Ana Botín | Executive Chair 25 February | London 1 Important information Non-IFRS and alternative performance measures Banco Santander, S.A. ("Santander") cautions that this webcast may contain financial information prepared according to International Financial Reporting Standards (IFRS) and taken from our consolidated financial statements, as well as alternative performance measures (APMs) as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authori ...

Financial Data and Key Metrics Changes - The company reported a quarterly revenue increase of 21% year-over-year, with net interest income growing by 30% year-over-year [5][21] - Adjusted total revenue for Q4 2025 was $42.1 million, reflecting a 21% increase over Q4 2024 [21] - Net interest margin improved to 2.22%, up 55 basis points year-over-year [22] - Net income for Q4 2025 was $5.3 million, or $0.60 per diluted share, with adjusted net income of $5.6 million, or $0.64 per diluted share [21] Business Line Data and Key Metrics Changes - The banking-as-a-service (BaaS) initiatives generated over $1.3 billion in new deposits for 2025, more than tripling from the previous year [6] - The SBA business maintained a strong position with nearly $580 million in funded originations during 2025, despite industry challenges [7] - The company processed over $165 billion in payments volume, an increase of over 225% from 2024 [6] Market Data and Key Metrics Changes - Total loans as of December 31, 2025, were $3.7 billion, a 4% increase from the linked quarter but a 10% decrease from the previous year [26] - Total deposits as of December 31, 2025, were $4.8 billion, representing a 2% decrease compared to both September 30, 2025, and December 31, 2024 [26] Company Strategy and Development Direction - The company is focused on a digital-first banking model, emphasizing operational efficiency and disciplined expense management [5] - Strategic sale of approximately $850 million in single-tenant lease financing loans to Blackstone improved capital position and reduced exposure to lower-yielding assets [6] - The company aims to enhance credit quality by prioritizing higher credit quality borrowers in its SBA production, projecting a more measured production of approximately $500 million for 2026 [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong financial performance while building long-term shareholder value [11] - The company anticipates continued loan growth of 15%-17% in 2026, driven by strong pipelines across commercial lending verticals [27] - Management expects credit conditions to stabilize as problem loans are resolved and enhanced underwriting standards take effect [10] Other Important Information - The company recognized a provision for credit losses of $12 million in Q4 2025, primarily due to net charge-offs [25] - Non-performing loans increased to $58.5 million, with a ratio of 1.56% of total loans, primarily related to SBA guaranteed balances [25] Q&A Session Summary Question: What is the expected yield on SBA loans retained on the balance sheet? - Management indicated that they expect to hold an additional $94 million of guaranteed SBA loans on the balance sheet, priced at prime plus 1.5 [42] Question: What are the expectations for deposit repricing in the first half of the year? - Management expects continued decreases in deposit costs, particularly in the first quarter, due to maturing CDs and lower market rates [39][40] Question: What is the outlook for net charge-offs relative to the provision guidance? - Management indicated that approximately half of the provision guidance would be for charge-offs, with expectations for elevated levels in the first half of the year [60][61]

Core Insights - Juniper Research announced the winners of the Future Digital Awards for Fintech & Payments 2025, celebrating innovation in digital payments, banking, and fraud prevention [1][7] - The awards highlight significant contributions from various companies and individuals in the fintech sector, showcasing advancements in technology and services [1][7] Fintech Leadership - DailyPay was awarded Fintech & Payments Startup of the Year (Platinum) [1] - Chrissy Wagner, Senior Vice President at FIS, received the title of Fintech Leader of the Year (Platinum) [1] Banking Innovation - Huawei Mobile Finance Solution won Banking Innovation of the Year (Platinum) [2] - Mitek Systems Digital Fraud Defender was recognized as Fraud & Security Innovation of the Year (Platinum) [2] - Other notable winners include Prometeo Borderless Banking (Platinum) and Amdocs Agentic AI Platform (Platinum) [2] Banking Fraud Prevention - Alipay Tap! was awarded Payment Innovation of the Year (Platinum) [3] - Worldpay received the Omnichannel Payments Platform of the Year (Platinum) [3] - G+D Netcetera BIN Attack Score won in the Soft POS Innovation category (Platinum) [3] Sustainability in Payment Cards - Thales PVC-Free Payment Card received a Platinum award for its sustainability efforts [4] - FV Bank secured a Platinum award for Digital Currency Innovation, emphasizing the integration of traditional banking with digital asset services [4] Company Statements - Mitek emphasized the importance of multi-layered defenses against sophisticated fraud, highlighting their commitment to protecting customers [5] - Thunes celebrated their dual Platinum Awards for B2B and Cross-border Payments, reflecting their global impact on payment solutions [6]