FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of October, 2022
Commission File Number: 001-12518
 
 
Banco Santander, S.A.
(Exact name of registrant as specified in its charter)
 
 
Ciudad Grupo Santander
28660 Boadilla del Monte (Madrid) Spain
(Address of principal executive office)
 
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F  ☒            Form 40-F  ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes  ☐            No  ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes  ☐            No  ☒






BANCO SANTANDER, S.A.
________________________

TABLE OF CONTENTS










































Item 1. January - September 2022 Financial Report


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January - September2022



Index


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This report was approved by the board of directors on 25 October 2022, following a favourable report from the audit committee. Important information regarding this report can be found on pages 88 and 89.
Key consolidated data

BALANCE SHEET (EUR million)Sep-22Jun-22%Sep-22Sep-21%Dec-21
Total assets1,815,792 1,722,840 5.4 1,815,792 1,578,295 15.0 1,595,835 
Loans and advances to customers1,067,466 1,037,721 2.9 1,067,466 958,311 11.4 972,682 
Customer deposits1,008,800 973,787 3.6 1,008,800 909,034 11.0 918,344 
Total funds1,241,548 1,204,407 3.1 1,241,548 1,140,322 8.9 1,153,656 
Total equity99,312 97,462 1.9 99,312 95,624 3.9 97,053 
Note: Total funds includes customer deposits, mutual funds, pension funds and managed portfolios.

INCOME STATEMENT (EUR million)Q3'22Q2'22%9M'229M'21%2021
Net interest income10,051 9,554 5.2 28,460 24,654 15.4 33,370 
Total income13,474 12,815 5.1 38,594 34,626 11.5 46,404 
Net operating income7,314 6,915 5.8 20,999 18,848 11.4 24,989 
Profit before tax3,846 3,744 2.7 11,761 10,716 9.8 14,547 
Profit attributable to the parent2,422 2,351 3.0 7,316 5,849 25.1 8,124 
Changes in constant euros:
Q3'22 / Q2'22: NII: +5.4%; Total income: +5.2%; Net operating income: +5.7%; Profit before tax: +2.5%; Attributable profit: +2.5%.
9M'22 / 9M'21: NII: +8.2%; Total income: +4.6%; Net operating income: +3.2%; Profit before tax: +0.1%; Attributable profit: +13.7%.

EPS, PROFITABILITY AND EFFICIENCY (%)Q3'22Q2'22%9M'229M'21%2021
EPS (euros)0.137 0.131 4.9 0.409 0.313 30.5 0.438 
RoE10.64 10.44 10.86 9.54 9.66 
RoTE13.38 13.10 13.57 11.82 11.96 
RoA0.61 0.63 0.64 0.61 0.62 
RoRWA1.75 1.76 1.82 1.66 1.69 
Efficiency ratio45.6 46.0 45.5 45.6 46.2 

UNDERLYING INCOME STATEMENT (1) (EUR million)
Q3'22Q2'22%9M'229M'21%2021
Net interest income10,051 9,554 5.2 28,460 24,654 15.4 33,370 
Total income13,509 12,815 5.4 38,629 34,626 11.6 46,404 
Net operating income7,349 6,915 6.3 21,034 18,848 11.6 24,989 
Profit before tax3,846 3,744 2.7 11,761 11,432 2.9 15,260 
Profit attributable to the parent2,422 2,351 3.0 7,316 6,379 14.7 8,654 
Changes in constant euros:
Q3'22 / Q2'22: NII: +5.4%; Total income: +5.5%; Net operating income: +6.3%; Profit before tax: +2.5%; Attributable profit: +2.5%.
9M'22 / 9M'21: NII: +8.2%; Total income: +4.7%; Net operating income: +3.3%; Profit before tax: -5.7%; Attributable profit: +5.0%.

UNDERLYING EPS AND PROFITABILITY (1) (%)
Q3'22Q2'22%9M'229M'21%2021
Underlying EPS (euros)0.137 0.131 4.9 0.409 0.344 18.9 0.468 
Underlying RoE 10.64 10.44 10.86 10.18 10.29 
Underlying RoTE 13.38 13.10 13.57 12.61 12.73 
Underlying RoA 0.61 0.63 0.64 0.65 0.65 
Underlying RoRWA 1.75 1.76 1.82 1.76 1.78 


January - September 2022
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3
SOLVENCY (%)Sep-22Jun-22Sep-22Sep-21Dec-21
Fully-loaded CET1 ratio12.10 12.05 12.10 11.85 12.12 
Fully-loaded total capital ratio16.00 15.95 16.00 15.82 16.41 

CREDIT QUALITY (%)Q3'22Q2'229M'229M'212021
Cost of risk2
0.86 0.83 0.86 0.90 0.77 
NPL ratio3.08 3.05 3.08 3.18 3.16 
Total coverage ratio70 71 70 74 71 

MARKET CAPITALIZATION AND SHARESSep-22Jun-22%Sep-22Sep-21%Dec-21
Shares (millions)16,794 16,794 0.0 16,794 17,341 (3.2)17,341 
Share price (euros)2.398 2.688 (10.8)2.398 3.137 (23.6)2.941 
Market capitalization (EUR million)40,265 45,143 (10.8)40,265 54,389 (26.0)50,990 
Tangible book value per share (euros)4.31 4.24 4.31 3.99 4.12 
Price / Tangible book value per share (X)0.56 0.63 0.56 0.79 0.71 

CUSTOMERS (thousands)Q3'22Q2'22%9M'229M'21%2021
Total customers159,384 156,896 1.6 159,384 151,433 5.3152,943 
Loyal customers26,841 26,494 1.3 26,841 24,742 8.525,548 
     Loyal retail customers24,674 24,361 1.3 24,674 22,588 9.223,359 
     Loyal SME & corporate customers2,167 2,133 1.6 2,167 2,154 0.62,189 
Digital customers50,451 49,870 1.2 50,451 46,693 8.047,489 
Digital sales / Total sales (%)55.5 54.6 55.5 54.0 54.4 

OTHER DATASep-22Jun-22%Sep-22Sep-21%Dec-21
Number of shareholders3,928,568 3,985,638 (1.4)3,928,568 3,817,454 2.9 3,936,922 
Number of employees203,376 200,651 1.4 203,376 195,264 4.2 199,177 
Number of branches9,134 9,193 (0.6)9,134 9,254 (1.3)9,229 

(1) In addition to financial information prepared in accordance with International Financial Reporting Standards (IFRS) and derived from our consolidated financial statements, this report contains certain financial measures that constitute alternative performance measures (APMs) as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority (ESMA) on 5 October 2015, and other non-IFRS measures, including the figures related to “underlying” results, which do not include the items recorded in the separate line of “net capital gains and provisions”, above the line of profit attributable to the parent. Further details are provided in the “Alternative performance measures” section of the appendix to this report.

For further details on the APMs and non-IFRS measures used, including their definition or a reconciliation between any applicable management indicators and the financial data presented in the annual consolidated financial statements prepared under IFRS, please see our 2021 Annual Financial Report, published in the CNMV on 25 February 2022, our 20-F report for the year ending 31 December 2021 filed with the SEC in the United States on 1 March 2022, as updated by the Form 6-K filed with the SEC on 8 April 2022 in order to reflect our new organizational and reporting structure, as well as the “Alternative performance measures” section of the appendix to this report.
(2) Allowances for loan-loss provisions over the last 12 months / Average loans and advances to customers over the last 12 months.

4
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January - September 2022
Business model
Group financial informationFinancial information by segmentResponsible banking
Corporate governance
Santander share		Appendix

Our business model is based on three pillars
01. Customer focus02. Our scale03. Diversification

Deepening the relationships
with our customers
Local scale and global reach
Geographic and business diversification
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Top 3 NPS1
in 6 out of 9 markets
Top 3 in lending2
in 10 of our markets
Balanced profit distribution3
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159 mn
total customers
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(1) NPS – internal benchmark of individual customers' satisfaction audited by Stiga / Deloitte in H1'22.(2) Market share in lending as of June 2022 including only privately-owned banks. UK benchmark refers to the mortgage market. Digital Consumer Bank (DCB) refers to auto in Europe.(3) 9M'22 underlying attributable profit by region.
     Operating areas excluding Corporate Centre.
Our business model remains a source of great strength and resilience
Our corporate culture
The Santander Way remains unchanged to continue to deliver for all our stakeholders

Our purpose
To help people and businesses prosper.
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Our aim
To be the best open financial services
platform, by acting responsibly and
earning the lasting loyalty of our
people, customers, shareholders and
communities.
Our how
Everything we do should be
Simple, Personal and Fair.

January - September 2022
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5
Group performance

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HIGHLIGHTS OF THE PERIOD
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u
In Q3'22, attributable profit amounted to EUR 2,422 million, including a charge of EUR 181 million (net of tax) as a result of the Polish mortgage payment holiday regulations. Profit was 3% higher than the second quarter (+11% excluding the aforementioned charge).
u
In the first nine months of 2022, attributable profit rose to EUR 7,316 million, 25% more than in the same period of 2021 (+14% in constant euros).
Underlying profit also amounted to EUR 7,316 million, 15% higher (+5% in constant euros) than the first nine months of 2021 (excluding a net charge for restructuring costs of EUR 530 million).
u
Our geographic and business diversification to some extent protects us from adverse circumstances and enables us to resiliently face the indirect impacts arising from the Russia-Ukraine conflict. Santander's presence in and exposure to Russia and Ukraine is negligible.
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u
In applying the shareholder remuneration policy for 2022, the board of directors approved an interim distribution against 2022 results, which will be made in two parts:
•A cash dividend of EUR 5.83 cents per share (pre-tax) which is expected to be paid from 2 November 2022 (20% higher than the equivalent in 2021).
•A share repurchase programme of up to EUR 979 million is expected to start once the applicable regulatory approval has been obtained, as announced in the Inside Information disclosed on 27 September 2022.
As a result, the total remuneration of this interim distribution will exceed EUR 1.9 billion (+16% compared to its equivalent in 2021) and represents approximately 40% of H1 2022 profit (c. 20% dividend payment and c. 20% share repurchase).


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u
TNAV per share was EUR 4.31, with 11% growth year-on-year including the cash dividends per share paid in May 2022 and the one already announced for November 2022. In the quarter, TNAV per share plus dividend increased 3%.
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u
Santander is the leader in renewable energy financing and mobilized close to EUR 78.7 billion between 2019 and the end of Q3'22. The Group's target is to mobilize EUR 220 billion in green finance by 2030.
u
We continued to help our customers in their green transition with, for example, the financing of fully-electric vehicles.
u
In 2022, we granted EUR 677 million in loans through our microfinance programmes to 1.1 million micro-entrepreneurs in 8 countries.
u
We were named Best Global Bank for Financial Inclusion by Euromoney, highlighting our programmes in South America and Mexico, and Best Bank for Corporate Responsibility in Central and Eastern Europe for our support to refugees from the Russia-Ukraine conflict.
6
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January - September 2022
Group performance
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GROWTH
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u
Total customers amounted to 159 million, +8 million compared to September 2021 (+2.5 million in the third quarter). Loyal customers reached 26.8 million, 8% higher year-on-year.
u
Digital adoption continued to be key, as we now have 50 million digital customers, an increase of 3.8 million since September 2021. In the first nine months of 2022, 56% of sales were made through digital channels.
u
Business volumes continued to grow in a context of uncertainty. In this environment, loans and advances to customers increased 2% in the quarter and 10% year-on-year (+7% in constant euros). Customer funds rose 3% in the quarter (+2% in constant euros) and +8% year-on-year (+4% in constant euros).
u
Greater activity, together with higher interest rates and margin management, was reflected in the 15% rise in net interest income and a 14% increase in net fee income (+8% and +7%, respectively, in constant euros).
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PROFITABILITY
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u
The increase in profit, underpinned by the positive performance across regions, Digital Consumer Bank (DCB) and the global businesses, was reflected in higher profitability.
u
Sustained earnings per share growth, which rose +31% year-on-year to EUR 40.9 cents in the first nine months of 2022 (underlying EPS +19%).
u
RoTE of 13.6%, RoRWA was 1.82%, both clearly exceeding figures from the first nine months of 2021.
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STRENGTH
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u
Regarding credit quality, the cost of risk stood at 0.86% (0.90% in September 2021).
u
The NPL ratio was 3.08%, 3 bps higher quarter-on-quarter and 10 bps lower year-on-year, mainly due to the good performance in Europe and Digital Consumer Bank.
u
Total loan-loss reserves reached EUR 24,813 million, with a coverage of 70% (-1 pp vs. Q2'22).
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u
The fully-loaded CET1 ratio was 12.10%.
In the quarter, net organic generation of 26 bps, resulting from gross organic generation of 34 bps from Q3'22 profit and an 8 bp charge for a future cash dividend payment1. In addition there were negative impacts, mainly from market performance and models.
(1) Implementation of the shareholder remuneration policy is subject to future corporate and regulatory decisions and approvals.
January - September 2022
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7
Income statement
GRUPO SANTANDER RESULTS
Grupo Santander. Summarized income statement
EUR million
ChangeChange
Q3'22Q2'22%% excl. FX9M'229M'21%% excl. FX
Net interest income10,051 9,554 5.2 5.4 28,460 24,654 15.4 8.2 
Net fee income (commission income minus commission expense)3,015 3,040 (0.8)(0.3)8,867 7,810 13.5 7.3 
Gains or losses on financial assets and liabilities and exchange differences (net)372 356 4.5 7.6 1,115 1,220 (8.6)(13.1)
Dividend income87 267 (67.4)(67.5)422 404 4.5 4.4 
Share of results of entities accounted for using the equity method189 179 5.6 5.6 501 295 69.8 61.9 
Other operating income / expenses(240)(581)(58.7)(51.7)(771)243 — — 
Total income13,474 12,815 5.1 5.2 38,594 34,626 11.5 4.6 
Operating expenses(6,160)(5,900)4.4 4.5 (17,595)(15,778)11.5 6.3 
   Administrative expenses(5,367)(5,162)4.0 4.0 (15,360)(13,714)12.0 6.7 
       Staff costs (3,177)(3,085)3.0 2.8 (9,125)(8,205)11.2 6.3 
       Other general administrative expenses (2,190)(2,077)5.4 5.7 (6,235)(5,509)13.2 7.2 
   Depreciation and amortization(793)(738)7.5 7.8 (2,235)(2,064)8.3 3.8 
Provisions or reversal of provisions(370)(480)(22.9)(18.6)(1,305)(2,006)(34.9)(35.7)
Impairment or reversal of impairment of financial assets not measured at fair value through profit or loss (net)(3,073)(2,640)16.4 16.0 (7,836)(6,000)30.6 21.5 
Impairment on other assets (net)(25)(26)(3.8)(6.1)(86)(134)(35.8)(37.7)
Gains or losses on non-financial assets and investments, net6 (6)— — 2 43 (95.3)(96.3)
Negative goodwill recognized in results— — — — — — — — 
Gains or losses on non-current assets held for sale not classified as discontinued operations(6)(19)(68.4)(67.1)(13)(35)(62.9)(66.9)
Profit or loss before tax from continuing operations3,846 3,744 2.7 2.5 11,761 10,716 9.8 0.1 
Tax expense or income from continuing operations(1,164)(1,072)8.6 8.8 (3,538)(3,725)(5.0)(13.6)
Profit from the period from continuing operations2,682 2,672 0.4 0.0 8,223 6,991 17.6 7.4 
Profit or loss after tax from discontinued operations— — — — — — — — 
Profit for the period2,682 2,672 0.4 0.0 8,223 6,991 17.6 7.4 
Profit attributable to non-controlling interests(260)(321)(19.0)(18.0)(907)(1,142)(20.6)(25.7)
Profit attributable to the parent2,422 2,351 3.0 2.5 7,316 5,849 25.1 13.7 
EPS (euros)0.137 0.131 4.9 0.409 0.313 30.5 
Diluted EPS (euros)0.137 0.130 4.9 0.408 0.312 30.5 
Memorandum items:
   Average total assets1,769,904 1,707,903 3.6 1,702,210 1,550,943 9.8 
   Average stockholders' equity91,044 90,035 1.1 89,854 83,574 7.5 







8
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January - September 2022
Income statement
Executive summary
Profit. In constant euros
Performance. In constant euros
Strong profit growth underpinned by our geographic and business diversificationRevenue growth accelerated, costs under control and LLP growth slowed
Attributable profitTotal incomeCostsProvisions
EUR 7,316 mn+14% vs 9M'21+4.7%+6.3%+16.7%
+5% vs 9M'21 underlying att. profit
EfficiencyProfitability
The Group's efficiency ratio improved, mainly driven by EuropeStrong improvement in our profitability ratios
GroupEuropeRoTERoRWA
45.5%47.4%13.6%1.82%
-0.1 pp-4.1 pp+1.8 pp+1.0 pp
1
+0.2 pp+0.1 pp
2
Changes vs 9M'21.Changes vs 9M'21.
1. vs underlying RoTE.
2. vs under. RoRWA
è Results performance compared to 9M'21
The Group presents, both at the total level and for each of the business units, the changes in euros produced in the income statement, as well as variations excluding the exchange rate effect (FX), on the understanding that the latter provide a better analysis of the Group’s management of the country units. For the Group as a whole, exchange rates had an impact of +7 pp in revenue and +5 pp in costs.
u Total income
Total income in the first nine months of 2022 was EUR 38,594 million, up 11% compared to the same period in 2021. Excluding the exchange rate impact, total income increased 5%. Net interest income and net fee income accounted for 97% of total income. By line:
•Net interest income amounted to EUR 28,460 million, 15% higher compared to 9M 2021. Stripping out the exchange rate impact, growth was 8%, mainly due to greater volumes and higher interest rates.
By country, and at constant exchange rates, there were increases in the UK (+12%), Poland (+104%), the US (+2%, +4% without the Bluestem portfolio disposal in 2021), Mexico (+12%), Chile (+1%) and Argentina (+142%).
Net interest income
EUR million
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constant euros
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On the other hand, Spain remained flat due to lower ALCO portfolio volumes, lower TLTRO contribution and a change of mix towards mortgages. Brazil fell (-1%) due to its negative sensitivity to interest rate hikes and Portugal fell 6% impacted by lower ALCO portfolio and TLTRO contributions. All three improved their trend in the third quarter, with Spain and Portugal rising compared to the second quarter, and Brazil remained stable.
•Net fee income was EUR 8,867 million, up 14% compared to the first nine months of 2021. Excluding the exchange rate impact, net fee income increased 7%, driven by higher volumes and improved activity.
There was strong growth in high value-added products and services, as card and point of sale turnover increased 16% and 29%, respectively, and card transactions were 14% higher. Transactional fees rose 9%.
In Wealth Management & Insurance (WM&I), net fee income from mutual funds and pensions grew 3% and insurance premiums rose 24%.
In Santander Corporate & Investment Banking (SCIB), net fee income increased 9%, with double-digit growth in its core businesses.
Net fee income
EUR million
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constant euros
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January - September 2022
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9
Income statement
Together, the two businesses accounted for close to 50% of the Group’s total fee income (SCIB: 17%; WM&I: 31%).
By region, net fee income in Europe was up 6%, supported by growth in all countries except the UK (transfer of its SCIB business in Q4 2021). There was a 4% increase in North America, as the US was dampened by the Bluestem portfolio disposal in 2021. Excluding it, net fee income would have increased 7% in the region. The 20% increase in Mexico was driven by net fee income from payments, insurance and mutual funds. South America was up 11% driven by greater transactionality, with growth in all main countries and Digital Consumer Bank rose 2% driven by greater new lending.
•Gains on financial transactions, accounted for 3% of total income and were 9% lower year-on-year at EUR 1,115 million (-13% excluding the exchange rate impact), due to the negative impact of FX hedges at the Corporate Centre which offset the positive impact of exchange rates in the countries' results. In addition, there were decreases in Portugal and Mexico, due to ALCO portfolio sales recorded in 9M'21, and the US backed by lower capital market activity.
•Dividend income was EUR 422 million in the first nine months of 2022, increasing 4% in both euros and constant euros.
•The results of entities accounted for using the equity method rose 70% (62% excluding the exchange rate impact) to EUR 501 million, due to the greater contribution from Group entities in Spain and Brazil.
•Other operating income stood at -EUR 771 million compared to EUR 243 million in the first nine months of 2021.
Several effects justify this movement: lower leasing income in North America, greater contribution to the SRF, the creation of an Institutional Protection Scheme in Poland in Q2'22, and finally, the impact of high inflation in Argentina.
Total income
EUR million
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constant euros
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u Costs
Operating costs amounted to EUR 17,595 million, 12% higher than in the first nine months of 2021 (+6% excluding the exchange rate impact), due to the sharp increase in inflation. In real terms (excluding the rise in average inflation), costs fell 5% in constant euros.
Our disciplined cost management enabled us to maintain one of the best efficiency ratios in the sector, which stood at 45.5%, a 0.1 pp improvement on the first nine months of 2021. Our transformation plan continued to progress across countries towards a more integrated and digital operating model, with better business dynamics and improved customer service and satisfaction.
The year-on-year trends in costs in constant euros were as follows:
•In Europe, costs rose 1%, which translates into a 7% drop in real terms, on the back of our transformation process and operational improvements. In real terms, there were falls across the region: -11% in Spain, -6% in the UK, -18% in Portugal and -4% in Poland. The region's efficiency ratio was 47.4% (-4.1 pp compared to the first nine months of 2021), improving in all countries.
•In North America, costs increased 5%. In real terms, they were down 3%. They remained flat in the US (-8% in real terms) while Mexico recorded an increase due to wage increases, digitalization and technology, and by the increase in supply costs affected by inflation at 8%. The efficiency ratio stood at 47.0% (+2.7 pp compared to the first nine months of 2021).
•In South America, the rise in costs (+17%) was significantly distorted by soaring average inflation in the region (+19%, due to +61% in Argentina) which was reflected in salary increases in Brazil and Argentina. In real terms, costs in Brazil fell 2%, -3% in Chile and they rose 24% in Argentina. The efficiency ratio was 36.3% (+1.6 pp compared to the first nine months of 2021).
•In Digital Consumer Bank, cots rose 2% affected by inflation, strategic investments, transformational costs and business growth. In real terms, costs fell 5%. The efficiency ratio stood at 47.7% (+0.1 pp compared to the first nine months of 2021).
Operating expenses
EUR million
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constant euros
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10
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January - September 2022
Income statement
u Provisions or reversal of provisions
Provisions (net of provisions reversals) amounted to EUR 1,305 million (EUR 2,006 million in in the first nine months of 2021). This item includes the charges for restructuring costs recorded in 2021 (EUR 530 million net of tax).
u Impairment or reversal of impairment of financial assets not measured at fair value through profit or loss (net)
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss (net) amounted to EUR 7,836 million, 31% higher than in the first nine months of 2021 (+22% in constant euros). This comparison was affected by the releases recorded in the UK and the US in Q2 2021, macro provisions in 2022 (mainly in Spain, the UK and the US) resulting from a potential macroeconomic slowdown, the charges in Poland and DCB for CHF mortgages and the new mortgage payment holiday regulations in Poland (EUR 287 million). Lastly, there was a year-on-year rise in Brazil, driven by individuals, although they showed a decline in the third quarter.
u Impairment on other assets (net)
The impairment on other assets (net) stood at EUR 86 million, down from EUR 134 million in the first nine months of 2021.
u Gains or losses on non-financial assets and investments (net)
EUR 2 million was recorded in this line in the first nine months of 2022 (EUR 43 million in the first nine months of 2021).
Net loan-loss provisions
EUR million
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constant euros
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u Negative goodwill recognized in results
No negative goodwill was recorded in the first nine months of 2022 or in the same period of 2021.
u Gains or losses on non-current assets held for sale not classified as discontinued operations
This item, which mainly includes impairment of foreclosed assets recorded and the sale of properties acquired upon foreclosure, totalled -EUR 13 million in the first nine months of 2022, compared to -EUR 35 million in the first nine months of 2021.
u Profit before tax
Profit before tax was EUR 11,761 million in the first nine months of 2022, 10% higher compared to the first nine months of 2021 (practically stable in constant euros).
u Income tax
Total corporate income tax was EUR 3,538 million (EUR 3,725 million in the first nine months of 2021).
u Profit attributable to non-controlling interests
Profit attributable to non-controlling interests amounted to EUR 907 million, down 21% year-on-year (-26% excluding the exchange rate impact), mainly due to the buyback of minority interests of SC USA in the US.
u Profit attributable to the parent
Profit attributable to the parent amounted to EUR 7,316 million in the first nine months of 2022, compared to EUR 5,849 million in the same period of 2021. The evolution of the aforementioned income statement items is reflected in a profit growth of 25% in euros and 14% in constant euros.
RoTE stood at 13.57%, RoRWA at 1.82% and earnings per share at EUR 0.409 (11.82%, 1.66% and EUR 0.313, respectively, in the first nine months of 2021).

January - September 2022
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11
Income statement
u Underlying profit attributable to the parent
Underlying profit attributable to the parent recorded the same amount as profit attributable to the parent in 9M'22, as profit was not affected by the recording of results that are outside the ordinary course of our business. As such, attributable profit and underlying profit attributable to the parent in 9M'22 both amounted to EUR 7,316 million.
In 9M'21, profit attributable to the parent was affected by restructuring costs, mainly in the UK and Portugal. Excluding these charges from the line where they were recorded, and including them separately in the net capital gains and provisions line, adjusted profit or underlying profit attributable to the parent in 9M'21 stood at EUR 6,379 million.
As a result, profit in 9M'22 was 15% higher in euros and +5% in constant euros compared to the adjusted or underlying profit in the same period of 2021.
For more details, see 'Alternative Performance Measures' section in the appendix of this report.
The Group’s cost of risk (considering the last 12 months) stood at 0.86%, (0.90% in September 2021).
Before recording loan-loss provisions, Grupo Santander's underlying net operating income (total income less operating expenses) was EUR 21,034 million, 12% higher year-on-year in euros, +3% excluding the FX impact. This is the highest net operating income ever recorded in the first nine months of a year. The performance in constant euros is detailed below.
By line:
•Total income increased mainly due to net interest income (+8%), continuing with its quarter-after-quarter improvement, and net fee income (+7%), which recovered further given the greater commercial activity.
•Costs were driven up by soaring inflation.
By region:
•In Europe, net operating income increased 19% underscored by higher total income and costs stability.
•In North America, net operating income fell 7%, -5% excluding the impact from the sale of the Bluestem portfolio in 2021, dampened by lower net fee income and leasing income in the US. Growth in Mexico was 12%.
•In South America, net operating income growth was 5% with rises in all countries, with the exception of Brazil which remained flat.
•In Digital Consumer Bank, net operating income increased 2%.
In the first nine months of 2022, Grupo Santander’s underlying RoTE was 13.57%, underlying RoRWA was 1.82% and underlying earnings per share was EUR 0.409 (12.61%, 1.76% and EUR 0.344, respectively, in the first nine months of 2021).
Summarized underlying income statement
EUR millionChangeChange
Q3'22Q2'22%% excl. FX9M'229M'21%% excl. FX
Net interest income10,051 9,554 5.25.428,460 24,654 15.48.2
Net fee income3,015 3,040 (0.8)(0.3)8,867 7,810 13.57.3
Gains (losses) on financial transactions (1)
372 356 4.57.61,115 1,220 (8.6)(13.1)
Other operating income71 (135)——187 942 (80.1)(82.4)
Total income13,509 12,815 5.45.538,629 34,626 11.64.7
Administrative expenses and amortizations(6,160)(5,900)4.44.5(17,595)(15,778)11.56.3
Net operating income7,349 6,915 6.36.321,034 18,848 11.63.3
Net loan-loss provisions(2,756)(2,634)4.64.1(7,491)(5,973)25.416.7
Other gains (losses) and provisions(747)(537)39.143.5(1,782)(1,443)23.522.2
Profit before tax3,846 3,744 2.72.511,761 11,432 2.9(5.7)
Tax on profit(1,164)(1,072)8.68.8(3,538)(3,911)(9.5)(17.4)
Profit from continuing operations2,682 2,672 0.4—8,223 7,521 9.30.4
Net profit from discontinued operations— — — — — — — (100.0)
Consolidated profit2,682 2,672 0.4—8,223 7,521 9.30.4
Non-controlling interests(260)(321)(19.0)(18.0)(907)(1,142)(20.6)(25.7)
Net capital gains and provisions— — ——— (530)(100.0)(100.0)
Profit attributable to the parent2,422 2,351 3.02.57,316 5,849 25.113.7
Underlying profit attributable to the parent (2)
2,422 2,351 3.02.57,316 6,379 14.75.0
(1) Includes exchange differences.
(2) Excludes net capital gains and provisions.

12
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January - September 2022
Income statement
è Results performance compared to the previous quarter
Underlying profit attributable to the parent and profit attributable to the parent recorded the same amount in Q3'22 as profit was not affected by results outside the ordinary course of our business.
Q2'22 was also not affected by results outside the ordinary course of our business and as such underlying profit attributable to the parent and profit attributable to the parent were the same.
Profit in the third quarter amounted to EUR 2,422 million, including a EUR 181 million (net of tax) charge mainly as a result of the Polish mortgage payment holiday regulations. Profit was 3% higher than second quarter (+2% in constant euros) and +11% excluding the aforementioned charge (+10% in constant euros).
The performance of the main lines of the income statement in constant euros was as follows:
•Total income increased significantly in the quarter (+5%) with overall improvement in all regions, DCB, SCIB and WM&I, partially favoured by the contributions made to the SRF and BFG in the second quarter.
•Of note was the net interest income increase, up 5% due to higher interest rates and volumes. By region, 7% rise in Europe, driven by all countries. In North America, net interest income growth was 6%, with a positive performance both in the US and Mexico. South America rose 5%, as the decline in Chile compared to an exceptionally high second quarter and stability in Brazil (due to the negative sensitivity to interest rate hikes and growth in less profitable and lower-risk products) were offset by the rise in Argentina.
•
Net operating income
EUR million
leyendaconstantesa07a.gif
constant euros
chart-f34ccb0f680e493388f.jpg
•Net fee income remained flat in Europe (seasonality, lower deposit earnings in SCIB and a one-off in cards in the second quarter in the UK), and North America (due to lower net fee income from global businesses in the US). On the other hand, South America increased 5%.
•Gains on financial transactions increased 8%, due to CIB performance in Spain and Argentina.
•Costs rose 4% affected by the overall increase in inflation and labour agreements in Mexico, Brazil and Argentina.
•Net loan-loss provisions increased 4% mainly due to the US, where it is normalizing from historical lows. On the other hand, decreases in some units, such as Brazil, Chile and Mexico.
•Other losses and provisions rose 44%, negatively affected by the aforementioned charge related to mortgage payment holidays.
Underlying profit attributable to the parent1
EUR million
leyendaconstantesa07a.gif
constant euros
chart-1e66e79798f045bdba4.jpg
(1) Excluding net capital gains and provisions.
January - September 2022
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13

Business model




Balance sheet
Grupo Santander. Condensed balance sheet
EUR million
Change
AssetsSep-22Sep-21Absolute%Dec-21
Cash, cash balances at central banks and other demand deposits246,533 191,035 55,498 29.1 210,689 
Financial assets held for trading 179,775 122,967 56,808 46.2 116,953 
   Debt securities37,655 30,834 6,821 22.1 26,750 
   Equity instruments9,271 14,586 (5,315)(36.4)15,077 
   Loans and advances to customers14,131 3,651 10,480 287.0 6,829 
   Loans and advances to central banks and credit institutions35,480 17,246 18,234 105.7 14,005 
   Derivatives83,238 56,650 26,588 46.9 54,292 
Financial assets designated at fair value through profit or loss15,462 42,126 (26,664)(63.3)21,493 
   Loans and advances to customers7,306 22,930 (15,624)(68.1)10,826 
   Loans and advances to central banks and credit institutions618 11,876 (11,258)(94.8)3,152 
   Other (debt securities an equity instruments)7,538 7,320 218 3.0 7,515 
Financial assets at fair value through other comprehensive income87,915 109,570 (21,655)(19.8)108,038 
   Debt securities78,117 98,016 (19,899)(20.3)97,922 
   Equity instruments2,030 2,690 (660)(24.5)2,453 
   Loans and advances to customers7,768 8,864 (1,096)(12.4)7,663 
   Loans and advances to central banks and credit institutions— — — — — 
Financial assets measured at amortized cost1,173,274 1,011,994 161,280 15.9 1,037,898 
   Debt securities68,727 34,079 34,648 101.7 35,708 
   Loans and advances to customers1,038,261 922,867 115,394 12.5 947,364 
   Loans and advances to central banks and credit institutions66,286 55,048 11,238 20.4 54,826 
Investments in subsidiaries, joint ventures and associates7,805 7,684 121 1.6 7,525 
Tangible assets35,662 32,446 3,216 9.9 33,321 
Intangible assets18,789 16,246 2,543 15.7 16,584 
    Goodwill14,138 12,645 1,493 11.8 12,713 
    Other intangible assets4,651 3,601 1,050 29.2 3,871 
Other assets50,577 44,227 6,350 14.4 43,334 
Total assets1,815,792 1,578,295 237,497 15.0 1,595,835 
Liabilities and shareholders' equity
Financial liabilities held for trading 132,563 80,147 52,416 65.4 79,469 
   Customer deposits12,451 4,809 7,642 158.9 6,141 
   Debt securities issued— — — — — 
   Deposits by central banks and credit institutions18,792 5,350 13,442 251.3 7,526 
   Derivatives82,505 55,086 27,419 49.8 53,566 
   Other18,815 14,902 3,913 26.3 12,236 
Financial liabilities designated at fair value through profit or loss44,599 47,900 (3,301)(6.9)32,733 
   Customer deposits35,994 36,694 (700)(1.9)25,608 
   Debt securities issued5,442 5,401 41 0.8 5,454 
   Deposits by central banks and credit institutions3,163 5,805 (2,642)(45.5)1,671 
   Other— — — — — 
Financial liabilities measured at amortized cost1,493,298 1,317,759 175,539 13.3 1,349,169 
   Customer deposits960,355 867,531 92,824 10.7 886,595 
   Debt securities issued279,591 238,882 40,709 17.0 240,709 
   Deposits by central banks and credit institutions214,164 180,221 33,943 18.8 191,992 
   Other39,188 31,125 8,063 25.9 29,873 
Liabilities under insurance contracts777 779 (2)(0.3)770 
Provisions8,341 9,815 (1,474)(15.0)9,583 
Other liabilities36,902 26,271 10,631 40.5 27,058 
Total liabilities1,716,480 1,482,671 233,809 15.8 1,498,782 
Shareholders' equity123,340 118,380 4,960 4.2 119,649 
   Capital stock8,397 8,670 (273)(3.1)8,670 
   Reserves (including treasury stock)108,606 104,702 3,904 3.7 103,691 
   Profit attributable to the Group 7,316 5,849 1,467 25.1 8,124 
   Less: dividends(979)(841)(138)16.4 (836)
Other comprehensive income(32,316)(32,992)676 (2.0)(32,719)
Minority interests8,288 10,236 (1,948)(19.0)10,123 
Total equity99,312 95,624 3,688 3.9 97,053 
Total liabilities and equity1,815,792 1,578,295 237,497 15.0 1,595,835 
14
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January - September 2022

Business model




Balance sheet
GRUPO SANTANDER BALANCE SHEET
Executive summary 1
Loans and advances to customers (excl. reverse repos)
Customer funds (deposits excl. repos + mutual funds)
Positive trend in loans and advances to customers continued, increasing both QoQ and YoYCustomer funds continued to grow, mainly backed by customer deposits
1,040+2% QoQ+7% YoY1,129+2% QoQ+4% YoY
EUR billionEUR billion
 è By segment (YoY changes):
 è By product (YoY changes):
Growth backed by individuals and large corporatesDemand deposits accounted for 64% of customer funds. Increase in time deposits due to higher interest rates and mutual funds were impacted by market performance
IndividualsSMEs and corporatesCIBDemandTimeMutual funds
+7%+2%+14%+1%+27%-5%
(1) Changes in constant euros.
è Loans and advances to customers
Loans and advances to customers stood at EUR 1,067,466 million at 30 September, +3% quarter-on-quarter and +11% year-on-year.
For the purpose of analysing traditional commercial banking loans, the Group uses gross loans and advances to customers excluding reverse repos, which exceeded EUR 1 trillion (EUR 1,040,457 million). In order to facilitate the analysis of the Group's management, the comments below do not include the exchange rate impact.
In the quarter, gross loans and advances to customers, excluding reverse repos, rose 2%, as follows:
•Europe rose 1% with increases in the UK and Spain, while Portugal and Poland remained flat.
•North America rose 2% with equal growth both in Mexico and the US.
•In South America, loans increased 4%, with Brazil increasing 4%, Chile +3%, Argentina +14% and Uruguay +5%.
•Digital Consumer Bank (DCB) rose 2%, with Openbank also growing 2%.
Gross loans and advances to customers (excl. reverse repos)
EUR billion
chart-0042cd4638884cad937.jpg
+10 %
1a
Sep-22 / Sep-21
(1) In constant EUR: +7%.
Compared to September 2021, gross loans and advances to customers (excluding reverse repos and the FX impact) grew 7%, with broad-based growth across countries, as follows:
•In Europe, growth was 5%. Spain rose 7% (individuals and private banking), Poland rose 6% (corporates, institutions and CIB), the UK rose 4% (mortgages) and Portugal was up 1% (mortgages).
•+9% in North America as the US grew 8% propelled by auto financing, CIB and CRE (commercial real estate), while Mexico was up 13% with rises in most segments, except SMEs.
•Growth in South America was 13%, with Chile +11% backed by individuals, Brazil increased +10% owing to individuals and corporates, Argentina rose +68% driven by auto, SMEs and corporates and Uruguay recorded a 15% increase.
•DCB increased 6%, receiving an uplift from new lending, which rose 10% year-on-year, and increased in most countries. Openbank increased 42%.
As of September 2022, gross loans and advances to customers excluding reverse repos maintained a balanced structure: individuals (61%), SMEs and corporates (24%) and SCIB (15%).
Gross loans and advances to customers (excl. reverse repos)
% operating areas. September 2022
chart-a02081380f904553afc.jpg


January - September 2022
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15

Business model




Balance sheet
è Customer funds
Customer deposits amounted to EUR 1,008,800 million in September 2022, increasing 4% quarter-on-quarter and 11% year-on-year.
The Group uses customer funds (customer deposits excluding repos, plus mutual funds) for the purpose of analysing traditional retail banking funds, which amounted to EUR 1,129,020 million in September 2022. Just as for loans and advances to customers, the comments below do not include the exchange rate impact.
•In the third quarter, customer funds grew 2%, as follows:
–By product, customer deposits excluding repos increased 2% and mutual funds fell 1%.
–By primary segment, customer funds rose in the three regions while DCB remained stable. By country, customer funds increased 4% in Spain, 3% in Poland and the US, +5% in Chile and +15% in Argentina. In Portugal and Mexico customer funds decreased 2%, while Brazil was practically unchanged.
•Compared to September 2021, customer funds were up 4%, excluding the exchange rate impact:
–By product, deposits excluding repos rose 6%. Demand deposits grew 1% (with rises Europe and falls in North and South America) and time deposits were 27% higher driven by Europe and North America. Mutual funds dropped 5% with widespread falls across most countries due to the impact from markets and the rising interest rate environment.
–By region, customer funds increased 4% in Europe, with rises in Spain (+8%), Portugal (+1%) and Poland (+1%), while the UK decreased 2%. There was a 2% rise in North America (the US: +4%; Mexico: -0.4%) and +5% South America (Brazil: +2%; Chile: -5%; Argentina: +73%; Uruguay: +17%).
–6% rise in DCB, where Openbank increased 9%.
With this performance, the weight of demand deposits as a percentage of total customer funds was 64%, time deposits accounted for 20% of the total and mutual funds 16%.
Customer funds
EUR billion
chart-e8d09ea3db8b4fc8b63.jpg
+8 %
1a
+1 %
+9 %
•Total
•Mutual funds
•Deposits
exc. repos
Sep-22 / Sep-21
(1) In constant EUR: +4%.
In addition to capturing customer deposits, the Group, for strategic reasons, maintains a selective policy of issuing securities in the international fixed income markets and strives to adapt the frequency and volume of its market operations to the structural liquidity needs of each unit, as well as to the receptiveness of each market.
In the first nine months of 2022, the Group issued:
•Medium- and long-term covered bonds amounting to EUR 9,041 million and EUR 16,170 million of senior debt placed in the market.
•There were EUR 13,751 million of securitizations placed in the market. Additionally, we extended the maturity of an additional EUR 158 million.
•In order to strengthen the Group’s situation, issuances to meet the TLAC requirement amounted to EUR 9,716 million (EUR 9,594 million of senior non-preferred debt and EUR 122 million of subordinated debt).
•Maturities of medium- and long-term debt totalled EUR 21,622 million.
The net loan-to-deposit ratio was 106% (105% in September 2021). The ratio of deposits plus medium- and long-term funding to the Group’s loans was 118%, underscoring the comfortable funding structure.
The Group's access to wholesale funding markets as well as the cost of issuances depends, in part, on the ratings of the rating agencies.
The ratings of Banco Santander, S.A. by the main rating agencies were: Fitch A- senior non-preferred debt, A senior long-term and F2/F1 senior short-term; Moody's A2 long-term and P-1 short-term; and DBRS A High and R-1 Medium short-term. In December 2021, Standard & Poor's (S&P) raised its long-term rating to A+ (from A) and maintained its short-term rating at A-1. Moody's, DBRS and Fitch maintained their stable outlooks. In March 2022, S&P upgraded it to stable as a result of the sovereign's outlook upgrade.
Sometimes the methodology applied by the agencies limits a bank's rating to the sovereign rating of the country where it is headquartered. Banco Santander, S.A. is still rated above the sovereign debt rating of the Kingdom of Spain by Moody’s, DBRS and S&P and at the same level by Fitch, which demonstrates our financial strength and diversification.
Customer funds
% operating areas. September 2022

chart-34df4ed7ce21465abbb.jpg
16
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January - September 2022






Solvency ratios
SOLVENCY RATIOS
Executive summary
Fully-loaded capital ratioFully-loaded CET1 ratio
Fully-loaded CET1 ratio exceeded 12% at the end of September 2022We continued to generate capital organically in the quarter, backed by profit and RWA management
capitalenga.jpg
Gross organic generation  +26 bps+34 bps
Cash dividend accrual1
   -8 bps-8 bps
TNAV per share
TNAV per share was EUR 4.31, +3% quarter-on-quarter and 11% higher year-on-year including cash dividends
At the end of September 2022, the total phased-in capital ratio (applying the IFRS 9 transitional arrangements) stood at 16.18% and the phased-in CET1 ratio at 12.24%. We comfortably meet the levels required by the European Central Bank on a consolidated basis (13.01% for the total capital ratio and 8.86% for the CET1 ratio). This results in a distance to the maximum distributable amount (MDA) of 307 bps and a CET1 management buffer of 338 bps.
The total fully-loaded capital ratio stood at 16.00% and the fully-loaded CET1 ratio at 12.10%.
We maintained strong net organic generation in the quarter, 26 bps, resulting from gross organic generation of 34 bps (from Q2'22 profit and RWA management), and the 8 bp accrual for the future cash dividend payment1.
Additionally, in the quarter there was a 15 bp negative impact from markets (mainly from portfolio valuations) and -6 bps from models.
The fully-loaded leverage ratio stood at 4.59%, and the phased-in at 4.63%.
Lastly, the TNAV per share ended September 2022 at EUR 4.31, +3% quarter-on-quarter including the EUR 5.83 cents cash dividend to be paid in November, but which has already been deducted from shareholder's equity. Compared to the same period last year, TNAV per share increased 11%, including the previously mentioned dividend, and EUR 5.15 cent cash dividend paid in May 2022.
Eligible capital. September 2022
EUR million
Fully-loadedPhased-in*
CET174,653 75,499 
Basic capital83,667 84,513 
Eligible capital98,724 99,773 
Risk-weighted assets617,116 616,738 
CET1 capital ratio12.10 12.24 
Tier 1 capital ratio13.56 13.70 
Total capital ratio16.00 16.18 
Fully-loaded CET1 ratio performance
%
capital-escaleraeng.jpg

(1) Cash dividend accrual corresponding to 20% of Q3'22 profit. The implementation of the shareholder remuneration policy is subject to future corporate and regulatory decisions and approvals.
(*) The phased-in ratio includes the transitory treatment of IFRS 9, calculated in accordance with article 473 bis of the Capital Requirements Regulation (CRR2) and subsequent modifications introduced by Regulation 2020/873 of the European Union. Total phased-in capital ratios include the transitory treatment according to chapter 4, title 1, part 10 of the CRR2.
January - September 2022
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17
Risk management
RISK MANAGEMENT
Executive summary

Credit riskMarket risk
Credit quality indicators increased slightly in response to macro economic uncertainty, inflationary pressure and the resulting reaction of the central banks
Our risk profile remains stable with just a slight rise in the VaR levels, despite the current uncertainty
Cost of risk2
NPL ratioCoverage ratioQ3'22Average
VaR
EUR 15 million
0.86%3.08%70%
+3 bps vs Q2'22+3 bps vs Q2'22-1 pp vs Q2'22
Structural and liquidity riskOperational risk
Robust and diversified liquidity buffer, with ratios well above regulatory requirements
Losses, by Basel categories, were lower than the previous quarter
Liquidity Coverage Ratio (LCR)3
  169% +4 pp vs Q2'22
u Monitoring of Russia-Ukraine conflict effects
The Russia-Ukraine conflict is having a significant impact on the global economy, with rising commodity prices, supply chain disruptions and rapidly rising inflation.
The impacts of the rising inflation will depend on the intensity and duration of the measures taken by the different central banks, who currently face the challenge of balancing economic growth and inflation.
Our diversification across countries, together with our proactive risk management, is helping us to maintain our medium-low risk profile despite the current economic environment.
u Credit risk management
Total risk exposure increased slightly to EUR 1,156,548 million, +2% in comparison to the second quarter and +8% year-on-year, both in constant euros.
Credit impaired loans: stood at EUR 35,600 million, 2% higher in constant euros compared to the previous quarter, in line with the aforementioned portfolio growth.
The NPL ratio rose slightly in the quarter (+3 bps) and stood at 3.08%, explained by the performance in North and South America, partially offset by the positive trend in Europe and Digital Consumer Bank. In the year-on-year comparison, the NPL ratio was 10 bps lower.
Loan-loss provisions amounted to EUR 2,756 million in the third quarter, 4% higher compared to the previous quarter in constant euros. Considering the first nine months of the year, loan-loss provisions amounted to EUR 7,491 million (+17% year-on-year in constant euros), driven mainly by a potential economic slowdown and the provisions releases in 2021. As a consequence, the cost of risk stood at 0.86% (+3 bps compared to Q2'22, although at lower levels than the previous year).
This loan-loss provisions performance brought the total loan-loss reserves to EUR 24,813 million, a 2% decrease year to date in constant euros.
Total coverage of credit impaired loans remained stable at 70% compared to the previous quarter. It should be noted that a significant part of our portfolios in Spain and the UK has real estate collateral, which requires lower coverage levels.
Key metrics performance by geographic area
Loan-loss provisions1
Cost of risk (%)2
NPL ratio (%)Total coverage ratio (%)
9M'22Chg (%)
/ 9M'21		9M'22Chg (bps)
/ 9M'21		9M'22Chg (bps)
/ 9M'21		9M'22Chg (pp)
/ Q1'21
Europe1,760 (6.0)0.36 (12)2.58 (57)49.7 (1.4)
North America1,666 35.6 1.12 (34)2.79 23 102.7 (36.6)
South America3,633 34.5 3.11 58 5.54 116 84.7 (14.0)
Digital Consumer Bank429 (4.7)0.43 (14)2.20 5 95.6 (17.2)
TOTAL GROUP7,491 16.7 0.86 (4)3.08 (10)69.7 (4.3)
(1) EUR million and % change in constant euros.
(2) Allowances for loan-loss provisions over the last 12 months / Average loans and advances to customers over the last 12 months.
(3) Provisional data.
For more detailed information regarding the countries, please see the Alternative Performance Measures section.
18
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January - September 2022
Risk management
The Group closely monitors the performance of government liquidity programmes, mainly concentrated in Spain, as the payment holiday periods are reaching their end, with no signs of deterioration.
IFRS 9 stages evolution: the distribution of the portfolio remained stable in the quarter.

Coverage ratio by stage
EUR billion
Exposure1
Coverage
Sep-22Jun-22Sep-21Sep-22Jun-22Sep-21
Stage 11,0309989120.5 %0.5 %0.5 %
Stage 27066677.7 %8.5 %8.6 %
Stage 336343341.0 %40.1 %43.0 %
1. Exposure subject to impairment. Additionally, in September 2022 there was EUR 21 billion in loans and advances to customers not subject to impairment recorded at mark to market with changes through P&L (EUR 23 billion in June 2022 and EUR 27 billion in September 2021).
Stage 1: financial instruments for which no significant increase in credit risk is identified since its initial recognition.
Stage 2: if there has been a significant increase in credit risk since the date of initial recognition but the impairment event has not materialized, the financial instrument is classified in Stage 2.
Stage 3: a financial instrument is catalogued in this stage when it shows effective signs of impairment as a result of one or more events that have already occurred resulting in a loss.
Credit impaired loans and loan-loss allowances
EUR million
Change (%)
Q3'22QoQYoY
Balance at beginning of period34,259 (4.0)3.0 
   Net additions3,703 75.1 69.2 
   Increase in scope of consolidation— — — 
   Exchange rate differences and other496 — — 
   Write-offs(2,858)(12.8)40.1 
Balance at period-end35,600 3.9 7.7 
Loan-loss allowances24,813 2.6 1.4 
   For impaired assets14,603 6.3 2.8 
   For other assets10,210 (2.4)(0.5)

u Market risk
The risk associated with global corporate banking trading activity is mainly interest rate driven, focused on servicing our customers' needs and measured in daily VaR terms at 99%.
In the third quarter of 2022, the VaR fluctuated around an average value of EUR 15 million, reflecting our low market risk profile in a context that remains highly volatile, as a result of the impact of the Russia-Ukraine conflict on energy prices and its effect on inflation, increasing the pressure on central banks. By the end of the quarter, VaR was EUR 13 million. These figures remain low compared to the size of the Group’s balance sheet and activity.
Trading portfolios.(1) VaR by geographic region
EUR million
20222021
Third quarterAverageLatestAverage
Total14.6 13.4 10.6 
Europe14.1 13.7 9.9 
North America2.0 1.7 2.6 
South America7.7 6.0 5.9 
1. Activity performance in Santander Corporate & Investment Banking markets.

Trading portfolios.(1) VaR by market factor
EUR million
Third quarter 2022Min.Avg.Max.Last
VaR total11.3 14.6 21.5 13.4 
Diversification effect(8.4)(13.3)(22.3)(14.9)
Interest rate VaR9.7 12.8 19.3 13.2 
Equity VaR2.5 3.3 5.1 3.3 
FX VaR2.7 4.4 7.2 3.6 
Credit spreads VaR3.6 5.0 7.8 7.0 
Commodities VaR1.3 2.4 4.4 1.3 
1.Activity performance in Santander Corporate & Investment Banking markets.
Note: In the North America, South America and Asia portfolios, VaR corresponding to the credit spreads factor other than sovereign risk is not relevant and is included in the interest rate factor.

January - September 2022
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19
Risk management
Trading portfolios1. VaR performance

EUR million
chart-84a630f8bebb43b2a8e.jpg1. Corporate & Investment Banking performance in financial markets.


u Structural and liquidity risk
Structural exchange rate risk: mainly driven by transactions in foreign currencies related to permanent financial investments, their results and related hedges. Our dynamic management of this risk seeks to limit the impact of foreign exchange rate movements on the Group's core capital ratio. In the third quarter, currency hedging impacting this ratio remained close to 100%.
Structural interest rate risk: the persistence of high levels of inflation caused significant adjustments in the monetary policies of some central banks such as the ECB or the Fed, with interest rate markets reflecting these movements. In this context, our structural debt portfolios continued to be negatively impacted. Despite the volatility of the markets during the quarter, the risk remained at comfortable levels.
Liquidity risk: the Group maintained a comfortable liquidity risk position, supported by a robust and diversified liquidity buffer, with ratios well above regulatory limits. During the third quarter, the Group issued a mortgage covered bond of EUR 3,500 million in a multi-tranche operation to obtain liquidity. This kind of operation has been reactivated within the Eurozone as a result of the current economic conjuncture.
u Operational risk
In general, our operational risk profile remained stable in the third quarter of 2022, after a moderate increase in the beginning of the year. The following aspects were closely monitored during this period:
•IT risks arising from transformation plans related to business strategy and development of digital capabilities, as well as proactive management of obsolete technology and IT services provided by third parties, in order to ensure availability of services and operations.
•Regulatory compliance, due to increasing regulatory requirements (such as ESG, operational resilience, data management regulations, among others) across the Group.
•New types of fraud, mainly in online banking transactions (e.g. customer fraud) and in the loan admission processes (e.g. identity theft).
•We continued to focus on consumer protection and Financial Crime Compliance monitoring, and compliance with international financial measures and sanctions due to the Russia-Ukraine conflict.
•Cyber threats across the financial industry, focused on alerts derived from the Russia-Ukraine conflict, strengthening the bank's monitoring and control environment mechanisms.
•Third party risk exposure, maintaining close oversight of critical providers, focusing on their control environment including business continuity capabilities, supply chains, cyber risk management and compliance with service level agreements.
Regarding the third quarter performance, losses (by Basel categories) were lower than the previous quarter.
20
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January - September 2022





General background
GENERAL BACKGROUND
Grupo Santander conducted its business in the third quarter of 2022 in an environment marked by market volatility, uncertainty stemming from the Russia-Ukraine conflict, and its impact on gas supply in Europe, in addition to other factors, such as China's zero-covid strategy and consequent impacts on global production chains. This has exacerbated the already high pricing pressures, accelerating inflation globally and for longer than expected. Against this backdrop, central banks in mature and developing countries moved ahead with monetary policy normalization, which will likely lead to a slowdown in the global economy in the coming quarters due to rising interest rates.
Country
GDP Change1
Economic performance
eu.jpg
Eurozone
+1.4%
GDP showed solid growth during Q2'22, driven by the services sector, with the unemployment rate falling to historic lows (6.6% in August). Inflation surprised on the upside (9.9% in September), with a rise in core inflation. In this context, the ECB raised its interest rates twice, from -0.50% before the first increase (July) to 0.75% today.
spain.jpg
Spain
+1.3%
In Q2'22, the reopening after covid-19 restrictions (which allowed tourism to recover) offset the uncertainty stemming from the Russia-Ukraine conflict. The labour market remained dynamic, although recent data indicates a slowdown. Although inflation eased in September (8.9%), it remains high and core inflation, at 6.2% is particularly concerning.
uk.jpg
United Kingdom
+0.9%
The recovery ran out of steam and the economy faced adverse circumstances such as rising inflation (10.1% in September) and higher interest rates (2.25%) to contain it. Both measures reduced household purchasing power. The result was a slowdown, that will get worse in the coming quarters However, the labour market remained strong (3.5% unemployment rate).
portugal.jpg
Portugal
+2.5%
The strong performance in exports offset the worse domestic demand, as GDP remained broadly flat in Q2. High inflation (9.3% in September) affected activity in Q3, although demand should remain stable due to accumulated household savings. The Q2'22 unemployment rate fell to 5.7%. Public accounts continued to improve.
poland.jpg
Poland
+0.3%
Economic growth continued to lose momentum in Q2'22 due to the consequences of the Russia-Ukraine conflict. Government measures to support households in the face of sharp price increases (CPI was 17.2% in September) and supply cuts, as well as the strong labour market (unemployment rate at 2.6%) should mean economic growth will slow gradually. The official interest rate was raised to 6.5%.
us.jpg
United States
-0.6%
Inflation remained high (8.2% in September) and core inflation rose to 6.6%. Employment continued to grow at a healthy pace and unemployment remained at historically low levels. To contain inflation, the Fed increased rates aggressively (300 bps in 7 months) and expects further hikes this year, increasing fears of recession.
mexico.jpg
Mexico
+2.1%
The economy continued to grow at the beginning of Q3'22 supported by expansion in industry and service sector. However, greater global uncertainty and high inflation (8.7% in September) could result in a slowdown. The central bank reaffirmed its commitment to price stability and accelerated interest rate hikes (150 bps in Q3'22 to 9.25%), suggesting higher rates in the coming months.
brazil.jpg
Brazil
+2.4%
After the solid growth in the first half of the year, economic growth remained dynamic, supported by industry and service sector expansion, and the lowest unemployment rate since 2015 (8.9%). Inflation subsided (7.2% in September) and expectations started to ease. The central bank, raised the official rate in August (50 bps to 13.75%), but left it stable in September, though maintained its restrictive tone.
chile.jpg
Chile-0.6%
Following strong growth in 2021, the economy began an adjustment process in 2022, as fiscal and monetary stimulus effects from the previous year faded. Inflation remained high (13.7% in September) and the central bank continued to raise the official rate (+175 bps in Q3'22 to 10.75%) with an additional hike in October to 11.25%, but suggested stability in the future.
argentina.jpg
Argentina+2.2%
The IMF approved the second review of Argentina's programme, allowing it to refinance its debt maturities with the organization until the end of the year. The economy grew 1% quarter-on-quarter in Q2'22 and inflation remained high (6.8% monthly average in Q3'22). The central bank continued to raise the official rate to 75% in Q3'22 (vs. 52% in Q2'22).
(1) Year-on-year change for H1'22.
January - September 2022
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21






DESCRIPTION OF SEGMENTS
We base segment reporting on financial information presented to the chief operating decision maker, which excludes certain statutory results items that distort year-on-year comparisons and are not considered for management reporting. This financial information (underlying basis) is computed by adjusting reported results for the effects of certain gains and losses (e.g. capital gains, write-downs, impairment of goodwill, etc.). These gains and losses are items that management and investors ordinarily identify and consider separately to better understand the underlying trends in the business.
Santander has aligned the information in this chapter with the underlying information used internally for management reporting and with that presented in the Group's other public documents.
Santander's executive committee has been selected to be its chief operating decision maker. The Group's operating segments reflect its organizational and managerial structures. The executive committee reviews internal reporting based on these segments to assess performance and allocate resources.
The segments are split by geographic area in which profits are earned and type of business. We prepare the information by aggregating the figures for Santander’s various geographic areas and business units, relating it to both the accounting data of the business units integrated in each segment and that provided by management information systems. The same general principles as those used in the Group are applied.
With the aim of increasing transparency and improving capital allocation to continue enhancing our profitability, on 4 April 2022, we announced that, starting and effective with the financial information for the first quarter of 2022, inclusive, we would carry out the following modifications to our reporting:

a. Main changes in the composition of Grupo Santander's segments announced in April 2022
The main changes, which have been applied to management information for all periods included in the consolidated financial statements, are the following:
1.Reallocation of certain financial costs from the Corporate Centre to the country units:
•Further clarity in the MREL/TLAC regulation makes it possible to better allocate the cost of eligible debt issuances to the country units.
•Other financial costs, primarily associated with the cost of funding the excess capital held by the country units above the Group's CET1 ratio, have been reassigned accordingly.
2.Downsizing of Other Europe:
•The Corporate & Investment Banking branches of Banco Santander, S.A. in Europe and other business lines previously reported under 'Other Europe' have been now integrated into the Spain unit to reflect how the business will be managed and supervised, in line with other regions.
The Group recast the corresponding information of earlier periods considering the changes included in this section to facilitate a homogeneous comparison.
In addition to these changes, we completed the usual annual adjustment of the perimeter of the Global Customer Relationship Model between Retail Banking and Santander Corporate & Investment Banking and between Retail Banking and Wealth Management & Insurance.
The above-mentioned changes have no impact on the Group’s reported consolidated financial figures.

22
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January - September 2022





b. Current composition of Grupo Santander segments
Primary segments
This primary level of segmentation, which is based on the Group’s management structure, comprises five reportable segments: four operating areas plus the Corporate Centre. The operating areas are:
Europe: comprises all business activity carried out in the region, except that included in Digital Consumer Bank. Detailed financial information is provided on Spain, the UK, Portugal and Poland.
North America: comprises all the business activities carried out in Mexico and the US, which includes the holding company (SHUSA) and the businesses of Santander Bank, Santander Consumer USA (SC USA), the specialized business unit Banco Santander International, Santander Investment Securities (SIS), Santander's New York branch and Amherst Pierpont Securities (APS).
South America: includes all the financial activities carried out by Grupo Santander through its banks and subsidiary banks in the region. Detailed information is provided on Brazil, Chile, Argentina, Uruguay, Peru and Colombia.
Digital Consumer Bank: includes Santander Consumer Finance, which incorporates the entire consumer finance business in Europe, Openbank and ODS.
Secondary segments
At this secondary level, Grupo Santander is structured into Retail Banking, Santander Corporate & Investment Banking (SCIB), Wealth Management & Insurance (WM&I) and PagoNxt.
Retail Banking: this covers all customer banking businesses, including consumer finance, except those of corporate banking which are managed through Santander Corporate & Investment Banking and asset management, private banking and insurance, which are managed by Wealth Management & Insurance. The results of the hedging positions in each country are also included, conducted within the sphere of their respective assets and liabilities committees.

Santander Corporate & Investment Banking: this business reflects revenue from global corporate banking, investment banking and markets worldwide including treasuries managed globally (always after the appropriate distribution with Retail Banking customers), as well as equity business.
Wealth Management & Insurance: includes the asset management business (Santander Asset Management), the corporate unit of Private Banking and International Private Banking in Miami and Switzerland (Santander Private Banking) and the insurance business (Santander Insurance).
PagoNxt: this includes digital payment solutions, providing global technology solutions for our banks and new customers in the open market. It is structured into four businesses: Merchant, International Trade, Payments and Consumer.
In addition to these operating units, both primary and secondary segments, the Group continues to maintain the Corporate Centre, that includes the centralized activities relating to equity stakes in financial companies, financial management of the structural exchange rate position, assumed within the sphere of the Group’s assets and liabilities committee, as well as management of liquidity and shareholders’ equity via issuances, adapting this management to the changes described above.
As the Group’s holding entity, this area manages all capital and reserves and allocations of capital and liquidity with the rest of businesses. It also incorporates goodwill impairment but not the costs related to the Group’s central services (charged to the areas), except for corporate and institutional expenses related to the Group’s functioning.








The businesses included in each of the primary segments in this report and the accounting principles under which their results are presented here may differ from the businesses included and accounting principles applied in the financial information separately prepared and disclosed by our subsidiaries (some of which are publicly listed) which in name or geographical description may seem to correspond to the business areas covered in this report. Accordingly, the results of operations and trends shown for our business areas in this document may differ materially from those of such subsidiaries.
The results of our business areas presented below are provided on the basis of underlying results only and including the impact of foreign exchange rate fluctuations. However, for a better understanding of the changes in the performance of our business areas, we also provide and discuss the year-on-year changes to our results excluding such exchange rate impacts.
Certain figures contained in this report, including financial information, have been subject to rounding to enhance their presentation. Accordingly, in certain instances, the sum of the numbers in a column or a row in tables contained in this report may not conform exactly to the total figure given for that column or row.
January - September 2022
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23





January-September 2022
Main items of the underlying income statement
EUR million
Primary segmentsNet interest
income		Net fee
income		Total
income		Net operating
income		Profit
before tax		Underlying profit attributable to
the parent
Europe8,998 3,441 13,273 6,977 4,076 2,837 
     Spain3,134 2,172 6,058 3,118 1,497 1,104 
     United Kingdom3,695 295 4,031 2,023 1,535 1,138 
     Portugal516 366 933 557 524 360 
     Poland1,424 403 1,780 1,270 512 229 
     Other229 205 471 10 8 5 
North America7,102 1,450 9,021 4,782 3,005 2,271 
     US4,546 588 5,667 3,032 1,908 1,489 
     Mexico2,556 831 3,312 1,845 1,198 874 
     Other0 31 42 (95)(101)(92)
South America9,838 3,350 13,613 8,677 4,656 2,884 
     Brazil6,672 2,412 9,671 6,661 3,316 2,027 
     Chile1,440 341 1,934 1,197 889 551 
     Argentina1,347 445 1,413 604 312 234 
     Other378 152 594 215 138 72 
Digital Consumer Bank3,032 629 3,887 2,034 1,581 908 
Corporate Centre(510)(3)(1,165)(1,437)(1,558)(1,583)
TOTAL GROUP28,460 8,867 38,629 21,034 11,761 7,316 
Secondary segments
Retail Banking25,767 5,759 31,634 17,834 8,815 5,891 
Corporate & Investment Banking2,637 1,517 5,597 3,562 3,499 2,364 
Wealth Management & Insurance554 982 1,907 1,149 1,118 818 
PagoNxt11 611 655 (74)(114)(173)
Corporate Centre(510)(3)(1,165)(1,437)(1,558)(1,583)
TOTAL GROUP28,460 8,867 38,629 21,034 11,761 7,316 

Underlying profit attributable to the parent distribution*
January - September 2022


chart-c2c7dbc086ff4ae688e.jpg
(*) As a % of operating areas. Excluding the Corporate Centre.

Underlying profit attributable to the parent. 9M'22
EUR million. % change YoY in constant euros
Flags
Europe
uk.jpg
spain.jpg
portugal.jpg
poland.jpg
North
America
us.jpg
mexico.jpg
South
America
brazil.jpg
chile.jpg
argentina.jpg
Digital Consumer BankDCB
Global businesses
scib.gif
wmi.gif
pagonxt.gif
chart-542715fd05574570ab8.jpg
Var
Var1
+2 %0 %
+99 %+99 %
+11 %+11 %
+109 %+115 %
-14 %-24 %
+49 %+33 %
+15 %-1 %
+19 %+23 %
+31 %+66 %
+12 %+11 %
+41 %+36 %
+11 %+7 %
-16 %-13 %
    (1) Changes in constant euros.
24
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January - September 2022





January-September 2021
Main items of the underlying income statement
EUR million
Primary segmentsNet interest
income		Net fee
income		Total
income		Net operating
income		Profit
before tax		Underlying profit attributable to
the parent
Europe7,857 3,237 12,018 5,825 3,095 2,121 
     Spain3,137 2,057 5,909 2,898 772 553 
     United Kingdom3,232 352 3,589 1,652 1,587 1,120 
     Portugal548 325 1,020 591 471 324 
     Poland719 386 1,157 674 259 109 
     Other221 118 342 10 7 15 
North America5,986 1,247 8,166 4,549 3,405 2,218 
     US3,942 606 5,506 3,160 2,704 1,732 
     Mexico2,043 617 2,643 1,466 808 588 
     Other0 24 18 (77)(108)(102)
South America8,242 2,726 11,290 7,374 4,678 2,462 
     Brazil5,776 2,027 8,079 5,713 3,520 1,758 
     Chile1,475 294 1,833 1,124 856 462 
     Argentina704 272 925 371 189 178 
     Other287 133 452 166 113 64 
Digital Consumer Bank3,027 616 3,795 1,990 1,422 809 
Corporate Centre(459)(15)(642)(891)(1,168)(1,232)
TOTAL GROUP24,654 7,810 34,626 18,848 11,432 6,379 
Secondary segments
Retail Banking22,629 5,244 28,957 16,283 9,292 5,398 
Corporate & Investment Banking2,135 1,322 4,268 2,568 2,478 1,680 
Wealth Management & Insurance350 911 1,709 1,033 1,022 739 
PagoNxt(2)349 334 (145)(191)(206)
Corporate Centre(459)(15)(642)(891)(1,168)(1,232)
TOTAL GROUP24,654 7,810 34,626 18,848 11,432 6,379 
January - September 2022
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25

Business model




Primary segments

europa.gif
EUROPEUnderlying attributable profit
EUR 2,837 mn
Executive summary
→ We continue to accelerate our business transformation in One Santander in Europe, in order to achieve superior growth and a more efficient operating model. This should allow us to further improve profitability and increase RoTE in the coming years.
→ Generalized growth in volumes quarter-on-quarter and in the last 12 months, when loans grew 5% and deposits 7% in constant euros.
→ Higher revenue, together with efficiency improvement and better cost of risk, led to an underlying attributable profit of EUR 2,837 million, up 34% year-on-year in euros and +32% excluding the exchange rate impact.

Strategy
Our goal with One Santander in Europe is to create a better bank to which our customers and our people feel a deep connection and that delivers sustainable value for our shareholders with a positive impact on society. In order to achieve our goals of growing our customer base and loyalty while delivering a more efficient and profitable business model, we are making progress in the business transformation through our action plan, defined around three main blocks:
•Growing our business by better serving our customers through regional simplification and an improved value proposition.
•Redefining customer interaction by enhancing our digital capabilities to offer comprehensive experiences (such as OneApp).
•Creating a common operating model that embeds technology into our business, leveraging our scale in the region.
Key developments by country in the quarter:
•Spain: we focused on accelerating profitable growth by strengthening the customer base by continuously improving the experience in our channels and simplifying our products; automating processes which reduces the cost to serve; and proactively managing risk. All while continuing to develop a more agile organization.
•United Kingdom: in an environment of rising interest rates, we focused on managing the spread between assets and liabilities. Our transformation programme continued to provide efficiency improvements through process simplification and digitalization.
•Portugal: we continued to implement our process transformation plan, focusing on improving service quality, to increase our customer base. Profit grew thanks to sustained customer revenue, lower costs and adequate risk management.


clientesvinculados.jpg
Loyal customers
europa.gif
SpainUKPortugalPoland
Thousands10,6692,9674,4649082,329
YoY change+5%+8%+2%+7%+6%
clientesdigitales.jpg
Digital customers
europa.gif
SpainUKPortugalPoland
Thousands17,2185,7896,9561,0733,235
YoY change+8%+9%+6%+9%+11%

26
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January - September 2022

Business model




Primary segments

•Poland: we remained focused on providing the best customer and employee experience by simplifying our products and internal processes through digitalization, while developing platforms to accelerate our progress towards our responsible banking commitments.
Additionally, and to deliver on our targets to tackle climate change, we developed a new governance structure, identifying five key verticals for which we have appointed business leaders in each country: green buildings, clean mobility, renewable energy, agro and circular economy. With this specialization, we strive to create business opportunities to help our customers. We launched different initiatives in each of the countries, to later export the best proposals to the rest of the region.
Regarding digitalization, Santander recently received the Global Finance award for Best Digital Bank for companies in Spain, and Best App for Companies in Europe.
Business performance
In the third quarter, we continued to operate in a complex and uncertain macro environment, marked by the continuation of the Russia-Ukraine conflict, as inflationary pressures, widespread interest rate hikes and market volatility and, consequently, lower growth expectations remained.
Loans and advances to customers grew 3% year-on-year. In gross terms, excluding the exchange rate impact and reverse repurchase agreements, growth was 5%, driven by mortgages (mainly in the UK and Spain, but also by the positive trends in Portugal) and cards (primarily in the UK and Portugal). Loans to corporates and SMEs decreased slightly year-on-year affected by the lower demand in long-term products due to interest rate hikes. Poland was the exception with growth in the corporate sector.
Europe. Business performance. September 2022
EUR billion and YoY % change in constant euros
europa.gif
590 +5%
europa.gif
715 +4%
spain.jpg
uk.jpg
portugal.jpg
poland.jpg
chart-bbc498dda745444798a.jpgaaaaa
spain.jpg
uk.jpg
portugal.jpg
poland.jpg
chart-9a1dc6be6863430e887.jpg
Gross loans and advances to customers excl. reverse reposCustomer deposits excl.
repos + mutual funds
Customer deposits rose 5%. Excluding the exchange rate impact and repurchase agreements, they increased 7%, with positive trends in all countries except the UK, where rising interest rates continued to increase competition to capture funds, especially in the retail segment. To reverse the trend, we are actively working on several customer acquisition campaigns. Mutual funds decreased due to the higher interest rate environment, particularly in Poland.
Results
Underlying attributable profit in the first nine months of 2022 was EUR 2,837 million, after absorbing the EUR 175 million charge (net of tax) related to the mortgage payment holidays in Poland, and was 34% higher than in the same period of 2021. Excluding the exchange rate impact, profit rose 32%, as follows:
•Total income was up 10%, driven by net interest income in the UK and Poland, benefitting from higher volumes and interest rate hikes. Moreover, following the ECB rate hikes, the net interest margin improved in the quarter in all countries.
•Net fee income increased mainly from CIB and payment methods. These increases were partially offset by lower ALCO and TLTRO contributions and higher payments to the deposit guarantee fund in Poland.
•Costs grew by 1% in a high-inflation environment, which offset savings from our transformation plans. In real terms, total costs fell by 7%.
•Loan-loss provisions decreased 6% year-on-year, even with the new CHF portfolio related provisions in Poland, primarily driven by Spain. Additionally, we recorded provisions related to the updated macro outlooks in Spain and the UK.
In the quarter, the profit increased 22% supported by revenue growth (net interest income and lower regulatory charges), cost control and the good cost of risk performance, partially offset by the aforementioned charge related to the mortgage payment holidays.
Europe. Underlying income statement
EUR million and % change
/ Q2'22/ 9M'21
Q3'22%excl. FX9M'22%excl. FX
Revenue4,692 +10+1013,273 +10+10
Expenses-2,132 +1+2-6,296 +2+1
Net operating income2,559 +18+186,977 +20+19
LLPs-614 -3-2-1,760 -6-6
PBT1,384 +15+164,076 +32+30
Underlying attrib. profit998 +22+222,837 +34+32
Detailed financial information on page 55
January - September 2022
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27

Business model




Primary segments

spain.jpg
SpainUnderlying attributable profit
EUR 1,104 mn
Commercial activity and business performance
The quarter was marked by rising inflation and the ECB's response, with two interest rate hikes.
In individuals, we maintained positive commercial dynamics in consumption, while mortgages showed a certain slowdown as a consequence of interest rate hikes, though still grew year-on-year. Consequently, new protection insurance volumes were also affected but continued to grow year-on-year.
In corporates, short-term financing maintained its solid quarterly pace, with confirming (+8%) and foreign trade (+6%) standing out. Interest rate hikes shifted the demand for long-term products towards non-home mortgages (+24%).
In transactional products, we continued to increase our market shares in PoS, both in volumes and number of customers, while card invoicing grew 7% quarter-on-quarter.
We delivered net customer growth in every quarter of 2022, increasing our customer base by more than half a million since December.
Loans and advances to customers grew 8% year-on-year (+7% in gross terms, excluding reverse repurchase agreements and the exchange rate impact), mainly backed by individuals and private banking.
Customer deposits increased 15% year-on-year. Excluding repos they increased 13%, propelled by commercial banking and demand (+6%) and time deposits (+59%). Market volatility continued to impact mutual fund assets under management.
Results
Underlying attributable profit to September amounted to EUR 1,104 million, 99% higher year-on-year. By line:
•Total income rose 3% year-on-year, backed by net fee income (+6%), with growth in both retail and wholesale banking.
•The cost base continued to fall (-2%) benefitting from commercial banking's operating model transformation, which absorbed wholesale banking investments and high inflation.
•Proactive and early risk management was reflected in the 118 bp decline year-on-year in the NPL ratio to 3.69%, enabling us to continue reducing LLPs (-27%). As a result, the year-to-date cost of risk was stable at 0.62%.
Compared to the second quarter, underlying attributable profit increased 57%, supported by higher net interest income (+10%) and SRF contribution in the previous quarter.
Spain. Underlying income statement
EUR million and % change
Q3'22/ Q2'229M'22/ 9M'21
Revenue2,121 +116,058 +3
Expenses-997 +3-2,941 -2
Net operating income1,124 +193,118 +8
LLPs-421 +1-1,228 -27
PBT593 +541,497 +94
Underlying attrib. profit452 +571,104 +99
Detailed financial information on page 56
uk.jpg
United KingdomUnderlying attributable profit
EUR 1,138 mn
Commercial activity and business performance
In the first nine months of 2022, we delivered a positive performance amid a challenging backdrop of rising inflation and interest rates.
Our customers further utilized digital channels for banking services, with 68% of refinanced mortgage loans processed online, 92% of new current accounts opened through digital channels and digital transactions up year-on-year.
We increased deposit interest rates across our savings product range, offering some of the best savings’ rates and relaunched our switcher campaign during the quarter.
Loans and advances to customers decreased 2% year-on-year. In gross terms and excluding reverse repos and the exchange rate impact, growth was 4%, supported by an increase of GBP 28.2 billion in gross new mortgage lending as the housing market remained robust (GBP 9.8 billion in net mortgage lending).
Customer deposits declined by 7%. Excluding repos and the exchange rate impact, customer deposits contracted 1% primarily due to the CIB business transfer. This performance also reflected reductions in retail liability balances following the peak levels seen in June 2021.
Results
Underlying attributable profit in the nine months of 2022 was EUR 1,138 million, remaining flat in constant euros, as follows:
•Total income was up 10% driven by strong NII growth (+12%) benefitting from higher interest rates and a resilient mortgage market. This performance was partially offset by negative fee income growth due to the transfer of the CIB business in Q4 2021.
•Operating expenses grew 2% affected by inflationary pressures. In real terms, costs were down reflecting the year-on-year savings from our transformation programme. The efficiency ratio improved 4.2 pp to 49.8%. Net operating income grew by 20%.
•Loan-loss provisions rose to EUR 234 million (EUR 68 million release in 9M'21), reflecting the impact of the macro environment on our retail portfolios. However, cost of risk remained very low (2 bps).
In the quarter, underlying attributable profit grew 12% with widening jaws due to net interest income growth (+5%) and overall expenses reduction.
United Kingdom. Underlying income statement
EUR million and % change
/ Q2'22/ 9M'21
Q3'22%excl. FX9M'22%excl. FX
Revenue1,397 +4+54,031 +12+10
Expenses-660 -3-2-2,008 +4+2
Net operating income738 +11+122,023 +22+20
LLPs-109 +47+48-234 ——
PBT540 +10+111,535 -3-5
Underlying attrib. profit402 +12+121,138 +20
Detailed financial information on page 57
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PortugalUnderlying attributable profit
EUR 360 mn
Commercial activity and business performance
Activity and business volumes continued to rise as a result of our strategy based on our service quality and diversified offering. As a result, we further increased the number of loyal and digital customers.
Momentum continued in new lending, especially in new mortgage lending with market shares over 20%. Unsecured personal loans moderated slightly. As a result, loans and advances to customers increased 1%, as well as excluding reverse repos.
Customer deposits increased 3% (both including and excluding repos) boosted by demand deposits (+5%), while time deposits remained stable. On the other hand, mutual funds dropped 11%, as a result of the instability in capital markets during the year.
Results
Underlying attributable profit to September 2022 was EUR 360 million, 11% higher year-on-year. The fall in net interest income and gains on financial transactions (ALCO portfolio sales in 2021) was more than offset by higher fees and reductions in costs and provisions:
•Customer revenue grew 1% driven by the positive trend in net fee income (+13%), due to new business dynamics, more customer transactions and the strength of our insurance business. On the other hand, net interest income continued to decline year-on-year, due to margin pressure and lower ALCO portfolio and TLTRO contributions, but rebounded slightly in the quarter (+3%).
•Costs continued their downward trend (-12%), benefiting from the business and digital transformation and enabled the efficiency ratio to fall to 40.3%.
•Loan-loss provisions plummeted 90% due to the portfolio's good performance (3.03% NPL ratio improving in 41 bps year-on-year) maintaining the cost of risk for the year virtually at 0%.
Compared to the previous quarter, profit increased 75% supported by revenue growth, where interest rate rises were reflected in greater net interest income, and the SRF contribution recorded in the second quarter, while costs and provisions remained stable.
Portugal. Underlying income statement
EUR million and % change
Q3'22/ Q2'229M'22/ 9M'21
Revenue320 +14933 -9
Expenses-125 0-376 -12
Net operating income194 +25557 -6
LLPs2 —-9 -90
PBT196 +75524 +11
Underlying attrib. profit135 +75360 +11
Detailed financial information on page 58
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PolandUnderlying attributable profit
EUR 229 mn
Commercial activity and business performance
In the first nine months of 2022 we remained focused on providing the best customer and employee experience. To this end, we further simplified our products and internal processes through digitalization, while developing platforms to accelerate our progress on our ESG commitments.
In retail banking, we focused on our strategic priorities: improving customer and employee experience, digital acceleration and simplification, and profitable business growth. We improved service quality and remained focused on improving our NPS. As part of our ESG activities, we developed Powerful Women in Business project.
In corporates, we continued our strategic Agile programmes: best-in-class electronic banking (iBiznes24) and credit workflow CLP (Corporate Lending Platform). In the quarter, we introduced a new version of the iBiznes24 platform focused on quick and safe fund management for corporate customers. The updated version includes a new Trade Finance module, the e-FX currency platform and user support system.
Loans and advances to customers rose 1% year-on-year. Gross loans and advances to customers, excluding reverse repos and the exchange rate impact, increased 6% on the back of corporates, institutions and CIB, where we continue to be market leaders.
Customer deposits were 1% higher. Excluding repos and the exchange rate impact, they were up 6% strongly driven by time deposits (+173%), which benefited from interest rate hikes in recent quarters. Customer funds excluding repos rose 1% in constant euros.
Results
In the first nine months of 2022, underlying attributable profit reached EUR 229 million, doubling year-on-year and after absorbing the aforementioned mortgage payment holiday charge of EUR 175 million (net of tax). By line and in constant euros:
•Total income was 58% higher year-on-year as net interest income doubled on the back of higher volumes and rates.
•Operating costs were 8% up, well below inflation (12%).
•Loan-loss provisions were affected by CHF mortgage charges (previously reported in other gains (losses) and provisions).
The quarterly profit was impacted by the charge mentioned above. Excluding it, profit rose 110%. Revenue increased +21% driven by growth in net interest income and costs were flat.
Poland. Underlying income statement
EUR million and % change
/ Q2'22/ 9M'21
Q3'22%excl. FX9M'22%excl. FX
Revenue690 +19+211,780 +54+58
Expenses-171 -1+1-510 +5+8
Net operating income519 +28+301,270 +89+94
LLPs-88 -36-35-290 +80+85
PBT68 -67-65512 +97+103
Underlying attrib. profit22 -77-75229 +109+115
Detailed financial information on page 59
January - September 2022
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NORTH AMERICAUnderlying attributable profit
EUR 2,271 mn
Executive summary
→ In North America, we continue leveraging our own local individual strengths and capabilities in Mexico and the US while capitalizing on Group’s scale and connectivity.

→ In volumes, loans and advances to customers increased 9% in constant euros driven by growth in most segments in Mexico and in CIB, CRE and Auto in the US. Customer funds rose 2% in constant euros, boosted by higher retail and CIB deposits in the US, and deposits from individuals and mutual funds in Mexico.

→ Underlying attributable profit increased 2% year-on-year. In constant euros, profit was down 9% as the NII increase in both countries and Mexico's strong profit performance were offset by lower lease income and the LLP normalization process in the US.
Strategy
In line with our strategy to deploy capital towards our businesses where we can grow profitably, during the year:
•After receiving Federal Reserve approval on 31 January 2022, SHUSA completed the acquisition of the remaining shares of common stock of Santander Consumer USA (SC USA).
•Santander US discontinued mortgage and home equity originations to focus efforts on products, services and digital capabilities that have greater potential for growth.
•In addition, on 21 October 2022, the Group announced that it intends to repurchase the outstanding shares of Santander México that it does not already own (3.76%). This transaction is expected to be completed in the first quarter of 2023 once the relevant regulatory approvals are obtained.
In terms of our regional strategy, synergies across countries leverage our joint initiatives, including:
•Boost customer attraction and retention through loyalty strategies, while broadening our tailored products and services proposition for a more straightforward customer experience. We are taking advantage of successful proven businesses and improved interactions to drive customer loyalty, NPS and CX.
•Create synergies and reduce duplications in our business model, by leveraging our regional capabilities and sharing best practices to optimize expenses and improve profitability.
•Strengthen One Santander in North America, by unifying a common and regional approach by promoting a strong level of
collaboration between both countries and the Group, to forge future growth within the region.
In line with our global responsible banking agenda and public commitments, we are focusing on expanding and implementing sustainable finance opportunities within our businesses, as can be noted in the following transactions:
•In September, Santander US issued its first sustainable bond for USD 500 million. We expect to earmark an amount equal to the net proceeds from its offering for assets that meet the eligibility criteria as described in the Group’s Green, Social & Sustainability Funding Global Framework.
•In line with our Mexican bank’s commitment to accompany our customers in their transition to a low-carbon economy, we formalized green financing for the acquisition of 50 zero-emission buses for the Metrobus public transport service in Mexico City.
In addition, in terms of their local priorities:
United States
Solid results and profitability in Santander US in the first nine months of 2022 supported by the progress of our strategic initiatives:
•We have continued to focus on capital allocation towards our more profitable segments, allowing Santander US to reduce organic risk-weighted assets by 2% year-on-year (excluding the APS acquisition).
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Loyal customers
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United StatesMexico
Thousands4,5583454,214
YoY change+9%-5%+10%
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Digital customers
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United StatesMexico
Thousands7,0141,0345,813
YoY change+8%0%+10%
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•Santander US's continued disciplined capital management was reflected in a dividend distribution of USD 1.75 billion in the quarter, bringing the total distributed up to September to USD 3.25 billion.
Mexico
We continue to focus on multi-channel innovation, promoting digital channels and strengthening our value proposition:
•We continued to strengthen synergies between business lines, particularly projects to increase profitability through attracting new payrolls and portability, commercial alliances and customer referrals.
•We maintained the momentum of the LikeU credit card, our flagship product, exceeding 700,000 cards issued since its launch in August 2021.
•Launch of Cash Back Baby, the first recurring loyalty programme that gives cash back to customers for using their LikeU credit card or payroll card in many retail outlets and in which customers are automatically enrolled.
•In payroll loans, we launched an offer to replace customers' debts at other banking institutions with better financial conditions. To improve the loyalty and penetration in this segment, we also launched Anticipo de Nómina, a short-term, interest-free salary advance, with only one price.
•In mortgages, we improved the formalization process and the conditions of our construction and land acquisition offering. We launched a new insurance offering related to mortgage loans at a lower cost.
•In auto, and in alliance with Mazda, we launched Mazda First, a new financial programme to help young people purchase their first car with more flexibility while allowing them to build a credit history.
•In SMEs, we remain focused on our customer attraction strategy through commercial agreements in strategic sectors and continuing to attract digital customers. In our acquiring business, we further promoted our main products (G-Mini, G-Advance, G-Smart and G-Store).
•In deposits, we extended our Tu Sueldo Extra Santander campaign to further attract new customers and increase current customers' balances while encouraging greater use of digital channels as well as improving average customer balances.
Business performance. September 2022
EUR billion and YoY % change in constant euros
norteamerica.gif
165 +9%
norteamerica.gif
164 +2%
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Gross loans and advances to customers excl. reverse reposCustomer deposits excl.
repos + mutual funds
Business performance
Loans and advances grew 43% year-on-year. In gross terms, excluding reverse repos and the exchange rate impact, they were up 9% boosted by growth in individuals and commercial loans in Mexico (except SMEs) and a positive performance in Auto, CIB and CRE in the US.
Customer deposits rose 37% year-on-year. Excluding repos and the exchange rate impact, customer deposits increased 3% mainly driven by positive dynamics deposits from individuals in Mexico and by higher retail and CIB deposits in the US in a highly competitive market.
Results
During the first nine months of 2022, underlying attributable profit amounted to EUR 2,271 million, up 2% in euros year-on-year. In constant euros, profit dropped 9% mainly due to lower lease income and higher LLPs. By line:
•In revenue, net interest income increased 6% following to interest rate hikes and higher loan volumes in both countries which compensated lower-than-expected auto yields in US.
Net fee income rose 4%, where Mexico's strong performance in credit card, insurance and account management offset lower capital market activity in the US. However, total income was 2% lower mainly due to other operating income (-58%) owing to an increase in the share of lease-end vehicles repurchased at dealerships in the US.
•Costs rose 5% primarily due to higher-than-expected inflation. However, strict cost control remains in both countries to absorb this impact. In real terms, costs decreased 3%.
•Loan-loss provisions increased 36%, due to the releases in the US in the previous year, from the LLP normalization process and due to the updated macro outlooks. The cost of risk stood at 1.12%.
In the quarter, net interest income showed signs of recovery and costs remained under control. Underlying attributable profit fell 16% in constant euros due to higher LLPs in the US.
North America. Underlying income statement
EUR million and % change
/ Q2'22/ 9M'21
Q3'22%excl. FX9M'22%excl. FX
Revenue3,240 +9+39,021 +10-2
Expenses-1,546 +8+3-4,239 +17+5
Net operating income1,694 +9+34,782 +5-7
LLPs-703 +34+29-1,666 +52+36
PBT945 -7-123,005 -12-22
Underlying attrib. profit693 -10-162,271 +2-9
Detailed financial information on page 61
January - September 2022
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United StatesUnderlying attributable profit
EUR 1,489 mn
Commercial activity and business performance
The increased integration of Santander US's core business lines and the strength of our balance sheet allow us to perform in line with our financial goals despite more challenging market conditions.
The stock of loans and advances to customers grew 46% year-on-year. In gross terms, excluding reverse repos and the exchange rate impact, loans grew 8% led by growth in CIB, CRE and Auto. Auto originations increased 5% YoY, driven by higher prime loan originations (increased manufacturer incentives). Additionally, we saw higher average balances across our prime and non-prime book and greater lease originations.
Customer deposits grew 44% year-on-year. After strong growth throughout 2021, customer deposits increased 6% excluding repos and the exchange rate impact, while maintaining deposit costs relatively stable despite the significantly higher rate environment.
Results
Underlying attributable profit in the first nine months of 2022 was EUR 1,489 million, 14% lower in euros year-on-year. When measured in constant euros, profit was down 24%. By line:
•Total income decreased 9% affected by lower leasing revenue, home lending exit and capital market activity. Net interest income increased 2% due to the positive impact from interest rates and disciplined deposit cost management partially offset by the lower-than-expected Auto spreads, due to competitive pricing pressures, and lower originations in personal lending.
•Operating expenses were slightly lower despite the inflationary pressure on personnel costs, and investment initiatives in our retail network and digitalization. In real terms, costs decreased 8%.
•On the back of exceptionally low figures in the first nine months of 2021, loan-loss provisions doubled as cost of risk continued to normalize. Despite the increase, the cost of risk remained low in 2022. Used car prices are still elevated, but have been trending downward as inventory has slowly started to increase.
In the quarter, net interest income accelerated its improving trend, +5% and total income increased 2%. Nevertheless profit fell by 27% mainly due to higher LLPs related to the normalization process, loan growth and the impact of updates to macroeconomic scenarios.

United States. Underlying income statement
EUR million and % change
/ Q2'22/ 9M'21
Q3'22%excl. FX9M'22%excl. FX
Revenue2,001 +8+25,667 +3-9
Expenses-953 +8+2-2,635 +120
Net operating income1,048 +8+23,032 -4-15
LLPs-513 +52+46-1,107 +146+118
PBT530 -17-231,908 -29-37
Underlying attrib. profit399 -21-271,489 -14-24
Detailed financial information on page 62
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MexicoUnderlying attributable profit
EUR 874 mn
Commercial activity and business performance
In Mexico, we continued to gain market share in individual loans driven by our mortgage, auto and credit card strategies.
We are one of the largest mortgage originators in the country, with an innovative product range and an offering for each customer profile, such as Hipoteca Plus, Hipoteca Free and Hipoteca Integral. In auto, we further consolidated our position, remaining the third largest player in the market with a 15% market share. In addition, credit cards have shown a significant recovery in recent months; with four consecutive months of market share gains in this segment, as a result of the recent LikeU card launch.
The stock of loans and advances to customers grew 35% year-on-year. In gross terms, excluding reverse repos and the exchange rate impact, it was up 13%, supported by loans to individuals (consumer: +23%, cards: +21% and mortgages: +12%) and corporate loans (+24% in CIB and +8% in companies and institutions, which offset the 8% decline in SMEs).
Customer deposits grew 20% year-on-year. Excluding reverse repos and the exchange rate impact, customer deposits shrank 4% affected by the corporate segment, offsetting the growth in individual deposits (+7%), due to the bank’s strategy to manage funding costs and improve the mix by increasing the weight of individuals. Investment funds increased 8%.
Results
Underlying attributable profit to September was EUR 874 million, 49% higher in euros year-on-year. In constant euros, growth was 33%. By line:
•Total income rose 12%. Net interest income increased 12% supported by higher volumes and the rise in interest rates. Positive net fee income performance (+20%) from payment methods, insurance and mutual funds. Gains on financial transactions dropped due to gains on ALCO portfolio sales recorded in 2021 and a weak market performance so far this year.
•Operating expenses increased 11%, affected by wage increases, digitalization and technology spend and due to the increase in supply costs affected by inflation at 8%.
•Loan-loss provisions dropped 23% due to the positive portfolio performance, and to the release of provisions for some (single name) corporate customers.
Compared to the previous quarter, underlying attributable profit increased 5% in constant euros driven by the strong upturn in net interest income (+6%) and lower provisions (-3%).
Mexico. Underlying income statement
EUR million and % change
/ Q2'22/ 9M'21
Q3'22%excl. FX9M'22%excl. FX
Revenue1,216 +9+43,312 +25+12
Expenses-537 +8+3-1,467 +25+11
Net operating income679 +10+51,845 +26+12
LLPs-188 +2-3-555 -14-23
PBT452 +11+61,198 +48+32
Underlying attrib. profit328 +10+5874 +49+33
Detailed financial information on page 63
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SOUTH AMERICAUnderlying attributable profit
EUR 2,884 mn
Executive summary
→ We continued with our strategy to strengthen connectivity and share best practices across countries, capturing new business opportunities.
→ We maintained high profitability, through sustainable growth of our customer base and its loyalty, improving customer experience while strengthening our risk and cost models.
→ Quarter-on-quarter and year-on-year growth in both gross loans and advances to customers and customer deposits, while we continue to expand ESG initiatives in the region.
→ Underlying attributable profit increased 17% year-on-year (+6% in constant euros) backed by the increase in revenue and a lower tax burden.

Strategy
We maintained our strategy of capturing synergies across business units:
•In consumer finance, we remained focused on exchanging positive experiences across countries such as the management platform for new and used vehicle financing and the consolidation of Cockpit in Chile and Argentina. In Uruguay, auto financing increased 50% year-on-year, maintaining our market leadership. In Peru, the NeoAuto platform, a digital marketplace for new and used vehicle financing, continued to grow with 1.7 million hits. In Colombia, the new and used vehicle portfolio increased 68% year-on-year.
•In payment methods, we continued to make progress: our e-commerce strategies, instant domestic and international transfers and in expanding Getnet. For example, PoS installed in Chile exceed 131,000 and we launched a current account for microenterprises integrated with Genet. In Argentina, we strengthened Getnet's value proposition, remaining the second largest company in payments processing, with more than 90,000 customers. In Uruguay, we launched Getnet for SMEs, previously only available for individuals.
•We continued to make headway in the development of joint initiatives between SCIB and corporates to deepen relationships with multinational clients, boosting loyalty and customer acquisition in all countries, especially in Chile and Argentina.
•We continued to promote inclusive and sustainable businesses, such as Prospera, whose portfolio in Brazil reached BRL 2,353 million and 842,000 active customers; in Colombia, it is present in 386 municipalities and has more than 10,000 entrepreneurs in Uruguay. In Peru, we drove micro-credits through Surgir, with 70,000 customers, of which 95% are women. In Argentina, we consolidated our alliance with Gentos to boost the livestock business through a sustainable approach, and with Acindar Pymes, which provides better access to financing for projects related to renewable energy.
The main initiatives by country were:
•Brazil: our strategy is based on four pillars:
•Customer focus, aiming to improve customer experience with initiatives such as redefining the Select segment.
•More integrated and wider reaching sales channels. In the physical channel, we continued to capture business opportunities in our offices, which received more than 15 million visits per month; in digital, we reached 535 million accesses per month and in the remote channel, 10.5 million monthly attendances.
•Innovation and capital, focused on exploring new markets and services innovation.
•A horizontal and unique culture, which promotes empowerment, meritocracy and diversity.
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Loyal customers
sudamerica.gif
BrazilChileArgentinaOther South America
Thousands11,2688,5928471,659171
YoY change+12%+14%+5%+3%+12%
clientesdigitales.jpg
Digital customers
sudamerica.gif
BrazilChileArgentinaOther South America
Thousands25,35719,9101,9942,837616
YoY change+8%+9%+3%+5%-6%
January - September 2022
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•Chile: we remained focused on digital banking and enhancing customer service. As a result, we increased our current account market share to 29.5%, driven by Santander Life and Superdigital. In payment methods, we continued to develop e-commerce and our domestic and international transfer business. In ESG, in 2022, we aim to build six solar plants and to make the bank's energy sources 100% renewable.
•Argentina: we continued to improve our customer service, loyalty and digitalization, maintaining our second place in NPS. Our app remained the best rated among banks on iOS and Android, and we made progress in building our open financial services platform by strengthening Getnet's and Superdigital's value offering. We continued developing MODO, a systemic solution that promotes digital payments and financial inclusion. In addition, we boosted consumer credit through Todocuentas.com and reached a 16% market share in auto lending.
•Uruguay: we remained the country's leading privately-owned bank. We also continued our digital expansion, with the consolidation of Soy Santander, a fully-digital loyalty proposition for individuals and added new functionalities such as QR code payments, enabling us to improve customer acquisition and loyalty. We continued to promote inclusive and sustainable businesses, for example by granting carbon neutral credit for vehicle purchases.
•Peru: we developed new business through joint initiatives between SCIB and corporates. We are in the top 3 of investment banks and leaders in Mergers and Acquisitions, supporting M&A deals and selling derivative instruments. We furthered digitalized our processes and increased the use of data intelligence for internal control, improving our customer experience and operational efficiency.
•Colombia: we continued to offer sustainable and inclusive financial solutions, maintaining our participation in the most relevant operations for the country's development, with joint offers for SCIB and Corporate. We also continued to grant loans to entrepreneurs. We supported more than 25,000 micro-entrepreneurs, especially women, agricultural activities and charities.
South America. Business performance. September 2022
EUR billion and YoY % change in constant euros
sudamerica.gif
159 +13%
sudamerica.gif
191 +5%
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chile.jpg
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Gross loans and advances to customers excl. reverse reposCustomer deposits excl.
repos + mutual funds
Business performance
Loans and advances to customers rose 24% year-on-year. Gross loans and advances to customers (excluding reverse repos and exchange rates) increased 13% year-on-year, with double-digit rises in all country units.
Customer deposits were 19% higher year-on-year. Excluding the exchange rate impact and reverse repos, customer deposits rose 6%, with increases in all countries except Chile. Mutual funds were 4% higher excluding the exchange rate impact.
Results
Underlying attributable profit in the first nine months of 2022 amounted to EUR 2,884 million, up 17% year-on-year. Excluding the exchange rate impact, it was 6% higher, as follows:
•In total income, of note was the performance in net interest income and net fee income (+8% and +11%, respectively) and the 59% rise in gains on financial transactions (Brazil, Chile and Argentina).
•Costs were 17% higher, heavily affected by inflation. In real terms, they decreased 1%, reflecting management efforts.
•Loan-loss provisions increased 35% mainly due to the rises recorded in the main countries. The cost of risk stood at 3.11%.
By country, of note was the strong profit growth recorded in all markets except Brazil, which decreased 1%, as growth in net fee income and gains on financial transactions and a lower tax burden did not entirely offset the impact on the net interest income of the sensitivity to interest rate hikes and the increase in costs and provisions.
Compared to the second quarter of 2022, of note was the increase in customer revenue (+5%) and in gains on financial transactions, as well as the LLP reduction in Brazil and Chile. Underlying profit decreased 8% in constant euros due to the rise in costs (wage increases due to labour agreement in Brazil and Argentina) and a higher tax burden.
South America. Underlying income statement
EUR million and % change
/ Q2'22/ 9M'21
Q3'22%excl. FX9M'22%excl. FX
Revenue4,680 -1+213,613 +21+9
Expenses-1,782 +7+11-4,935 +26+17
Net operating income2,898 -6-38,677 +18+5
LLPs-1,300 -3-2-3,633 +52+35
PBT1,491 -7-54,656 0-11
Underlying attrib. profit938 -10-82,884 +17+6
Detailed financial information on page 65
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BrazilUnderlying attributable profit
EUR 2,027 mn
Commercial activity and business performance
We continued our expansion through strategic businesses:
•In corporates, we recorded the best year in our history. In SMEs we reached a record in customer acquisition, with more than 31,000 accounts opened per month on the digital channel.
•In insurance, we developed an ecosystem where we have already produced BRL 2.3 billion in the year (+33% in two years). Additionally, in Santander Auto, we reached a 28% penetration rate in new financing contracts, an all-time high.
•We continued to transform our investment platform, with a new investment advisory model, with 350 advisors and we expect to reach 1,300 by June 2023. In Toro, our digital investment platform, we continued to grow in customers, exceeding one million.
•In auto, we remained market leaders, with a 23% market share in individuals. We also boosted our vehicle production, with 20% production share in September.
Loans and advances to customers rose 30% year-on-year. Gross loans and advances to customers, excluding reverse repos and the exchange rate impact, grew 10% due to individuals and corporates.
Customer deposits surged 27%. Excluding the exchange rate impact and repos, they rose 6% year-on-year driven by time deposits (+9%), more than offsetting the fall in demand deposits (-4%).
Results
In the first nine months of 2022, underlying attributable profit amounted to EUR 2,027 million, +15% year-on-year. Excluding the exchange rate impact, profit decreased 1%, as follows:
•Total income rose 2% due to gains on financial transactions as a slight increase in net fee income. Net interest income fell 1% as higher volumes were not enough to offset the initial negative sensitivity to interest rate hikes.
•Costs rose 9%, strongly impacted by inflation. However, in real terms, costs decreased 2% and the efficiency ratio is at a level close to the historical lows reached last year.
•Net loan-loss provisions increased 37% due to the retail portfolio. The cost of risk was 4.46% (+86 bps year-on-year) and the NPL ratio was 6.63%.
In the quarter, net interest income stabilized following declines in previous quarters and provisions fell slightly. These positive impacts were offset by cost increases (costs related to business and investments in technology) and falls in net fee income and gains on financial transactions, from high levels in the second quarter.
Brazil. Underlying income statement
EUR million and % change
/ Q2'22/ 9M'21
Q3'22%excl. FX9M'22%excl. FX
Revenue3,278 -3-29,671 +20+2
Expenses-1,058 +4+4-3,009 +27+9
Net operating income2,220 -6-56,661 +170
LLPs-1,150 -1-1-3,165 +60+37
PBT1,047 -9-83,316 -6-20
Underlying attrib. profit662 -10-102,027 +15-1
Detailed financial information on page 66    
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ChileUnderlying attributable profit
EUR 551 mn
Commercial activity and business performance
We remained focused on improving customer satisfaction through the transformation of our commercial network and our digital banking proposition, expanding Santander Life (which exceeded one million customers) and Superdigital (with 355,000 customers). Getnet is firmly established in the country.
As a result of our actions, we exceeded 4 million customers and remained top in service quality in terms of NPS. We were named the Best Bank in Chile in 2021 by The Banker magazine and we were recognized as Top Employer 2022 for the fourth year in a row. We also won the 2022 Sustainable Finance Award from Global Finance and the Best Bank in Chile from Euromoney magazine.
In volumes, loans and advances to customers increased 11% year-on-year. Gross loans and advances to customers excluding reverse repurchase agreements and at constant exchange rates, were also 11% higher, mainly driven by individuals (+13% boosted by the impact that charges in the UF had on mortgages), corporates and institutions (+14%) and CIB (+30%).
Customer deposits were down 6%. Excluding the exchange rate impact and repurchase agreements, customer deposits decreased 7% as customers are normalizing their liquidity levels, following strong growth in 2021, due to the withdrawal of pension funds and state aids during the pandemic.
Results
Underlying attributable profit in the first nine months of 2022 amounted to EUR 551 million, 19% higher year-on-year. In constant euros, profit grew 23%, as follows:
•Total income rose 9% driven by the double-digit rise in net fee income (greater customer base and transactionality) and gains on financial transactions (+68% driven by customer business). Net interest income increased 1%, as the positive impacts from the UF portfolio and greater volumes were partially offset by the initial negative sensitivity to interest rates hikes.
•Costs rose 7%, below inflation (10%), which enabled net operating income to increase 10% and the efficiency ratio to improve to 38.1% (-59 bps year-on-year).
•Loan-loss provisions rose 13%, while the cost of risk remained virtually stable. Delinquency indicators remained better than pre-pandemic levels, although they are expected to normalize.
In the quarter, profit decreased 18% in constant euros, due to the reduction in net interest income as a result of lower quarterly inflation growth and higher funding costs, which offset the good performance of the rest of the income statement.
Chile. Underlying income statement
EUR million and % change
/ Q2'22/ 9M'21
Q3'22%excl. FX9M'22%excl. FX
Revenue577 -18-151,934 +5+9
Expenses-248 -3+1-737 +4+7
Net operating income329 -27-241,197 +7+10
LLPs-85 -23-20-290 +9+13
PBT244 -25-21889 +4+7
Underlying attrib. profit160 -22-18551 +19+23
Detailed financial information on page 67
January - September 2022
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35

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Primary segments

argentina.jpg
ArgentinaUnderlying attributable profit
EUR 234 mn
Commercial activity and business performance
Santander Argentina remained centred on improving customer service through innovation and process digitalization. The number of loyal customers increased and digital sales represented 83% of total sales. We continued to build our open financial services platform, strengthening the value proposition of Getnet, Santander Consumer, Superdigital and MODO.
In the quarter, we signed new alliances and launched new products, such offering agro products through the agribusiness card and through the financing of long-term investments. We also signed an alliance with LATAM Pass, enabling Super Club+ customers to redeem their points for miles.
Loans and advances to customers were up 36% year-on-year. In gross terms, excluding reverse repos and the exchange rate impact, loans and advances to customers rose 68% year-on-year, driven by auto loans, SMEs and corporates.
Customer deposits increased 26% with respect to September 2021. Excluding repos and the exchange rate impact, customer deposits rose 60% with growth in demand (+50%) and time (+80%) deposits, and mutual funds were 121% higher. As a result, total customer funds increased 73% in constant euros.
These high growth rates, as well as results, are impacted by high inflation in the country.
Results
Underlying attributable profit in the first nine months of 2022 was EUR 234 million, 31% higher year-on-year. At constant exchange rates, profit was 66% higher. By line:
•Total income grew 93%, underpinned by net interest income (+142% driven by business and higher volumes and rates on central bank notes), net fee income (+107%, mainly driven by transactional fees and mutual funds and insurance) and gains on financial transactions (+126%). These increases were partially offset by a hyperinflation charge of EUR 546 million.
•Costs rose 85%, impacted by inflation and the effect of the Argentine peso depreciation on overhead costs. The efficiency ratio improved to 57.3% (-258 bps compared to September 2021) and net operating income rose 105%.
•Loan-loss provisions increased due to extraordinarily low levels in 2021 (following pandemic-related provisioning in 2020). The cost of risk stood at 2.88%, 63 bps lower than in September 2021.
In the third quarter, profit increased 26% in constant euros, due to higher revenue, which offset the cost increase in the quarter, partly due to the salary agreement.
Argentina. Underlying income statement
EUR million and % change
/ Q2'22/ 9M'21
Q3'22%excl. FX9M'22%excl. FX
Revenue592 +29+551,413 +53+93
Expenses-333 +28+53-809 +46+85
Net operating income259 +31+57604 +63+105
LLPs-34 +4+29-106 +20+51
PBT144 +48+75312 +65+108
Underlying attrib. profit88 +3+26234 +31+66
Detailed financial information on page 68
Other South America
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peru.jpg
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Uruguay
Gross loans and advances to customers, excluding reverse repurchase agreements and the exchange rate impact were up 15% year-on-year. Customer deposits excluding repos and exchange rates rose 2%, spurred by time deposits (+62%).
Underlying attributable profit in the first nine months of EUR 96 million, up 21% year-on-year and +2% in constant euros, as follows:
•Total income up 10% boosted by net interest income, following interest rate hikes and higher inflation, and gains on financial transactions.
•Costs were slightly up (+1%), despite high inflation (+9%). As a result, the efficiency ratio stood at 43.5% (-3.9 pp year-on-year).
•Loan-loss provisions rose, normalizing following the low levels recorded in 2021. The cost of risk remained low (1.48%) and the NPL ratio stood at 2.43%.
Compared to the previous quarter, underlying attributable profit rose 13% in constant euros due to the increase in net interest income and gains on financial transactions and lower provisions.
Peru
Gross loans and advances to customers excluding reverse repos and the exchange rate impact rose 18% year-on-year and customer deposits (excluding repos and at constant exchange rates) increased 1%, impacted by time deposits (-9%), as demand deposits were 23% higher.
In the first nine months of 2022, underlying attributable profit amounted to EUR 52 million, 23% higher year-on-year. Excluding the exchange rate impact, growth was 8%, as follows:
•Total income rose 19%, mainly led by net interest income (+32%). Costs rose 48%, mainly driven by inflation and the launch of new businesses.
•Loan-loss provisions dropped 5% and the cost of risk remained very low (0.49%).
Colombia
Gross loans and advances to customers (excluding reverse repos and the exchange rate impact) were 19% higher year-on-year. Customer deposits (excluding repos and exchange rates) rose 39% due to demand deposits (+43%).
In the first nine months of 2022, underlying attributable profit of EUR 22 million, 31% higher year-on-year. At constant exchange rates, profit was 28% higher, due to:
•Total income growth of 39% (driven by net interest income and gains on financial transactions) and a 63% rise in costs due to the development of new business lines.
•Loan-loss provisions fell 18% and the cost of risk improved 47 bps year-on-year to 0.24%.
Other South America. Underlying income statement
EUR million and % change
Net operating incomeUnderlying attrib. profit
/ 9M'21/ 9M'21
9M'22%excl. FX9M'22%excl. FX
Uruguay184 +39+1896 +21+2
Peru92 +21+752 +23+8
Colombia40 +21+1822 +31+28
36
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Primary segments

DCBDIGITAL CONSUMER BANKUnderlying attributable profit
EUR 908 mn
Executive summary
→ Continuing to reinforce auto leadership via new strategic alliances, leasing and subscription. We signed the binding agreement with Stellantis, continued BNPL deployment and had >20% growth in new leasing contracts.
→ New lending +10% year-on-year in constant euros. In auto, global production issues dampened the new auto market. In this context, we gained market share in new and used car financing in most markets. Strong increase in consumer new lending.
→ Underlying attributable profit amounted to EUR 908 million, improving 12% year-on-year (+11% in constant euros) driven by total income growth (fees and leasing), good cost of risk performance and other results. RoRWA remained high, c.2%.

Strategy
Digital Consumer Bank (DCB) is the leading consumer finance bank in Europe, created through the combination of Santander Consumer Finance's (SCF) scale and leadership in consumer finance in Europe, and Openbank’s retail banking and digital capabilities.
SCF is Europe's consumer finance leader, present in 18 countries (16 in Europe including the recent launch in Greece, China and Canada) and works through more than 130,000 associated points of sale (mainly auto dealers and retail merchants). In addition, it is developing pan-European initiatives to boost Direct business across its footprint.
Openbank is the largest 100% digital bank in Europe. It offers current accounts, cards, loans, mortgages, a state-of-the-art robo-advisor service and open platform brokerage services. Openbank is currently active in Spain, the Netherlands, Germany and Portugal, and we are working on its expansion across Europe and the Americas.
DCB's aim is to generate synergies for both businesses:
•SCF is dedicated to helping its customers and partners (OEMs, car dealers and retailers) to enhance their sales capacity by financing their products and developing advanced technologies to give them a competitive edge. SCF is the top mobility financer and provider in Europe.
Digital Consumer Bank. Loan distribution
September 2022
chart-6f91243d04ea41b2908a.jpg
Germany
Nordics
France
Spain
The UK
Italy
Poland
Others
•Openbank continues to work on improving customer loyalty and engagement targets by applying its technological developments and business philosophy, while maintaining its ability to swiftly launch new initiatives.
Our main priorities for 2022 are to:
•Secure leadership in global digital consumer lending focusing on growth and transformation within three dimensions:
–Auto: strengthen our auto financing leadership position, gain market share, reinforce the leasing business and develop subscription services. SCF is focusing on providing its partners advanced digital financing capabilities to support their sales growth strategy and the best customer experience. We had a EUR 95 billion loan book at the end of September.
–Consumer Non-Auto: gain market share in consumer lending and develop buy now, pay later (BNPL) 2.0 to strengthen our top 3 position in Europe. We had a loan book of EUR 20 billion as of 30 September. In Retail, the aim is to continue improving digital capabilities to increase loyalty among our 3.8 million customers (Openbank and SC Germany Retail), boosting digital banking activity.
–Simplification and efficiency from self-contained banks to European hubs (Western Hub, Nordics, Germany) through: legal structure simplification, implementing shared services and IT commonality, and capital and liquidity optimization.
•Increase profit leveraging strategic operations initiated in 2021, e.g. Stellantis (Auto), leasing and subscription launch and BNPL development (Non-Auto).
•Launch of tech transformation projects to seize on the fast-growing transition to online, support digital customer base expansion and provide our partners with digital tools to achieve a single European digital connection (via auto marketplaces). All this while maintaining high profitability and one of the best efficiency ratios in the sector.

January - September 2022
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37

Business model




Primary segments

To contribute to the transition to a greener economy, we continue to do business in a sustainable way, supporting our customers' green transitions by providing more than EUR 3 billion of green finance in the year to date. Our green finance offering includes financing of electric vehicles (>100k EVs financed year to date, gaining market share), electric chargers, solar panels, green heating systems, e-bikes, etc.
We are also contributing to build a more inclusive society and were recognized as a Top Employer or Great Place to Work (GPTW) in 8 countries in our footprint.
Business performance
New lending increased 10% year-on-year in 9M'22, despite impacts from the covid-19 Omicron wave, the microchip crisis and global supply chain disruptions from the Russia-Ukraine conflict.
In this difficult environment, our leadership position and strategic alliances enabled us to increase our market share in new and used car financing in most countries. Our new car volumes were up 1% year-on-year while new car registrations in Europe fell 10% versus 9M 2021. New loans for used vehicles rose 18% in the same period compared to a 12% fall in the European market.
In Auto, our leasing solutions and commercial focus generated a >20% year-on-year increase in the number of leasing customers. We continued to develop a proprietary digital leasing platform for Europe with the ambition of disrupting the market.
SCF's new subscription service Wabi is live in Spain, Norway and Germany and will expand to other countries in the coming years. In June, SCF launched Ulity, its new platform for vehicle subscription-based solutions for companies.
In Q1, we expanded our partnership with Stellantis in a transaction expected to complete in H1 2023 (following the required authorizations). In 2022, we also entered into a long-term global partnership with Piaggio Group, Europe's leader in scooters.
In Non-Auto, Zinia, our buy now, pay later initiative continues to achieve outstanding results with more than 4 million contracts since its launch and more than 33,000 retail merchants connected.
The TIMFin joint venture is a strategic alliance with the leading Italian Telco, a new vertical for DCB. The company has >1.2
Activity
EUR billion and % change in constant euros
+2%
QoQ0%
QoQ
121
+6%60+6%
YoYYoY
Gross loans and advances to customers excl. reverse reposCustomer deposits excl. repos + mutual funds
million contracts since launch as well as >5,800 active points of sale.
The stock of loans and advances to customers increased 6% year-on-year. In gross terms, excluding reverse repos and the exchange rate impact they also rose 6% year-on-year to EUR 120.6 billion.
These solid results have been achieved in an unstable environment where the global political situation and soaring energy prices are generating uncertainty affecting our customers' consumption decisions, while inflation and rising interest rates are reducing their disposable income. We will continue to closely monitor our portfolios to prevent the impact that a deterioration in unemployment or a hard consumption stop may have on our activity.
Results
Underlying attributable profit in the first nine months was EUR 908 million, 12% higher year-on-year in euros. In constant euros, growth was 11% (RoRWA of c.2%). By line:
•Total income rose 2% mainly driven by 2% growth in net fee income (increased volumes) and greater leasing activity. Net interest income was flat, dampened by the short-term impact of rising interest rates on liabilities as they reprice faster than assets.
•Costs grew 2% affected by inflation, strategic investments, transformational costs and business growth, however in real terms, costs fell 5%. The efficiency ratio stood at 47.7% (in line with 9M 2021).
•Loan-loss provisions fell 5% reflecting the good credit quality performance. The cost of risk improved to 0.43%.
•By country, the largest contribution to underlying attributable profit came from Germany (EUR 295 million), the Nordic countries (EUR 182 million), the UK (EUR 181 million) and France (EUR 123 million).
Compared to the previous quarter, underlying attributable profit increased 16%, mainly due to leasing, lower minority interests and the SRF charge in Q2.
Digital Consumer Bank. Underlying income statement
EUR million and % change
/ Q2'22/ 9M'21
Q3'22%excl. FX9M'22%excl. FX
Revenue1,315 +4+43,887 +2+2
Expenses-605 0+1-1,853 +3+2
Net operating income709 +8+82,034 +2+2
LLPs-142 +2+2-429 -4-5
PBT572 +13+131,581 +11+10
Underlying attrib. profit336 +16+16908 +12+11
Detailed financial information on page 70
38
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Primary segments

centrocorporativo.gif
Corporate CentreUnderlying attributable profit
-EUR 1,583 mn
Executive summary
→ The Corporate Centre continued with its role supporting the Group.
→ The Corporate Centre’s objective is to define and coordinate the Group's strategy and aid the operating units by contributing value and carrying out the corporate oversight and control function. It also carries out functions related to financial and capital management.
→ Underlying profit was impacted by lower gains on financial transactions due to the exchange rate differences from the hedging of results, partly offset by the improvement in provisions.

Strategy and functions
The Corporate Centre contributes value to the Group in various ways:
•Making the Group’s governance more solid, through global control frameworks and supervision.
•Fostering the exchange of best practices in cost management, which enables us to be one of the most efficient banks in the sector.
•Contributing to the launch of projects that will be developed by our global businesses aimed at leveraging our worldwide presence to generate economies of scale.
It also coordinates the relationship with European regulators and supervisors and develops functions related to financial and capital management, as follows:
•Financial Management functions:
–Structural management of liquidity risk associated with funding the Group’s recurring activity and stakes of a financial nature.
–This activity is carried out by the diversification of funding sources (issuances and other), always maintaining an adequate profile in volumes, maturities and costs. The price of these operations with other Group units is the market rate that includes all liquidity concepts (which the Group supports by immobilizing funds during the term of the operation) and regulatory requirements (TLAC/MREL).
–Interest rate risk is also actively managed in order to dampen the impact of interest rate changes on net interest income, conducted via high credit quality, very liquid and low capital consumption derivatives.
–Strategic management of the exposure to exchange rates in equity and dynamic in the countervalue of the units’ annual results in euros. Net investments in equity are currently hedged, EUR 20,630 million mainly Brazil, the UK, Mexico, Chile, the US, Poland and Norway with different instruments (spot, fx, forwards).
•Management of total capital and reserves: efficient capital allocation to each of the units in order to maximize shareholder return.

Results
In the first nine months of 2022, underlying attributable loss of EUR 1,583 million, compared to -EUR 1,232 million in September 2021, as follows:
•Lower gains on financial transactions (EUR 479 million less than in the same period of 2021), dampened by negative foreign currency hedging results, which partially offset the favourable FX impacts in the countries' results.
•Net interest income decreased, impacted by the rising interest rates and the higher liquidity buffer.
•Lastly, other results and provisions were considerably down on the same period in 2021.



Corporate Centre. Underlying income statement
EUR million
Q3'22Q2'22Chg.9M'229M'21Chg.
Total income-418 -446 -6%-1,165 -642 +81%
Net operating income-511 -538 -5%-1,437 -891 +61%
PBT-544 -577 -6%-1,558 -1,168 +33%
Underlying attrib. profit-543 -577 -6%-1,583 -1,232 +28%
Detailed financial information on page 71

January - September 2022
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39
Business model
Secondary segments

iconosan.gif
Retail BankingUnderlying attributable profit
EUR 5,891 mn
Executive summary
Results. (9M'21 vs. 9M'22). % change in constant euros
Business performance. EUR bn. % change in constant euros
Profit increased driven by total income and lower minority interests and tax burden
Continued growth in asset and liability volumes
Total incomeCostsProvisionsLoans and advances to customersCustomer funds
+2%+4%+22%859+6% YoY809 +2% YoY
Customers
comercialclienteseng.jpg

Commercial activity
We continued to accelerate the implementation and development of our digital transformation, focusing on our multi-channel strategy and the digitalization of processes and businesses. Our aim is to ensure personalized support tailored to each customer's needs, which also addresses one of our main priorities, the continuous improvement our customer service.
In addition, we rolled out several commercial initiatives, with tailored products and services for each segment, as previously explained in the regions and countries:
•In individuals, mortgages continued to grow in many of our markets, with positive trends in the UK, Portugal (market share exceeded 20%) and in Mexico, where we continued to be one of the top mortgage lenders in the country. However, there was a slowdown in Spain in the quarter due to rising interest rates. We are digitalizing the processes for granting consumer loans in most countries.
•In auto finance, we made headway in new alliances and partnerships and renewing existing ones, both in Europe and the US, and we continued to record strong increases in auto financing in most South American countries.
•Regarding corporates, we continued to offer differentiated products and services for SMEs, companies and SCIB, while launching joint initiatives between them to deepen relationships with multinational clients.
These initiatives allowed us to reach 159 million customers across the Group. The number of loyal customers increased 8% year-on-year to 26.8 million, digital customers rose 8% year-on-year to 50 million and digital sales accounted for 56% of total sales.

Results
Underlying attributable profit in the first nine months of 2022 was EUR 5,891 million, 9% higher year-on-year. Excluding the exchange rate impact, it was stable, as follows:
•Total income grew 2% driven by higher net interest income (+7%) and net fee income (+4%) which offset lower gains on financial transactions.
•Costs increased 4%, affected by inflation. Net operating income grew 1% and efficiency stood at 43.6%.
•Loan-loss provisions rose 22%, mainly driven by the increases in North and South America.
•Lower tax burden and lower impacts from minority interests.
Retail Banking. Underlying income statement
EUR million and % change
/ Q2'22/ 9M'21
Q3'22%excl. FX9M'22%excl. FX
Revenue10,999 +4+431,634 +9+2
Expenses-4,775 +3+3-13,800 +9+4
Net operating income6,224 +5+517,834 +10+1
LLPs-2,733 +4+4-7,465 +31+22
PBT2,818 -1-28,815 -5-13
Underlying attrib. profit1,899 -2-35,891 +90
Detailed financial information on page 72
40
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January - September 2022
Business model
Secondary segments
scib.gif
Santander Corporate & Investment BankingUnderlying attributable profit
EUR 2,364 mn
Executive summary
Results. (9M'22 vs. 9M'21). % change in constant euros
Our aim and strategic priorities
Total incomeUnderlying att. profit
imagen5.jpg
+25%+36%
Efficiency ratioRoTE
36.4%24.8%
Revenue growth by business and region*
Other highlights in the quarter

scib-ingresosenga.jpg
lt_scib.jpg
europa.gif
+16%
norteamerica.gif
+33%
sudamerica.gif
+34%
* Constant EUR million
Strategy
In a challenging macroeconomic and geopolitical environment, our priority has been to support our clients, while ensuring compliance with international restrictions and sanctions related to the Russia-Ukraine conflict.
In this environment, SCIB continued to make headway in the execution of its strategy to transform the business and become our clients' strategic advisor of choice, via specialized high value-added products and services; focusing on ESG and the digital transformation.
Our goal with this transformation is to become one of the leading investment banks in Europe through a pan-European platform, consolidate leadership in Latin America in most countries and products, and continue to accelerate growth in the US focusing on the integration of broker-dealer Amherst Pierpont Securities (APS) as a first step towards achieving its growth ambitions.
As an example of the execution of our strategy, in the third quarter of the year, SCIB announced the reorganization of the Markets business naming Michael Bagguley the new Global Markets head. Michael, from Barclays, will centralize the management of a business traditionally divided in regions in SCIB. To strengthen the pan-European platform, we also announced Tobias Heilmaier's appointment as the head of SCIB Germany.
In ESG in Q3, SCIB was financial advisor in the sale of 3 offshore wind farms (The largest being Hornsea One (1.2GB) with a global value of GBP 4.5 billion) and acted as advisor in its first transaction in the distributed solar photovoltaic power generation market, in an operation valued at EUR 1.4 billion.
In Debt Capital Markets (DCM), SCIB closed its first mandate as structurer with the European Union under the Next Generation EU (NGEU) programme. Additionally, we structured Grupo Santander's first "Green, Social & Sustainability Funding Global Framework" bond, totalling USD 500 million.
Global Transaction Banking (GTB) consolidated its leadership in sustainability-linked confirming programmes. With the help of SCIB, a major European telecommunications company will support its European supply chain in its energy transition. Henkel will do the same in Latin America, offering the first such programme in the region. Together they cover more than 5,000 suppliers and purchase volumes exceeding EUR 7 billion. In addition, the Export Finance team, together with the Inter-American Development Bank, closed USD 60 million of financing to BAC Credomatic El Salvador to support the funding of women-led SMEs under the El Salvador Accelerate Women programme.
Focusing on digital transformation, during the quarter SCIB and SAP joined forces to accelerate the digitalization of GTB services. As a result, SCIB's global clients have at their disposal state-of-the-art banking solutions that will help them avoid supply chain disruptions and empower their energy and digital transformations.
Digital Solutions Group (DSG) had strong activity in digital infrastructure M&A with significant transactions in Spain and Italy, and funding and advice from Global Debt Financing (GDF) in the fintech space in Europe and the Americas.

January - September 2022
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41
Business model
Secondary segments
scibawards.jpg
Results
Underlying attributable profit in the first nine months of 2022 amounted to EUR 2,364 million (27% of the Group's total operating areas), 36% higher than in the same period of 2021, becoming one of the best in SCIB's history, backed by double-digit growth across core businesses, notably GTB and GDF.
Revenue performance by business (in constant euros) was as follows:
•Markets: 22% increase year-on-year. Macroeconomic uncertainty and volatility contributed to the good performance of exchange rate hedging products. This, combined with good risk management, led to a positive revenue trend.
By region, in Markets Europe & Asia, this uncertainty resulted in lower sales activity with clients. On the other hand, good management of the Market Making teams allowed us to protect the value of our trading books.
There was strong demand for hedging products in all countries in Latin America. Inflation and political events also generated trading book opportunities, especially in Chile and Brazil.
In the US, the solid results in the quarter were driven by FICC (Fixed Income Currency and Commodities), Rates, FX and Securities Finance tables, combined with greater institutional and corporate customers flows.
•GDF (Global Debt Financing): continued to increase revenue (+12%) despite the complex geopolitical situation and high inflation. DCM remained at levels similar to Q2, breaking the negative streak in markets, but without a definitive rebound. Santander continued to gain market share, remaining in the top 5 for corporates in Europe.
Regarding Structured Finance, Santander continued to lead league tables globally, highlighting our clear leadership in the renewable sector (top in Latin America, Europe and globally), a key element in the bank's ESG strategy.
•GTB (Global Transactional Banking): revenue grew 42% year-on-year. Cash Management continued the year's upward trend both in terms of transactionality and revenue from liabilities, favoured by the rise in economic activity in most countries where SCIB is present, as well as the rise in interest rates, especially in Europe and the US.


Trade & Working Capital Solutions (T&WCS) continued to focus on providing our clients with solutions that enable them to release captive liquidity from accounts and inventories, strengthen their supply chains, mitigate business transactions risks and achieve their ESG objectives. With regard to the latter, T&WCS more than tripled ESG operating revenue year-on-year.
In Export Finance, SCIB continued its good trend and maintains its leadership in the market. It was second in the global ranking of ECA financing (according to Dealogic's criteria), with 50% growth in the volume financed compared to the previous year. It also led the ranking in Europe and remained in the top 2 in Latin America in export finance.
•CF (Corporate Finance): strong performance in Mergers and Acquisitions (M&A), with double-digit year-on-year growth, but damped the slowdown in Equity Capital Markets activity in the face of the global equity market closures. Of note, was the participation in Opdenery's IPO, the first in Spain in the last 12 months.
In the Telecommunications, Media & Technology (TMT) industry, Santander remained very active, including the M&A transactions of MasMovil and Ardian, valued at almost EUR 2 billion.
In Energy, Santander strengthened its presence in the offshore wind sector with three major operations: the aforementioned Hornsea One, Vikinger and advice on the largest M&A's largest operation of offshore wind asset in the Baltic Sea.
In CRH (Consumer Retail Healthcare), Santander continued to grow its franchise through the most significant operations in the sector, including the merger of Dufry with Autogrill for EUR 5,3 billion.
Santander continued to be a key player in infrastructure, both in Europe and Latin America. This quarter, we advised Platinum Equity on the sale of Socamex, a Spanish water company acquired by Quaero Capital.
Operating expenses increased 15% year-on-year due to investments in products and franchises under development. However, at 36.4%, efficiency remained lower than the previous year and well below the sector.
Sharp improvement in loan-loss provisions compared to 9M 2021, which was still heavily affected by the macroeconomic deterioration caused by the covid-19 pandemic.
Compared to the previous quarter, revenue increased 8% and underlying attributable profit increased 10%.
SCIB. Underlying income statement
EUR million and % change
/ Q2'22/ 9M'21
Q3'22%excl. FX9M'22%excl. FX
Revenue1,985 +7+85,597 +31+25
Expenses-747 +11+10-2,035 +20+15
Net operating income1,238 +5+73,562 +39+33
LLPs-8 ——14 ——
PBT1,208 +5+73,499 +41+35
Underlying attrib. profit833 +8+102,364 +41+36
Detailed financial information on page 72
42
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Business model
Secondary segments
wmi.gif
Wealth Management & InsuranceUnderlying attributable profit
EUR 818 mn
Executive summary
Results (9M'22 vs. 9M'21). % change in constant euros
Growth drivers 9M'22
Total fee income generated1
Total contribution to profit1
Assets under management
(AuMs)		RoTE
privatebanking.gif
sam.gif
insurance.gif
Net new moneyAuMsGross written premiums
+6%+17%-5%59.5%EUR 9.5 bnEUR 192 bn+24%
(3.7% of total CAL)(-5% vs Sep-21) vs Sep-21
Total contribution to profit by businessOther highlights in the period
Constant EUR million (incl. fee income ceded to the Group)Private Banking
crecimiento.jpg
SAM
bancaresponsable_1.jpg
Insurance
clientes.jpg
wmicontribucion_eng.jpg
Customer growth
+6% vs Sep- 21
SRI*
EUR 38.5 bn
Fee income1
EUR 1.23 bn
+8% vs. 9M'21
(Total SRI WM&I:
 EUR 54 bn)
premioa.jpg
(1) Excluding insurance one-offs in 2021.
 * Socially Responsible Investments

Commercial activity
We aim to become the best Wealth & Protection Manager in Europe and Latin America, being one of the Group's growth drivers:
•In Private Banking, despite market volatility and inflationary pressures, we continued to leverage our scale so clients can benefit from our global platform and to foster collaboration across markets and segments. Collaboration volumes reached EUR 11.6 billion, year to date generating 18% revenue growth year-on-year. We are the leader in the large flow of investment from Latin America to Spain and the United States.
Collaboration volumes
Constant EUR billion
11.6
〉+18%
vs. 9M'21
We continued to renew our value proposition, widening our product range according to market trends, with a particular focus on alternative products, collateralized lending, investment banking and socially responsible products (ESG). We also continued to grow our discretionary advisory service, to offer our clients value-added solutions tailored to their specific investment needs and risk profiles, which accounted for 12.1% of total assets under management (AuMs), 1% more than the same period last year.
Our range of alternative products exceeded EUR 2.6 billion (EUR 1.7 billion in the same period of 2021) in both Santander Asset Management (SAM) and third-party funds. In addition to the funds launched during the first six months (Laurion, Blackrock, Compass, Ameris, Sancus and Qualitas), this quarter we also launched EB Capital Preferred Futures and EPC Multifamily Partners V.

Our real estate investment service, which is capturing a large part of the existing flow between Latin America and Europe and the United States, reached a total volume of EUR 110 million through transactions in the period.
Our Socially Responsible Investment (SRI) products amounted to more than EUR 24 billion, (classified according to Article 8 or 9 under the SFDR or similar criteria applicable in Latin America).
•In SAM, market volatility affected overall asset valuations and investment flows. In this environment, we continued to improve and complete our local and global product offerings. We made further headway in our ESG strategy, offering 71 products globally, and AuMs (integrating sustainability strategies) of around EUR 38.5 billion. The range of alternative products aimed primarily at our institutional clients and Family Offices is increasingly robust, with 8 funds already launched and EUR 1,009 million already invested.
•In Insurance, we maintained a healthy growth rate in premiums, mainly in the Non-Related and Savings businesses. The credit-related business was slightly affected by the macroeconomic environment, especially in Brazil.
Protection insurance sales were particularly strong in Europe, as a result of the optimization of client communication and the introduction of new products. The new savings value proposition developed in Spain was particularly successful, completing the range of unit linked products, guaranteed interest and annuities.
In the Americas we continued to consolidate the diversification of the non-credit insurance business, with double-digit growth in new sales in 2022. We launched a new Life and Accident Insurance offer in Brazil and a new unit linked product offering in Mexico.


January - September 2022
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43
Business model
Secondary segments
The motor vehicle insurance business was 11% higher. Our Autocompara platform, which operates in Argentina, Brazil, Chile, Mexico and Uruguay, reached 1.4 million active policies. Gross fees from the SME grew 11% year-on-year, boosted by the good performance of the Americas, where they grew 16% year-on-year.
Regarding our digital strategy, we continued to increase the number of insurance policies distributed through our digital channels at double-digit rates, which now account for 20% of the total sales volumes (+5% year-on-year).
Business performance
Total assets under management amounted to EUR 402 billion, 5% lower year-on-year, dampened by market performance since early 2022, particularly in Europe.
Business performance: SAM and Private Banking
Constant EUR billion
Total assets under management
Funds and investment*
- SAM
- Private Banking
Custody of customer funds
Customer deposits
Customer loans
chart-731299ee6e864821805.jpg
/ Jun-22/ Sep-21
0 %-5 %
0 %-5 %
0 %-5 %
0 %-7 %
-1 %-14 %
+3 %+12 %
+1 %+8 %
Note: Total assets marketed and/or managed in 2022 and 2021.
(*) Total adjusted private banking customer funds managed by SAM.
•In Private Banking, the volume of customer assets and liabilities (CAL) reached EUR 257 billion, 4% lower than in September 2021, affected by custody valuations. Net new money amounted to EUR 9.5 billion (3.7% of total volume), including EUR 1.6 billion in credit. Net profit in 9M'22 was EUR 501 million, up 30% compared to 9M'21, primarily backed by total income. Threshold Private Banking clients increased 6% to 112,000 clients.
•In SAM, total AuMs decreased 5% year-on-year due to market performance to EUR 192 billion. Net sales recorded outflows of EUR 2.8 billion (1.5% of the total). The total contribution to the Group's profit (including ceded fee income) was EUR 441 million, 8% higher year-on-year.
•In Insurance, the volume of gross written premiums in 9M'22 amounted to EUR 8.7 billion (+24% year-on-year), with protection premiums growing 9% despite lower lending demand in Latin America. Total fee income rose 4% (+8% excluding the impact from insurance portfolio buybacks in 2021) and net fee income from protection insurance was 6% higher. The total contribution to profit stood at EUR 1,055 million, -3% year-on-year (+15% excluding insurance earn-out one-offs and insurance portfolio buybacks in 2021).
Results
Underlying attributable profit was EUR 818 million in the first nine months of 2022, up 7% year-on-year in constant euros (+31% excluding insurance one-offs in 2021), as follows:
•Total income increased 7% as a result of improved margins and net fee income.
•Total fee income generated amounted to EUR 2,735 million (+4% year-on-year; +6% excluding insurance one-offs in 2021) and represented 31% of the Group's total.
Total fee income generated
Constant EUR million
2.735
〉+4%31%
vs. 9M'21/ total Group
•Operating expenses were 6% higher year-on-year, due to the investments carried out together with higher costs related to increased commercial activity and the perimeter of several operations, such as the acquisition of Crédit Agricole's business in Miami in 2021.
The total contribution to the Group (including net profit and total fees generated net of tax) was EUR 1,997 million in 9M'22, 6% higher than in the same period of 2021 (+17% excluding insurance one-offs in 2021).
Compared to the previous quarter, underlying attributable profit rose 11% primarily driven by the positive performance in total income and cost stability.
To sum up, a very positive quarter in which we continued to grow at double-digit rates on a like-for-like basis despite the macroeconomic and market environment.
Total contribution to profit
EUR million and % change in constant euros
Q3'229M'22
image99.jpg
713
image99.jpg
1,997
+7 %/ Q2'22+6 %/ 9M'21
WM&I. Underlying income statement
EUR million and % change
/ Q2'22/ 9M'21
Q3'22%excl. FX9M'22%excl. FX
Revenue685 +8+71,907 +12+7
Expenses-263 +4+3-758 +12+6
Net operating income422 +10+101,149 +11+8
LLPs-5 -45-46-13 -34-35
PBT414 +13+131,118 +9+6
Underlying attrib. profit302 +12+11818 +11+7
Detailed financial information on page 73
44
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January - September 2022
Business model
Secondary segments
pagonxt.gif
Underlying attributable profit
-EUR 173 mn
Executive summary
Revenue performance
Our business
Solid revenue growth*MerchantsInternational TradePaymentsConsumers
imagen7eng.jpg
 +75%9M'22 vs 9M'21
Global payments solutions for all merchant segmentsInternational trading solutions for businessWholesale account-to-account payment solutionsFinancial marketplace for the underbanked
Our main strategic prioritiesMain growth drivers
•Scaling up our global technology platform
Merchants Total Payments Volume*Active merchantsInternational Trade
active customers
•Accelerating our commercial growth
•Pursuing the open market opportunity
 +29%
9M'22 vs 9M'21
 +3%
Sep-22 vs Sep-21
>30k
(*) Constant EUR million.

Strategy
PagoNxt aims to achieve a global leadership position in payments through our distinctive, holistic and customer-centric value proposition. We are one-of-a-kind paytech business providing customers with a one-stop shop for innovative payments and integrated value-added solutions.
We address several high-growth and strategic business segments, namely:
•Merchants: providing global and integrated acquiring, processing and value-added solutions for physical and e-commerce merchants of all sizes.
logogetnet.jpg
•International Trade: delivering specialized cross-border trading solutions – payments, FX, cash management, trade finance – for business customers, in a large and global addressable market yet to be fully digitalized.

eburylogo-1.jpg logoonetrade.jpg
•Payments: providing wholesale account-to-account payments processing and instant connectivity to schemes in multiple geographies through a highly-scalable model.

paymentshub.jpg
•Consumers: providing a financial marketplace for the economic inclusion of the underbanked and low-income population, with a focus on Latin America.

superdigital.jpg

PagoNxt's technology platform and specialist teams serve Grupo Santander's payments needs and additionally cater for open market opportunities beyond Santander's business.
PagoNxt's strategy is anchored on the following key levers:
•Scaling up our global, cloud-native, data-driven, secure and efficient platform. We operate a connected, real-time, flexible and highly scalable technology platform that is fully cloud and API-based to ensure access to PagoNxt's latest features through a single integration. We process and generate insights to help our customers and their businesses leverage the full power of data and make data-driven decisions.
•Accelerating commercial growth by continuing to strengthen our commerce and international trade ecosystem, our offerings and our distribution through Santander's commercial muscle.
•Decisively pursuing the open market opportunity through direct commercialization and distribution partnerships, increasing our market penetration in Europe, South America and North America and extending our footprint to additional countries.
January - September 2022
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45
Business model
Secondary segments
Business performance
In the first nine months of the year, PagoNxt had several important achievements, effectively responding to the current market challenges:
•Getnet continued its growth, reaching 1.27 million active merchants (+3% vs Sep-21) and EUR 117 billion in Total Payments Volume (TPV), 29% higher compared to the same period of 2021.
–TPV in Getnet Brasil increased 18% from January to September boosted by the retail customer segment and by our e-commerce activity. Our strategy in the country is also focused on driving profitable growth through our pre-payments products proposition and value-added services, and through an increase in our SME penetration. We are pursuing opportunities through all sales channels and reinforcing our open market sales through partnerships, direct sales and digital channels.
–Getnet Europe, our pan-European acquirer, grew significantly in the first nine months. TPV increased 42% and active merchants rose 13% year-on-year, mainly driven by the Spanish market which displayed a strong performance across all industries. In addition, we continue to progressively develop our open market strategy in the European region, where our presence now includes activity in 12 different countries.
–Getnet México continued on its strong growth path, with TPV increasing 35% from January to September year-on-year. This rise was driven by an increase in the average ticket of our merchant base and by the strong performance of our open market distribution channels which include several partnerships with financial institutions, independent software vendors (ISVs) and payment ecosystems.
•Our One Trade platform continued to develop new and innovative solutions to become Grupo Santander's core provider of international capabilities. In the last quarter, the platform implemented new international trade services across the Santander banks in Spain, Chile and the US.
•More broadly in Grupo Santander payments, PagoNxt continued to accelerate its roadmap to become Santander's wholesale payments provider, centralizing all types of non-card payments.
•In the last quarter, Ebury showed strong performance on its B2B offerings targeting the open market, driven mainly by FX services.
•On the consumer side, our Superdigital business continued to expand its offering in Latin America. In Q3, Superdigital added financial products to our propositions in Brazil and Argentina, including loans, insurance and credit cards.
Merchants
Active merchantsTotal Payments Volume
MillionsConstant EUR billion
+3%1.27+29%117.0
1.24
90.5
Sep-21Sep-229M'219M'22
Results
In the first nine months of 2022, underlying attributable loss decreased year-on-year to -EUR 173 million, compared to -EUR 206 million in the first nine months of 2021.
Total income was EUR 655 million, a 96% increase year-on-year (+75% in constant euros), backed by the increase in business activity and volumes across regions, especially in our Merchant and Trade businesses (Getnet, Ebury).
This keeps PagoNxt on track to achieve its 50% revenue growth target for 2022.
PagoNxt. Revenue performance
Constant EUR million
655 
+75%
374
9M'219M'22

In the period, PagoNxt continued its investment plans to develop and implement its global technology.
Compared to the previous quarter, underlying attributable profit stood at -EUR 69 million.


PagoNxt. Underlying income statement
EUR million and % change
/ Q2'22/ 9M'21
Q3'22%excl. FX9M'22%excl. FX
Revenue257 +9+9655 +96+75
Expenses-282 +9+10-729 +52+45
Net operating income-24 +12+16-74 -49-43
LLPs-13 +50+50-24 +246+195
PBT-50 +50+51-114 -40-36
Underlying attrib. profit-69 +38+40-173 -16-13
Detailed financial information on page 73
46
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January - September 2022



Responsible banking


RESPONSIBLE BANKING
br1.jpg
Responsible Banking targets
We continue to progress in our ESG agenda, towards the fulfillment of our public commitments:
bra.jpg
More information available at www.santander.com/en/our-approach.
Note: 2022 data not audited.
(*) H1’22 data.


Of note among the implemented ESG initiatives were:
br2.jpg
Environmental
♣    In line with our commitment to grant EUR 120 billion in green finance by 2025 and EUR 220 billion by 2030, we mobilized nearly EUR 4.3 billion in green finance in the quarter, EUR 78.7 billion since 2019.
♣ In addition, in 2022 we funded more than 100,000 electric vehicles in SCF with a volume of more than EUR 3 billion.
♣ The volume of AuMs in socially responsible investments amounted to EUR 54 billion.
♣ We continued to support our wholesale customers through:
•Participation as joint global coordinator of Greenvolt's capital increase to accelerate the development of renewable projects in Portugal.
•A sustainable mobility initiative, financing 50 electric buses in Mexico City and the expansion of the bicycle service in São Paulo, Rio de Janeiro and Bogotá.
♣ New features and products for our customers, such as the new web portal for companies and individuals with sustainable product offers in Spain.
♣ Banco Santander joined the Taskforce on Nature-related Financial Disclosures (TNFD) forum. It is a multidisciplinary advisory group of global institutions which contributes to and actively participates in the development of the new disclosure framework.
January - September 2022
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47



Responsible banking


iconoinclusion.jpg
Social
t    We continue to strengthen our financial inclusion and empowerment proposition:
•We have financially empowered more than 9 million people since 2019, heading towards our 10 million target by 2025, mainly driven by our microfinance programmes in Brazil and Mexico.
•We granted over EUR 677 million in loans in the first nine months of the year through our microfinance programmes in 8 countries.
•In Chile, the Santander Life financial inclusion proposal is going from strength to strength with more than one million customers. This fully-digital account can be opened from a mobile, has no minimum income requirements and has full functionality.
•In the UK, we added a financial support functionality to the mobile to help customers manage the increase in the cost of living.
•In Spain, together with Plena Inclusión, we launched the 'Finanzas para Mortales' guide for people with learning difficulties focused on cybersecurity and using digital banking to promote financial education to those that need it most.
t    We promote a diverse and inclusive workplace: in Brazil, we collaborated with Afro Presença for the fair employability of young black people, supported by the Public Ministry of Labour of São Paulo and other bodies such as Global Compact and UN Women. We also boosted the Rede Mulher Empreenedora, Brazil's largest female entrepreneur event.
t    We support the communities in which we operate:
•We provided 10,000 Santander scholarships for 15 hours of Excel training in 11 countries in our footprint.
•In Brazil, we offered 100,000 free accesses to content on the Education First platform to encourage the study of English.
•Universia Foundation launched its 2022-2023 scholarships programme for students with disabilities.
•We continued to support Ukraine with various types of aid such as school kits for refugees or the donation of computer equipment to the police to help streamline their procedures.
iconogobierno.jpg
Governance
v    Mexico introduced aspects related to sustainable funding into the incentive schemes of its commercial teams.
v    One Europe launched an internal ESG and green funding campaign to raise awareness and train employees in the relevance of these issues.
v    IR Magazine has given Santander its award for Best Annual Report and Best ESG Materiality Reporting.
v    Published annual sustainability reports in Poland and the United States.
iconomedalla.jpg
9M'22 Awards
☑ In Portugal, we were named the Best Retail Bank by World Finance, for sustainable initiatives and for being the best in managing global public health and climate change crises.


premiosbr.jpg
48
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January - September 2022



Corporate governance


CORPORATE GOVERNANCE
A responsible bank has a solid governance model with well-defined functions, it manages risks and opportunities prudently and defines its long-term strategy looking out for the interests of all its stakeholders and society in general
gobiernocorpotatia01.jpg

àChanges in the organizational structure of the Group's Senior Management

On 27 September, Javier Maldonado assumed the role as Head of US Transformation to support and accelerate Santander’s transformation of business and operations in the US. Mr Maldonado maintains his duties in strategic real estate development projects and in the Group Project Execution Office.

January - September 2022
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49



Santander share


SANTANDER SHARE
In application of the shareholder remuneration policy for 2022, the board of directors approved the first payment against 2022 results, which will be made in two parts:
•A cash dividend of EUR 5.83 cents per share (pre-tax) will be paid from 2 November 2022. This is 20% higher than the equivalent in 2021.
•A share repurchase programme of up to EUR 979 million is expected to start once the applicable regulatory approval has been obtained, as announced in the Inside Information disclosed on 27 September 2022.
As a result, the total remuneration of this interim distribution will exceed EUR 1.9 billion (+16% compared to its equivalent of 2021) and represents approximately 40% of the H1 2022 underlying profit (20% dividend payment and 20% share repurchase).
The bank plans to announce a further and final remuneration from 2022 earnings in the first quarter of 2023, subject to the appropriate corporate and regulatory approvals.
à Share price performance
Santander's shares are listed in 5 markets, in Spain, Mexico, Poland, the US (as an ADR) and the UK (as a CDI).
The quarter was marked by uncertainty due to the Russia-Ukraine conflict, high inflation and the fear of an economic slowdown.
The IMF lowered its global growth forecast for this year, and, more significantly, for 2023, first in July, and more severe in October. The deterioration, generalized and more pronounced than expected, was explained by: (i) higher inflation, which led to the tightening of financial conditions; (ii) China's slowdown, due to covid-19-related outbreaks and confinements; and (iii) other consequences from the Russia-Ukraine conflict.

In this context, the central banks had to tighten their monetary policies, prioritizing inflation control ahead of economic growth, increasing the likelihood of recession in almost all economies. The Fed raised interest rates to 3.25%, +300 bps in the year, while the ECB made a historic 75 bp hike to 1.25% at its last meeting, for a total of +125 bps since June.
The impact of these measures is driving a depreciation in many exchange rates against the dollar, resulting in the euro losing parity against it. The euro is affected by the high levels of uncertainty in Europe due to the energy crisis.
In this highly volatile and uncertain environment, the Santander share price ended the first nine months of the year with a negative return of 16.9%, similar performance to the Eurozone's main banking index, EuroStoxx Banks, which was down 17.3%. The other main indices also closed with declines. The DJ Stoxx Banks fell 13.5% and the MSCI World Banks 19.8%, compared to the 13.1% decrease in the Ibex 35 and the 10% decline in DJ Stoxx 50.
Share price
accion4.jpg
accin3a01.jpg
START 31/12/2021
END 30/09/2022
€2.941€2.398
accionmax.jpg
accionmin.jpg
Maximum 10/02/2022
Minimum 15/07/2022
€3.482€2.324
Comparative share performance
chart-09c795de3e53406cb7e.jpg

50
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January - September 2022



Santander share


àMarket capitalization and trading
As at 30 September 2022, Santander was the second largest bank in the Eurozone by market capitalization and 42nd in the world among financial entities (EUR 40,265 million).
The share’s weighting in the DJ Stoxx Banks index was 6.3% and 11.3% in the DJ Euro Stoxx Banks. In the domestic market, its weight in the Ibex 35 as at end-September was 10.3%.
A total of 10,730 million shares were traded in the period for an effective value of EUR 30,937 million and a liquidity ratio of 63%.
The daily trading volume was 56 million shares with an effective value of EUR 160 million.
àShareholder base
The total number of Santander shareholders at 30 September 2022 was 3,928,568, of which 3,420,921 were European (74.82% of the capital stock) and 496,437 from the Americas (24.13% of the capital stock).
Excluding the board, which holds 1.10% of the bank’s capital stock, retail shareholders accounted for 42.62% and institutional shareholders accounted for 56.28%.



Share capital distribution by geographic area
September 2022
The AmericasEuropeOther
24.13%74.82%1.06%
accionfinala01.jpg
Source: Banco Santander, S.A Shareholder register.

globo-europa2.gif
2nd
Bank in the Eurozone by market capitalization
EUR 40,265 million

The Santander share
September 2022
Shares and trading data
Shares (number)16,794,401,584 
Average daily turnover (number of shares)55,595,426 
Share liquidity (%)63
(Number of shares traded during the year / number of shares)
Stock market indicators
Price / Tangible book value (X)0.56
Free float (%)99.87



Share capital distribution by type of shareholder
September 2022
chart-db0c433494704efe9ba.jpg
Institutions
56.28%
Board *
1.10%
Retail
42.62%
(*) Shares owned or represented by directors.


January - September 2022
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51







2022 A P P E N D I X
anexoeng.jpg




52
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January - September 2022






Group financial information

Net fee income. Consolidated
EUR million
Q3'22Q2'22Change (%)9M'229M'21Change (%)
Fees from services1,771 1,772 (0.1)5,140 4,255 20.8
Wealth management and marketing of customer funds1,064 1,004 6.02,991 2,751 8.7
Securities and custody180 264 (31.8)736 804 (8.5)
Net fee income3,015 3,040 (0.8)8,867 7,810 13.5


Underlying operating expenses. Consolidated
EUR million
Q3'22Q2'22Change (%)9M'229M'21Change (%)
Staff costs3,177 3,085 3.09,125 8,205 11.2
Other general administrative expenses2,190 2,077 5.46,235 5,509 13.2
   Information technology662 596 11.11,823 1,596 14.2
   Communications103 108 (4.6)311 299 4.0
   Advertising142 144 (1.4)407 364 11.8
   Buildings and premises198 192 3.1557 519 7.3
   Printed and office material23 24 (4.2)70 66 6.1
   Taxes (other than tax on profits)147 139 5.8427 394 8.4
   Other expenses915 874 4.72,640 2,271 16.2
Administrative expenses5,367 5,162 4.015,360 13,714 12.0
Depreciation and amortization793 738 7.52,235 2,064 8.3
Operating expenses6,160 5,900 4.417,595 15,778 11.5
Operating means. Consolidated
Employees1
Branches2
Sep-22Sep-21ChangeSep-22Sep-21Change
Europe64,925 64,538 387 3,163 3,265 (102)
     Spain26,674 25,632 1,042 1,914 1,952 (38)
     United Kingdom20,818 21,454 (636)449 450 (1)
     Portugal4,953 5,716 (763)385 397 (12)
     Poland10,502 10,291 211 407 458 (51)
     Other1,978 1,445 533 8 8 — 
North America44,500 43,135 1,365 1,852 1,888 (36)
     US14,705 15,484 (779)484 514 (30)
     Mexico28,783 27,027 1,756 1,368 1,374 (6)
     Other1,012 624 388 — — — 
South America76,028 69,961 6,067 3,754 3,793 (39)
     Brazil53,699 47,877 5,822 2,903 2,941 (38)
     Chile9,798 10,570 (772)301 332 (31)
     Argentina8,452 8,715 (263)403 408 (5)
     Other4,079 2,799 1,280 147 112 35 
Digital Consumer Bank16,066 15,920 146 365 308 57 
Corporate Centre1,857 1,710 147 
Total Group203,376 195,264 8,112 9,134 9,254 (120)
(1) UK and Poland figures have been changed to headcount to align with the other units.
(2) Branch data for Brazil has been adjusted to the show number of physical branches rather than operating units.

Underlying net loan-loss provisions. Consolidated
EUR million
Q3'22Q2'22Change (%)9M'229M'21Change (%)
Non-performing loans3,093 2,988 3.58,490 6,901 23.0
Country-risk(1)— — — (1)(100.0)
Recovery of written-off assets(336)(354)(5.1)(999)(927)7.8
Net loan-loss provisions2,756 2,634 4.67,491 5,973 25.4

January - September 2022
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53






Group financial information
Loans and advances to customers. Consolidated
EUR million
Change
Sep-22Sep-21Absolute%Dec-21
Commercial bills55,936 42,316 13,620 32.249,603 
Secured loans576,932 525,118 51,814 9.9542,404 
Other term loans300,343 276,474 23,869 8.6269,526 
Finance leases38,998 38,083 915 2.438,503 
Receivable on demand12,128 9,549 2,579 27.010,304 
Credit cards receivable22,394 18,570 3,824 20.620,397 
Impaired assets33,727 31,629 2,098 6.631,645 
Gross loans and advances to customers (excl. reverse repos)1,040,458 941,739 98,719 10.5962,382 
Reverse repos51,093 40,358 10,735 26.633,264 
Gross loans and advances to customers1,091,551 982,097 109,454 11.1995,646 
Loan-loss allowances24,085 23,786 299 1.322,964 
Loans and advances to customers1,067,466 958,311 109,155 11.4972,682 


Total funds. Consolidated
EUR million
Change
Sep-22Sep-21Absolute%Dec-21
Demand deposits716,428 697,371 19,057 2.7717,728 
Time deposits226,737 167,035 59,702 35.7164,259 
Mutual funds185,855 184,782 1,073 0.6188,096 
Customer funds1,129,020 1,049,188 79,832 7.61,070,083 
Pension funds13,840 15,828 (1,988)(12.6)16,078 
Managed portfolios33,053 30,678 2,375 7.731,138 
Repos65,635 44,628 21,007 47.136,357 
Total funds1,241,548 1,140,322 101,226 8.91,153,656 


Eligible capital (phased-in) 1. Consolidated
EUR million
Change
Sep-22Sep-21Absolute%Dec-21
Capital stock and reserves117,231 115,063 2,169 1.9114,806 
Attributable profit7,316 5,849 1,468 25.18,124 
Dividends(1,463)(1,276)(188)14.7(1,731)
Other retained earnings(31,705)(34,968)3,262 (9.3)(34,395)
Minority interests7,289 6,658 631 9.56,736 
Goodwill and intangible assets(17,464)(15,781)(1,682)10.7(16,064)
Other deductions(5,705)(4,757)(948)19.9(5,076)
Core CET175,499 70,787 4,711 6.772,402 
Preferred shares and other eligible tier 19,015 10,110 (1,095)(10.8)10,050 
Tier 184,513 80,897 3,616 4.582,452 
Generic funds and eligible tier 2 instruments15,260 12,639 2,620 20.714,865 
Eligible capital99,773 93,537 6,236 6.797,317 
Risk-weighted assets616,738 577,209 39,530 6.8578,930 
CET1 capital ratio12.2412.26-0.0212.51
Tier 1 capital ratio13.7014.02-0.3114.24
Total capital ratio16.1816.20-0.0316.81
(1) The phased-in ratio includes the transitory treatment of IFRS 9, calculated in accordance with article 473 bis of the Regulation on Capital Requirements (CRR) and subsequent amendments introduced by Regulation 2020/873 of the European Union. Total phased-in capital ratios include the transitory treatment according to chapter 4, title 1, part 10 of the CRR2.
54
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Financial information by segment
EUROPE
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income3,179 6.6 7.3 8,998 14.5 13.7 
Net fee income1,125 (3.1)(3.0)3,441 6.3 6.1 
Gains (losses) on financial transactions 1
229 34.4 34.3 599 5.2 4.5 
Other operating income159 — — 235 (33.7)(33.6)
Total income4,692 9.7 10.2 13,273 10.4 9.8 
Administrative expenses and amortizations(2,132)1.4 1.7 (6,296)1.7 1.0 
Net operating income2,559 17.8 18.4 6,977 19.8 19.3 
Net loan-loss provisions(614)(2.8)(2.3)(1,760)(6.3)(6.0)
Other gains (losses) and provisions(562)64.2 64.9 (1,140)33.8 34.4 
Profit before tax1,384 15.4 16.0 4,076 31.7 30.3 
Tax on profit(372)12.4 13.1 (1,125)22.1 20.9 
Profit from continuing operations1,011 16.6 17.2 2,952 35.8 34.3 
Net profit from discontinued operations— — — — — — 
Consolidated profit1,011 16.6 17.2 2,952 35.8 34.3 
Non-controlling interests(13)(72.2)(70.4)(115)118.0 124.0 
Underlying profit attributable to the parent998 21.6 22.1 2,837 33.7 32.1 
Balance sheet
Loans and advances to customers608,463 (0.1)0.8 608,463 3.0 3.9 
Cash, central banks and credit institutions249,140 6.3 6.9 249,140 23.5 23.9 
Debt instruments67,937 2.7 3.4 67,937 (4.0)(2.8)
Other financial assets54,416 15.7 15.4 54,416 12.6 12.4 
Other asset accounts28,197 (3.1)(2.8)28,197 (7.3)(7.2)
Total assets1,008,153 2.3 3.0 1,008,153 7.0 7.8 
Customer deposits638,309 1.9 2.9 638,309 4.8 6.0 
Central banks and credit institutions179,222 3.0 3.2 179,222 20.1 18.9 
Marketable debt securities72,780 0.9 2.2 72,780 (3.6)(2.2)
Other financial liabilities62,826 8.1 8.1 62,826 23.1 23.0 
Other liabilities accounts11,419 2.4 3.2 11,419 1.9 3.1 
Total liabilities964,557 2.4 3.2 964,557 7.7 8.4 
Total equity43,596 (1.9)(1.2)43,596 (5.5)(4.8)
Memorandum items:
Gross loans and advances to customers 2
590,309 0.2 1.1 590,309 4.1 5.0 
Customer funds714,628 1.3 2.1 714,628 2.9 3.9 
Customer deposits 3
621,834 2.1 3.1 621,834 5.6 6.7 
 Mutual funds92,794 (4.0)(3.7)92,794 (12.1)(11.8)
Ratios (%), operating means and customers
Underlying RoTE9.87 2.02 9.15 2.07 
Efficiency ratio45.4 (3.7)47.4 (4.1)
NPL ratio2.58 (0.06)2.58 (0.57)
Total coverage ratio49.7 (0.5)49.7 (1.4)
Number of employees64,925 2.1 64,925 0.6 
Number of branches3,163 (0.5)3,163 (3.1)
Number of loyal customers (thousands)10,669 1.3 10,669 4.8 
Number of digital customers (thousands)17,218 2.4 17,218 8.3 
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
January - September 2022
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55






Financial information by segment
Spain
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%9M'22%
Net interest income1,119 10.0 3,134 (0.1)
Net fee income697 (4.6)2,172 5.6 
Gains (losses) on financial transactions 1
168 98.8 383 13.9 
Other operating income138 63.9 370 (2.7)
Total income2,121 10.7 6,058 2.5 
Administrative expenses and amortizations(997)2.7 (2,941)(2.4)
Net operating income1,124 19.0 3,118 7.6 
Net loan-loss provisions(421)1.4 (1,228)(27.2)
Other gains (losses) and provisions(110)(24.0)(392)(10.7)
Profit before tax593 54.2 1,497 94.0 
Tax on profit(141)44.6 (393)79.9 
Profit from continuing operations452 57.4 1,104 99.6 
Net profit from discontinued operations— — — — 
Consolidated profit452 57.4 1,104 99.6 
Non-controlling interests— — — — 
Underlying profit attributable to the parent452 57.3 1,104 99.5 
Balance sheet
Loans and advances to customers268,775 0.9 268,775 8.1 
Cash, central banks and credit institutions156,806 5.3 156,806 24.0 
Debt instruments34,889 10.2 34,889 3.4 
Other financial assets48,523 15.2 48,523 7.2 
Other asset accounts18,486 (0.3)18,486 (1.4)
Total assets527,478 3.9 527,478 11.6 
Customer deposits327,358 5.0 327,358 15.0 
Central banks and credit institutions94,144 1.3 94,144 5.9 
Marketable debt securities23,830 (6.7)23,830 (18.0)
Other financial liabilities55,131 7.4 55,131 20.3 
Other liabilities accounts6,692 12.0 6,692 42.1 
Total liabilities507,155 4.0 507,155 11.9 
Total equity20,324 1.5 20,324 3.5 
Memorandum items:
Gross loans and advances to customers 2
257,396 1.6 257,396 6.8 
Customer funds391,002 3.8 391,002 8.5 
    Customer deposits 3
319,476 5.5 319,476 13.2 
    Mutual funds71,526 (3.5)71,526 (8.5)
Ratios (%), operating means and customers
Underlying RoTE9.16 3.39 7.46 3.42 
Efficiency ratio47.0 (3.7)48.5 (2.4)
NPL ratio3.69 (0.15)3.69 (1.18)
Total coverage ratio49.3 (0.1)49.3 (0.2)
Number of employees26,674 1.5 26,674 4.1 
Number of branches1,914 (0.4)1,914 (1.9)
Number of loyal customers (thousands)2,967 3.0 2,967 7.8 
Number of digital customers (thousands)5,789 1.6 5,789 9.3 
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
56
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January - September 2022






Financial information by segment
United Kingdom
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income1,277 4.1 5.0 3,695 14.3 12.1 
Net fee income93 (15.3)(14.3)295 (16.1)(17.7)
Gains (losses) on financial transactions 1
27 319.1 319.8 39 — — 
Other operating income1 — — 1 (53.2)(54.1)
Total income1,397 4.1 5.0 4,031 12.3 10.1 
Administrative expenses and amortizations(660)(2.5)(1.6)(2,008)3.7 1.7 
Net operating income738 10.8 11.8 2,023 22.5 20.1 
Net loan-loss provisions(109)47.4 48.4 (234)— — 
Other gains (losses) and provisions(88)(11.0)(10.0)(253)91.6 87.9 
Profit before tax540 9.7 10.7 1,535 (3.2)(5.1)
Tax on profit(138)4.8 5.8 (397)(14.9)(16.6)
Profit from continuing operations402 11.5 12.5 1,138 1.6 (0.3)
Net profit from discontinued operations— — — — — — 
Consolidated profit402 11.5 12.5 1,138 1.6 (0.3)
Non-controlling interests— — — — — — 
Underlying profit attributable to the parent402 11.5 12.5 1,138 1.6 (0.3)
Balance sheet
Loans and advances to customers256,914 (1.0)1.1 256,914 (1.9)0.4 
Cash, central banks and credit institutions68,554 5.0 7.2 68,554 13.7 16.3 
Debt instruments6,344 2.7 4.9 6,344 (21.0)(19.2)
Other financial assets873 51.9 55.2 873 61.3 65.1 
Other asset accounts4,208 (20.1)(18.4)4,208 (31.7)(30.1)
Total assets336,893 — 2.1 336,893 — 2.3 
Customer deposits225,842 (1.4)0.7 225,842 (6.9)(4.8)
Central banks and credit institutions48,477 5.4 7.7 48,477 57.8 61.5 
Marketable debt securities44,591 3.4 5.6 44,591 6.6 9.1 
Other financial liabilities3,225 7.1 9.3 3,225 11.4 14.0 
Other liabilities accounts1,532 (19.9)(18.1)1,532 (52.3)(51.2)
Total liabilities323,667 0.2 2.3 323,667 0.7 3.1 
Total equity13,226 (4.3)(2.2)13,226 (15.0)(13.0)
Memorandum items:
Gross loans and advances to customers 2
248,403 (1.0)1.1 248,403 1.9 4.3 
Customer funds224,440 (1.8)0.3 224,440 (4.1)(1.9)
    Customer deposits 3
217,519 (1.6)0.5 217,519 (3.5)(1.2)
    Mutual funds6,921 (8.4)(6.5)6,921 (19.8)(17.9)
Ratios (%), operating means and customers
Underlying RoTE12.47 1.81 11.31 0.02 
Efficiency ratio47.2 (3.2)49.8 (4.2)
NPL ratio1.16 (0.01)1.16 (0.11)
Total coverage ratio32.4 (0.5)32.4 (4.1)
Number of employees20,818 2.5 20,818 (3.0)
Number of branches449 (0.2)449 (0.2)
Number of loyal customers (thousands)4,464 — 4,464 2.0 
Number of digital customers (thousands)6,956 2.8 6,956 6.5 
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
January - September 2022
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57






Financial information by segment
Portugal
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%9M'22%
Net interest income175 2.7 516 (5.8)
Net fee income121 (1.2)366 12.7 
Gains (losses) on financial transactions 1
10 (28.0)54 (64.3)
Other operating income13 — (3)(10.9)
Total income320 13.9 933 (8.6)
Administrative expenses and amortizations(125)0.2 (376)(12.4)
Net operating income194 25.0 557 (5.8)
Net loan-loss provisions2 — (9)(90.2)
Other gains (losses) and provisions1 — (24)(9.0)
Profit before tax196 74.7 524 11.3 
Tax on profit(61)74.9 (162)11.0 
Profit from continuing operations136 74.6 361 11.4 
Net profit from discontinued operations— — — — 
Consolidated profit136 74.6 361 11.4 
Non-controlling interests— 29.3 (1)44.0 
Underlying profit attributable to the parent135 74.8 360 11.4 
Balance sheet
Loans and advances to customers39,637 0.2 39,637 1.2 
Cash, central banks and credit institutions11,188 (4.6)11,188 21.9 
Debt instruments7,779 (2.6)7,779 (11.1)
Other financial assets1,328 (4.5)1,328 (15.2)
Other asset accounts1,542 9.7 1,542 16.0 
Total assets61,473 (1.0)61,473 2.5 
Customer deposits42,944 (1.9)42,944 2.7 
Central banks and credit institutions10,344 1.7 10,344 8.9 
Marketable debt securities3,335 23.6 3,335 25.8 
Other financial liabilities444 55.9 444 103.8 
Other liabilities accounts1,234 (7.0)1,234 (26.1)
Total liabilities58,302 0.1 58,302 4.4 
Total equity3,172 (17.0)3,172 (23.3)
Memorandum items:
Gross loans and advances to customers 2
40,566 — 40,566 0.9 
Customer funds46,638 (1.9)46,638 1.4 
    Customer deposits 3
42,944 (1.9)42,944 2.7 
    Mutual funds3,693 (2.3)3,693 (11.3)
Ratios (%), operating means and customers
Underlying RoTE16.24 7.93 13.20 2.48 
Efficiency ratio39.3 (5.4)40.3 (1.7)
NPL ratio3.03 (0.30)3.03 (0.41)
Total coverage ratio76.3 2.0 76.3 0.8 
Number of employees4,953 (0.5)4,953 (13.3)
Number of branches385 (0.3)385 (3.0)
Number of loyal customers (thousands)908 2.8 908 7.4 
Number of digital customers (thousands)1,073 5.3 1,073 9.4 
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
58
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January - September 2022






Financial information by segment
Poland
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income530 9.0 11.0 1,424 98.2 103.6 
Net fee income135 3.9 6.0 403 4.5 7.3 
Gains (losses) on financial transactions 1
25 (43.3)(41.8)82 29.9 33.5 
Other operating income(1)(98.8)(97.5)(130)— — 
Total income690 19.0 21.1 1,780 53.8 58.0 
Administrative expenses and amortizations(171)(1.4)0.6 (510)5.5 8.4 
Net operating income519 27.7 29.8 1,270 88.5 93.6 
Net loan-loss provisions(88)(36.5)(35.0)(290)80.3 85.2 
Other gains (losses) and provisions(363)503.6 508.2 (469)84.6 89.7 
Profit before tax68 (67.2)(65.4)512 97.4 102.8 
Tax on profit(36)(46.1)(44.2)(170)74.5 79.3 
Profit from continuing operations33 (76.9)(75.1)342 111.2 117.0 
Net profit from discontinued operations— — — — — — 
Consolidated profit33 (76.9)(75.1)342 111.2 117.0 
Non-controlling interests(11)(76.9)(75.1)(113)114.9 120.8 
Underlying profit attributable to the parent22 (77.0)(75.2)229 109.4 115.1 
Balance sheet
Loans and advances to customers29,287 (3.2)(0.2)29,287 1.3 6.6 
Cash, central banks and credit institutions8,179 116.4 122.9 8,179 368.4 393.2 
Debt instruments11,460 (11.9)(9.3)11,460 (21.5)(17.3)
Other financial assets955 13.5 16.9 955 15.9 22.1 
Other asset accounts1,751 2.1 5.2 1,751 37.1 44.4 
Total assets51,632 4.1 7.3 51,632 9.0 14.8 
Customer deposits36,552 — 3.0 36,552 0.8 6.2 
Central banks and credit institutions6,511 40.2 44.4 6,511 221.8 238.9 
Marketable debt securities1,025 31.1 35.1 1,025 (47.3)(44.5)
Other financial liabilities1,268 9.3 12.6 1,268 43.3 50.9 
Other liabilities accounts1,526 (5.1)(2.3)1,526 26.2 32.9 
Total liabilities46,882 4.8 7.9 46,882 10.8 16.7 
Total equity4,750 (1.8)1.1 4,750 (6.1)(1.1)
Memorandum items:
Gross loans and advances to customers 2
30,076 (2.9)— 30,076 0.4 5.7 
Customer funds39,513 (0.4)2.6 39,513 (3.7)1.4 
    Customer deposits 3
36,552 — 3.0 36,552 0.8 6.2 
    Mutual funds2,961 (5.3)(2.5)2,961 (38.3)(35.0)
Ratios (%), operating means and customers
Underlying RoTE3.08 (9.31)10.12 5.64 
Efficiency ratio24.8 (5.1)28.6 (13.1)
NPL ratio3.63 0.18 3.63 (0.71)
Total coverage ratio74.8 (1.2)74.8 0.3 
Number of employees10,502 0.3 10,502 2.1 
Number of branches407 (1.5)407 (11.1)
Number of loyal customers (thousands)2,329 0.9 2,329 5.6 
Number of digital customers (thousands)3,235 2.0 3,235 10.9 
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
January - September 2022
image6.jpg
59






Financial information by segment
Other Europe
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income77 (3.1)(6.3)229 3.5 (1.7)
Net fee income79 14.7 12.0 205 73.3 58.9 
Gains (losses) on financial transactions 1
(1)— — 41 140.0 84.0 
Other operating income8 — — (4)(75.7)(77.3)
Total income164 3.7 0.6 471 37.8 27.9 
Administrative expenses and amortizations(179)13.8 11.7 (462)39.2 32.2 
Net operating income(15)— — 10 (8.3)(50.8)
Net loan-loss provisions3 — — 1 — — 
Other gains (losses) and provisions(2)— — (3)125.9 123.9 
Profit before tax(15)— — 8 16.3 (48.2)
Tax on profit3 — — (3)— — 
Profit from continuing operations(11)— — 6 (59.4)(72.2)
Net profit from discontinued operations— — — — — — 
Consolidated profit(11)— — 6 (59.4)(72.2)
Non-controlling interests(1)— — (1)— — 
Underlying profit attributable to the parent(13)— — 5 (64.2)(75.4)
Balance sheet
Loans and advances to customers13,850 2.2 (3.7)13,850 12.9 (3.7)
Cash, central banks and credit institutions4,413 (4.9)(9.7)4,413 6.8 (9.1)
Debt instruments7,464 2.1 1.4 7,464 32.0 31.2 
Other financial assets2,738 28.8 21.7 2,738 — 831.0 
Other asset accounts2,211 2.5 (0.6)2,211 (23.3)(27.9)
Total assets30,676 3.0 (1.4)30,676 22.3 8.5 
Customer deposits5,614 14.2 8.0 5,614 59.7 38.0 
Central banks and credit institutions19,746 (2.5)(6.2)19,746 8.8 (3.1)
Marketable debt securities— (83.6)(84.4)— (80.9)(83.7)
Other financial liabilities2,757 18.7 12.7 2,757 124.0 97.6 
Other liabilities accounts435 32.0 31.0 435 6.7 5.9 
Total liabilities28,552 2.7 (1.7)28,552 22.5 8.8 
Total equity2,124 7.9 2.2 2,124 20.2 4.7 
Memorandum items:
Gross loans and advances to customers 2
13,868 2.2 (3.7)13,868 12.9 (3.6)
Customer funds13,036 1.8 (0.4)13,036 (1.2)(5.2)
 Customer deposits 3
5,343 12.7 6.4 5,343 59.9 37.3 
    Mutual funds7,693 (4.6)(4.6)7,693 (21.9)(21.9)
Resources
Number of employees1,978 28.3 1,978 36.9 
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
60
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January - September 2022






Financial information by segment
NORTH AMERICA
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income2,619 11.4 5.8 7,102 18.7 5.6 
Net fee income513 3.8 (1.4)1,450 16.3 3.8 
Gains (losses) on financial transactions 1
4 (90.0)(98.7)124 (37.9)(44.7)
Other operating income104 3.4 (2.6)344 (53.1)(58.4)
Total income3,240 8.5 3.0 9,021 10.5 (1.7)
Administrative expenses and amortizations(1,546)8.0 2.6 (4,239)17.2 4.5 
Net operating income1,694 9.0 3.4 4,782 5.1 (6.7)
Net loan-loss provisions(703)34.3 28.8 (1,666)52.2 35.6 
Other gains (losses) and provisions(46)135.7 138.1 (111)123.6 104.0 
Profit before tax945 (6.5)(12.3)3,005 (11.7)(21.7)
Tax on profit(239)4.4 (1.2)(703)(9.7)(19.8)
Profit from continuing operations706 (9.7)(15.6)2,302 (12.3)(22.3)
Net profit from discontinued operations— — — — — — 
Consolidated profit706 (9.7)(15.6)2,302 (12.3)(22.3)
Non-controlling interests(13)26.9 21.5 (31)(92.4)(93.2)
Underlying profit attributable to the parent693 (10.2)(16.0)2,271 2.4 (9.3)
Balance sheet
Loans and advances to customers183,998 12.4 5.4 183,998 43.4 20.6 
Cash, central banks and credit institutions40,202 14.3 7.2 40,202 7.9 (9.2)
Debt instruments44,815 (0.7)(7.0)44,815 19.9 0.1 
Other financial assets16,958 21.6 13.9 16,958 55.3 29.4 
Other asset accounts25,120 5.2 (1.2)25,120 19.4 0.8 
Total assets311,094 10.4 3.5 311,094 32.4 11.2 
Customer deposits168,473 9.1 2.3 168,473 37.1 15.2 
Central banks and credit institutions36,613 18.0 10.5 36,613 44.1 20.4 
Marketable debt securities46,286 13.7 6.7 46,286 15.6 (2.5)
Other financial liabilities24,563 18.0 10.5 24,563 85.4 54.3 
Other liabilities accounts7,416 9.6 2.8 7,416 22.4 2.8 
Total liabilities283,352 11.7 4.7 283,352 36.5 14.6 
Total equity27,742 (1.3)(7.4)27,742 1.7 (14.2)
Memorandum items:
Gross loans and advances to customers 2
164,773 8.7 1.9 164,773 29.6 9.0 
Customer funds163,570 8.3 1.5 163,570 22.1 2.5 
 Customer deposits 3
133,613 8.1 1.4 133,613 23.1 3.4 
    Mutual funds29,958 8.9 2.0 29,958 17.7 (1.5)
Ratios (%), operating means and customers
Underlying RoTE10.33 (1.46)11.54 (1.46)
Efficiency ratio47.7 (0.2)47.0 2.7 
NPL ratio2.79 0.08 2.79 0.23 
Total coverage ratio102.7 (8.7)102.7 (36.6)
Number of employees44,500 1.6 44,500 3.2 
Number of branches1,852 (0.4)1,852 (1.9)
Number of loyal customers (thousands)4,558 1.8 4,558 8.8 
Number of digital customers (thousands)7,014 0.8 7,014 7.6 
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
January - September 2022
image6.jpg
61






Financial information by segment
United States
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income1,669 11.3 5.4 4,546 15.3 2.4 
Net fee income194 (2.0)(7.9)588 (3.0)(13.9)
Gains (losses) on financial transactions 1
10 (68.5)(76.9)108 (12.6)(22.4)
Other operating income129 2.1 (3.8)425 (49.1)(54.8)
Total income2,001 8.0 2.1 5,667 2.9 (8.6)
Administrative expenses and amortizations(953)7.9 2.0 (2,635)12.3 (0.3)
Net operating income1,048 8.0 2.1 3,032 (4.0)(14.8)
Net loan-loss provisions(513)51.8 45.6 (1,107)145.9 118.3 
Other gains (losses) and provisions(5)— — (17)199.7 166.0 
Profit before tax530 (17.2)(23.1)1,908 (29.4)(37.4)
Tax on profit(131)(1.7)(7.6)(419)(31.5)(39.2)
Profit from continuing operations399 (21.2)(27.2)1,489 (28.9)(36.8)
Net profit from discontinued operations— — — — — — 
Consolidated profit399 (21.2)(27.2)1,489 (28.9)(36.8)
Non-controlling interests— — — — (100.0)(100.0)
Underlying profit attributable to the parent399 (21.2)(27.2)1,489 (14.0)(23.7)
Balance sheet
Loans and advances to customers140,391 12.6 5.7 140,391 46.3 23.8 
Cash, central banks and credit institutions18,451 (13.7)(18.9)18,451 (32.5)(42.9)
Debt instruments22,984 3.2 (3.1)22,984 43.4 21.4 
Other financial assets6,392 9.1 2.5 6,392 58.2 33.9 
Other asset accounts20,100 3.3 (3.0)20,100 15.1 (2.6)
Total assets208,318 7.6 1.0 208,318 29.6 9.6 
Customer deposits125,416 10.7 4.0 125,416 43.6 21.5 
Central banks and credit institutions11,604 (21.0)(25.8)11,604 (1.1)(16.3)
Marketable debt securities36,768 13.2 6.3 36,768 8.7 (8.1)
Other financial liabilities10,293 19.4 12.1 10,293 153.6 114.6 
Other liabilities accounts4,834 8.6 2.0 4,834 22.8 3.9 
Total liabilities188,915 8.9 2.3 188,915 34.1 13.5 
Total equity19,403 (3.7)(9.5)19,403 (2.6)(17.6)
Memorandum items:
Gross loans and advances to customers 2
121,218 8.62.0121,218 27.27.6
Customer funds111,301 9.63.0111,301 22.53.7
    Customer deposits 3
96,752 9.93.296,752 25.46.1
    Mutual funds14,549 7.71.214,549 6.2(10.1)
Ratios (%), operating means and customers
Underlying RoTE7.82 (2.67)10.31 (3.57)
Efficiency ratio47.6 — 46.5 3.9 
NPL ratio2.92 0.29 2.92 0.56 
Total coverage ratio102.8 (18.3)102.8 (58.7)
Number of employees14,705 (1.6)14,705 (5.0)
Number of branches484 (0.4)484 (5.8)
Number of loyal customers (thousands)345 (5.3)345 (5.5)
Number of digital customers (thousands)1,034 0.3 1,034 0.2 
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
62
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Financial information by segment
Mexico
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income950 11.4 6.4 2,556 25.1 11.8 
Net fee income303 6.8 1.8 831 34.7 20.3 
Gains (losses) on financial transactions 1
(6)— — 16 (79.5)(81.7)
Other operating income(31)2.4 (2.5)(91)(3.1)(13.4)
Total income1,216 9.1 4.1 3,312 25.3 12.0 
Administrative expenses and amortizations(537)8.0 3.0 (1,467)24.7 11.4 
Net operating income679 10.0 5.0 1,845 25.9 12.5 
Net loan-loss provisions(188)2.3 (2.6)(555)(13.8)(23.0)
Other gains (losses) and provisions(38)46.1 41.7 (91)612.4 536.5 
Profit before tax452 11.1 6.1 1,198 48.2 32.5 
Tax on profit(111)12.6 7.5 (293)68.8 50.8 
Profit from continuing operations340 10.6 5.6 906 42.6 27.4 
Net profit from discontinued operations— — — — — — 
Consolidated profit340 10.6 5.6 906 42.6 27.4 
Non-controlling interests(12)15.2 10.1 (32)(32.4)(39.6)
Underlying profit attributable to the parent328 10.5 5.5 874 48.6 32.8 
Balance sheet
Loans and advances to customers43,550 11.6 4.3 43,550 34.5 11.1 
Cash, central banks and credit institutions21,429 58.7 48.2 21,429 121.3 82.8 
Debt instruments21,831 (4.5)(10.8)21,831 2.3 (15.5)
Other financial assets10,350 30.8 22.1 10,350 50.4 24.3 
Other asset accounts4,769 14.1 6.6 4,769 44.5 19.4 
Total assets101,928 16.5 8.8 101,928 38.5 14.4 
Customer deposits42,829 4.4 (2.5)42,829 20.4 (0.6)
Central banks and credit institutions24,883 53.5 43.3 24,883 82.4 50.7 
Marketable debt securities9,518 15.8 8.1 9,518 53.8 27.1 
Other financial liabilities14,066 17.0 9.2 14,066 53.8 27.0 
Other liabilities accounts2,521 11.5 4.1 2,521 21.4 0.3 
Total liabilities93,817 17.7 9.9 93,817 40.8 16.3 
Total equity8,111 4.9 (2.0)8,111 16.8 (3.5)
Memorandum items:
Gross loans and advances to customers 2
43,492 8.9 1.7 43,492 36.9 13.0 
Customer funds52,040 5.4 (1.6)52,040 20.7 (0.4)
    Customer deposits 3
36,632 3.5 (3.4)36,632 16.7 (3.6)
    Mutual funds15,408 10.1 2.8 15,408 31.1 8.3 
Ratios (%), operating means and customers
Underlying RoTE18.17 1.34 16.59 3.33 
Efficiency ratio44.2 (0.4)44.3 (0.2)
NPL ratio2.34 (0.61)2.34 (0.79)
Total coverage ratio102.7 18.6 102.7 12.6 
Number of employees28,783 1.9 28,783 6.5 
Number of branches1,368 (0.4)1,368 (0.4)
Number of loyal customers (thousands)4,214 2.5 4,214 10.2 
Number of digital customers (thousands)5,813 0.9 5,813 9.5 
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
January - September 2022
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63






Financial information by segment
Other North America
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income— (25.8)(25.8)— (97.2)(97.2)
Net fee income17 27.9 27.9 31 29.8 29.8 
Gains (losses) on financial transactions 1
— (97.0)(97.0)1 — — 
Other operating income6 30.9 30.9 11 — — 
Total income23 31.9 31.9 42 137.4 137.4 
Administrative expenses and amortizations(56)8.7 8.6 (137)45.1 45.1 
Net operating income(33)(3.1)(3.2)(95)23.7 23.7 
Net loan-loss provisions(2)21.9 21.9 (3)— — 
Other gains (losses) and provisions(2)400.4 383.1 (3)(90.5)(91.2)
Profit before tax(37)3.4 3.2 (101)(6.3)(8.4)
Tax on profit3 7.3 6.6 8 49.6 49.6 
Profit from continuing operations(34)3.0 2.9 (93)(9.3)(11.5)
Net profit from discontinued operations— — — — — — 
Consolidated profit(34)3.0 2.9 (93)(9.3)(11.5)
Non-controlling interests— — — 1 84.7 84.7 
Underlying profit attributable to the parent(34)6.4 6.2 (92)(9.5)(11.7)
Balance sheet
Loans and advances to customers57 37.1 37.1 57 208.0 208.0 
Cash, central banks and credit institutions323 4.9 4.9 323 34.5 34.5 
Debt instruments— (35.9)(35.9)— — — 
Other financial assets216 26.2 26.2 216 — — 
Other asset accounts252 3.4 3.4 252 (10.9)(10.9)
Total assets848 11.0 11.0 848 56.5 56.5 
Customer deposits229 24.6 24.6 229 — — 
Central banks and credit institutions126 (3.2)(3.2)126 247.8 216.1 
Marketable debt securities— — — — — — 
Other financial liabilities205 22.7 22.7 205 344.0 344.0 
Other liabilities accounts60 17.4 17.4 60 36.8 36.8 
Total liabilities620 16.5 16.5 620 356.5 344.6 
Total equity228 (1.7)(1.7)228 (43.8)(43.3)
Memorandum items:
Gross loans and advances to customers 2
62 37.2 37.2 62 235.5 235.5 
Customer funds229 24.6 24.6 229 — — 
    Customer deposits 3
229 24.6 24.6 229 — — 
    Mutual funds— — — — — — 
Resources
Number of employees1,012 68.7 1,012 62.2 
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
64
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Financial information by segment
SOUTH AMERICA
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income3,411 0.6 4.5 9,838 19.4 8.4 
Net fee income1,174 1.0 4.5 3,350 22.9 10.9 
Gains (losses) on financial transactions 1
387 1.7 4.9 992 68.4 59.0 
Other operating income(292)49.8 72.1 (567)112.2 133.6 
Total income4,680 (1.2)1.8 13,613 20.6 9.1 
Administrative expenses and amortizations(1,782)6.8 11.5 (4,935)26.0 17.3 
Net operating income2,898 (5.6)(3.5)8,677 17.7 4.9 
Net loan-loss provisions(1,300)(2.6)(2.0)(3,633)52.4 34.5 
Other gains (losses) and provisions(107)(17.6)(4.0)(389)24.5 18.1 
Profit before tax1,491 (7.1)(4.7)4,656 (0.5)(11.1)
Tax on profit(409)5.1 8.4 (1,306)(27.6)(36.9)
Profit from continuing operations1,082 (11.0)(8.7)3,350 16.5 5.7 
Net profit from discontinued operations— — — — — — 
Consolidated profit1,082 (11.0)(8.7)3,349 16.5 5.7 
Non-controlling interests(144)(15.0)(13.3)(466)12.8 5.9 
Underlying profit attributable to the parent938 (10.3)(8.0)2,884 17.1 5.6 
Balance sheet
Loans and advances to customers150,809 7.1 4.1 150,809 24.5 11.8 
Cash, central banks and credit institutions56,336 10.3 7.6 56,336 19.8 7.2 
Debt instruments59,346 (0.1)(2.6)59,346 14.7 0.9 
Other financial assets27,029 12.4 8.1 27,029 65.6 54.1 
Other asset accounts19,670 4.9 2.1 19,670 24.7 10.6 
Total assets313,190 6.5 3.5 313,190 24.3 11.2 
Customer deposits144,173 7.0 4.5 144,173 18.7 6.6 
Central banks and credit institutions47,483 (0.1)(3.1)47,483 3.5 (7.7)
Marketable debt securities34,740 7.0 3.3 34,740 52.3 35.8 
Other financial liabilities49,998 9.9 6.2 49,998 47.6 31.5 
Other liabilities accounts11,947 10.4 7.0 11,947 48.1 32.2 
Total liabilities288,342 6.4 3.4 288,342 24.2 11.2 
Total equity24,849 8.0 5.3 24,849 25.0 11.7 
Memorandum items:
Gross loans and advances to customers 2
158,670 7.2 4.2 158,670 25.6 12.7 
Customer funds190,756 5.1 2.6 190,756 17.3 5.0 
    Customer deposits 3
129,873 4.7 2.3 129,873 16.9 5.7 
    Mutual funds60,883 6.1 3.2 60,883 18.2 3.6 
Ratios (%), operating means and customers
Underlying RoTE18.75 (2.68)20.04 (0.03)
Efficiency ratio38.1 2.9 36.3 1.6 
NPL ratio5.54 0.16 5.54 1.16 
Total coverage ratio84.7 (2.2)84.7 (14.0)
Number of employees76,028 0.6 76,028 8.7 
Number of branches3,754 (0.8)3,754 (1.0)
Number of loyal customers (thousands)11,268 1.1 11,268 11.9 
Number of digital customers (thousands)25,357 0.3 25,357 7.7 
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
January - September 2022
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65






Financial information by segment
Brazil
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income2,251 (1.2)(0.4)6,672 15.5 (1.3)
Net fee income812 (5.3)(5.0)2,412 19.0 1.7 
Gains (losses) on financial transactions 1
215 (12.1)(13.8)551 68.2 43.7 
Other operating income— (98.9)(93.3)36 — — 
Total income3,278 (2.8)(2.3)9,671 19.7 2.3 
Administrative expenses and amortizations(1,058)3.6 4.4 (3,009)27.2 8.7 
Net operating income2,220 (5.6)(5.2)6,661 16.6 (0.4)
Net loan-loss provisions(1,150)(1.1)(1.2)(3,165)59.9 36.6 
Other gains (losses) and provisions(23)(46.9)(45.1)(180)(15.8)(28.1)
Profit before tax1,047 (8.7)(8.0)3,316 (5.8)(19.5)
Tax on profit(308)(5.9)(3.8)(1,059)(32.2)(42.1)
Profit from continuing operations738 (9.8)(9.7)2,257 15.2 (1.5)
Net profit from discontinued operations— — — — — — 
Consolidated profit738 (9.8)(9.7)2,257 15.2 (1.6)
Non-controlling interests(76)(6.2)(5.8)(230)14.5 (2.2)
Underlying profit attributable to the parent662 (10.2)(10.1)2,027 15.3 (1.5)
Balance sheet
Loans and advances to customers91,788 7.2 3.5 91,788 29.8 8.9 
Cash, central banks and credit institutions42,464 12.6 8.8 42,464 42.0 19.1 
Debt instruments39,873 (3.3)(6.6)39,873 4.8 (12.0)
Other financial assets7,906 (5.2)(8.5)7,906 28.0 7.4 
Other asset accounts14,150 5.7 2.1 14,150 27.7 7.1 
Total assets196,182 5.3 1.7 196,182 25.8 5.5 
Customer deposits94,045 8.6 4.9 94,045 27.5 7.0 
Central banks and credit institutions26,145 (5.5)(8.7)26,145 (5.9)(21.0)
Marketable debt securities24,211 8.3 4.6 24,211 71.0 43.4 
Other financial liabilities29,301 3.7 0.2 29,301 31.4 10.2 
Other liabilities accounts6,203 2.0 (1.5)6,203 21.0 1.5 
Total liabilities179,904 5.3 1.7 179,904 25.7 5.5 
Total equity16,277 5.9 2.3 16,277 27.0 6.6 
Memorandum items:
Gross loans and advances to customers 2
98,009 7.4 3.7 98,009 31.7 10.5 
Customer funds126,439 3.8 0.3 126,439 21.9 2.2 
    Customer deposits (3)
79,909 4.2 0.6 79,909 26.0 5.7 
    Mutual funds46,530 3.1 (0.4)46,530 15.3 (3.2)
Ratios (%), operating means and customers
Underlying RoTE19.10 (2.83)20.65 (0.94)
Efficiency ratio32.3 2.0 31.1 1.8 
NPL ratio6.63 0.29 6.63 1.91 
Total coverage ratio89.2 (3.1)89.2 (22.6)
Number of employees53,699 (0.1)53,699 12.2 
Number of branches2,903 (1.1)2,903 (1.3)
Number of loyal customers (thousands)8,592 0.7 8,592 14.4 
Number of digital customers (thousands)19,910 0.3 19,910 9.1 
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
66
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Financial information by segment
Chile
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income402 (27.5)(24.6)1,440 (2.4)0.9 
Net fee income120 9.1 12.7 341 15.9 19.9 
Gains (losses) on financial transactions 1
64 30.0 34.3 179 62.9 68.4 
Other operating income(9)34.5 39.2 (26)(43.3)(41.4)
Total income577 (18.4)(15.3)1,934 5.5 9.1 
Administrative expenses and amortizations(248)(2.7)0.6 (737)3.9 7.4 
Net operating income329 (27.2)(24.2)1,197 6.5 10.1 
Net loan-loss provisions(85)(22.8)(19.9)(290)9.3 13.0 
Other gains (losses) and provisions— (99.4)(98.5)(17)766.5 795.8 
Profit before tax244 (24.6)(21.5)889 3.9 7.4 
Tax on profit(17)(45.7)(41.9)(103)(43.9)(42.0)
Profit from continuing operations227 (22.3)(19.3)787 16.9 20.8 
Net profit from discontinued operations— — — — — — 
Consolidated profit227 (22.3)(19.3)787 16.9 20.8 
Non-controlling interests(67)(24.2)(21.2)(235)11.6 15.4 
Underlying profit attributable to the parent160 (21.5)(18.5)551 19.3 23.3 
Balance sheet
Loans and advances to customers42,193 7.5 3.1 42,193 11.5 11.3 
Cash, central banks and credit institutions7,976 9.1 4.6 7,976 (16.7)(16.8)
Debt instruments11,397 5.3 0.9 11,397 17.7 17.5 
Other financial assets18,781 21.6 16.6 18,781 89.7 89.4 
Other asset accounts3,478 2.3 (1.9)3,478 15.5 15.3 
Total assets83,825 10.0 5.5 83,825 19.7 19.5 
Customer deposits29,493 5.3 1.0 29,493 (6.4)(6.6)
Central banks and credit institutions15,327 6.2 1.9 15,327 18.8 18.6 
Marketable debt securities9,842 4.2 (0.1)9,842 18.3 18.0 
Other financial liabilities19,408 21.4 16.4 19,408 81.7 81.3 
Other liabilities accounts4,706 21.8 16.8 4,706 111.1 110.7 
Total liabilities78,776 9.8 5.3 78,776 20.0 19.8 
Total equity5,049 12.4 7.8 5,049 15.6 15.4 
Memorandum items:
Gross loans and advances to customers 2
43,413 7.5 3.1 43,413 11.5 11.3 
Customer funds38,416 9.8 5.3 38,416 (4.4)(4.5)
    Customer deposits 3
29,381 7.7 3.2 29,381 (6.7)(6.8)
    Mutual funds9,035 17.4 12.6 9,035 4.0 3.8 
Ratios (%), operating means and customers
Underlying RoTE19.30 (4.64)21.56 3.12 
Efficiency ratio43.0 6.9 38.1 (0.6)
NPL ratio4.63 (0.07)4.63 0.27 
Total coverage ratio60.3 (0.1)60.3 (3.8)
Number of employees9,798 (1.2)9,798 (7.3)
Number of branches301 (1.6)301 (9.3)
Number of loyal customers (thousands)847 3.9 847 5.0 
Number of digital customers (thousands)1,994 1.6 1,994 3.1 
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
January - September 2022
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67






Financial information by segment
Argentina
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income616 42.5 68.5 1,347 91.4 141.6 
Net fee income182 26.9 52.1 445 63.8 106.8 
Gains (losses) on financial transactions (1)
79 25.3 50.5 193 78.9 125.9 
Other operating income(284)57.7 84.6 (573)260.4 354.9 
Total income592 29.3 54.6 1,413 52.8 92.9 
Administrative expenses and amortizations(333)27.8 53.1 (809)46.2 84.6 
Net operating income259 31.3 56.6 604 62.6 105.3 
Net loan-loss provisions(34)3.7 28.7 (106)20.0 51.5 
Other gains (losses) and provisions(81)20.3 44.6 (186)97.9 149.8 
Profit before tax144 48.2 74.5 312 65.0 108.2 
Tax on profit(56)402.7 445.5 (78)671.5 873.9 
Profit from continuing operations88 2.5 26.0 234 30.8 65.1 
Net profit from discontinued operations— — — — — — 
Consolidated profit88 2.5 26.0 234 30.8 65.1 
Non-controlling interests— (5.4)19.0 (1)(50.7)(37.8)
Underlying profit attributable to the parent88 2.6 26.0 234 31.4 65.8 
Balance sheet
Loans and advances to customers6,317 3.6 14.5 6,317 35.8 71.4 
Cash, central banks and credit institutions3,024 (16.3)(7.6)3,024 (26.3)(6.9)
Debt instruments5,355 18.7 31.2 5,355 123.7 182.4 
Other financial assets60 71.0 88.9 60 (25.0)(5.3)
Other asset accounts1,136 6.9 18.1 1,136 31.3 65.8 
Total assets15,891 3.7 14.6 15,891 31.4 65.9 
Customer deposits11,202 (0.7)9.7 11,202 26.4 59.6 
Central banks and credit institutions995 38.5 53.0 995 18.9 50.1 
Marketable debt securities164 5.3 16.4 164 161.4 229.9 
Other financial liabilities922 (3.6)6.5 922 21.0 52.8 
Other liabilities accounts495 23.9 36.9 495 39.0 75.4 
Total liabilities13,779 2.0 12.7 13,779 26.7 59.9 
Total equity2,112 16.7 28.9 2,112 74.0 119.7 
Memorandum items:
Gross loans and advances to customers 2
6,539 3.2 14.0 6,539 32.7 67.5 
Customer funds15,456 4.3 15.2 15,456 37.0 72.9 
    Customer deposits 3
11,202 (0.7)9.7 11,202 26.4 59.6 
    Mutual funds4,253 20.1 32.6 4,253 75.4 121.4 
Ratios (%), operating means and customers
Underlying RoTE23.28 0.15 21.82 (3.20)
Efficiency ratio56.2 (0.7)57.3 (2.6)
NPL ratio2.13 (0.34)2.13 (1.72)
Total coverage ratio179.0 7.9 179.0 29.7 
Number of employees8,452 (0.7)8,452 (3.0)
Number of branches403 (1.0)403 (1.2)
Number of loyal customers (thousands)1,659 1.7 1,659 3.4 
Number of digital customers (thousands)2,837 (0.5)2,837 4.6 
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
68
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Financial information by segment
Other South America
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income142 13.7 10.7 378 31.6 15.1 
Net fee income62 18.0 15.9 152 14.4 2.4 
Gains (losses) on financial transactions 1
28 24.1 23.4 69 58.3 41.7 
Other operating income1 — — (5)(58.7)(62.6)
Total income233 17.0 14.6 594 31.4 15.9 
Administrative expenses and amortizations(144)8.6 7.2 (379)32.4 21.3 
Net operating income89 33.7 29.3 215 29.7 7.3 
Net loan-loss provisions(30)7.3 3.2 (71)41.8 25.2 
Other gains (losses) and provisions(3)137.7 135.1 (6)117.7 95.1 
Profit before tax56 49.6 45.7 138 22.3 (1.7)
Tax on profit(28)43.8 41.5 (67)36.0 18.5 
Profit from continuing operations28 55.9 50.5 71 11.7 (15.3)
Net profit from discontinued operations— — — — — — 
Consolidated profit28 55.9 50.5 71 11.7 (15.3)
Non-controlling interests— — — 1 63.2 58.3 
Underlying profit attributable to the parent28 48.2 42.5 72 12.0 (15.0)
Balance sheet
Loans and advances to customers10,512 7.5 7.2 10,512 33.2 16.3 
Cash, central banks and credit institutions2,873 17.9 17.2 2,873 (16.1)(28.8)
Debt instruments2,721 (3.6)(4.9)2,721 68.1 43.5 
Other financial assets281 28.2 28.0 281 68.0 45.2 
Other asset accounts906 1.2 0.9 906 10.8 3.9 
Total assets17,292 7.0 6.5 17,292 24.2 7.8 
Customer deposits9,433 6.8 5.6 9,433 28.7 7.7 
Central banks and credit institutions5,016 6.6 7.4 5,016 14.9 5.5 
Marketable debt securities523 5.2 3.3 523 97.9 62.0 
Other financial liabilities367 22.9 22.9 367 177.3 151.7 
Other liabilities accounts543 15.5 14.3 543 53.2 31.7 
Total liabilities15,882 7.3 6.7 15,882 27.6 10.4 
Total equity1,411 4.7 4.0 1,411 (4.3)(14.2)
Memorandum items:
Gross loans and advances to customers 2
10,710 7.4 7.1 10,710 33.1 16.2 
Customer funds10,446 5.7 4.5 10,446 41.7 18.6 
    Customer deposits 3
9,382 6.2 5.1 9,382 28.0 7.2 
    Mutual funds1,065 1.5 (0.3)1,065 — — 
Resources
Number of employees4,079 19.6 4,079 45.7 
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
January - September 2022
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69






Financial information by segment
DIGITAL CONSUMER BANK
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income1,000 (1.2)(1.0)3,032 0.1 (0.3)
Net fee income204 (6.7)(6.6)629 2.0 2.0 
Gains (losses) on financial transactions 1
5 (72.5)(72.3)23 250.4 250.6 
Other operating income106 788.2 774.3 204 41.3 36.9 
Total income1,315 4.3 4.4 3,887 2.4 2.0 
Administrative expenses and amortizations(605)0.4 0.7 (1,853)2.7 2.4 
Net operating income709 7.8 7.8 2,034 2.2 1.6 
Net loan-loss provisions(142)1.9 1.9 (429)(4.4)(4.7)
Other gains (losses) and provisions4 — — (24)(80.0)(79.8)
Profit before tax572 12.6 12.6 1,581 11.2 10.3 
Tax on profit(146)18.9 18.9 (379)10.1 9.6 
Profit from continuing operations426 10.5 10.6 1,203 11.6 10.5 
Net profit from discontinued operations— — — — — — 
Consolidated profit426 10.5 10.6 1,203 11.6 10.5 
Non-controlling interests(90)(5.5)(5.2)(295)9.6 9.5 
Underlying profit attributable to the parent336 15.8 15.9 908 12.2 10.8 
Balance sheet
Loans and advances to customers118,092 1.1 1.8 118,092 5.8 6.8 
Cash, central banks and credit institutions12,978 (10.4)(9.8)12,978 (29.2)(28.6)
Debt instruments7,683 (1.9)(1.5)7,683 50.1 52.1 
Other financial assets198 47.5 48.1 198 332.3 336.6 
Other asset accounts7,962 4.4 4.9 7,962 18.8 19.5 
Total assets146,913 — 0.7 146,913 3.6 4.6 
Customer deposits57,306 (0.4)0.1 57,306 5.4 6.3 
Central banks and credit institutions40,380 2.6 3.5 40,380 14.3 15.5 
Marketable debt securities30,245 (2.6)(2.1)30,245 (11.7)(11.0)
Other financial liabilities1,629 (3.5)(3.0)1,629 12.6 13.5 
Other liabilities accounts4,755 2.7 3.1 4,755 9.7 10.4 
Total liabilities134,316 — 0.6 134,316 3.5 4.5 
Total equity12,597 0.1 1.1 12,597 4.1 5.6 
Memorandum items:
Gross loans and advances to customers 2
120,598 1.0 1.7 120,598 5.4 6.5 
Customer funds59,527 (0.4)0.1 59,527 5.1 6.1 
    Customer deposits 3
57,306 (0.4)0.1 57,306 5.4 6.3 
    Mutual funds2,221 0.5 0.5 2,221 (0.5)(0.5)
Ratios (%), operating means and customers
Underlying RoTE14.12 2.73 12.71 1.16 
Efficiency ratio46.0 (1.8)47.7 0.1 
NPL ratio2.20 (0.03)2.20 0.05 
Total coverage ratio95.6 (1.8)95.6 (17.2)
Number of employees16,066 1.1 16,066 0.9 
Number of branches365 (1.4)365 18.5 
Number of total customers (thousands)19,487 0.5 19,487 1.9 
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
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Financial information by segment
CORPORATE CENTRE
EUR million
Underlying income statementQ3'22Q2'22%9M'229M'21%
Net interest income(157)(181)(13.0)(510)(459)11.2 
Net fee income(2)2 — (3)(15)(82.2)
Gains (losses) on financial transactions 1
(252)(253)(0.1)(624)(145)330.5 
Other operating income(7)(15)(52.7)(29)(23)24.9 
Total income(418)(446)(6.2)(1,165)(642)81.5 
Administrative expenses and amortizations(93)(92)0.5 (272)(249)9.2 
Net operating income(511)(538)(5.0)(1,437)(891)61.3 
Net loan-loss provisions2 (4)— (4)(168)(97.8)
Other gains (losses) and provisions(35)(34)1.1 (117)(108)8.0 
Profit before tax(544)(577)(5.7)(1,558)(1,168)33.4 
Tax on profit1 (1)— (25)(63)(59.9)
Profit from continuing operations(543)(577)(5.9)(1,583)(1,231)28.6 
Net profit from discontinued operations— — — — — (100.0)
Consolidated profit(543)(577)(5.9)(1,583)(1,231)28.6 
Non-controlling interests— — (30.3)— (1)(97.6)
Underlying profit attributable to the parent(543)(577)(5.9)(1,583)(1,232)28.5 
Balance sheet
Loans and advances to customers6,104 7,087 (13.9)6,104 6,350 (3.9)
Cash, central banks and credit institutions141,112 108,644 29.9 141,112 81,150 73.9 
Debt instruments8,194 6,928 18.3 8,194 1,423 475.6 
Other financial assets1 522 (99.8)1 2,157 (100.0)
Other asset accounts129,286 129,429 (0.1)129,286 116,606 10.9 
Total assets284,696 252,610 12.7 284,696 207,687 37.1 
Customer deposits538 928 (42.0)538 1,324 (59.3)
Central banks and credit institutions83,271 69,730 19.4 83,271 45,798 81.8 
Marketable debt securities100,982 84,309 19.8 100,982 71,720 40.8 
Other financial liabilities1,491 287 419.8 1,491 1,495 (0.3)
Other liabilities accounts10,483 9,063 15.7 10,483 7,197 45.7 
Total liabilities196,766 164,317 19.7 196,766 127,534 54.3 
Total equity87,931 88,292 (0.4)87,931 80,154 9.7 
Memorandum items:
Gross loans and advances to customers 2
6,107 7,172 (14.9)6,107 6,589 (7.3)
Customer funds538 928 (42.0)538 1,324 (59.3)
    Customer deposits 3
538 928 (42.0)538 1,324 (59.3)
    Mutual funds— — — — — (100.0)
Resources
Number of employees1,857 1,811 2.5 1,857 1,710 8.6 
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.

January - September 2022
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71






Financial information by segment
RETAIL BANKING
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income9,053 5.0 5.2 25,767 13.9 6.7 
Net fee income1,967 (0.4)0.5 5,759 9.8 3.8 
Gains (losses) on financial transactions 1
16 (89.5)(90.5)222 (61.7)(63.9)
Other operating income(37)(82.2)(68.9)(113)— — 
Total income10,999 4.4 4.3 31,634 9.2 2.3 
Administrative expenses and amortizations(4,775)3.2 3.5 (13,800)8.9 3.7 
Net operating income6,224 5.2 4.9 17,834 9.5 1.2 
Net loan-loss provisions(2,733)4.3 3.7 (7,465)31.0 21.6 
Other gains (losses) and provisions(673)47.7 53.4 (1,554)20.2 18.1 
Profit before tax2,818 (0.7)(1.6)8,815 (5.1)(13.3)
Tax on profit(732)12.6 12.8 (2,231)(23.0)(30.5)
Profit from continuing operations2,086 (4.7)(5.8)6,584 2.9 (5.4)
Net profit from discontinued operations— — — — — — 
Consolidated profit2,086 (4.7)(5.8)6,584 2.9 (5.4)
Non-controlling interests(186)(25.9)(25.0)(693)(30.5)(34.9)
Underlying profit attributable to the parent1,899 (1.9)(3.3)5,891 9.1 (0.1)
(1) Includes exchange differences.

CORPORATE & INVESTMENT BANKING
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income924 (0.4)0.6 2,637 23.5 17.9 
Net fee income491 (3.0)(2.8)1,517 14.8 9.3 
Gains (losses) on financial transactions 1
583 35.9 40.1 1,434 101.9 94.6 
Other operating income(12)(9.2)91.1 9 (91.2)(91.3)
Total income1,985 7.3 8.2 5,597 31.1 25.4 
Administrative expenses and amortizations(747)10.9 10.5 (2,035)19.7 14.5 
Net operating income1,238 5.3 7.0 3,562 38.7 32.7 
Net loan-loss provisions(8)— — 14 — — 
Other gains (losses) and provisions(22)(39.8)(40.6)(77)656.6 — 
Profit before tax1,208 5.1 6.8 3,499 41.2 34.7 
Tax on profit(323)(0.5)(0.2)(977)42.5 33.0 
Profit from continuing operations885 7.3 9.5 2,522 40.7 35.4 
Net profit from discontinued operations— — — — — — 
Consolidated profit885 7.3 9.5 2,522 40.7 35.4 
Non-controlling interests(52)(0.4)1.2 (159)41.2 31.1 
Underlying profit attributable to the parent833 7.9 10.1 2,364 40.7 35.7 
(1) Includes exchange differences.

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Financial information by segment
WEALTH MANAGEMENT & INSURANCE
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income225 22.4 22.3 554 58.5 52.2 
Net fee income327 (2.0)(2.7)982 7.8 2.9 
Gains (losses) on financial transactions 1
30 4.4 4.2 88 15.5 11.5 
Other operating income103 15.6 13.2 282 (24.2)(26.0)
Total income685 7.8 7.1 1,907 11.6 7.2 
Administrative expenses and amortizations(263)4.4 3.0 (758)12.1 6.3 
Net operating income422 10.1 9.7 1,149 11.2 7.8 
Net loan-loss provisions(5)(44.9)(46.4)(13)(34.1)(34.5)
Other gains (losses) and provisions(4)(53.8)(53.5)(17)— — 
Profit before tax414 12.8 12.5 1,118 9.4 6.0 
Tax on profit(95)17.6 17.8 (254)1.2 (1.5)
Profit from continuing operations319 11.5 11.0 864 12.1 8.4 
Net profit from discontinued operations— — — — — — 
Consolidated profit319 11.5 11.0 864 12.1 8.4 
Non-controlling interests(16)4.5 6.4 (47)45.1 39.6 
Underlying profit attributable to the parent302 11.9 11.3 818 10.7 7.1 
(1) Includes exchange differences.




PAGONXT
EUR million
/ Q2'22/ 9M'21
Underlying income statementQ3'22%% excl. FX9M'22%% excl. FX
Net interest income6 110.9109.911 ——
Net fee income232 4.44.0611 75.157.2
Gains (losses) on financial transactions 1
(4)76.379.4(5)390.1348.3
Other operating income23 79.6 80.8 38 — — 
Total income257 9.28.9655 96.475.3
Administrative expenses and amortizations(282)9.49.5(729)52.344.9
Net operating income(24)12.116.0(74)(49.1)(43.0)
Net loan-loss provisions(13)49.8 50.2 (24)245.9 194.9 
Other gains (losses) and provisions(12)365.9 366.4 (16)(59.4)(60.2)
Profit before tax(50)50.551.3(114)(40.4)(35.9)
Tax on profit(15)(2.7)(2.9)(51)235.3139.1
Profit from continuing operations(64)33.835.6(165)(20.2)(17.2)
Net profit from discontinued operations— — — — — — 
Consolidated profit(64)33.835.6(165)(20.2)(17.2)
Non-controlling interests(5)162.0161.8(8)——
Underlying profit attributable to the parent(69)38.440.0(173)(16.2)(13.1)
(1) Includes exchange differences.
January - September 2022
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73






Alternative performance measures
ALTERNATIVE PERFORMANCE MEASURES (APMs)
In addition to the financial information prepared under IFRS, this consolidated directors’ report contains financial measures that constitute alternative performance measures (‘APMs’) to comply with the guidelines on alternative performance measures issued by the European Securities and Markets Authority on 5 October 2015 and non-IFRS measures.

The financial measures contained in this consolidated directors’ report that qualify as APMs and non-IFRS measures have been calculated using the financial information from Santander but are not defined or detailed in the applicable financial information framework or under IFRS and have neither been audited nor reviewed by our auditors.

We use these APMs and non-IFRS measures when planning, monitoring and evaluating our performance. We consider these APMs and non-IFRS financial measures to be useful metrics for management and investors to facilitate operating performance comparisons from period to period. While we believe that these APMs and non-IFRS financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute of IFRS measures. In addition, the way in which Santander defines and calculates these
APMs and non-IFRS measures may differ from the calculations by other companies with similar measures and, therefore, may not be comparable.

The APMs and non-IFRS measures we use in this document can be categorized as follows:

Underlying results
In addition to IFRS results measures, we present some results measures which are non-IFRS measures and which we refer to as underlying measures. These underlying measures allow in our view a better year-on-year comparability as they exclude items outside the ordinary performance of our business which are grouped in the non-IFRS line net capital gains and provisions and are further detailed on page 12 of this report.
In addition, in the section "Financial information by segments", relative to the primary and secondary segments, results are presented on an underlying basis in accordance with IFRS 8, and reconciled on an aggregate basis to our IFRS consolidated results to the consolidated financial statements, which are set out below.
Reconciliation of underlying results to statutory results
EUR million
January-September 2022
Underlying resultsAdjustmentsStatutory results
Net interest income28,460 — 28,460 
Net fee income8,867 — 8,867 
Gains (losses) on financial transactions 1
1,115 — 1,115 
Other operating income187 (35)152 
Total income38,629 (35)38,594 
Administrative expenses and amortizations(17,595)— (17,595)
Net operating income21,034 (35)20,999 
Net loan-loss provisions(7,491)(287)(7,778)
Other gains (losses) and provisions(1,782)322 (1,460)
Profit before tax11,761 — 11,761 
Tax on profit(3,538)— (3,538)
Profit from continuing operations8,223 — 8,223 
Net profit from discontinued operations— — — 
Consolidated profit8,223 — 8,223 
Non-controlling interests(907)— (907)
Profit attributable to the parent7,316 — 7,316 
(1) Includes exchange differences.
Explanation of adjustments:
Mainly, payment holidays in Poland.

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Alternative performance measures
Reconciliation of underlying results to statutory results
EUR million
January-September 2021
Underlying resultsAdjustmentsStatutory results
Net interest income24,654 — 24,654 
Net fee income7,810 — 7,810 
Gains (losses) on financial transactions 1
1,220 — 1,220 
Other operating income942 — 942 
Total income34,626 — 34,626 
Administrative expenses and amortizations(15,778)— (15,778)
Net operating income18,848 — 18,848 
Net loan-loss provisions(5,973)— (5,973)
Other gains (losses) and provisions(1,443)(716)(2,159)
Profit before tax11,432 (716)10,716 
Tax on profit(3,911)186 (3,725)
Profit from continuing operations7,521 (530)6,991 
Net profit from discontinued operations— — — 
Consolidated profit7,521 (530)6,991 
Non-controlling interests(1,142)— (1,142)
Profit attributable to the parent6,379 (530)5,849 
(1) Includes exchange differences.


Explanation of adjustments:
Restructuring costs for a net impact of -EUR 530 million, mainly in the UK and Portugal.



January - September 2022
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75






Alternative performance measures
Profitability and efficiency ratios
The purpose of the profitability and efficiency ratios is to measure the ratio of profit to capital, to tangible capital, to assets and to risk- weighted assets, while the efficiency ratio measures how much general administrative expenses (personnel and other) and amortization costs are needed to generate revenue.
Additionally, the goodwill adjustments have been removed from the RoTE numerator as, since they are not considered in the denominator, we believe this calculation is more correct.

RatioFormulaRelevance of the metric
RoEProfit attributable to the parentThis ratio measures the return that shareholders obtain on the funds invested in the bank and as such measures the company's ability to pay shareholders.
(Return on equity)
Average stockholders’ equity 1 (excl. minority interests)
Underlying RoE Underlying profit attributable to the parentThis ratio measures the return that shareholders obtain on the funds invested in the bank excluding items outside the ordinary performance of our business.
Average stockholders’ equity 1 (excl. minority interests)
RoTE
Profit attributable to the parent2
This indicator is used to evaluate the profitability of the company as a percentage of its tangible equity. It's measured as the return that shareholders receive as a percentage of the funds invested in the entity less intangible assets.
(Return on tangible equity)
Average stockholders' equity 1 (excl. minority interests) - intangible assets
Underlying RoTEUnderlying profit attributable to the parentThis indicator measures the profitability of the tangible equity of a company arising from ordinary activities, i.e. excluding items outside the ordinary performance of our business.
Average stockholders' equity 1 (excl. minority interests) - intangible assets
RoAConsolidated profitThis metric measures the profitability of a company as a percentage of its total assets. It is an indicator that reflects the efficiency of the company's total funds in generating profit.
(Return on assets)Average total assets
Underlying RoAUnderlying consolidated profitThis metric measures the profitability of a company as a percentage of its total assets, excluding non-recurring results. It is an indicator that reflects the efficiency of the company's total funds in generating underlying profit.
Average total assets
RoRWAConsolidated profitThe return adjusted for risk is a derivative of the RoA metric. The difference is that RoRWA measures profit in relation to the bank's risk-weighted assets.
(Return on risk weighted assets)Average risk-weighted assets
Underlying RoRWAUnderlying consolidated profitThis relates the consolidated profit (excluding items outside the ordinary performance of our business) to the bank's risk-weighted assets.
Average risk-weighted assets
Efficiency ratio
Operating expenses 3
One of the most commonly used indicators when comparing productivity of different financial entities. It measures the amount of funds used to generate the bank's total income.
Total income
(1) Stockholders’ equity = Capital and Reserves + Accumulated other comprehensive income + Profit attributable to the parent + Dividends.
(2) Excluding the adjustment to the valuation of goodwill.
(3) Operating expenses = Administrative expenses + amortizations.
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Alternative performance measures
Profitability and efficiency (1) (2) (3) (4)
Q3'22Q2'229M'229M'21
RoE10.64 %10.44 %10.86 %9.54 %
Profit attributable to the parent9,6889,4049,7557,975
Average stockholders' equity (excluding minority interests)91,04490,03589,85483,574
Underlying RoE10.64 %10.44 %10.86 %10.18 %
 Profit attributable to the parent9,6889,4049,7557,975
(-) Net capital gains and provisions———-530
Underlying profit attributable to the parent9,6889,4049,7558,505
Average stockholders' equity (excluding minority interests)91,04490,03589,85483,574
RoTE13.38 %13.10 %13.57 %11.82 %
 Profit attributable to the parent9,6889,4049,7557,975
(+) Goodwill impairment————
Profit attributable to the parent (excluding goodwill impairment)9,6889,4049,7557,975
Average stockholders' equity (excluding minority interests)91,04490,03589,85483,574
(-) Average intangible assets18,65418,25517,96716,109
Average stockholders' equity (excl. minority interests) - intangible assets72,39071,78071,88767,466
Underlying RoTE13.38 %13.10 %13.57 %12.61 %
Profit attributable to the parent9,6889,4049,7557,975
(-) Net capital gains and provisions———-530
Underlying profit attributableto the parent9,6889,4049,7558,505
Average stockholders' equity (excl. minority interests) - intangible assets72,39071,78071,88767,466
RoA0.61 %0.63 %0.64 %0.61 %
Consolidated profit10,72810,68810,9649,498
Average total assets1,769,9041,707,9031,702,2101,550,943
Underlying RoA0.61 %0.63 %0.64 %0.65 %
Consolidated profit10,72810,68810,9649,498
(-) Net capital gains and provisions———-530
Underlying consolidated profit10,72810,68810,96410,028
Average total assets1,769,9041,707,9031,702,2101,550,943
RoRWA1.75 %1.76 %1.82 %1.66 %
Consolidated profit10,72810,68810,9649,498
Average risk-weighted assets614,670606,154603,483570,653
Underlying RoRWA1.75 %1.76 %1.82 %1.76 %
Consolidated profit10,72810,68810,9649,498
(-) Net capital gains and provisions———-530
Underlying consolidated profit10,72810,68810,96410,028
Average risk-weighted assets614,670606,154603,483570,653
Efficiency ratio45.6 %46.0 %45.5 %45.6 %
   Underlying operating expenses6,1605,90017,59515,778
      Operating expenses6,1605,90017,59515,778
      Net capital gains and provisions impact on operating expenses————
   Underlying total income13,50912,81538,62934,626
      Total income13,47412,81538,59434,626
      Net capital gains and provisions impact on total income35—35—
(1) Averages included in the RoE, RoTE, RoA and RoRWA denominators are calculated using 4 months' worth of data in the case of quarterly figures (from June to September in Q3 and March to June in Q2) and 10 months in the case of year-to-date (December to September).
(2) For periods less than one year, and if there are results in the net capital gains and provisions line, the profit used to calculate RoE and RoTE is the annualized underlying attributable profit to which said results are added without annualizing.
(3) For periods less than one year, and if there are results in the net capital gains and provisions line, the profit used to calculate RoA and RoRWA is the annualized underlying consolidated profit, to which said results are added without annualizing.
(4) The risk weighted assets included in the denominator of the RoRWA metric are calculated in line with the criteria laid out in the CRR (Capital Requirements Regulation).

January - September 2022
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77






Alternative performance measures
Efficiency ratio
9M'229M'21
%   Total income   Operating expenses%   Total income   Operating expenses
Europe47.4 13,273 6,296 51.5 12,018 6,192 
   Spain48.5 6,058 2,941 51.0 5,909 3,011 
   United Kingdom49.8 4,031 2,008 54.0 3,589 1,937 
   Portugal40.3 933 376 42.1 1,020 429 
   Poland28.6 1,780 510 41.8 1,157 483 
North America47.0 9,021 4,239 44.3 8,166 3,617 
   US46.5 5,667 2,635 42.6 5,506 2,346 
   Mexico44.3 3,312 1,467 44.5 2,643 1,177 
South America36.3 13,613 4,935 34.7 11,290 3,916 
   Brazil31.1 9,671 3,009 29.3 8,079 2,366 
   Chile38.1 1,934 737 38.7 1,833 710 
   Argentina57.3 1,413 809 59.8 925 554 
Digital Consumer Bank47.7 3,887 1,853 47.6 3,795 1,805 





Underlying RoTE
9M'229M'21
%   Underlying profit attributable to the parent   Average stockholders' equity (excl. minority interests) - intangible assets%   Underlying profit attributable to the parent   Average stockholders' equity (excl. minority interests) - intangible assets
Europe9.15 3,783 41,351 7.08 2,828 39,955 
   Spain7.46 1,472 19,731 4.04 738 18,258 
   United Kingdom11.31 1,517 13,414 11.29 1,493 13,223 
   Portugal13.20 481 3,642 10.71 431 4,027 
   Poland10.12 306 3,018 4.48 146 3,255 
North America11.54 3,028 26,237 13.00 2,958 22,748 
   US10.31 1,986 19,259 13.88 2,310 16,636 
   Mexico16.59 1,165 7,022 13.27 784 5,910 
South America20.04 3,845 19,191 20.07 3,283 16,356 
   Brazil20.65 2,703 13,085 21.59 2,344 10,853 
   Chile21.56 735 3,410 18.44 616 3,343 
   Argentina21.82 311 1,428 25.01 237 948 
Digital Consumer Bank12.71 1,210 9,522 11.55 1,078 9,336 






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January - September 2022






Alternative performance measures
Credit risk indicators
The credit risk indicators measure the quality of the credit portfolio and the percentage of non-performing loans covered by provisions.
RatioFormulaRelevance of the metric
NPL ratio
(Non-performing loans)
Credit impaired loans and advances to customers, customer guarantees and customer commitments grantedThe NPL ratio is an important variable regarding financial institutions' activity since it gives an indication of the level of risk the entities are exposed to. It calculates risks that are, in accounting terms, declared to be credit impaired as a percentage of the total outstanding amount of customer credit and contingent liabilities.
Total Risk 1
Total coverage ratioTotal allowances to cover impairment losses on loans and advances to customers, customer guarantees and customer commitments grantedThe total coverage ratio is a fundamental metric in the financial sector. It reflects the level of provisions as a percentage of the credit impaired assets. Therefore it is a good indicator of the entity's solvency against client defaults both present and future.
Credit impaired loans and advances to customers, customer guarantees and customer commitments granted
Cost of riskAllowances for loan-loss provisions over the last 12 monthsThis ratio quantifies loan-loss provisions arising from credit risk over a defined period of time for a given loan portfolio. As such, it acts as an indicator of credit quality.
Average loans and advances to customers over the last 12 months
(1) Total risk = Total loans and advances and guarantees to customers (including credit impaired assets) + contingent liabilities granted that are credit impaired.




Credit risk (I)Sep-22Jun-22Sep-22Sep-21
NPL ratio3.08 %3.05 %3.08 %3.18 %
Credit impaired loans and advances to customers, customer guarantees and customer commitments granted35,60034,25935,60033,046
Gross loans and advances to customers registered under the headings “financial assets measured at amortized cost” and "financial assets designated at fair value through profit or loss" classified in stage 3 (OCI), excluding POCI (Purchased or Originated Credit Impaired) that is currently impaired33,46832,10033,46831,237
POCI exposure (Purchased or Originated Credit Impaired) that is currently impaired258303258392
Customer guarantees and customer commitments granted classified in stage 31,8651,8461,8651,409
Doubtful exposure of loans and advances to customers at fair value through profit or loss91098
Total risk1,156,5481,121,7261,156,5481,038,796
Impaired and non-impaired gross loans and advances to customers1,091,5511,061,1721,091,551982,097
Impaired and non-impaired customer guarantees and customer commitments granted64,99760,55464,99756,699


January - September 2022
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79






Alternative performance measures
Credit risk (II)Sep-22Jun-22Sep-22Sep-21
Total coverage ratio70 %71 %70 %74 %
Total allowances to cover impairment losses on loans and advances to customers, customer guarantees and customer commitments granted24,81324,19524,81324,462
Total allowances to cover impairment losses on loans and advances to customers measured at amortized cost and designated at fair value through OCI24,08423,45224,08423,786
Total allowances to cover impairment losses on customer guarantees and customer commitments granted729743729676
Credit impaired loans and advances to customers, customer guarantees and customer commitments granted35,60034,25935,60033,046
Gross loans and advances to customers registered under the headings “financial assets measured at amortized cost” and "financial assets designated at fair value through profit or loss" classified in stage 3 (OCI), excluding POCI (Purchased or Originated Credit Impaired) that is currently impaired33,46832,10033,46831,237
POCI exposure (Purchased or Originated Credit Impaired) that is currently impaired258303258392
Customer guarantees and customer commitments granted classified in stage 31,8651,8461,8651,409
Doubtful exposure of loans and advances to customers at fair value through profit or loss91098
Cost of risk0.86 %0.83 %0.86 %0.90 %
Underlying allowances for loan-loss provisions over the last 12 months8,9548,4178,9548,584
Allowances for loan-loss provisions over the last 12 months9,2418,4179,2418,584
Net capital gains and provisions impact in allowances for loan-loss provisions-287—-287—
Average loans and advances to customers over the last 12 months1,037,2881,010,2821,037,288956,925



NPL ratio
9M'229M'21
%Credit impaired loans and advances to customers, customer guarantees and customer commitments granted   Total risk%Credit impaired loans and advances to customers, customer guarantees and customer commitments granted   Total risk
Europe2.5816,918 656,979 3.1520,088 638,207 
   Spain3.6911,251 305,299 4.8613,877 285,505 
   United Kingdom1.163,000 258,402 1.273,354 263,747 
   Portugal3.031,281 42,267 3.441,437 41,833 
   Poland3.631,190 32,795 4.341,415 32,586 
North America2.795,541 198,786 2.563,588 140,314 
   US2.924,416 150,986 2.362,474 104,794 
   Mexico2.341,118 47,738 3.141,114 35,520 
South America5.549,627 173,642 4.386,095 139,167 
   Brazil6.637,168 108,078 4.723,947 83,610 
   Chile4.632,147 46,367 4.361,801 41,278 
   Argentina2.13141 6,607 3.85191 4,951 
Digital Consumer Bank2.202,659 121,028 2.152,469 114,781 


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Alternative performance measures
Total coverage ratio
9M'229M'21
%Total allowances to cover impairment losses on loans and advances to customers, customer guarantees and customer commitments grantedCredit impaired loans and advances to customers, customer guarantees and customer commitments granted%Total allowances to cover impairment losses on loans and advances to customers, customer guarantees and customer commitments grantedCredit impaired loans and advances to customers, customer guarantees and customer commitments granted
Europe49.78,409 16,918 51.110,258 20,088 
   Spain49.35,549 11,251 49.66,878 13,877 
   United Kingdom32.4973 3,000 36.61,226 3,354 
   Portugal76.3977 1,281 75.51,086 1,437 
   Poland74.8890 1,190 74.61,055 1,415 
North America102.75,691 5,541 139.34,999 3,588 
   US102.84,537 4,416 161.53,994 2,474 
   Mexico102.71,149 1,118 90.11,004 1,114 
South America84.78,154 9,627 98.86,019 6,095 
   Brazil89.26,395 7,168 111.84,412 3,947 
   Chile60.31,295 2,147 64.11,155 1,801 
   Argentina179.0252 141 149.3285 191 
Digital Consumer Bank95.62,543 2,659 112.82,785 2,469 



Cost of risk
9M'229M'21
%Underlying allowances for loan-loss provisions over the last 12 monthsAverage loans and advances to customers over the last 12 months%Underlying allowances for loan-loss provisions over the last 12 monthsAverage loans and advances to customers over the last 12 months
Europe0.362,176 609,518 0.482,805 585,485 
   Spain0.711,861 263,016 0.972,405 248,300 
   United Kingdom0.0256 274,222 0.0130 216,521 
   Portugal-0.12-48 40,279 0.35136 39,473 
   Poland1.07329 30,605 0.82241 29,586 
North America1.121,780 158,691 1.461,868 128,061 
   US0.871,076 123,021 1.061,011 95,385 
   Mexico1.86702 37,782 2.69856 31,829 
South America3.114,500 144,807 2.523,086 122,237 
   Brazil4.463,900 87,517 3.602,519 70,034 
   Chile0.87366 41,884 0.89360 40,279 
   Argentina2.88158 5,497 3.51137 3,897 
Digital Consumer Bank0.43507 117,554 0.57653 115,012 
January - September 2022
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81






Alternative performance measures
Other indicators
The market capitalization indicator provides information on the volume of tangible equity per share. The loan-to-deposit ratio (LTD) identifies the relationship between net customer loans and advances and customer deposits, assessing the proportion of loans and advances granted by the Group that are funded by customer deposits.
The Group also uses gross customer loan magnitudes excluding reverse repurchase agreements (repos) and customer deposits excluding repos. In order to analyse the evolution of the traditional commercial banking business of granting loans and capturing deposits, repos and reverse repos are excluded, as they are mainly treasury business products and highly volatile.

RatioFormulaRelevance of the metric
TNAV per share
 Tangible book value 1
This is a very commonly used ratio used to measure the company's accounting value per share having deducted the intangible assets. It is useful in evaluating the amount each shareholder would receive if the company were to enter into liquidation and had to sell all the company's tangible assets.
(Tangible equity net asset value per share)  Number of shares excluding treasury stock
Price / tangible book value per share (X)
Share price
This is one of the most commonly used ratios by market participants for the valuation of listed companies both in absolute terms and relative to other entities. This ratio measures the relationship between the price paid for a company and its accounting equity value.
TNAV per share
LTD ratio Net loans and advances to customersThis is an indicator of the bank's liquidity. It measures the total (net) loans and advances to customers as a percentage of customer deposits.
(Loan-to-deposit) Customer deposits
Loans and advances (excl. reverse repos) Gross loans and advances to customers excluding reverse reposIn order to aid analysis of the commercial banking activity, reverse repos are excluded as they are highly volatile treasury products.
Deposits (excl. repos) Customer deposits excluding reposIn order to aid analysis of the commercial banking activity, repos are excluded as they are highly volatile treasury products.
PAT + After tax fees paid to SAN (in Wealth Management & Insurance) Net profit + fees paid from Santander Asset Management and Santander Insurance to Santander, net of taxes, excluding Private Banking customersMetric to assess Wealth Management & Insurance's total contribution to Grupo Santander profit.
(1) Tangible book value = Stockholders' equity (excl. minority interests) - intangible assets.


OthersSep-22Jun-22Sep-22Sep-21
TNAV (tangible book value) per share4.314.244.313.99
   Tangible book value72,23571,16272,23569,142
   Number of shares excl. treasury stock (million)16,77316,79116,77317,331
Price / Tangible book value per share (X)0.560.630.560.79
   Share price (euros)2.3982.6882.3983.137
   TNAV (tangible book value) per share4.314.244.313.99
Loan-to-deposit ratio106 %107 %106 %105 %
   Net loans and advances to customers1,067,4661,037,7211,067,466958,311
   Customer deposits1,008,800973,7871,008,800909,034
Q3'22Q2'229M'229M'21
PAT + After tax fees paid to SAN (in WM&I) (Constant EUR million)7136671,9971,880
   Profit after tax315284864797
   Net fee income net of tax3973831,1321,082
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Alternative performance measures

Local currency measures
We make use of certain financial measures in local currency to help in the assessment of our ongoing operating performance. These non-IFRS financial measures include the results of operations of our subsidiary banks located outside the Eurozone, excluding the impact of foreign exchange. Because changes in foreign currency exchange rates do not have an operating impact on the results, we believe that evaluating their performance on a local currency basis provides an additional and meaningful assessment of performance to both management and the company’s investors.
The Group presents, at both the Group level as well as the business unit level, the real changes in the income statement as well as the changes excluding the exchange rate effect, as it considers the latter facilitates analysis, since it enables businesses movements to be identified without taking into account the impact of converting each local currency into euros.
Said variations, excluding the impact of exchange rate movements, are calculated by converting P&L lines for the different business units comprising the Group into our presentation currency, the euro, applying the average exchange rate for the first nine months of 2022 to all periods contemplated in the analysis.


The Group presents, at both the Group level as well as the business unit level, the changes in euros in the balance sheet as well as the changes excluding the exchange rate effect for loans and advances to customers excluding reverse repos and customer funds (which comprise deposits and mutual funds) excluding repos. As with the income statement, the reason is to facilitate analysis by isolating the changes in the balance sheet that are not caused by converting each local currency into euros.
These changes excluding the impact of exchange rate movements are calculated by converting loans and advances to customers excluding reverse repos and customer funds excluding repos, into our presentation currency, the euro, applying the closing exchange rate on the last working day of September 2022 to all periods contemplated in the analysis.
The average and period-end exchange rates for the main currencies in which the Group operates are set out in the table below.





Exchange rates: 1 euro / currency parity
Average (income statement)Period-end (balance sheet)
9M'229M'21Sep-22Jun-22Sep-21
US dollar1.062 1.196 0.981 1.045 1.160 
Pound sterling0.847 0.863 0.878 0.860 0.858 
Brazilian real5.440 6.367 5.286 5.473 6.300 
Mexican peso21.506 24.069 19.678 21.073 23.826 
Chilean peso911.870 882.025 939.402 979.495 941.091 
Argentine peso126.972 111.546 144.538 130.825 114.500 
Polish zloty4.670 4.547 4.843 4.702 4.599 
January - September 2022
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83






Condensed consolidated financial statements
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
•CONSOLIDATED BALANCE SHEET
•CONSOLIDATED INCOME STATEMENT
NOTE:    The following financial information for the first nine months of 2022 and 2021 (attached herewith) corresponds to the condensed consolidated financial statements prepared in accordance with the International Financial Reporting Standards.
Interim condensed consolidated balance sheet
EUR million
ASSETSSep-22Dec-21Sep-21
Cash, cash balances at central banks and other deposits on demand246,533 210,689 191,035 
Financial assets held for trading179,775 116,953 122,967 
Non-trading financial assets mandatorily at fair value through profit or loss5,788 5,536 5,156 
Financial assets designated at fair value through profit or loss9,674 15,957 36,970 
Financial assets at fair value through other comprehensive income87,915 108,038 109,570 
Financial assets at amortized cost1,173,274 1,037,898 1,011,994 
Hedging derivatives11,586 4,761 5,404 
Changes in the fair value of hedged items in portfolio hedges of interest risk(5,510)410 991 
Investments7,805 7,525 7,684 
Joint ventures entities2,055 1,692 1,669 
Associated entities5,750 5,833 6,015 
Assets under insurance or reinsurance contracts307 283 257 
Tangible assets35,662 33,321 32,446 
Property, plant and equipment34,553 32,342 31,515 
For own-use13,613 13,259 12,619 
Leased out under an operating lease20,940 19,083 18,896 
Investment property1,109 979 931 
Of which : Leased out under an operating lease848 839 821 
Intangible assets18,789 16,584 16,246 
Goodwill14,138 12,713 12,645 
Other intangible assets4,651 3,871 3,601 
Tax assets29,517 25,196 24,544 
Current tax assets8,222 5,756 5,008 
Deferred tax assets21,295 19,440 19,536 
Other assets10,971 8,595 8,745 
Insurance contracts linked to pensions109 149 157 
Inventories8 6 4 
Other10,854 8,440 8,584 
Non-current assets held for sale3,706 4,089 4,286 
TOTAL ASSETS1,815,792 1,595,835 1,578,295 
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Condensed consolidated financial statements
Interim condensed consolidated balance sheet
Financial liabilities at amortized cost
LIABILITIESSep-22Dec-21Sep-21
Financial liabilities held for trading 132,563 79,469 80,147 
Financial liabilities designated at fair value through profit or loss44,599 32,733 47,900 
Financial liabilities at amortized cost1,493,298 1,349,169 1,317,759 
Hedging derivatives11,372 5,463 5,821 
Changes in the fair value of hedged items in portfolio hedges of interest rate risk (110)248 402 
Liabilities under insurance or reinsurance contracts777 770 779 
Provisions8,341 9,583 9,815 
Pensions and other post-retirement obligations2,469 3,185 3,337 
Other long term employee benefits991 1,242 1,298 
Taxes and other legal contingencies2,086 1,996 2,025 
Contingent liabilities and commitments729 733 674 
Other provisions2,066 2,427 2,481 
Tax liabilities 10,441 8,649 8,516 
Current tax liabilities3,330 2,187 2,269 
Deferred tax liabilities7,111 6,462 6,247 
Other liabilities 15,199 12,698 11,532 
Liabilities associated with non-current assets held for sale— — — 
TOTAL LIABILITIES1,716,480 1,498,782 1,482,671 
EQUITY
Shareholders' equity123,340 119,649 118,380 
Capital 8,397 8,670 8,670 
Called up paid capital8,397 8,670 8,670 
Unpaid capital which has been called up— — — 
Share premium 46,273 47,979 47,979 
Equity instruments issued other than capital681 658 650 
Equity component of the compound financial instrument— — — 
Other equity instruments issued681 658 650 
Other equity176 152 165 
Accumulated retained earnings66,701 60,273 60,273 
Revaluation reserves— — — 
Other reserves(5,171)(4,477)(4,336)
(-) Own shares(54)(894)(29)
Profit attributable to shareholders of the parent7,316 8,124 5,849 
(-) Interim dividends(979)(836)(841)
Other comprehensive income (loss)(32,316)(32,719)(32,992)
Items not reclassified to profit or loss (3,999)(4,241)(4,522)
Items that may be reclassified to profit or loss(28,317)(28,478)(28,470)
Non-controlling interest8,288 10,123 10,236 
Other comprehensive income(1,958)(2,104)(2,120)
Other items10,246 12,227 12,356 
TOTAL EQUITY99,312 97,053 95,624 
TOTAL LIABILITIES AND EQUITY1,815,792 1,595,835 1,578,295 
MEMORANDUM ITEMS: OFF BALANCE SHEET AMOUNTS
Loan commitments granted292,313 262,737 252,301 
Financial guarantees granted13,071 10,758 12,069 
Other commitments granted95,887 75,733 78,730 




January - September 2022
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85






Condensed consolidated financial statements
Interim condensed consolidated income statement
EUR million
9M'229M'21
Interest income50,318 33,629 
   Financial assets at fair value through other comprehensive income3,211 2,023 
   Financial assets at amortized cost42,381 29,397 
   Other interest income4,726 2,209 
Interest expense(21,858)(8,975)
Interest income/ (charges)28,460 24,654 
Dividend income422 404 
Income from companies accounted for using the equity method501 295 
Commission income11,886 10,132 
Commission expense(3,019)(2,322)
Gain or losses on financial assets and liabilities not measured at fair value through profit or loss, net326 482 
   Financial assets at amortized cost7 95 
   Other financial assets and liabilities319 387 
Gain or losses on financial assets and liabilities held for trading, net1,151 729 
   Reclassification of financial assets at fair value through other comprehensive income— — 
   Reclassification of financial assets from amortized cost— — 
   Other gains (losses)1,151 729 
Gains or losses on non-trading financial assets and liabilities mandatorily at fair value through profit or loss1 11 
   Reclassification of financial assets at fair value through other comprehensive income— — 
   Reclassification of financial assets from amortized cost— — 
   Other gains (losses)1 11 
Gain or losses on financial assets and liabilities measured at fair value through profit or loss, net965 296 
Gain or losses from hedge accounting, net102 91 
Exchange differences, net(1,430)(389)
Other operating income1,068 1,735 
Other operating expenses(1,981)(1,706)
Income from assets under insurance and reinsurance contracts2,081 1,114 
Expenses from liabilities under insurance and reinsurance contracts(1,939)(900)
Total income38,594 34,626 
Administrative expenses(15,360)(13,714)
   Staff costs(9,125)(8,205)
   Other general and administrative expenses(6,235)(5,509)
Depreciation and amortization(2,235)(2,064)
Provisions or reversal of provisions, net(1,305)(2,006)
Impairment or reversal of impairment of financial assets not measured at fair value
through profit or loss and net gains and losses from changes		(7,836)(6,000)
   Financial assets at fair value through other comprehensive income(6)(27)
   Financial assets at amortized cost(7,830)(5,973)
Impairment of investments in subsidiaries, joint ventures and associates, net— — 
Impairment on non-financial assets, net(86)(134)
   Tangible assets(35)(116)
   Intangible assets(39)(15)
   Others(12)(3)
Gain or losses on non-financial assets and investments, net2 43 
Negative goodwill recognized in results— — 
Gains or losses on non-current assets held for sale not classified as discontinued operations(13)(35)
Operating profit/(loss) before tax11,761 10,716 
Tax expense or income from continuing operations(3,538)(3,725)
Profit/(loss) for the period from continuing operations8,223 6,991 
Profit/( loss) after tax from discontinued operations— — 
Profit/(loss) for the period8,223 6,991 
Profit attributable to non-controlling interests907 1,142 
Profit/(loss) attributable to the parent7,316 5,849 
Earnings/(losses) per share
Basic 0.41 0.31 
Diluted0.41 0.31 
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Glossary
GLOSSARY
•Active customer: Those customers who comply with the minimum balance, income and/or transactionality requirements as defined according to the business area
•ADR: American Depositary Receipt
•ALCO: Assets and Liabilities Committee
•APIs: Application Programming Interface
•APM: Alternative Performance Measures
•APS: Amherst Pierpont Securities
•AuMs: Assets under management
•bn: Billion
•BNPL: Buy now, pay later
•BFG: Bankowy Fundusz Gwarancyjny (Bank Guarantee Fund)
•bps: basis points
•CAL: consumer, assets and liabilities
•CDI: CREST Depository Interest
•CET1: Core equity tier 1
•CHF: Swiss francs
•CIB: Corporate & Investment Banking
•CNMV: Spanish National Securities Market Commission (Comisión Nacional del Mercado de Valores)
•CX: Customer experience
•DCB: Digital Consumer Bank
•DGF: Deposit guarantee fund
•Digital customers: Every consumer of a commercial bank’s services who has logged on to their personal online banking and/or mobile banking in the last 30 days
•EBA: European Banking Authority
•ECB: European Central Bank
•EPS: Earnings per share
•ESG: Environmental, Social and Governance
•ESMA: European Securities and Markets Authority
•Fed: Federal Reserve
•Financially empowered people: People (unbanked, underbanked or financially vulnerable), who are given access to the financial system, receive tailored finance and increase their knowledge and resilience through financial education.
•FX: Foreign Exchange
•GDP: Gross Domestic Product
•ICO: Instituto de Crédito Oficial (Official Credit Institution)
•IFRS 9: International Financial Reporting Standard 9, regarding financial instruments
•IMF: International Monetary Fund
•IPO: Initial Public Offering
•LCR: Liquidity Coverage Ratio
•LLPs: Loan-loss provisions
•Loyal customers: Active customers who receive most of their financial services from the Group according to the commercial segment that they belong to. Various engaged customer levels have been defined taking profitability into account
•MDA: Maximum Distribution Amount
•mn: Million
•NII: Net Interest Income
•NPLs: Non-performing loans
•NPS: Net Promoter Score
•PBT: Profit before tax
•PoS: Point of Sale
•pp: percentage points
•PPI: Payment protection insurance
•QoQ: Quarter-on- quarter
•Repos: Repurchase agreements
•RoA: Return on assets
•RoE: Return on equity
•RoRWA: Return on risk-weighted assets
•RoTE: Return on tangible equity
•RWAs: Risk-weighted assets
•SAM: Santander Asset Management
•SBNA: Santander Bank N.A.
•SCF: Santander Consumer Finance
•SCIB: Santander Corporate & Investment Banking
•SC USA: Santander Consumer USA
•SEC: Securities and Exchanges Commission
•SH USA: Santander Holdings USA, Inc.
•SMEs: Small and medium enterprises
•SRF: Single resolution fund
•Switcher: clients who change bank as part of the Current Account Switch Service, in which the new bank is in charge of managing the whole process, free of charge, within 7 working days
•TLAC: The total loss-absorption capacity requirement which is required to be met under the CRD V package
•TLTRO: Targeted longer-term refinancing operations
•TNAV: Tangible net asset value
•UF: Unidad de fomento
•VaR: Value at Risk
•WM&I: Wealth Management & Insurance
•YoY: Year-on-year
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Important Information
IMPORTANT INFORMATION
Non-IFRS and alternative performance measures
This report contains, in addition to the financial information prepared in accordance with International Financial Reporting Standards (“IFRS”) and derived from our financial statements, alternative performance measures (“APMs”) as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority (ESMA) on 5 October 2015 (ESMA/2015/1415en) and other non-IFRS measures (“Non-IFRS Measures”). These financial measures that qualify as APMs and non-IFRS measures have been calculated with information from the Banco Santander Group; however those financial measures are not defined or detailed in the applicable financial reporting framework nor have been audited or reviewed by our auditors. We use these APMs and non-IFRS measures when planning, monitoring and evaluating our performance. We consider these APMs and non-IFRS measures to be useful metrics for our management and investors to compare operating performance between accounting periods, as these measures exclude items outside the ordinary course performance of our business, which are grouped in the “management adjustment” line and are further detailed in Section 3.2 of the Economic and Financial Review in our Directors’ Report included in our Annual Report on Form 20-F for the year ended 31 December 2021. Nonetheless, these APMs and non-IFRS measures should be considered supplemental information to, and are not meant to substitute IFRS measures. Furthermore, companies in our industry and others may calculate or use APMs and non-IFRS measures differently, thus making them less useful for comparison purposes. For further details on APMs and Non-IFRS Measures, including their definition or a reconciliation between any applicable management indicators and the financial data presented in the consolidated financial statements prepared under IFRS, please see the 2021 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (the “SEC”) on 1 March 2022, as updated by the Form 6-K filed with the SEC on 8 April 2022 in order to reflect our new organizational and reporting structure, as well as the section “Alternative performance measures” of the annex to the Banco Santander, S.A. (“Santander”) Q3 2022 Financial Report, published as Inside Information on 26 October 2022. These documents are available on Santander’s website (www.santander.com). Underlying measures, which are included in this report, are non-IFRS measures.
This report also contains statements on emissions and other climate-related performance data, statistics, metrics and/or targets (the “ESG Data”). The ESG Data are not financial data and are non-IFRS data. Such ESG Data are non-audited estimates, continue to evolve and may be based on assumptions believed to be reasonable at the time of preparation, but should not be considered guarantees. The ESG Data is for informational purposes only, is not intended to be comprehensive and does not constitute investment, legal or tax advice.
The businesses included in each of our geographic segments and the accounting principles under which their results are presented here may differ from the included businesses and local applicable accounting principles of our public subsidiaries in such geographies. Accordingly, the results of operations and trends shown for our geographic segments may differ materially from those of such subsidiaries.
Forward-looking statements
Santander advises that this report contains “forward-looking statements” as per the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements may be identified by words like “expect”, “project”, “anticipate”, “should”, “intend”, “probability”, “risk”, “VaR”, “RoRAC”, “RoRWA”, “TNAV”, “target”, “goal”, “objective”, “estimate”, “future”, “commitment”, “commit”, “focus”, “pledge” and similar expressions. Found throughout this report, they include (but are not limited to) statements on our future business development, performance, shareholder remuneration policy and ESG Data. However, a number of risks, uncertainties and other important factors may cause actual developments and results to differ materially from those anticipated, expected, projected or assumed in forward-looking statements. The following important factors, in addition to other factors discussed elsewhere in this report and other risk factors, uncertainties or contingencies detailed in our most recent Form 20-F and subsequent 6-Ks filed with, or furnished to, the SEC, as well as other unknown or unpredictable factors, could affect our future development and results and could cause materially different outcomes from those anticipated, expected, projected or assumed in forward-looking statements: (1) general economic or industry conditions of areas where we have significant operations or investments (such as a worse economic environment; higher volatility in the capital markets; inflation or deflation; changes in demographics, consumer spending, investment or saving habits; energy prices; and the effects of the war in Ukraine or the COVID-19 pandemic in the global economy); (2) climate-related conditions, regulations, targets and weather events; (3) exposure to various market risks (particularly interest rate risk, foreign exchange rate risk, equity price risk and risks associated with the replacement of benchmark indices); (4) potential losses from early repayments on our loan and investment portfolio, declines in value of collateral securing our loan portfolio, and counterparty risk; (5) political stability in Spain, the United Kingdom, other European countries, Latin America and the United States; (6) changes in legislation, regulations, taxes, including regulatory capital and liquidity requirements, especially in view of the United Kingdom exit from the European Union and increased regulation in response to financial crises; (7) our ability to integrate successfully our acquisitions and related challenges that result from the inherent diversion of management’s focus and resources from other strategic opportunities and operational matters; and (8) changes in our access to liquidity and funding on acceptable terms, in particular if resulting from credit spreads shifts or downgrade in credit ratings for the entire Santander, the Banco Santander Group or significant subsidiaries.
Forward looking statements are based on current expectations and future estimates about Santander’s and third-parties’ operations and businesses and address matters that are uncertain to varying degrees, including, but not limited to developing standards that may change in the future; plans, projections, expectations, targets, objectives, strategies and goals relating to environmental, social, safety and governance performance, including expectations regarding future execution of Santander’s and third-parties’ energy and climate strategies, and the underlying assumptions and estimated impacts on Santander’s and third-parties’ businesses related thereto;
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Important Information
Santander’s and third-parties’ approach, plans and expectations in relation to carbon use and targeted reductions of emissions; changes in operations or investments under existing or future environmental laws and regulations; and changes in government regulations and regulatory requirements, including those related to climate-related initiatives.
Forward-looking statements are aspirational, should be regarded as indicative, preliminary and for illustrative purposes only, speak only as of the date of this report, are informed by the knowledge, information and views available on such date and are subject to change without notice. Santander is not required to update or revise any forward-looking statements, regardless of new information, future events or otherwise, except as required by applicable law.
No offer
The information contained in this report is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by Santander. Any person at any time acquiring securities must do so only on the basis of such person’s own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in this report. No investment activity should be undertaken on the basis of the information contained in this report. In making this report available Santander gives no advice and makes no recommendation to buy, sell or otherwise deal in shares in Santander or in any other securities or investments whatsoever.
Neither this report nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities. No offering of securities shall be made in the United States except pursuant to registration under the U.S. Securities Act of 1933, as amended, or an exemption therefrom. Nothing contained in this report is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotion in the U.K. Financial Services and Markets Act 2000.
Historical performance is not indicative of future results
Statements about historical performance must not be construed to indicate that future performance, share price or results (including earnings per share) in any future period will necessarily match or exceed those of any prior period. Nothing in this report should be taken as a profit forecast.
Third Party Information
In this report, Santander relies on and refers to certain information and statistics obtained from publicly-available information and third-party sources, which it believes to be reliable. Neither Santander nor its directors, officers and employees have independently verified the accuracy or completeness of any such publicly-available and third-party information, make any representation or warranty as to the quality, fitness for a particular purpose, non-infringement, accuracy or completeness of such information or undertake any obligation to update such information after the date of this report. In no event shall Santander be liable for any use by any party of, for any decision made or action taken by any party in reliance upon, or for inaccuracies or errors in, or omission from, such publicly-available and third-party information contained herein. Any sources of publicly-available information and third-party information referred or contained herein retain all rights with respect to such information and use of such information herein shall not be deemed to grant a license to any third party.





This document is a translation of a document originally issued in Spanish. Should there be any discrepancies between the English and the Spanish versions, only the original Spanish version should be binding.





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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Banco Santander, S.A.
Date:    26 October 2022By:/s/ José García Cantera
Name:José García Cantera
Title:Chief Financial Officer