Banco Santander, S.A 6-K, filed Jul 24, 2024
Banco Santander, S.A. (SAN)
6-K
2024-07-24
For: 2024-06-30
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July 04, 2026
About this 6-K
Banco Santander, S.A filed this 6-K on July 24, 2024.
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 July, 2024 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 ☐
BANCO SANTANDER, S.A. ________________________ TABLE OF CONTENTS Item 1. January - June 2024 Earnings presentation
Earnings Presentation H1’24 24 July 2024
2 Important information Non-IFRS and alternative performance measures This presentation contains financial information prepared according to International Financial Reporting Standards (IFRS) and taken from our consolidated financial statements, as well as alternative performance measures (APMs) as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority (ESMA) on 5 October 2015, and other non-IFRS measures. The APMs and non-IFRS measures were calculated with information from Grupo Santander; however, they are neither defined or detailed in the applicable financial reporting framework nor audited or reviewed by our auditors. We use these APMs and non-IFRS measures when planning, monitoring and evaluating our performance. We consider them to be useful metrics for our management and investors to compare operating performance between periods. APMs we use are presented unless otherwise specified on a constant FX basis, which is computed by adjusting comparative period reported data for the effects of foreign currency translation differences, which distort period-on-period comparisons. Nonetheless, the APMs and non-IFRS measures are supplemental information; their purpose is not 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. APMs using ESG labels have not been calculated in accordance with the Taxonomy Regulation or with the indicators for principal adverse impact in SFDR. 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 2023 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (the SEC) on 21 February 2024 (https://www.santander.com/content/dam/santander- com/en/documentos/informacion-sobre-resultados-semestrales-y-anuales-suministrada-a-la-sec/2024/sec-2023-annual-20-f-2023-en.pdf), as well as the section “Alternative performance measures” of Banco Santander, S.A. (Santander) Q2 2024 Financial Report, published on 24 July 2024 (https://www.santander.com/en/shareholders-and-investors/financial-and-economic-information#quarterly- results). Underlying measures, which are included in this document, are non-IFRS measures. The businesses included in each of our geographic segments and the accounting principles under which their results are presented here may differ from the businesses included 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. Non-financial information This presentation contains, in addition to financial information, non-financial information (NFI), including environmental, social and governance-related metrics, statements, goals, commitments and opinions. NFI is not audited nor reviewed by an external auditor. NFI is prepared following various external and internal frameworks, reporting guidelines and measurement, collection and verification methods and practices, which are materially different from those applicable to financial information and are in many cases emerging and evolving. NFI is based on various materiality thresholds, estimates, assumptions, judgments and underlying data derived internally and from third parties. NFI is thus subject to significant measurement uncertainties, may not be comparable to NFI of other companies or over time or across periods and its inclusion is not meant to imply that the information is fit for any particular purpose or that it is material to us under mandatory reporting standards. NFI is for informational purposes only and without any liability being accepted in connection with it except where such liability cannot be limited under overriding provisions of applicable law. Forward-looking statements Santander hereby warns that this presentation contains “forward-looking statements” as per the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such statements can be understood through words and expressions like “expect”, “project”, “anticipate”, “should”, “intend”, “probability”, “risk”, “VaR”, “RoRAC”, “RoRWA”, “TNAV”, “target”, “goal”, “objective”, “estimate”, “future”, “commitment”, “commit”, “focus”, “pledge” and similar expressions. They include (but are not limited to) statements on future business development, shareholder remuneration policy and NFI.
3 Important information While these forward-looking statements represent our judgement and future expectations concerning our business developments, results may differ materially from those anticipated, expected, projected or assumed in forward-looking statements. In particular, 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 and may change, including, but not limited to (a) 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’ (including governments and other public actors) energy and climate strategies, and the underlying assumptions and estimated impacts on Santander’s and third-parties’ businesses related thereto; (b) Santander’s and third-parties’ approach, plans and expectations in relation to carbon use and targeted reductions of emissions, which may be affected by conflicting interests such as energy security; (c) changes in operations or investments under existing or future environmental laws and regulations; (d) changes in rules and regulations, regulatory requirements and internal policies, including those related to climate-related initiatives; (e) our own decisions and actions including those affecting or changing our practices, operations, priorities, strategies, policies or procedures; (f) events that lead to damage to our reputation and brand; (g) exposure to operational losses, including as a result of cyberattacks, data breaches or other security incidents; and (h) the uncertainty over the scope of actions that may be required by us, governments and others to achieve goals relating to climate, environmental and social matters, as well as the evolving nature of underlying science and industry and governmental standards and regulations. In addition, the important factors described in this presentation 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 lead to outcomes materially different from what our forward-looking statements anticipate, expect, project or assume. Forward-looking statements are therefore aspirational, should be regarded as indicative, preliminary and for illustrative purposes only, speak only as of the date of this presentation, 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. Santander does not accept any liability in connection with forward-looking statements except where such liability cannot be limited under overriding provisions of applicable law. Not a securities offer This presentation and the information it contains does not constitute an offer to sell nor the solicitation of an offer to buy any securities. Past performance does not indicate future outcomes Statements about historical performance or growth rates must not be construed as suggesting that future performance, share price or results (including earnings per share) will necessarily be the same or higher than in a previous period. Nothing in this presentation should be taken as a profit and loss forecast. Third Party Information In this presentation, 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 presentation. 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.
4 Index 1 H1’24 Highlights Progress on our strategy Group review 2 Final remarks 3 Appendix 4
5 Another record quarterly profit, including €0.5bn net one-time charges; recurring Q2 profit of €3.7bn Strong operating performance and increase in profitability supported by ONE Transformation Solid balance sheet and higher shareholder remuneration supporting sustained value creation FL CET1 TNAVps + DPS Efficiency RoTE Q2’24 attributable profit H1’24 attributable profit +137bps +0.22pp 12.5% 41.6% -261bps annualizing the temporary levy impact 15.9% Record H1’24 results with all our global businesses contributing to our 2024 targets +12% +16%+20% €3.2bn €6.1bn YoY Note: YoY changes. In constant euros: Q2’24 attributable profit +20% and H1’24 attributable profit +15%. P&L accounts are all presented on an underlying basis. TNAVps + Cash DPS includes the €8.10 cent cash dividend paid in November 2023 and the €9.50 cent cash dividend paid in May 2024, executed as part of our shareholder remuneration policy. 16.3%
6 Double-digit YoY profit increase driven by strong growth in net operating income, supported by customer revenue and efficiency improvements Excellent business and commercial dynamics continued in H1’24 • Record NII, fees, total revenue, net operating income and profit • C/I and RoTE improvement ex. Argentina P&L Current Constant Current Constant € million H1'24 H1'23 % % % % NII 23,457 20,920 12 11 11 10 Net fee income 6,477 6,103 6 6 8 7 Other income 1,116 1,211 -8 -7 8 9 Total revenue 31,050 28,234 10 9 10 10 Operating expenses -12,913 -12,479 3 3 5 4 Net operating income 18,137 15,755 15 14 15 14 LLPs -6,243 -5,771 8 8 9 8 Other results* -2,386 -1,655 44 43 40 39 Attributable profit 6,059 5,241 16 15 16 15 Note: underlying P&L. All references to variations in constant euros across the presentation include Argentina in current euros to mitigate distortions from a hyperinflationary economy. Additionally, from Q2 2024 onwards, we have begun to apply a new inflation-adjusted exchange rate for the Argentine peso. For further information, please see the ‘Alternative Performance Measures’ section of the Quarterly Financial Report. (*) Including the temporary levy on revenue earned in Spain (-€335mn in Q1’24 and -€224mn in Q1’23) and the write-downs in Q2’24 related to our merchant platform in Germany (-€214mn; -€170mn net of taxes) and Superdigital in Latin America (-€100mn; -€73mn net of taxes).
7 after Basel III implementation A record H1’24 puts us on track to exceed our 2024 targets … Note: targets market dependent. Based on macro assumptions aligned with international economic institutions. (1) YoY change in constant euros, except Argentina in current euros. Revenue1 Efficiency CoR FL CET1 RoTE H1’24 2024 targets High-single digit growth c.42% >16% Upgraded 2024 targets CONFIRMED CONFIRMED UPGRADED UPGRADED UPGRADED +9% 41.6% <43% 1.2% c.1.2% 12.5% >12.0% 15.9% 16% Mid-single digit growth annualizing the temporary levy impact 16.3%
8 … backed by execution of ONE Transformation, improving both revenue and costs … H1’24FY’22 Note: H1’24 or latest available data. Efficiency execution 2022-H1’24 • Product simplification: 6% fewer products in Q2’24 (-23% vs. Dec-22) • 59% products / services digitally available (58% Mar-24; 56% Dec-23) • US: $20mn efficiencies in Q2’24 ($230mn since 2022) captured in Consumer and Commercial ONE Transformation -266bps • Multi-Nationals: +3% YoY revenue growth • Wealth: collaboration fees with CIB and Corporates reached €2.03bn (+12% vs. H1’23) • Consumer: expansion of OEM agreements Global & Network businesses -87bps Global Tech capabilities & others • Global approach to technology: €77mn efficiencies in Q2’24 (€314mn since 2022) - Gravity (back-end) efficiencies - Process optimization - Global vendor agreements - IT&Ops shared-services -71bps 41.6%45.8% Reminder from Investor Day Efficiency 2022-2025 200-250bps c. 42% 100-150bps 50-75bps FY’22 2025 target 45.8%
9 … and by our five global businesses, leveraging our global scale to accelerate profitable growth 52% 20% 13% 6% 9% Revenue (€bn) Contribution to Group revenue C/I RoTE H1’24 2025 RoTE target c.17% >14% >20% c.60% >30% 15-17% Note: YoY changes and revenue in constant euros. Contribution to Group revenue as a percentage of total operating areas, excluding the Corporate Centre. Global businesses’ RoTEs are adjusted based on Group’s deployed capital. Data are presented annualizing the impact of the temporary levy. Without annualizing its impact: Retail 17.4% (+4.1pp); Consumer 12.8% (+0.3pp); CIB 19.0% (-2.3pp); Wealth 79.3% (+3.4pp); PagoNxt EBITDA margin 20.1% (not affected) and Group 15.9% (+1.4pp). Retail Consumer CIB Wealth Payments Group PagoNxt EBITDA margin 16.3 +12% 6.4 +7% 4.2 +6% 1.8 +12% 2.7 +3% 31.1 +9% 39.5% 18.1% -4.8pp +4.3pp 40.6% 13.0% -2.7pp +0.4pp 43.4% 19.1% +5.2pp -2.2pp 34.4% 80.4% -2.3pp +3.5pp 46.9% 20.1% +0.5pp +8.9pp 41.6% 16.3% -2.6pp +1.3pp
10 2,981 3,066 3,146 3,110 3,083 3,064 Q1'23 Q2 Q3 Q4 Q1'24 Q2 Retail: delivering 12% revenue growth with costs flat, by deploying global platforms # of products1 (k) # of non-commercial FTEs1 per mn total customers Active customers (mn) Execution of the strategy Key drivers Driving growth and efficiency on the back of our new model and proprietary technology Note: data and YoY changes in constant euros. RoTE annualizing the impact of the temporary levy. (1) Metrics cover all products and employees in the branch network in our 10 main countries. Operational leverage – Revenue vs. Costs (€ mn, excl. Argentina) Revenue Costs H1’24 financials Profit €3,326mn +35% +3% -23% -8% New digital onboarding and simplified product offering leading to an increase in customers and digital sales Customer experience Automated processes and a leaner organization driving efficiencies and a reduction of non-commercial FTEs New platform (ODS-Gravity) reducing the cost per transaction and driving efficiencies. Gravity implementation completed in the US Operational leverage Global platform Loans Deposits CoR RoTEC/I €619bn -1% €637bn +2% 1.03% +11bps 39.5% -4.8pp 18.1% +4.3pp 6,769 7,178 7,629 7,370 7,655 8,027 Q1'23 Q2 Q3 Q4 Q1'24 Q2 74.6 77.2 Dec-22 Jun-24 10.1 7.8 Dec-22 Jun-24 657 605 Jun-23 Jun-24
11 Consumer: strong improvement in operational leverage and better deposit cost-to-serve Fully-digital financing experience available for our auto partners Expanding partnerships across regions Customer experience Launched a new onboarding for pure digital players Double-digit deposit growth supported by our digital solutions Openbank launch in the US and Mexico Zinia’s successful launch of instalment loans with Apple in Germany Operational leverage Global platform Transforming into a best-in-class, global business and operating model H1’24 financials Key drivers Operating performance (€ mn) Non-autoAuto Retail deposits cost-to-serve (%) Total customers (mn) Operating expenses / ANEAs (%) Note: data and YoY changes in constant euros. Revenue and costs are negligibly affected by distortions from Argentina. RoTE annualizing the impact of the temporary levy. ANEAs: average net earning assets, including renting. CostsRevenue RevenueOperational leverage Execution of the strategy -1% -0.19pp -0.22pp +6% +8%+7% +0% Profit Loans Deposits CoR RoTEC/I €213bn +6% -2.7pp 40.6% €122bn +14% +31bps 2.17% €1,070mn +4% +0.4pp 13.0% 4,289 4,564 H1'23 H1'24 1,742 1,885 H1'23 H1'24 2,610 2,618 H1'23 H1'24 6,031 6,449 H1'23 H1'24 25.2 25.0 Dec-22 Jun-24 1.18 0.99 2022 H1'24 2.69 2.47 2022 H1'24
12 82 84 2022 H1'24 Key drivers Playing to our strengths to better serve our corporate customers and institutions Fee growth (€ bn) % Total revenue / RWAs % customer related revenue 80% CIB: US investments drove 12% fee growth and strong RoTE of 19% Note: data and YoY changes in constant euros. RoTE annualizing the impact of the temporary levy. Revenue (€ mn) Global Transaction Banking Global Markets Global Banking H1’24 financialsExecution of the strategy +2pp +1.1pp+12% +1% +17% +4% Significant progress broadening our product offering in the US Development of Markets infrastructure to serve institutional clients Customer experience Enhanced global centres of expertise, with new and strengthened industry and product teams Increased distribution capabilities, evolving our originate-to- share model towards a mainstream end-to-end platform Operational leverage Global platform Profit Loans Deposits CoR RoTEC/I €144bn +7% 43.4% +5.2pp €130bn -6% €1,405mn -5% 0.15% -4bps 19.1% -2.2pp 1,377 1,387 H1'23 H1'24 996 1,170 H1'23 H1'24 1,500 1,559 H1'23 H1'24 1.1 1.3 H1'23 H1'24 5.9 7.0 2022 H1'24
13 Revenue (including ceded fees, € mn) Wealth: network collaboration fees up 12% and profitability over 80% Key drivers Accelerating our customers’ connectivity with our global product platforms Santander Asset Management Private Banking Note: data and YoY changes in constant euros. RoTE annualizing the impact of the temporary levy. Including all fees generated by Santander Asset Management and Insurance, even those ceded to the commercial network, which are reflected in Retail’s P&L, PAT + fees of €1,714mn (+12% YoY). (1) Includes off-balance sheet assets and deposits. (2) Annualized net new money as % of total PB CAL. Annualized net sales as % of SAM’s AuMs. (3) Includes all fees generated by Santander Asset Management and Insurance, even those ceded to the commercial network, which are reflected in Retail’s P&L. Collaboration fees (€ bn) Revenue growth including ceded fees3 (€ bn) Assets under management1 (€ bn) H1’24 financialsExecution of the strategy +20% +12% +12% Fees ceded to the commercial network Improved customer relationships, providing the best service with the right solutions, reflected in +13% YoY PB customer growth Customer experience Boosted results by fostering collaboration with Retail (including Corporates) and CIB, and by connecting PB across countries Accelerating the regionalization of our auto insurance platform to promote direct-to-consumer business and new segments Operational leverage Global platform Profit Net new money (PB) Net sales (SAM) Gross written premiums RoTEC/I €11.9bn of volumes2 €8.9bn 8% of volumes28% 34.4% -2.3pp €818mn +14% €6.1bn -1% +3.5pp 80.4% 228 229 868 953 1,095 1,182 H1'23 H1'24 263 307 332 374 595 681 H1'23 H1'24 1,104 1,253 H1'23 H1'24 1.80 2.03 H1'23 H1'24 2.8 3.1 H1'23 H1'24 400 480 Dec-22 Jun-24 +13% +14% Insurance +8%
14 +4% Key drivers Seizing a growing opportunity by capturing scale through global platforms Revenue (€ mn) PagoNxt Cards Note: data and YoY changes in constant euros. Transactions include merchant payments, cards and electronic A2A payments. (1) Revenue growth excluding a one-time positive fee recorded in Q1 2023 from commercial agreements in Brazil. (2) Profit and YoY change including the write-downs related to our merchant platform in Germany and Superdigital in Latin America. Cost per transaction (€ cents, PagoNxt) % open market revenue (PagoNxt) # transactions (bn per month) % growth exc. Q1’23 impact1 Payments: PagoNxt open market revenue above 22% and EBITDA margin over 20% H1’24 financialsExecution of the strategy +23% -9% +8.7pp Invisible Payments providing the best experience New Dynamic Currency Conversion rolled out in Getnet Mexico Customer experience Capex optimization, operational efficiencies and more transactions in PagoNxt Payments, driving down the cost per transaction Significant progress in our Global Cards platform (Plard) Getnet focusing on leveraging Group’s scale Operational leverage Global platform Profit Payments TPV Getnet Active customers Ebury Turnover Cards EBITDA margin PagoNxt C/I Payments €108bn +12% +23% 23k €159bn +5% +8.9pp 20.1% +0.5pp 46.9% +30% €292mn €49mn -78% with one-offs2 13.6 22.4 2022 H1'24 2,108 2,117 H1'23 H1'24 2.6 3.2 2022 H1'24 4.1 3.7 2022 H1'24 522 583 H1'23 H1'24 +0% +12%
15 Note: our shareholder remuneration policy is c.50% payout (split in approximately equal parts in cash and share buybacks). Implementation of shareholder remuneration policy is subject to future corporate and regulatory decisions and approvals. (1) TNAVps + Cash DPS includes the €8.10 cent cash dividend paid in November 2023 and the €9.50 cent cash dividend paid in May 2024, executed as part of the shareholder remuneration policy. c.10% revenue growth and share buybacks drove EPS up 19% and a 12% increase in TNAVps + Cash DPS TNAVps + Cash DPS € per share Cash DPS: €17.6 cents 4.57 4.94 5.11 Jun-23 Jun-241 EPSRoTE % € cents Since 2021, Santander has repurchased c.11% of its outstanding shares 30.8 36.7 H1'23 H1'24 Annualizing the impact of the temporary levy +12%+19%+134bps 14.5 15.9 15.0 16.3 H1'23 H1'24
16 Index 1 H1’24 Highlights Progress of our strategy Group review 2 Final remarks 3 Appendix 4
17 2,571 2,670 2,902 2,933 2,852 3,207 Q1'23 Q2 Q3 Q4 Q1'24 Q2 +12% Double-digit YoY profit increase driven by strong growth in net operating income, supported by customer revenue and efficiency improvements € mn Attributable profit (Constant € mn) QoQ P&L Current Constant € million H1'24 H1'23 % % NII 23,457 20,920 12 11 Net fee income 6,477 6,103 6 6 Other income 1,116 1,211 -8 -7 Total revenue 31,050 28,234 10 9 Operating expenses -12,913 -12,479 3 3 Net operating income 18,137 15,755 15 14 LLPs -6,243 -5,771 8 8 Other results* -2,386 -1,655 44 43 Attributable profit 6,059 5,241 16 15 +20% 2,613 2,671 2,897 2,922 2,843 3,216 Attributable profit Note: underlying P&L. (*) Including the temporary levy on revenue earned in Spain (-€335mn in Q1’24 and -€224mn in Q1’23) and the write-downs in Q2’24 related to our merchant platform in Germany (-€214mn; -€170mn net of taxes) and Superdigital in Latin America (-€100mn; -€73mn net of taxes).
18 NII up 2% and costs flat QoQ when Argentina is excluded Fees NII 3,094 3,179 760 963 Other income Costs Revenue 6,244 6,254 Q1'23 Q2 Q3 Q4 Q1'24 Q2 14,767 15,263 Group excluding ArgentinaGroup Current Constant Current Constant % % % % NII -4 -4 1 2 Net fee income 0 1 2 3 Other income 511 506 27 27 Total revenue 2 3 3 3 Operating expenses -3 -2 0 0 Net operating income 5 6 5 6 Attributable profit 12 13 11 11 Group quarterly performance excluding Argentina 10,914 11,121 +3% 0% +2% +3% Constant € mn Following a prudent approach, we started to use a new inflation-adjusted exchange rate for Argentina in Q2, which affected QoQ trends Q2’24 vs. Q1’24
19 16,273 14,107 14,303 14,785 14,489 15,323 15,727 Q1'23 Q2 Q3 Q4 Q1'24 Q2 31,050 -8 28,410 +1,728 +418 +238 +194 +71 H1'23 Retail Consumer CIB Wealth Payments CC H1'24 +12% +7% +6% +12% +3% High-single digit revenue growth backed by customer activity across our businesses • >95% of total revenue is customer related which drove the vast majority of total revenue growth • Strong revenue increase YoY reflecting the benefits of our model, with all businesses and regions growing • Retail up double digits, with positive volumes trends in the Americas, and good margin management across regions • Consumer accelerated revenue growth, backed by DCB Europe (higher volumes and active asset repricing) and Brazil (higher activity and lower interest rates) • CIB increased to record levels in H1, on the back of strong NII and record fee performance, with growth across all three businesses • Wealth up double digits backed by strong commercial activity across businesses and good margin management in PB • Payments up, +6% excluding a one-time positive fee in Cards in Q1’23 from commercial agreements. Of note, PagoNxt +12% Total revenue Group Detail by business Note: data and YoY % changes in constant euros. YoY growth Total revenue +9% +10% with official Argentine FX rate Constant € mn
20 2.63% 2.73% 2.82% 2.76% 2.97% 2.89% Margins 10,333 10,759 11,182 11,082 11,939 11,518 12,279 Q1'23 Q2 Q3 Q4 Q1'24 Q2 Widening spreads drive NII and NIM expansion Note: NIM = NII / Average earning assets. Data and YoY % changes in constant euros. GTB: Global Transaction Banking. GB: Global Banking. NIM Quarterly NII NIM 2.93% -0.35 -0.08 2.68% +0.54 +0.14 H1'23 Asset yields Asset volumes Liability costs Liability volumes H1'24 Net interest income +7% 3.07% with official Argentine FX rate with official Argentine FX rate • >80% of the Group’s NII is from our Retail and Consumer businesses • Solid H1 NII increase YoY (+11%) across all businesses and regions − Retail in Europe and North America continued to rise on the back of strict liability management − Retail in South America and Consumer, supported by volume growth and negative interest rate sensitivity − Strong growth in CIB on the back of solid activity in GB • Q2 up 2% excl. Argentina mainly driven by Retail (+2%), with strong growth in South America (Chile and Brazil) and Europe slightly up − Consumer (+1%), expected to accelerate going forward − CIB (+6%) growing strongly, supported by GTB and GB − Retail in North America affected by change of mix in Mexico • NIM continued to improve YoY driven by asset repricing and controlled cost of deposits • Strong European franchise, mostly funded by stable retail deposits, and good momentum in South America Net interest income and NIM Constant € mn
21 • Good commercial dynamics, with generalized fee growth across the Group • Fees boosted by higher activity in account maintenance, funds and FX, especially in Brazil, Poland, the US and Mexico 3,076 3,047 3,089 2,816 3,225 3,252 3,361 Q1'23 Q2 Q3 Q4 Q1'24 Q2 Net fee income growth shows value added from our global businesses Note: data and YoY % changes in constant euros. Retail CIB Wealth Consumer Payments YoY growth 6,477 -107 6,124 +72 +157 +133 +91 +8 H1'23 Retail Consumer CIB Wealth Payments CC H1'24 +3% +27% +12% +15% -7% +6% +7% with official Argentine FX rate • Double-digit growth across its core markets, driven by insurance in DCB Europe, volumes in Brazil and auto in the US • Expanding existing partnerships across regions • Record fee income in H1, supported by all CIB businesses. Of note, Global Banking (+25%) • The US became the top contributor to CIB’s fee growth, reflecting the outcomes from our US Banking Build-Out strategy • Strong growth on the back of solid increases in Europe and North America • More recurrent activity in PB and record AuM levels in SAM • Payments affected by the one-time positive fee in Cards in Q1’23 from commercial agreements • In PagoNxt, strong growth of total payments volume (TPV) (+12% YoY) and transactions (+7% YoY), mainly in Europe and Mexico Net fee income Constant € mn
22 12,913 -15 12,543 +5 +8 +299 +30 +43 H1'23 Retail Consumer CIB Wealth Payments CC H1'24 ONE Transformation driving structural efficiency gains and positive jaws Note: data and YoY % changes in constant euros. (1) Costs in real terms exclude the impact from weighted average inflation. Costs -4% -3% +16% +2% -0% -11% ( in real terms1)-1% Costs YoY growth in real terms1 Efficiency Quarterly +3% 6,206 6,337 6,446 6,448 6,530 6,383 6,605 Q1'23 Q2 Q3 Q4 Q1'24 Q2 with official Argentine FX rate • Strong quarterly trend. H1’24 efficiency ratio improved 3pp YoY to 41.6%, even when we are investing in our transformation • Transformation investments (technology) in H1’24 totalled €1.2bn (€3.6bn since 2022) • Most businesses reflecting strong operational leverage from our initiatives to move towards a simpler and more integrated model • Costs fell 2% QoQ (flattish excluding Argentina), after three stable quarters • Costs decreased 1% YoY in real terms, with widespread reductions and efficiency gains - Retail: strong decline in costs, reflecting our transformation efforts - Consumer: costs down despite investments and business growth - CIB: higher costs as we invest for future growth through US BBO, our initiative to develop new products and capabilities - Wealth: slightly up due to higher commercial activity and reinforcing our PB teams - Payments: decreased even with Cards and PagoNxt still in investment phases - Corporate Centre: down driven by ongoing simplification measures Efficiency Efficiency and costs Constant € mn 44.1% 44.3% 43.6% 44.4% 42.6% 40.6%
23 Stable credit quality in line with 2024 target Note: CoR - provisions to cover losses due to impairment of loans in the last 12 months / average customer loans and advances of the last 12 months. Data in constant euros. Stages in current euros. Credit quality Detail by business CoR 12 month LLPs Other credit quality metrics 1.05% 1.08% 1.13% 1.18% 1.20% 1.21% Jun-23 Mar-24 Jun-24 NPL ratio 3.07% 3.10% 3.02% Coverage ratio 68% 66% 66% Stage 1 €1,011bn €1,007bn €1,008bn Stage 2 €75bn €83bn €94bn Stage 3 €35bn €36bn €35bn • YTD CoR stood at 1.17%, despite increasing CHF mortgage portfolio coverage • Credit quality remains robust, backed by overall good economic performance and record low unemployment in most countries • NPL ratio of 3.02%, improving significantly both YoY and QoQ with stable coverage ratio • In Retail, which represents 50% of Group LLPs, CoR remained stable QoQ at 1.03% − Spain: improving CoR and NPL YoY and QoQ − UK: CoR stable at very low levels − Brazil: CoR improving slightly QoQ and better NPL YoY − Mexico: CoR normalizing in line with expectations and affected by change of mix. NPL improved QoQ • In Consumer, which represents 35% of Group LLPs, CoR normalized YoY to 2.17% (both DCB Europe and the US), in line with expectations, and remained fairly stable QoQ LLPs and credit quality Constant € mn 2,903 2,898 3,234 3,391 3,104 3,139 Q1'23 Q2 Q3 Q4 Q1'24 Q2
24 Front book pricing RoRWA of new book Enhanced capital strength: profitable organic generation, with new front book at 23% RoTE, and record distributions % (1) Shareholder remuneration charged against profit earned in Q2 2024 in line with our c.50% payout target, divided approximately equally between cash dividends and share repurchases. The implementation of the shareholder remuneration policy is subject to future corporate and regulatory decisions and approvals. FL CET1 % RWAs with RoRWA > CoE Asset rotation and risk transfer activities RWAs mobilized vs. credit RWAs Maximize capital productivity Jun-24 or estimates 84% 16% 2.9% 1 12.5 -0.25 - -0.07 12.3 +0.52 Mar-24 Organic generation Shareholder remuneration Regulatory & Models Markets & others Jun-24 CET1 performance and capital productivity
25 Index 1 H1’24 Highlights Progress of our strategy Group review 2 Final remarks 3 Appendix 4
26 RoTE1 Profitability FL CET1 Strength RWAs with RoRWA > CoE Disciplined capital allocation Payout 50% Shareholder remuneration Note: target payout defined as c.50% of Group reported profit (excluding non-cash, non-capital ratios impact items), distributed approximately 50% in cash dividend and 50% in share buybacks. Execution of the shareholder remuneration policy is subject to future corporate and regulatory decisions and approvals. (1) RoTE annualizing the temporary levy impact. >12% c.85% 15-17% H1’24 vs. 2025 ID targets Making progress towards our ID targets in our new phase of value creation for our shareholders Cash dividend + SBB 50% annually 84%TNAVps + DPS Double-digit growth average through-the-cycle +12% 12.5% 16.3%
27 All-time high quarterly and half-year profit, driving an upgrade of our 2024 targets Note: targets market dependent. Based on macro assumptions aligned with international economic institutions. H1’24 RoTE annualizing the temporary levy impact. (1) YoY change in constant euros, except Argentina in current euros. (2) On average through-the-cycle. Record profit supported by an outstanding P&L from top to bottom Excellent business dynamics: record NII, fees, revenue and net operating income ONE Transformation and value-added by our global businesses, accelerating operational leverage and profitable growth Revenue and efficiency guidance for 2024 upgraded Sound credit quality performance in H1’24 CoR expected to remain at similar levels under current macro conditions Robust balance sheet with strong capital levels (CET1 +20bps in Q2) Unequivocally committed to maintaining our CET1 ratio above 12% Capital productivity and disciplined capital allocation, driving profitability and shareholder value creation Improved RoTE guidance. Confirmed double-digit growth2 TNAVps + Cash DPS Revenue1 Efficiency CoR FL CET1 RoTE High-single digit growth c.42% >16% Upgraded 2024 targetsH1’24 +9% 41.6% 1.2% 12.5% c.1.2% >12% Confirmed Confirmed after Basel III implementation 16.3%
28 Index 1 H1’24 Highlights Progress of our strategy Group review 2 Final remarks 3 Appendix 4
29 Appendix Investor Day Targets summary Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary The other information in the Appendix regularly provided each quarter can be found in the document entitled "Supplementary Information", published together with this presentation on the Group's corporate website
30 (1) Target payout defined as c.50% of Group reported profit (excluding non-cash, non-capital ratios impact items), distributed approximately 50% in cash dividend and 50% in share buybacks. Execution of the shareholder remuneration policy is subject to future corporate and regulatory decisions and approvals. (2) Those customers who meet transactionality threshold in the past 90 days. (3) Total transactions annual growth include merchant payments, cards and electronic A2A payments. Target c.+8% CAGR 2022-25. (4) Information is audited on a limited assurance basis. Green finance raised & facilitated (€bn): since 2019 (not EU taxonomy aligned). Financial inclusion (# people, mn): since 2023. Definitions in the Glossary section in this document. Equal pay gap is calculated annually. ONE Transformation driving double-digit growth in value creation TNAVps+DPS (Growth YoY) Double-digit growth average through-the-cycle+6% +15% RoTE (%) Payout (Cash + SBB)1 (%) EPS Growth (%) Total customers (mn) Active customers (mn)2 Simplification & automation Efficiency ratio (%) Customer activity Transactions volume per active customer (month, % growth)3 FL CET1 (%) RWA with RoRWA > CoE (%) Green financed raised & facilitated (€bn) Socially responsible Investments (AuM) (€bn) Financial inclusion (# People, mn) Women in leadership positions (%) Equal pay gap (%) Profitability Customer centric Capital ESG4 2022 2023 H1'24 2025 targets 13.4 15.1 15.9 15-17 40 50 50 50 23 21.5 19.2 Double-digit 160 165 168 c.200 99 100 101 c.125 45.8 44.1 41.6 c.42 - 10 9 c.+8 12.0 12.3 12.5 >12 80 84 84 c.85 94.5 114.6 123.4 120 53 67.7 74.0 100 - 1.8 2.8 5 c.29 31.4 31.1 35 c.1 c.0 - c.0 +12%
31 Appendix Investor Day Targets summary Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary The other information in the Appendix regularly provided each quarter can be found in the document entitled "Supplementary Information", published together with this presentation on the Group's corporate website
32 Detail by global business
33 Key data P&L Retail & Commercial Banking Highlights Loans Deposits Mutual Funds Efficiency CoR RoTE Note: Jun-24 data and YoY changes (loans, deposits and mutual funds in constant euros). RoTE annualizing the impact of the temporary levy. • Our transformation and disciplined capital allocation are reflected in a significant rise in total customers, efficiency improvements (-4.8pp to 39.5%) and higher profitability (RoTE +4pp to 18.1%) • Loans slightly down YoY, still affected by prepayments in Spain and a strict pricing policy in the UK. Growth in South America (lower interest rates), Mexico and Poland. Generalized increases in deposits and mutual funds • Strong profit growth YoY (+35%), with a solid revenue performance, lower costs in real terms and a drop in LLPs: - NII rose, mainly driven by Europe (good margin management) and South America (volumes and lower cost of deposits) - Solid fee performance boosted by higher activity in account maintenance, funds and FX, especially in Brazil, Poland, the US and Mexico - LLPs improved and CoR was stable due to the good performance in Europe, which offset normalization in Mexico and volumes in Brazil • Quarterly trends affected by Argentina. Excluding it, profit grew 22%, on the back of strong revenue growth and good underlying credit quality trends. Additional CHF provisions in Q2 were partially offset by the charge related to the temporary levy in Q1 Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 % H1'23¹ NII 6,870 -3.0 14,015 11.6 13.0 Net fee income 1,173 -0.4 2,366 3.1 3.5 Total revenue 8,226 3.2 16,274 11.9 13.1 Operating expenses -3,119 -4.8 -6,423 0.1 0.8 Net operating income 5,107 8.7 9,851 21.2 22.9 LLPs -1,564 4.6 -3,087 -1.3 -0.8 Attributable profit 1,824 21.8 3,326 34.9 37.4 (*) € mn and % change in constant euros. (1) % change in current euros. €619bn -1% €637bn +2% €92bn +22% 39.5% -4.8pp 1.03% +11bps 18.1% +4.3pp
34 New lending Deposits Mutual Funds Efficiency CoR RoTE Digital Consumer Bank Highlights Key data • We continue expanding our leadership in consumer finance across our footprint, converging towards a more digital global operating model and implementing enhanced solutions through common platforms • Loans up 6%, driven by higher new business volumes (+8%) mainly in Brazil and Europe, in a context of higher activity in auto • Deposits rose 14%, mainly in Europe, in line with our deposit gathering strategy to lower funding costs and reduce NII volatility across the cycle • Net operating income increased double-digits, supported by a positive revenue performance, including a 27% rise in fees, and good cost control (-3% in real terms) • Profit up 4% YoY, mainly driven by solid net operating income, and despite CoR normalization towards pre-pandemic levels and the impact from the additional CHF provisions to increase coverage • Profit rose 31% QoQ mainly driven by lower LLPs in the US, with positive trends in revenue and stable costs Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 % H1'23¹ NII 2,655 -1.9 5,364 6.7 6.8 Net fee income 387 9.7 742 26.8 27.1 Total revenue 3,264 2.6 6,449 6.9 7.0 Operating expenses -1,307 -0.5 -2,618 0.3 0.4 Net operating income 1,957 4.8 3,831 12.0 12.1 LLPs -1,055 -7.0 -2,193 21.4 21.6 Attributable profit 606 30.8 1,070 4.3 4.2 (*) € mn and % change in constant euros. (1) % change in current euros. Note: Jun-24 data (loans and deposits) and H1’24 new lending; YoY changes in constant euros. RoTE annualizing the impact of the temporary levy. P&L €46.7bn +8% €213bn +6% €122bn +14% 40.6% -2.7pp 2.17% +31bps 13.0% +0.4pp
35 Corporate & Investment Banking Highlights Key data • We continue making our centres of expertise more sophisticated, deepening client relationships, with focus on our Global Markets, the US Banking Build-Out strategy and actively managing capital • Strong activity YoY, mainly supported by Global Banking and Global Markets - Global Transaction Banking: positive trends in Export Finance partially offset by weaker activity in Cash Management (interest rate cuts) with Trade & Working Capital Solutions remained flat - Global Banking: strong activity with DCM gaining market share in Europe, LatAm and the US, and Corporate Finance, benefitting from positive market momentum - Global Markets: good activity levels, mainly in Europe, partially offset by a more challenging environment in Brazil • Revenue grew across businesses reaching record levels in H1, particularly driven by NII and fees. Profit down, as we invest for growth • Quarterly trends affected by Argentina. Excluding it, strong NII growth (+6%) offset by gains on financial transactions performance and our investments in transformation Loans Deposits Efficiency CoR RoTE 43.4% +5.2pp 0.15% -4bps 19.1% -2.2pp €144bn +7% €130bn -6% Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 % H1'23¹ NII 969 -7.9 2,031 22.0 21.6 Net fee income 626 -4.0 1,280 11.6 12.0 Total revenue 2,076 -1.2 4,188 6.0 5.9 Operating expenses -930 4.8 -1,817 19.7 20.2 Net operating income 1,146 -5.6 2,371 -2.5 -3.0 LLPs -56 39.4 -96 — — Attributable profit 700 0.0 1,405 -4.6 -4.9 (*) € mn and % change in constant euros. (1) % change in current euros. Note: Jun-24 data and YoY changes (loans and deposits in constant euros). RoTE annualizing the impact of the temporary levy. P&L
36 Gross written premiums Efficiency RoTE AuMs Net new money (PB) Net sales (SAM) Wealth Management & Insurance Highlights Key data Note: Jun-24 data (AuMs); H1’24 data (net new money, net sales and GWPs). YoY changes in constant euros. RoTE annualizing the impact of the temporary levy. (2) Considering annualized net new money as a % of total CAL and net sales as a % of SAM’s AuMs. (3) Including fees generated by asset management and insurance ceded to the commercial network. • We continue building the best Wealth and Insurance manager in Europe and the Americas, supported by our leading global private banking platform and our best-in-class funds and insurance product factories • Euromoney named us the Best International Private Bank in Latin America for the second year in a row, and the Best International Private Bank in 8 of our countries • AuMs at record levels (+13% YoY), backed by excellent commercial dynamics, both in Private Banking and SAM, and positive market performance • Double-digit profit growth YoY supported by revenue, with positive interest margin management and solid growth in fees across all three businesses. Total contribution to Group profit3 increased 12% YoY • Profit up QoQ driven by good revenue performance, mainly in Insurance, controlled costs and the impact of having charged the temporary levy in Q1 of volumes2 of volumes2 €480bn +13% €11.9bn 8% €8.9bn 8% €6.1bn -1% 34.4% -2.3pp 80.4% +3.5pp Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 % H1'23¹ NII 404 -4.4 827 13.4 13.8 Net fee income 355 -2.6 719 14.6 14.9 Total revenue 897 0.7 1,789 12.2 12.6 Operating expenses -309 1.0 -615 5.2 5.5 Net operating income 588 0.6 1,173 16.2 16.7 LLPs -10 147.9 -14 — — Attributable profit 417 4.5 818 14.3 15.0 Contribution to profit 879 5.3 1,714 12.1 12.5 (*) € mn and % change in constant euros. (1) % change in current euros. P&L
37Note: Jun-24 data and YoY changes in constant euros. In PagoNxt, a negative growth rate in profit indicates a lower loss. Number of cards managed by Cards is 101 million, as it excludes those managed by Digital Consumer Bank including Openbank (3 million cards). 11.2% 20.1% H1'23 H1'24 • TPV increased 12% YoY in Getnet, driven by Mexico, Chile and Europe. Active customers growing strongly in Ebury (+23% YoY) • Revenue rose 12% due to an overall increase in business activity across countries, supporting EBITDA margin improvement to 20.1% • Profit impacted by the write-downs related to our merchant platform in Germany and Superdigital in Latin America P&L Getnet Getnet Total Payments Volume (TPV) Number of transactions EBITDA margin • The total number of cards managed in the Group rose to 104 million, continuing the positive trends in previous quarters • Solid growth in customer activity (turnover +5% YoY) • Revenue up 4% YoY excluding a positive one-off recorded in Q1’23 • High profitability with RoTE at 35.0% Cards Average balanceTurnover P&L +7% €21bn +6% +8.9pp Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 % H1'23¹ NII 31 5.5 62 96.8 97.7 Net fee income 233 5.8 456 2.0 2.2 Total revenue 300 7.7 583 11.7 12.0 Operating expenses -297 -1.7 -601 4.9 5.0 Net operating income 4 — -18 -65.1 -65.9 LLPs -5 41.0 -9 -26.1 -26.1 Attributable profit -265 561.6 -304 198.5 195.8 Att. profit excl. one-offs -22 -46.5 -61 -39.8 -40.4 (*) € mn and % change in constant euros. (1) % change in current euros. €108bn +12% €159bn+5% Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 % H1'23¹ NII 613 -3.0 1,258 7.2 8.2 Net fee income 462 3.7 915 -11.3 -10.8 Total revenue 1,047 -0.4 2,117 0.5 1.2 Operating expenses -319 -7.1 -665 2.3 3.9 Net operating income 728 2.8 1,452 -0.4 0.0 LLPs -428 5.6 -843 -2.5 -1.5 Attributable profit 176 1.9 353 8.5 8.3 (*) € mn and % change in constant euros. (1) % change in current euros. Cards Payments
38 Corporate Centre • NII fairly stable, as higher liquidity buffer remuneration was offset by higher interest expense related to more TLAC/MREL issuances • Higher losses on financial transactions due to greater negative FX hedging impacts • Costs improved driven by ongoing simplification measures • As a result, lower attributable loss YoY Highlights P&L Underlying P&L* H1'24 H1'23 NII -100 -94 Gains / losses on financial transactions -284 -189 Operating expenses -174 -189 LLPs and other provisions -82 -70 Tax and minority interests -3 -19 Attributable profit -609 -620 (*) € mn.
39 Detail by region and country
40 Highlights Note: Jun-24 data and YoY changes (loans, deposits and mutual funds in constant euros). RoTE annualizing the impact of the temporary levy, 16.4% without annualizing it. Key data and P&L Loans Deposits Mutual Funds Efficiency CoR RoTE • We remain focused on growing our business while transforming our operating model to improve efficiency and customer experience • Customers increased across the region (+525k YoY), mainly driven by Spain • New business volumes continued to rise, however loans declined YoY, still affected by prepayments. Deposits up, with a migration to time deposits. Mutual funds also rose • Strong profit growth YoY supported by NII, especially Retail in Spain and Portugal, on the back of good margin management. Efficiency gains and active risk management • Profit up 7% QoQ, with revenue growth, good cost control and improving credit quality performance. Impact from additional CHF mortgage provisions to increase coverage partially offset the charge related to the temporary levy in Q1 Europe €561bn -1% €611bn +1% €116bn +16% 39.3% -2.6pp 0.39% -3bps 17.2% +3.1pp Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 % H1'23¹ NII 4,165 0.8 8,288 7.4 9.6 Net fee income 1,167 -3.1 2,368 4.4 5.5 Total revenue 5,910 1.5 11,718 10.1 12.0 Operating expenses -2,297 -0.5 -4,602 3.5 5.0 Net operating income 3,612 2.9 7,116 14.9 17.0 LLPs -532 9.6 -1,017 -22.7 -21.1 Attributable profit 1,647 6.7 3,187 23.6 25.7 (*) € mn and % change in constant euros. (1) % change in current euros.
41 Spain UK España and UK Loans Deposits Mutual FundsLoans Deposits Mutual Funds Efficiency CoR RoTEEfficiency CoR RoTE • Customer growth YoY. Loans still affected by mortgage prepayments YoY, but +3% QoQ driven by Retail and CIB. Migration to time deposits continued and mutual funds grew double digits YoY • Profit increased 55% YoY, supported by strong growth in NII (especially in Retail), higher fees (mutual funds) and lower LLPs • Profit also up QoQ, with positive NII, flat costs and a reduction in LLPs, and the charge related to the temporary levy in Q1 • Loans continued to decrease impacted by a strict pricing policy. Migrations to time deposits and an increase in mutual funds • Profit down YoY impacted by lower mortgage volumes, higher deposit costs and operating expenses performance. CoR improving from already very low levels • Profit up QoQ, driven by cost reductions which offset the decline in revenue (fees) and the increase in LLPs. QoQ comparisons benefited from the UK bank levy charge in Q1 Note: Jun-24 data and YoY changes (loans, deposits and mutual funds in constant euros). Spain RoTE annualizing the impact of the temporary levy, 20.4% without annualizing it. €234bn -1% €297bn -1% €86bn +14% 34.1% -5.8pp 0.56% -6bps 22.1% +7.5pp €236bn -4% €223bn -1% €8bn +4% 57.7% +8.3pp 0.08% -3bps 10.8% -3.0pp Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 % H1'23¹ NII 1,196 0.5 2,381 -10.1 -7.8 Net fee income 64 -19.3 142 -16.9 -14.8 Total revenue 1,260 -0.1 2,516 -11.0 -8.8 Operating expenses -717 -2.6 -1,451 3.8 6.5 Net operating income 542 3.4 1,065 -25.6 -23.7 LLPs -44 152.8 -61 -42.1 -40.6 Attributable profit 325 6.1 630 -24.9 -23.0 (*) € mn and % change in constant euros. (1) % change in current euros. Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 NII 1,840 1.3 3,656 15.6 Net fee income 738 -1.1 1,484 5.0 Total revenue 3,048 1.1 6,065 18.6 Operating expenses -1,033 0.1 -2,065 1.3 Net operating income 2,015 1.6 3,999 30.1 LLPs -327 -1.2 -658 -18.1 Attributable profit 984 27.5 1,756 55.1 (*) € mn and % change.
42 Portugal and Polonia Portugal Poland Loans Deposits Mutual Funds Loans Deposits Mutual Funds Efficiency CoR RoTE Efficiency CoR RoTE • Moderate decline in loans as customer deleveraging mitigated by new business recovery. Double-digit increases in time deposits and mutual funds • Profit +75% YoY, boosted by NII (better loan yields and funding costs under control) and positive fee performance, with LLPs at low levels • Profit down QoQ, with revenue decreasing from high levels in Q1, flat costs and regulatory charges in Q2 • Loans rose driven by Retail (record mortgage and personal loan originations) and CIB. Significant deposit growth, both in time and demand • Profit up 12% YoY, supported by strong NII, positive fees (FX and mutual funds) and improved LLPs, which offset higher costs • Profit down QoQ, affected by CHF mortgage portfolio provisions to increase coverage. Net operating income up 5%, backed by revenue Note: Jun-24 data and YoY changes (loans, deposits and mutual funds in constant euros). €38bn -1% €38bn +3% €5bn +14% 23.4% -8.7pp 0.12% +2bps 28.8% +10.1pp €37bn +9% €46bn +6% €6bn +44% 27.2% +0.4pp 1.81% -6bps 19.4% +1.5pp Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 % H1'23¹ NII 697 0.9 1,384 6.9 14.4 Net fee income 163 -7.9 339 9.5 17.3 Total revenue 878 4.5 1,711 5.9 13.4 Operating expenses -237 2.9 -466 7.6 15.3 Net operating income 640 5.1 1,245 5.2 12.7 LLPs -166 26.7 -297 -19.2 -13.4 Attributable profit 173 -19.5 386 12.3 20.3 (*) € mn and % change in constant euros. (1) % change in current euros. Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 NII 413 -4.1 844 46.8 Net fee income 115 -9.4 242 3.0 Total revenue 558 -4.4 1,142 38.6 Operating expenses -134 -0.2 -267 1.1 Net operating income 425 -5.7 874 56.4 LLPs 5 — -2 -93.1 Attributable profit 260 -14.3 563 75.2 (*) € mn and % change.
43Note: Jun-24 data and YoY changes (new lending, loans and customer funds in constant euros). RoTE annualizing the impact of the temporary levy, 8.9% without annualizing it. Digital Consumer Bank Europe New lending Loans Customer Funds Highlights Key data and P&L Efficiency CoR RoTE €26bn +2% €138bn +8% €81bn +23% 46.2% -3.2pp 0.72% +17bps 9.2% -1.8pp • We are focused on strengthening our leadership in auto and non-auto through strategic alliances and better service through new operational leasing platforms and non-auto platforms with Zinia • Loans rose 8% YoY. Deposits up 24%, in line with our deposit gathering strategy to increase retail funding through common digital platforms to reduce funding costs and NII volatility through the interest rate cycle • Revenue up 7% YoY, mainly driven by NII, as we actively repriced loans and captured customer deposits. Strong increase in fees, driven by greater penetration in direct insurance, especially in Germany • Profit down YoY and QoQ as the good performances in revenue and costs were more than offset by additional CHF mortgage provisions to increase coverage. Net operating income grew 14% YoY and 6% QoQ Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 % H1'23¹ NII 1,092 -0.1 2,187 6.8 7.2 Net fee income 231 5.2 451 14.1 14.4 Total revenue 1,444 2.5 2,854 7.0 7.4 Operating expenses -655 -1.4 -1,319 0.1 0.4 Net operating income 789 6.0 1,534 13.6 14.2 LLPs -308 12.0 -584 39.5 40.7 Attributable profit 224 -1.9 453 -13.2 -13.1 (*) € mn and % change in constant euros. (1) % change in current euros.
44 • Focus on transformation, leveraging the strengths of our businesses in the US and Mexico and enhancing our regional operating model in T&O • Loans rose 3%, particularly in Mexico and CIB in the US. Deposits declined 4%, in line with our strategy to reduce the costs of excess corporate deposits in CIB • Revenue up 7% driven by a strong performance in CIB in the US, reflecting our capabilities build-out, and across the board in Mexico • Costs rose, impacted by inflation and higher investments in digitalization as part of our transformation in Retail in Mexico and CIB in the US. Continued efficiency gains in Consumer and Commercial in the US • YoY profit affected by higher LLPs (higher volumes and expected CoR normalization). Strong net operating income growth (+7%) • Solid profit growth QoQ, supported by net operating income growth and improvement in LLPs in both countries Note: Jun-24 data and YoY changes (loans, deposits and mutual funds in constant euros). North America Loans Deposits Mutual Funds Efficiency CoR RoTE Highlights Key data and P&L €165bn +3% €134bn -4% €33bn +19% 47.6% -0.1pp 2.23% +54bps 11.7% +0.6pp Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 % H1'23¹ NII 2,636 0.8 5,247 3.8 6.4 Net fee income 662 3.6 1,300 16.3 20.7 Total revenue 3,554 1.8 7,039 6.9 9.7 Operating expenses -1,691 1.6 -3,352 7.1 9.6 Net operating income 1,863 2.0 3,686 6.7 9.8 LLPs -908 -8.1 -1,893 21.2 23.7 Attributable profit 703 9.1 1,347 -3.2 0.1 (*) € mn and % change in constant euros. (1) % change in current euros.
45 • Successful customer acquisition campaigns and new commercial agreements boosting loans (most global businesses) and deposits • Profit up YoY with positive jaws as a double-digit rise in revenue (mainly NII and fees) outpaced cost growth. Expected LLP normalization • Profit +5% QoQ supported by lower LLPs and better revenue (especially fees as NII flat due to changing asset mix) Note: Jun-24 data and YoY changes (loans, deposits and mutual funds in constant euros). (2) Adjusted RoTE: adjusted based on Group’s deployed capital calculated as contribution of RWAs at 12%. Using tangible equity, RoTE is 9.2%. Mexico Loans Deposits Mutual Funds Loans Deposits Mutual Funds Efficiency CoR RoTE2 Efficiency CoR RoTE US • Lending up 2%, driven by CIB activity and auto. Deposits declined in line with our funding strategy in CIB • Revenue rose 4% YoY, offset by higher costs (investments in CIB build out) and expected LLP normalization, resulting in flat profit YoY • Excellent profit performance QoQ, due to continued revenue growth, a marked fall in LLPs and greater fiscal benefits from EVs €118bn +2% €89bn -9% €13bn +8% 50.5% +0.8pp 2.06% +50bps 12.8% -0.3pp €47bn +6% €45bn +6% €20bn +28% 41.4% -0.7pp 2.71% +57bps 19.1% +1.2pp Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 % H1'23¹ NII 1,207 0.0 2,421 12.6 19.4 Net fee income 374 4.8 733 4.1 10.5 Total revenue 1,636 2.3 3,244 10.6 17.4 Operating expenses -677 2.4 -1,343 8.8 15.4 Net operating income 959 2.3 1,901 12.0 18.9 LLPs -351 -4.4 -721 30.0 37.9 Attributable profit 429 4.8 840 4.1 10.5 (*) € mn and % change in constant euros. (1) % change in current euros. Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 % H1'23¹ NII 1,428 1.4 2,824 -2.6 -2.6 Net fee income 272 1.3 539 38.3 38.3 Total revenue 1,900 0.9 3,769 4.1 4.0 Operating expenses -963 1.6 -1,903 5.8 5.8 Net operating income 938 0.1 1,866 2.3 2.3 LLPs -556 -10.4 -1,171 16.5 16.5 Attributable profit 385 36.7 664 -0.3 -0.4 (*) € mn and % change in constant euros. (1) % change in current euros.
46 South America Note: Jun-24 data and YoY changes (loans, deposits and mutual funds in constant euros). Loans Deposits Mutual Funds Efficiency CoR RoTE Highlights Key data and P&L • We are focused on being the primary bank for our 77 million customers (+4mn YoY), becoming the most profitable in each of our countries and enhancing service quality • Loans grew YoY across all global businesses, mainly boosted by Brazil. Time deposits and mutual funds rose YoY in most of our markets • Profit increased YoY, as strong NII growth across countries more than offset lower gains on financial transactions (CIB in Brazil) and higher provisions (volumes in Brazil and normalization in Chile) • Significant efficiency gains YoY (-3.7pp) driving up profitability (RoTE +2.1pp) • Quarterly trends affected by Argentina. Excluding it, profit +7%, with higher revenue and controlled costs €157bn +7% €129bn +8% €66bn +18% 35.4% -3.7pp 3.50% +18bps 16.0% +2.1pp Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 % H1'23¹ NII 3,649 -10.5 7,835 23.0 21.0 Net fee income 1,176 2.2 2,358 0.3 -1.6 Total revenue 4,903 3.1 9,790 10.5 8.3 Operating expenses -1,636 -8.3 -3,466 0.1 -1.9 Net operating income 3,267 9.9 6,324 17.1 14.9 LLPs -1,370 2.7 -2,748 9.5 8.2 Attributable profit 885 13.9 1,681 19.1 15.3 (*) € mn and % change in constant euros. (1) % change in current euros.
47Note: Jun-24 data and YoY changes (loans, deposits and mutual funds in constant euros). Brazil Chile Loans Deposits Mutual Funds Loans Deposits Mutual Funds Efficiency CoR RoTEEfficiency CoR RoTE • Double-digit growth YoY in loans (with increases across all global businesses), time deposits and mutual funds • Greater profit and profitability YoY, driven by NII (volumes and cost of deposits) and efficiency gains, more than offsetting lower gains on financial transactions and higher LLPs (growing less than loans) • Profit rose QoQ, with better NII and fees and controlled costs • Loans increased YoY across most global businesses. Double-digit growth YoY in time deposits and mutual funds • Profit fell YoY despite the strong performance in NII (volumes and lower cost of deposits), impacted by costs rising in line with inflation, and a pick up in LLPs from low levels in previous years • Strong profit growth QoQ, due to NII (UF and lower costs of deposits) €99bn +10% €86bn +14% €50bn +22% 32.4% -2.7pp 4.77% +3bps 15.9% +3.8pp €42bn +3% €28bn +7% €11bn +25% 39.2% -3.2pp 0.97% +9bps 13.7% -2.7pp Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 % H1'23¹ NII 472 31.4 824 32.2 13.3 Net fee income 137 4.0 265 -2.1 -16.1 Total revenue 659 22.5 1,187 12.7 -3.4 Operating expenses -241 5.2 -465 4.3 -10.6 Net operating income 418 35.3 721 18.8 1.8 LLPs -126 -1.3 -251 44.2 23.6 Attributable profit 162 76.0 253 -10.7 -23.5 (*) € mn and % change in constant euros. (1) % change in current euros. Underlying P&L* Q2'24 % Q1'24 H1'24 % H1'23 % H1'23¹ NII 2,605 3.3 5,235 22.4 22.2 Net fee income 888 9.3 1,734 3.8 3.6 Total revenue 3,477 3.4 6,984 11.4 11.2 Operating expenses -1,109 0.1 -2,265 2.8 2.6 Net operating income 2,368 5.1 4,719 16.1 15.8 LLPs -1,158 3.9 -2,322 7.6 7.3 Attributable profit 580 7.7 1,141 39.0 38.7 (*) € mn and % change in constant euros. (1) % change in current euros.
48 106 H1'24 Note: Jun-24 data and YoY changes (profit, loans, deposits and mutual funds in constant euros). In Argentina, variations are in current euros. Argentina Uruguay, Peru and Colombia Loans Deposits Mutual Funds Uruguay Peru Colombia RoTEs € mn Attributable profit Efficiency CoR RoTE • We are working to improve our customer service and adapt our value offer to customer needs in a dynamic market • Profit comparison both YoY and QoQ affected by the use of the new inflation-adjusted exchange rate from Q2 • Positive jaws, driving a 10pp efficiency improvement • Loan growth in Uruguay (+16% YoY) mainly in Consumer and Retail. Joint initiatives between CIB and Corporates in Peru and Colombia • Profit up YoY on the back of double-digit revenue growth in all three countries • High profitability, with double-digit RoTEs +27% +8% 18 €5bn -16% €6bn -44% €3bn -29% 40.6% -10.0pp 4.80% +133bps 39.1% +8.5pp 25.3% +2.1pp 25.8% +2.5pp 16.0% +0.4pp 51 H1'24 18 H1'24 +25% Underlying P&L* Q2'24 Q1'24 H1'24 % Q1'24 % H1'23 NII 397 1,025 1,423 -61.2 25.0 Net fee income 73 131 204 -44.6 -27.6 Total revenue 465 555 1,020 -16.4 -0.9 Operating expenses -129 -286 -414 -54.9 -20.5 Net operating income 336 270 606 24.4 19.3 LLPs -31 -35 -66 -11.6 -32.0 Attributable profit 164 101 266 62.1 5.4 (*) € mn and % change in current euros.
49 Appendix Investor Day Targets summary Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary
50 Reconciliation of underlying results to statutory results EUR mn (1) Includes exchange differences. Explanation of H1’24 adjustments: • Temporary levy on revenue earned in Spain in Q1’24, totalling EUR 335 million, which was moved from total income to other gains (losses) and provisions. • Provisions which strengthen the balance sheet in Brazil of EUR 352 million in Q2’24 (EUR 174 million net of tax and minority interests). Explanation of H1’23 adjustments: • Temporary levy on revenue earned in Spain in Q1’23, totalling EUR 224 million, which was moved from total income to other gains (losses) and provisions. • Provisions which strengthen the balance sheet in Brazil in the first quarter, totalling EUR 235 million, net of tax and non-controlling interests (EUR 474 million recorded in net loan-loss provisions, EUR 213 million positive impact in tax and EUR 26 million in non-controlling interests). Statutory results Adjustments Underlying results Statutory results Adjustments Underlying results Net interest income 23,457 — 23,457 20,920 — 20,920 Net fee income 6,477 — 6,477 6,103 — 6,103 Gains (losses) on financial transactions 1 957 — 957 1,302 — 1,302 Other operating income (176) 335 159 (315) 224 (91) Total income 30,715 335 31,050 28,010 224 28,234 Administrative expenses and amortizations (12,913) — (12,913) (12,479) — (12,479) Net operating income 17,802 335 18,137 15,531 224 15,755 Net loan-loss provisions (6,595) 352 (6,243) (6,245) 474 (5,771) Other gains (losses) and provisions (1,699) (687) (2,386) (1,196) (459) (1,655) Profit before tax 9,508 — 9,508 8,090 239 8,329 Tax on profit (2,916) — (2,916) (2,281) (213) (2,494) Profit from continuing operations 6,592 — 6,592 5,809 26 5,835 Net profit from discontinued operations — — — — — — Consolidated profit 6,592 — 6,592 5,809 26 5,835 Non-controlling interests (533) — (533) (568) (26) (594) Profit attributable to the parent 6,059 — 6,059 5,241 — 5,241 January-June 2023January-June 2024
51 Appendix Investor Day Targets summary Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary
52 Glossary - Acronyms • A2A: account to account • ALCO: Assets and Liabilities Committee • AM: Asset management • AuMs: Assets under Management • bn: Billion • BNPL: Buy now, pay later • bps: Basis points • c.: Circa • CAL: Customer assets and liabilities • CET1: Common equity tier 1 • CHF: Swiss franc • CIB: Corporate & Investment Banking • CoE: Cost of equity • Consumer: Digital Consumer Bank • CoR: Cost of risk • Covid-19: Coronavirus Disease 19 • DCB Europe: Digital Consumer Bank Europe • DPS: Dividend per share • EPS: Earning per share • ESG: Environmental, social and governance • EV: Electric Vehicle • FL: Fully-loaded • FTE: Full time employee • FX: Foreign exchange • FY: Full year • IFRS 9: International Financial Reporting Standard 9, regarding financial instruments • LLPs: Loan-loss provisions • mn: million • NII: Net interest income • NIM: Net interest margin • NPL: Non-performing loans • NPS: Net promoter score • OEM: Original equipment manufacturer • Payments: PagoNxt and Cards • PB: Private Banking • PBT: Profit before tax • P&L: Profit and loss • pp: Percentage points • Ps: Per share • QoQ: Quarter-on-Quarter • Repos: Repurchase agreements • Retail: Retail & Commercial Banking • RoE: Return on equity • RoRWA: Return on risk-weighted assets • RoTE: Return on tangible equity • RWA: Risk-weighted assets • SAM: Santander Asset Management • SBB: share buybacks • SME: Small and Medium Enterprises • US BBO: US Banking Building-Out • TNAV: Tangible net asset value • TPV: Total Payments Volume • YoY: Year-on-Year • YTD: Year to date • Wealth: Wealth Management & Insurance
53 Glossary - Definitions Notes: The averages for the RoTE and RoRWA denominators are calculated using the monthly average over the period, which we believe should not differ materially from using daily balances. 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). PROFITABILITY AND EFFICIENCY • RoTE: Return on tangible capital: Group attributable profit / average of: net equity (excluding minority interests) – intangible assets (including goodwill) • RoRWA: Return on risk-weighted assets: consolidated profit / average risk-weighted assets • Efficiency: Operating expenses / total income. Operating expenses defined as general administrative expenses + amortisations VOLUMES • Loans: Gross loans and advances to customers (excl. reverse repos) • Customer funds: Customer deposits excluding repos + marketed mutual funds CREDIT RISK • NPL ratio: Credit impaired loans and advances to customers, customer guarantees and customer commitments granted / Total risk. Total risk is defined as: Total loans and advances and guarantees to customers (including credit impaired assets) + contingent liabilities granted that are credit impaired • NPL coverage ratio: Total allowances to cover impairment losses on loans and advances to customers, customer guarantees and customer commitments granted / Credit impaired loans and advances to customers, customer guarantees and customer commitments granted • Cost of risk: Provisions to cover losses due to impairment of loans in the last 12 months / average customer loans and advances of the last 12 months CAPITALIZATION • Tangible net asset value per share – TNAVps: Tangible stockholders' equity / number of shares (excluding treasury shares). Tangible stockholders' equity calculated as shareholders equity + accumulated other comprehensive income - intangible assets ESG METRICS • Women in leadership positions = Percentage of women in senior executive positions over total headcount. This segment corresponds to less than 1% of the total workforce • Equal pay gap = The equal pay gap measures differences in remuneration between women and men in the same job at the same level • For financial ESG metrics, please see ‘Alternative Performance Measures’ section of the Quarterly Financial Report
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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: 24 July 2024 By: /s/ José García Cantera Name: José García Cantera Title: Chief Financial Officer