Summary of Banco Santander Investor Day 2026 Company Overview - **Company**: Banco Santander (NYSE: SAN) - **Event**: Investor Day 2026 - **Date**: February 25, 2026 - **Location**: London, with virtual attendance options Core Industry Insights - **Financial Services Transformation**: Banco Santander has transformed into a more effective and predictable global financial services platform over the past 11 years, focusing on reducing complexity and improving customer experience [3][4] - **Global Alignment**: The operating model is now globally aligned, with fewer products and more common processes, enhancing customer experience and reducing unit costs [4] - **Technology Scaling**: The bank is scaling common technology platforms to improve operational efficiency and customer experience, emphasizing the importance of operational scale in banking [5] Financial Performance and Targets - **Profitability Growth**: The bank aims to grow profits to above EUR 20 billion by 2028, with a return on tangible equity (RoTE) target of above 20% [15][49] - **Revenue Growth**: Revenue is expected to grow by double digits, including M&A contributions, with a focus on increasing fee income and capital-light businesses [16][20] - **Customer Base Expansion**: The target is to grow the customer base to over 210 million by the end of 2025, with active customers increasing from 106 million to close to 125 million by 2028 [18] Strategic Initiatives - **One Transformation**: The ongoing initiative aims to enhance operational efficiency and customer experience through technology and process simplification [12][26] - **M&A Strategy**: Recent acquisitions of TSB in the UK and Webster Bank in the US are expected to enhance market share and profitability, with significant cost synergies projected [41][62] - **Capital Allocation**: The bank emphasizes disciplined capital allocation, prioritizing profitable organic growth and shareholder distributions, with a commitment to return excess capital above a 13% CET1 ratio [40][43] Operational Efficiency - **Cost Management**: The bank has reduced its product offering by 61% and aims to lower costs per active customer by close to 17% by 2028 [13][19] - **Efficiency Gains**: The efficiency ratio is expected to improve significantly, with operational leverage and technology integration driving down costs [26][61] Risk Management and Market Position - **Credit Risk Management**: Pre-provision profits are reported to be close to three times the cost of risk, indicating a strong balance sheet and risk management framework [10][52] - **Market Competitiveness**: Banco Santander ranks among the top three in net promoter score (NPS) in eight out of nine countries, showcasing strong customer engagement and trust [51] Future Outlook - **Sustainable Growth**: The bank is focused on transitioning to a model that emphasizes quality-driven, capital-efficient growth, particularly in key markets like Brazil [63] - **Technological Advancements**: Continued investment in technology and AI is expected to enhance operational efficiency and customer experience, with Gravity 2.0 being a key platform for future growth [30][34] Conclusion - **Commitment to Shareholders**: Banco Santander aims to double cash dividends per share by 2028 from 2025 levels, with a clear focus on compounding tangible book value per share and accelerating shareholder value creation [46][47]

Financial Data and Key Metrics Changes - Santander reported a record annual profit of EUR 14.1 billion for 2025, marking a 12% year-over-year increase, and 15% excluding Argentina [3][4] - The annual dividend per share grew by 14%, reflecting strong shareholder value creation [4] - The CET1 ratio reached an all-time high of 13.5%, up 70 basis points from the previous year, indicating strong capital generation [13][30] Business Line Data and Key Metrics Changes - Retail profit increased by 9% year-on-year, with a cost-to-income ratio of 39% [8][9] - Consumer business net interest income (NII) grew by 5% year-on-year, while group NII, excluding Argentina, increased by 3% [5][6] - Wealth profit surged by 27% in 2025, driven by strong commercial activity and double-digit fee growth [11] - Payments volume rose by 9%, with PagoNxt EBITDA margin exceeding 34% [11] Market Data and Key Metrics Changes - The customer base expanded by 8 million to 180 million, showcasing strong market penetration [3] - The U.S. market is highlighted as a key growth area, with profits growing over 30% from 2023 to 2025 [15][16] Company Strategy and Development Direction - The acquisition of Webster Financial Corporation is a strategic move to enhance Santander's U.S. operations, aiming for a return on tangible equity (ROTE) of 18% by 2028 [17][22] - The focus remains on improving efficiency and profitability through the "One Transformation" initiative, which emphasizes simplification and automation [7][8] - The company aims to maintain a disciplined approach to capital allocation while pursuing growth opportunities in key markets [12][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a ROTE exceeding 20% by 2028, driven by the integration of Webster and ongoing transformation efforts [34] - The U.S. market is viewed as attractive due to its growth potential and favorable regulatory environment, with expectations for continued value creation [33][34] - The company anticipates mid-single-digit revenue growth in 2026, with double-digit growth including M&A impacts [35] Other Important Information - A new share buyback program of up to EUR 5 billion was approved, with 65% of the acquisition price for Webster to be paid in cash [13][19] - The integration of Webster is expected to yield approximately $800 million in cost synergies, with a focus on operational efficiencies [27][40] Q&A Session Summary Question: Can you provide more details on the EUR 800 million cost synergies? - Management highlighted that the synergies will come from significant overhead reductions and technology integrations, with a focus on eliminating duplicative structures [37][39][40] Question: Why is the expected ROTE for the U.S. set at 15%? - Management explained that the 15% ROTE aligns with their capital hierarchy and reflects the strong performance of the U.S. operations over the past five years [38][44] Question: What has changed regarding the West Coast market? - The acquisition of Webster allows Santander to operate as a full-service retail commercial bank in the Northeast, which was not feasible previously [49][50] Question: What are the implications of the 140 basis points impact on capital? - The capital impact from the acquisition will primarily come from cash payments, with additional adjustments for deferred tax assets and risk-weighted assets [52] Question: Will new shares be issued for the Webster acquisition? - Yes, 35% of the acquisition consideration will be paid in new shares, while a EUR 5 billion share buyback program will also be initiated [62][63]

Financial Data and Key Metrics Changes - The company reported a record quarterly profit of EUR 14.1 billion for 2025, marking a 12% year-over-year increase, and 15% excluding Argentina [2][4] - The efficiency ratio improved to almost 41%, with Return on Tangible Equity (RoTE) increasing from 8.1% to 16.3% [3][18] - The Common Equity Tier 1 (CET1) ratio reached an all-time high of 13.5%, reflecting strong organic capital generation [3][21] Business Line Data and Key Metrics Changes - The Corporate and Investment Banking (CIB), Wealth, and Payments segments experienced strong revenue growth, with double-digit fee increases driven by network effects [6][15] - Retail profits grew by 9% year-on-year, supported by a 5% increase in Net Interest Income (NII) [12][6] - Wealth profits surged by 27% in 2025, driven by strong commercial activity and fee growth [16] Market Data and Key Metrics Changes - The customer base expanded by 8 million to 180 million, indicating robust customer activity across all business lines [2] - The company reported a 9% increase in payment volumes, with PagoNXT EBITDA margin closing above 34% [17] Company Strategy and Development Direction - The company is focused on "One Transformation," aiming to simplify products and enhance operational efficiency through a common operating model [9][11] - The acquisition of Webster is expected to enhance the U.S. operations, aiming for a RoTE of 18% by 2028, positioning the company among the top banks in profitability [28][49] - The strategy includes maintaining a commitment to at least EUR 10 billion in share buybacks for 2025 and 2026 [19][51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the U.S. market, highlighting its attractiveness and potential for growth, particularly in the Northeast region [53][70] - The company anticipates mid-single-digit revenue growth in 2026, with double-digit growth including M&A activities [56][84] - The outlook for 2027 includes expectations for revenue growth in the double digits and net profit growth in the mid-teens [56] Other Important Information - The company completed the disposal of Santander Polska, generating around 95 basis points of capital, which will be used for share buybacks and acquisitions [22][50] - The integration of Santander Consumer Finance and Openbank into a single entity is expected to simplify operations and enhance customer experience [14] Q&A Session Summary Question: Can you provide more details on the $800 million cost synergies? - Management explained that the $800 million in synergies includes $480 million from headquarters and overheads, and $300 million from technology integrations, emphasizing the significant duplication in operations [59][62] Question: What has changed regarding the West Coast market? - Management clarified that the acquisition of Webster allows Santander to operate as a full-service retail commercial bank in the Northeast, which was not feasible previously [70] Question: What is the expected capital impact from the Webster acquisition? - The capital impact is estimated at 140 basis points, with 110 basis points attributed to the cash portion of the acquisition [68][73] Question: How will the transaction affect funding costs? - The average cost of deposits for the combined bank is expected to decrease by about 40 basis points, improving overall funding costs [78] Question: Will there be new shares issued for the Webster acquisition? - Yes, 35% of the acquisition will be paid in new shares, with the exchange ratio set at 2.0548 Santander shares per Webster share [85][86]

Financial Data and Key Metrics Changes - Santander reported a record annual profit of EUR 14.1 billion for 2025, marking a 12% year-over-year increase, and 15% excluding Argentina [4][5] - The return on tangible equity (ROTE) post-AT1 reached 16.3%, up nearly one percentage point year-over-year [13] - The fully loaded CET1 ratio increased by 70 basis points to 13.5%, exceeding the target range of 12-13% [15][32] - The annual dividend per share grew by 14% [5] Business Line Data and Key Metrics Changes - Retail profit grew by 9% year-on-year, with a cost-to-income ratio of 39% [9][10] - Consumer business net interest income (NII) increased by 5% year-on-year, while group NII, excluding Argentina, grew by 3% [7][10] - Wealth profit surged by 27% in 2025, driven by strong commercial activity and double-digit fee growth [12] - Corporate and Investment Banking (CIB) and Payments also saw strong revenue growth, with payments volume up 9% [12][13] Market Data and Key Metrics Changes - The customer base expanded by 8 million to 180 million [4] - The U.S. market has shown significant growth, with profits increasing by over 30% from 2023 to 2025 [17][18] - The acquisition of Webster Financial Corporation is expected to enhance Santander's position in the U.S. market, making it the tenth largest retail and commercial bank by assets [19][22] Company Strategy and Development Direction - The acquisition of Webster is a strategic move to enhance profitability and efficiency in the U.S. market, aiming for an ROTE of 18% by 2028 [19][23] - The company is focused on a "One Transformation" strategy to simplify operations and improve efficiency, which has already resulted in significant cost savings [8][10] - Santander aims to maintain a disciplined approach to capital allocation while pursuing growth opportunities in core markets [13][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a ROTE in excess of 20% by 2028, supported by the integration of Webster and ongoing transformation efforts [35] - The U.S. market is viewed as attractive due to its growth potential and favorable regulatory environment [34] - The company anticipates mid-single-digit revenue growth in 2026, with double-digit growth including M&A [37][38] Other Important Information - A new share buyback program of up to EUR 5 billion was approved, with 35% of the acquisition cost for Webster to be paid in shares [15][65] - The integration of Webster is expected to yield approximately $800 million in cost synergies, fully phased in by the end of 2028 [27][43] Q&A Session Questions and Answers Question: Can you provide more details on the EUR 800 million cost synergies? - Management highlighted that the synergies will come from headquarters and overhead reductions, technology integrations, and operational efficiencies [40][42][43] Question: Why is the expected ROIC set at 15% for the U.S. market? - Management explained that the 15% ROIC aligns with their capital hierarchy and reflects the expected returns from the acquisition [41][47] Question: What has changed regarding the attractiveness of the West Coast market? - The acquisition of Webster allows Santander to operate as a full-service retail commercial bank in the Northeast, which was not feasible previously [51][52] Question: Will new shares be issued for the Webster acquisition? - Yes, 35% of the acquisition consideration will be paid in new shares, while a share buyback program will also be initiated [65][66]

Financial Data and Key Metrics Changes - The company reported a record quarterly profit, achieving EUR 14.1 billion in 2025, with a year-over-year profit increase of 12%, and 15% excluding Argentina [1][2] - Revenue grew by 4% in constant euros, with fee income up 9% in constant euros, while expenses decreased by 1% in absolute terms [2] - The cost of risk ended the year at 1.15%, aligning with guidance for 2025, and the return on tangible equity (ROTE) increased from 8.1% to 16.3% [1][2][9] Business Line Data and Key Metrics Changes - The Corporate and Investment Banking (CIB), Wealth, and Payments segments experienced strong revenue growth, driven by fee increases and network effects [3][8] - The consumer business saw net interest income (NII) rise by 5% year-on-year, while group NII, excluding Argentina, grew by 3% [3][6] - Wealth profit increased by 27% in 2025, supported by strong commercial activity and double-digit fee growth [8] Market Data and Key Metrics Changes - The customer base grew by 8 million to 180 million, indicating strong customer activity across all business lines [1] - The company maintained a fully loaded CET1 ratio of 13.5%, well above the target range of 12-13% [10][28] Company Strategy and Development Direction - The company is focused on "One Transformation," aiming to simplify products and improve efficiency, which has resulted in a cost-to-income ratio of 39% [5][6] - The acquisition of Webster is expected to enhance the U.S. operations, aiming for an ROTCE of 18% by 2028, and is seen as a strategic move to strengthen the retail and commercial banking presence in the U.S. [14][18][29] - The company plans to maintain a commitment to at least EUR 10 billion in share buybacks for 2025 and 2026, while also pursuing bolt-on acquisitions [9][28] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the U.S. market, highlighting its attractiveness and potential for growth, with expectations of achieving a ROTE in excess of 20% by 2028 [30][31] - The integration of TSB and Webster is expected to provide significant operational synergies and enhance profitability [31][32] - The company anticipates mid-single-digit revenue growth in 2026, with double-digit growth including M&A, and profits expected to rise in constant euros [32][60] Other Important Information - The company completed the disposal of Santander Polska, generating around 95 basis points of capital, which will be used for share buybacks and acquisitions [10][11] - The integration of Webster is projected to yield approximately $800 million in cost synergies, with a focus on operational efficiencies and technology integration [23][39] Q&A Session Summary Question: Can you provide more details on the $800 million cost synergies? - Management explained that the synergies are derived from significant overhead reductions and technology integrations, with a focus on eliminating duplicative structures [35][38] Question: What is the rationale behind the 15% ROIC target? - Management stated that the target aligns with the company's capital hierarchy and reflects a consistent approach to shareholder value creation [41][42] Question: How does the acquisition of Webster change the strategy in the U.S. market? - The acquisition allows the company to operate as a full-service retail commercial bank in the Northeast, enhancing its competitive position and profitability [46][48] Question: What are the expected impacts from the Polish sale and TSB integration? - Management indicated that the sale of Poland and the integration of TSB will lead to improved profitability and operational leverage in 2027 [60][61] Question: Are new shares being issued for the Webster acquisition? - Yes, 35% of the acquisition consideration will be paid in new shares, while a share buyback program is also being initiated [61][62]

Financial Data and Key Metrics Changes - Banco Santander reported a record annual profit of EUR 14.1 billion for 2025, representing a 12% year-over-year increase, and a 15% increase excluding Argentina [3][4] - The annual dividend per share grew by 14%, and earnings per share rose by 17% due to solid profit generation and a lower share count following buybacks [4][12] - The CET1 ratio increased by 70 basis points to an all-time high of 13.5%, reflecting strong organic capital generation [4][13] Business Line Data and Key Metrics Changes - The Consumer business saw a net interest income (NII) increase of 5% year-on-year, while overall group NII performance, excluding Argentina, grew by 3% [5][9] - Wealth profit increased by 27% in 2025, driven by strong commercial activity and double-digit fee growth [11] - Payments volume rose by 9%, with PagoNxt EBITDA margin closing above 34% [11] Market Data and Key Metrics Changes - The customer base grew by 8 million to 180 million, indicating strong customer acquisition across all markets [3] - The retail profit grew by 9% year-on-year, with a cost-to-income ratio of 39% [8][9] - The U.S. market showed significant growth, with profits increasing by over 30% from 2023 to 2025, and the U.S. ROTE reaching 15% [16][46] Company Strategy and Development Direction - The acquisition of Webster Financial Corporation is a strategic move to enhance Santander's U.S. operations, aiming for a ROTE of 18% by 2028 [2][18] - The company is focused on a "One Transformation" strategy to simplify products and improve operational efficiency, which has already resulted in a 41% efficiency ratio [3][6] - The integration of Webster is expected to deliver approximately $800 million in cost synergies, enhancing the overall profitability and efficiency of the combined entity [21][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the U.S. market's potential, highlighting its attractive risk-return profile and growth opportunities [33] - The company anticipates achieving a ROTE in excess of 20% by 2028, supported by ongoing strategic initiatives and acquisitions [34] - The outlook for 2026 includes mid-single-digit revenue growth in constant EUR, with double-digit growth expected when including M&A [35] Other Important Information - The board approved a new buyback program of up to EUR 5 billion, with EUR 3.2 billion generated from the sale of Poland [13][31] - The acquisition of Webster is expected to close before the end of 2026, with a significant focus on integrating operations and realizing synergies [20][22] Q&A Session Questions and Answers Question: Can you provide more details on the EUR 800 million cost synergies? - Management explained that the synergies are derived from significant overhead reductions and technology integrations, with a focus on eliminating duplicative structures [41][42] Question: Why is the expected ROIC set at 15%? - The rationale for the 15% ROIC is consistent with the company's capital hierarchy, and management highlighted the U.S. market's strong performance in value creation over the past five years [45][46] Question: What has changed regarding the West Coast market? - Management clarified that the acquisition of Webster allows Santander to operate as a full-service retail commercial bank in the Northeast, which was not feasible previously [50][51] Question: What are the implications of issuing new shares for the Webster acquisition? - The company will issue new shares for 35% of the acquisition consideration, while also launching a EUR 5 billion share buyback program [66][67]

Financial Data and Key Metrics Changes - The company reported a record quarterly profit of EUR 14.1 billion for 2025, marking a 12% year-over-year increase in profits, and 15% excluding Argentina [1][2] - The return on tangible equity (ROTE) increased from 8.1% to 16.3%, with a cost-to-income ratio of 39% [1][5] - The fully loaded CET1 ratio rose by 70 basis points to 13.5%, exceeding the target range of 12-13% [10][28] Business Line Data and Key Metrics Changes - The Corporate and Investment Banking (CIB), Wealth, and Payments segments experienced strong revenue growth, with Wealth profit up 27% and Payments volume increasing by 9% [3][8] - The retail business saw a profit increase of 9% year-on-year, with a reduction in cost-to-serve by around 4% [5][6] - The consumer business reported a net interest income (NII) growth of 5% year-on-year, while overall group NII, excluding Argentina, grew by 3% [3][6] Market Data and Key Metrics Changes - The customer base grew by 8 million to 180 million, reflecting strong customer activity across all business lines [1] - The company maintained a prudent approach to risk, with a cost of risk ending the year at 1.15% [2] Company Strategy and Development Direction - The company is focused on "One Transformation," aiming to simplify products and improve operational efficiency [1][4] - The acquisition of Webster is expected to enhance the U.S. operations, aiming for an ROTE of 18% by 2028, and is seen as a strategic move to strengthen the retail and commercial banking presence in the U.S. [11][18] - The company plans to maintain a commitment to at least EUR 10 billion in share buybacks for 2025 and 2026 [9][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the U.S. market, highlighting its attractiveness and potential for growth, with expectations of achieving a ROTE in excess of 20% by 2028 [31][32] - The integration of TSB and Webster is expected to provide significant operational leverage and enhance profitability [32][64] Other Important Information - The company completed the disposal of Santander Polska, generating around 95 basis points of capital, which will be used for share buybacks and acquisitions [10][28] - The integration of Santander Consumer Finance and Open Bank into a single entity is aimed at simplifying the structure and enhancing customer experience [7] Q&A Session Summary Question: Can you provide more details on the $800 million cost synergies? - Management explained that the $800 million in synergies includes $480 million from headquarters and overheads, and $280 million from technology integrations, emphasizing the significant duplication in operations [36][39] Question: Why is the expected ROIC set at 15%? - Management stated that the 15% ROIC aligns with the company's capital hierarchy and reflects the current market conditions, emphasizing the U.S. market's strong performance over the past five years [37][43] Question: What has changed regarding the West Coast market? - Management clarified that the acquisition of Webster allows Santander to operate as a full-service retail commercial bank in the Northeast, which was not feasible previously [46][50] Question: What are the expected impacts from the Polish sale and TSB integration? - Management indicated that 2027 would be a clean year for assessing the full benefits of both TSB and Poland, with expectations of double-digit revenue growth and mid-teens profit increases [61][63] Question: Will new shares be issued for the Webster acquisition? - Management confirmed that 35% of the acquisition consideration will be paid in new shares, with a share buyback program also in place [64][65]

Financial Data and Key Metrics Changes - The quarterly profit reached a record €3.5 billion, marking the best nine-month period ever, with a customer base increase of 7 million year on year to 178 million [4][5] - Return on Invested Capital (ROIC) increased by 70 basis points to 16.1%, with a capital ratio at an all-time high of 13.1% [4][20] - Earnings per share rose by 16%, supported by solid profit generation and fewer shares due to buybacks, leading to a 15% increase in TNF plus cash dividend per share [20][34] Business Line Data and Key Metrics Changes - Net Interest Income (NII) increased by 2%, with fees reaching a new record, up 8%, driven by significant customer growth [6][7] - Consumer business saw NII growth of 6% year on year, while retail NII, excluding Argentina, grew by 1% [9][11] - Corporate and Investment Banking (CIB) reported a profit increase of 10% year on year, with revenue in global markets rising by 27% [15][16] Market Data and Key Metrics Changes - Payments revenue surged by 19%, with both PagoNext and cards delivering double-digit growth in NII and fees [24][19] - Wealth management revenue rose by 13%, supported by record assets under management [24] - The consumer segment showed strong performance, benefiting from lower rates and a focus on profitability [14][24] Company Strategy and Development Direction - The company is on track to meet its 2023-2025 strategic plan, with a focus on profitability and disciplined capital allocation [5][34] - The transformation strategy aims to simplify operations and enhance customer experience, with a significant rollout of global platforms [10][12] - The integration of Santander Consumer Finance and Openbank in Europe is expected to reduce costs and improve product offerings [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 targets despite a challenging environment, citing strong business dynamics and disciplined capital allocation [34][35] - The outlook for 2026 is promising, with expectations of improved credit quality and stable cost of risk [41][66] - The company anticipates a stable NII outlook in Brazil as interest rates are expected to decrease, positively impacting margins [66][67] Other Important Information - The company plans to distribute at least €10 billion to shareholders through share buybacks for 2025-2026, subject to regulatory approvals [5][20] - The CET1 capital ratio is expected to increase further in Q4, with regulatory headwinds being less than initially anticipated [49][50] Q&A Session Summary Question: What are the main drivers for achieving the ROIC target of 16.5%? - Management expects strong performance in Q4 driven by seasonality, higher fees, and execution of the transformation strategy [38][39] Question: How should we think about credit quality in Brazil? - Management noted a small improvement in credit quality, with stable provisions and expectations for a better macro environment [43][45] Question: What is the outlook for capital and regulatory headwinds? - Regulatory charges are expected to be lower than anticipated, with capital generation projected to increase in Q4 [49][50] Question: Can you provide an update on NII in Spain? - NII in Spain improved, with expectations for continued growth in Q4 and a positive outlook for 2026 [53][54] Question: What is the status of litigation provisions? - Management does not expect the net impact of litigation provisions to be material for the group [63][64] Question: What is the NII outlook in Brazil? - Management expects stable NII in Brazil with improved margins as interest rates decrease [66][67]

Financial Data and Key Metrics Changes - Quarterly profit reached a record EUR 3.5 billion, marking the best nine-month period ever, with a customer base increase of EUR 7 million year-on-year to EUR 178 million [4][5] - Return on Invested Capital (ROIC) increased by 70 basis points to 16.1%, with a strong capital ratio of 13.1% [4][5][20] - Earnings per share rose by 16%, supported by solid profit generation and share buybacks, leading to a 15% increase in TNF plus cash dividend per share [20][21] Business Line Data and Key Metrics Changes - Net Interest Income (NII) grew by 2%, while fees reached a new record, increasing by 8% [6][7] - Consumer business NII increased by 6% year-on-year, with retail NII growing by 1% excluding Argentina [9][11] - Payments revenue surged by 19%, with double-digit growth in both PagoNxt and cards [24][19] Market Data and Key Metrics Changes - CIB (Corporate and Investment Banking) revenue rose by 6% year-on-year, driven by global markets and growth initiatives in the U.S. [24][16] - Wealth management revenue increased by 13%, supported by record assets under management [24][18] - Retail revenue grew even in a less favorable interest rate environment, aided by active margin management [24][11] Company Strategy and Development Direction - The company is on track to meet its 2023/2025 strategic plan targets, with a focus on profitability and disciplined capital allocation [5][34] - The transformation strategy aims to simplify operations and enhance customer experience, with a significant emphasis on digitalization [10][12] - The integration of Santander Consumer Finance and Openbank in Europe is expected to reduce costs and improve product offerings [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 targets despite a challenging environment, citing strong business dynamics and revenue growth [34][35] - The outlook for 2026 is promising, with expectations of continued improvement in ROIC and profitability [39][41] - Credit quality is improving, with a stable cost of risk and a low NPL ratio of 2.92% [30][31] Other Important Information - The company plans to distribute at least EUR 10 billion to shareholders through share buybacks for 2025/2026, subject to regulatory approvals [5][20] - The CET1 capital ratio is expected to increase further in Q4, with regulatory headwinds being lower than initially anticipated [50] Q&A Session Summary Question: What are the main drivers for achieving the ROIC target of 16.5%? - Management expects strong performance in Q4 driven by seasonality, higher fees, and execution of the transformation strategy [38] Question: How should we think about credit quality in Brazil? - Credit quality is improving, with a stable cost of risk and a reduction in loan loss provisions [43][45] Question: Can you provide an update on capital and regulatory headwinds? - Regulatory charges are expected to be lower than anticipated, with capital generation projected to increase in Q4 [49][50] Question: What is the outlook for NII in Spain? - NII in Spain has improved, with expectations for continued growth in Q4 and a positive outlook for 2026 [53][54] Question: What is the status of litigation provisions? - The impact of litigation provisions is not expected to be material for the group, with ongoing reviews of the U.K. Motor Finance situation [63][64] Question: How does the company view NII outlook in Brazil? - The company anticipates stable NII in Brazil as interest rates are expected to come down, improving margins [65][66]

Financial Data and Key Metrics Changes - The quarterly profit reached a record €3.5 billion, marking the best nine-month period ever for the company [3] - Return on Invested Capital (ROIC) increased by 70 basis points to 16.1% [3] - The capital ratio ended the quarter at an all-time high of 13.1% [3][30] - Earnings per share rose by 16%, supported by solid profit generation and fewer shares due to buybacks [19] Business Line Data and Key Metrics Changes - Revenue grew by 4% in euros, with Net Interest Income (NII) increasing by 2% and fees rising by 8% [5] - Corporate and Investment Banking (CIB) revenue rose by 6%, driven by global markets and growth initiatives in the U.S. [23] - Wealth management revenue increased by 13%, supported by record assets under management [23] - Payments revenue surged by 19%, with both PagoNext and cards delivering double-digit growth [23][18] Market Data and Key Metrics Changes - The company added 7 million new customers year on year, bringing the total to 178 million [3] - Customer activity and diversification continued to drive revenue growth, particularly in fee-driven businesses [7] - The cost of risk improved year on year, reflecting robust credit quality trends [5][28] Company Strategy and Development Direction - The company is on track to meet its 2023-2025 strategic plan targets, focusing on profitability and disciplined capital allocation [4] - The transformation strategy aims to simplify operations and enhance customer experience, with a focus on digitalization [9][11] - The integration of Santander Consumer Finance and Openbank in Europe is expected to reduce costs and improve product offerings [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 targets despite a more challenging environment than initially anticipated [32] - The outlook for 2026 is promising, with expectations of improved credit quality and stable cost of risk [40][42] - The company anticipates a stable cost of risk in Brazil, supported by resilient labor markets [42][64] Other Important Information - The company plans to distribute at least €10 billion to shareholders through share buybacks for 2025-2026, subject to regulatory approvals [4][19] - The efficiency ratio improved to 41.3%, the best reported in over 15 years [28] Q&A Session Summary Question: ROIC target for the year of 16.5% - Management expects strong performance in Q4 driven by seasonality, higher fees, and execution of One Transformation [37] Question: Credit quality in Brazil - Provisions have decreased, and management expects stable cost of risk due to improved credit quality [41][43] Question: Capital guidance and regulatory headwinds - Regulatory charges are expected to be lower than initially anticipated, with a CET1 ratio projected to increase further in Q4 [48][49] Question: NII outlook in Spain - NII in Spain improved, with expectations for continued growth in Q4 and 2026 [51][52] Question: Litigation provisions - The impact of litigation provisions is not expected to be material for the group [60][62] Question: NII outlook in Brazil - Management expects stable NII with improved margins as interest rates decline [64][65]