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 - 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]

FY'25 Earnings Presentation Acquisition of Webster 3 February 2026 Important information Non-IFRS and alternative performance measures Banco Santander, S.A. ("Santander") cautions that this presentation 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 Securitie ...

Core Insights - Banco Santander has sold a 49% stake in Santander Bank Polska to Erste Group for approximately €7 billion ($8.2 billion), resulting in a net capital gain of around €1.9 billion for Santander [1][2] - The transaction is expected to enhance Santander's CET1 ratio by about 95 basis points, equating to an estimated €6 billion [1] - Following the deal, Erste Group will become the main shareholder of Santander Bank Polska, which will be rebranded as Erste Bank Polska in Q2 2026 [2] Financial Implications - Santander plans to allocate around half of the proceeds from the sale to its shareholder buyback program, pending regulatory approval [2] - After the transaction, Santander's ownership in its Polish banking business will decrease to 9.7% [2] - Erste Group anticipates a return on tangible equity of approximately 19% and expects earnings per share to rise by over 20% by 2026 [3] Strategic Developments - Santander has acquired the remaining 60% stake in Santander Consumer Bank in Poland, becoming its full owner and continuing operations in the consumer finance sector [3] - A partnership has been established between Santander and Erste Group focused on Corporate & Investment Banking, facilitating client referrals and collaboration on specific products [4] - The alliance may extend to collaboration through PagoNxt, Santander's global payments platform, starting with cloud-based payments infrastructure in Poland [5] Future Initiatives - The increased capital flexibility from this transaction is expected to support other initiatives, including the proposed acquisition of TSB in the UK, which is pending regulatory approval [6] - Santander's executive chair emphasized the strategic partnership with Erste Group to leverage complementary strengths for better client service across markets [6]

Core Insights - Santander reported a record attributable profit of €10.3 billion for the first nine months of 2025, marking an 11% increase year-over-year, driven by sustained customer growth and digital transformation efforts [2] - The bank's long-term profitability strategy focuses on streamlining its technology stack and enhancing digital relationships with its 178 million customers, which is a 7 million increase from the previous year [2] - The integration of Santander Consumer Finance and Openbank in Europe aims to simplify operations, reduce costs, and enhance product offerings, strengthening the bank's position in key markets like Germany [3] Digital Transformation - Santander's CEO emphasized the importance of simplification, automation, and technological capabilities, which are exceeding expectations for the end of 2025 [2] - Openbank, Santander's digital banking unit, has successfully attracted $6.75 billion in deposits and 162,000 new customers in the U.S., which is its fourth largest market [2] - The bank is transforming its retail operations to become a digital-first bank, combining advanced technology with the expertise of its teams [2] Payments Division Performance - Santander's payments division, PagoNxt, is performing well, with an EBITDA margin that has already surpassed the 2025 Investor Day target, reaching 32% [4] - The bank's U.S. business holds a significant share of the auto finance sector, which has faced scrutiny due to recent bankruptcies in the industry [5] - Santander's exposure to the auto finance sector includes a $77 million loan to First Brands, although this exposure is not considered material for the bank [6]

Core Insights - Santander reported a record attributable profit of €10.3 billion for the first nine months of 2025, marking an 11% increase year-over-year, driven by sustained customer growth and digital transformation efforts [2] - The bank's long-term profitability strategy focuses on streamlining its technology stack and enhancing digital relationships with its 178 million customers, which is a 7 million increase from the previous year [2] - The integration of Santander Consumer Finance and Openbank in Europe aims to simplify operations, reduce costs, and enhance product offerings, strengthening the bank's position in key markets like Germany [3] Digital Transformation - Santander's CEO emphasized the importance of simplification, automation, and technological capabilities, which are exceeding expectations for the end of 2025 [2] - Openbank, Santander's digital banking unit, has successfully attracted $6.75 billion in deposits and 162,000 new customers in the U.S., which is its fourth largest market [2] - The bank is transforming its retail operations to become a digital-first bank, combining advanced technology with the expertise of its teams [2] Payments Division Performance - Santander's payments division, PagoNxt, is performing well, with an EBITDA margin that has already surpassed the 2025 Investor Day target, reaching 32% [4] - The bank's U.S. business holds a significant share of the auto finance sector, which has faced scrutiny due to recent bankruptcies in the industry [5] - Santander's exposure to the auto finance sector includes a $77 million loan to First Brands, although this exposure is not considered material for the bank [6]

9M'25 Earnings Presentation For more details on APMs and non-IFRS measures, please see the 2024 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (the SEC) on 28 February 2025 (https://www.santander.com/content/dam/santander-com/en/documentos/informacion-sobre-resultados-semestrales-y-anuales-suministrada-a-la-sec/2025/sec-2024-annual-20-f-2024-en.pdf), as well as the section "Alternative performance measures" of Banco Santander, S.A. (Santander) Q3 2025 Financial Report, pub ...

Financial Performance Highlights - H1'25 attributable profit reached €6.83 billion, a 13% increase compared to H1'24 [22, 61] - Group revenue totaled €31.01 billion, showing a slight decrease of 0% in current euros but a 5% increase in constant euros compared to H1'24 [24] - The Group's RoTE post-AT1 stood at 16.0%, a 0.9 percentage point increase year-over-year [22] - TNAVps (Tangible Net Asset Value per Share) plus Cash DPS (Dividend Per Share) increased by 16% year-over-year [22, 57] Business Segment Performance - Retail banking achieved a RoTE post-AT1 of 17.2% with a profit of €3.7 billion [30, 33] - CIB (Corporate & Investment Banking) reported a RoTE post-AT1 of 20.8% and a profit of €1.5 billion [30, 39] - Wealth Management saw a RoTE post-AT1 of 67.3% and a profit of €948 million [30, 43] - Payments, including PagoNxt and Cards, reported a profit of €335 million, with PagoNxt EBITDA margin at 28.8% [30, 50] Strategic Initiatives and Capital Allocation - The company is ahead of its Investor Day 2025 targets, including profitability and shareholder remuneration [17] - The company plans to distribute approximately 50% of Group reported profit as shareholder remuneration, split evenly between cash dividends and share buybacks [19] - The company aims for at least €10 billion in share buybacks for 2025 and 2026 earnings [18, 88]

Group 1: Santander's Sale and Partnership - Santander is selling approximately 49% of Santander Polska's share capital and 50% of its Polish asset management business to Erste Group for $7.9 billion [1][2] - The deal includes a partnership where Santander will provide Erste access to its payment system, allowing both banks to explore opportunities in payments, particularly with Santander Polska post-completion [1][2] Group 2: Corporate and Investment Banking Collaboration - Santander and Erste are forming a corporate and investment banking partnership to leverage each other's regional strengths, offering local solutions and market insights to corporate and institutional clients through a referral model [3] - This partnership aims to facilitate seamless client interactions and service offerings [3] Group 3: Economic Outlook and Strategic Focus - Santander's Executive Chair, Ana Botín, highlighted the bank's focus on helping clients manage volatility related to U.S. tariffs and geopolitical uncertainty, which has contributed to a decline in the five-year growth forecast for the world economy to 3.1%, the lowest in 16 years [4] - The bank is leveraging its global scale and diversification as stabilizers in the current economic environment, anticipating continued profitability growth by 2025 [5] Group 4: Importance of Real-Time Payments - Research indicates that offering real-time payments is crucial for banks to attract and retain small and medium-sized business (SMB) clients, with many SMBs willing to pay fees for instant payment advantages [6][7] - Specifically, 88% of the smallest SMBs, those with annual revenues of less than $100,000, would be willing to pay a percentage fee for instant payments [7]