected to remain vulnerable to global uncertainty. In any event, domestic factors are likely to continue to play a significant role in market behaviour, which pay close attention to how countries in the region face their main challenges, in particular, fiscal consolidation and anchoring inflation expectations to central bank targets. The financial sector is expected to be marked by monetary policy normalization, which will have an impact on net interest income.

This impact is expected to be partially offset by an improvement in business volumes in a stable portfolio credit quality environment. Risks are slightly skewed to the downside and may come from non-bank financial institutions, with the risk of disorderly adjustments in asset prices and disruptions to market liquidity. Even so, at the moment, most entities currently have solid solvency positions to face such a scenario. In addition to the economic environment, banks must cope with the acceleration of the business digitalization and knowledge and management of the risks associated with climate change. à Financial regulation

Elections held across our footprint (the US, Mexico, the UK, the EU) in 2024, will usher in a new political cycle that will define the regulatory agenda. The first 100 days of the European Commission will be critical, focusing on boosting competitiveness and growth through simplification and with defence and both the green and digital transitions as the main focus points of its strategy. Competitiveness and Capital Markets Union 2.0 Recently released publications by political figures such as Enrico Letta, Christian Noyer and Mario Draghi agree on a lack of competitiveness and innovation within the EU. The new Savings and Investments Union (SIU) will be instrumental in channelling the trillions of euros in European savings towards capital markets, but this will require less fragmented, more liquid and transparent markets. The debate on how to complete the Banking Union, through the creation of a deposit guarantee fund, is expected to resume. Prudential and resolution During 2025