Banco Santander S A : Digital CB FY'23

31 January 2024

Digital Consumer Bank

2023

Earnings Presentation

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 2022 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (the SEC) on 1 March 2023 (https://www.santander.com/content/dam/santander-com/en/documentos/informacion-sobre-resultados-semestrales-y-anuales-suministrada-a-la-sec/2023/sec-2022-annual-20-f-2022-en.pdf), as well as the section "Alternative performance measures" of Banco Santander, S.A. (Santander) Q4 2023 Financial Report, published on 31 January 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

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Forward-looking statements

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Important Information

While these forward-looking statements represent our judgement and future expectations concerning our business developments and 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; and (f) 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

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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

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Index

1 2 3 4

Strategy and	Results	Concluding	Appendix
business		remarks

4

Digital Consumer Bank is #1 consumer finance player in Europe in profitability and scale

KEY DATA	12M'23	YoY Var.4
1	€135bn	+8.4%
Customer loans
2	€73bn	+18.9%
Customer funds
Attributable profit	€1,199mn	-6.9%
RoTE	12.3%	-1.3pp
Efficiency ratio	47.6%	+0.9pp
Market share	#1 European
Consumer Bank
3	18
Countries
Total customers	20mn	+2.3%
Employees	16,795	+3.7%

Consumer	Strategic Priorities
Digital
Bank

• Maintain strong relationships with our auto OEMs and retail partners, leverage our proprietary platforms at scale and provide a full suite of innovative products and services to differentiate our value proposition
• Gain market share in buy now, pay later (BNPL), checkout lending, credit cards and direct loans through specialization and tech platforms
• Reduce our cost-to-serve through organizational simplification, automation and common IT to defend our best-in-class efficiency
• Reduce sensitivity to rising interest rates by increasing retail deposit funding
• Focus on global relationships and new product placement opportunities to boost growth

(1)	Gross loans excluding reverse repos.	5
(2)	Excluding repos.
(3)	Footprint in the following countries: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland, UK, China and
	Canada.
(4)	Constant euros.

Digital Consumer Bank today

Digital Consumer Bank

	A Auto			B Consumer (Non-Auto)
	€108bn	Loans		€22bn	Loans
	€38bn	New business		€12bn	New business
	1.8mn	New contracts		4.6mn	New contracts

Contracts: 28mn active contracts and 8mn new contracts in 2023

Products: Auto Loans, Leasing, BNPL, Cards, Checkout Lending, Cash Loans, Robo Advisory, Insurance

Bank Licences: Accounts and Deposits and Three Hubs for simplification

Dec-23 Customer funds: €73bn across more than 10 countries

Digital

Consumer

Bank

Note: Dec-23 data. Auto loans include operational leases.

6

Europe's consumer finance leader: solid business model, geographic diversification and leading market shares in auto/mobility finance and in personal finance/e-commerce

Digital

Consumer

Bank

• Monoliner consumer businesses with >130,000 point of sale partners

• 1. Auto: Long-standing base of European captive agreements (>130) with several OEMs
  2. Consumer/Non-Auto: Agreements with main retailer chains, model evolving based on digitalization
  • Openbank: Santander's 100% digital bank: Leader1 in deposits
  • Openbank's technology stack: efficient customer acquisition & engagement platform
• c.20mn customers

 Presence in 16 European countries plus China and Canada

People

Top Employer Europe	Great Place To Work
SC Germany SC Austria	SC Italy
SC Poland

Loans as at Dec-23

(% of total DCB in € bn and ranking*)

				Nordics 13%
				(€17.4bn)
				Germany
	BeNeLux 2%	30%
UK 8%	(€40.8bn)	Poland 3%
(€2.8bn)
(€11.2bn)					(€4.3bn)
#2				#2
France 14%				Austria 3%
			(€3.4bn)
(€19.5bn)	#2
				Italy 12% (€15.5bn)
				#2	Greece
Portugal 1%	Spain 12%	(€16.0bn)
(€1.6bn)	#1
Openbank €2bn		China2 €2.0bn	Canada €0.8bn

(*) Retail Car Finance position in local market as of FY2022 (calculated as market share of New + Used retail cars financed by DCB in the country / Total Market units financed for individuals in the	7
country). Source: internal estimates based on information from local associations, magazines and market knowledge. DCB Management perimeter (now includes SC UK).
(1) Among its European competitors. (2) Equity accounting method.

Digital Consumer Bank: 2023 Key initiatives

	A Auto	B Consumer (Non-Auto)

Digital

Consumer

Bank

Strategic mobility initiatives: enhance auto leasing and subscription services to build a world-class digital offering

Capture new opportunities with OEMs: supporting them in their transformation journeys

Digital value propositions: providing innovative finance & sales solutions on dealer websites and in auto marketplaces

Stellantis agreement renewal signed with the aim to expand our partnership in the next few years

Zinia (BNPL): key growth driver with game changing deals to be executed in coming years

• New tech stack available with +1.15mn total requests in 2023

We are growing our deal pipeline, while we exit current deals to maintain non-auto business profitability

Retail: improving digital capabilities to increase loyalty among our Openbank and SC Germany customers

Transformation

Transforming the operating model across auto and non-auto,towards best-in-classglobal tech

platforms, with simple and automated processes & organization to reduce unitary costs, and delivering best in class CX solutions to improve our service to dealers, OEMs, retailers and final customers

Customer and retail deposit growth: significantly increase deposit acquisition through several pan- European initiatives to reduce our sensitivity to interest rates

8

New business volumes continued to grow (+3% YoY; +6% in auto) despite a difficult market environment. Total loans rose 8%

Digital

Consumer

Bank

Total customer loans (Constant € bn)1

124.7 127.2 128.4 131.7 135.2

Dec-22Mar-23	Jun-23	Sep-23	Dec-23
	Dec-23	Dec-22	YoY (%)	QoQ (%)
Auto	103.5	94.5	9.5	3.0
Consumer business	21.7	20.8	4.0	0.9
Others and Retail3	10.0	9.3	7.4	2.3
Total customer loans	135.2	124.7	8.4	2.6

Geographical diversification (% Total loans, Dec-23)

	2
Poland, 3%	Other, 8%
UK, 8%	Germany,
	30%
Italy, 12%

Spain, 12%	France, 14%

Nordics, 13%

Group criteria.	9
(1)	Excludes reverse repos. End period exchange rate as at Dec-23.
(2)	Austria, Belgium, the Netherlands, Portugal, Poland, Switzerland, Canada and Openbank.
(3)	Includes Openbank customer loans.

Strong growth in customer funds, rising to €73bn (+19% YoY), maintaining DCB's robust and diversified liquidity position

Digital

Consumer

Bank

Total customer funds (Constant € bn)1

	64.2	65.8	70.0	73.0
61.4

Dec-22	Mar-23	Jun-23	Sep-23	Dec-23
		Dec-23	Dec-22	YoY (%)	QoQ (%)
Demand		46.6	47.0		-0.9	0.9
Time		22.7	11.3	102.1	11.4
Total deposits		69.3	58.3		19.0	4.1
Mutual Funds		3.6	3.1		17.8	6.7
Total customer funds	73.0	61.4		18.9	4.2
Managed portfolios	1.4	0.9		60.3	17.2

Wholesale market funding2 (€ bn)

			54.0	56.1
		48.0
42.1	45.6	16.2	19.0
	14.9
15.5	15.8
26.6	29.8	33.1	37.8	37.1

Dec-22		Mar-23	Jun-23		Sep-23	Dec-23
		Secured				Unsecured
		Dec-23	Dec-22	YoY (%)	QoQ (%)
Unsecured			37.1			26.6		39.3	-1.9
Secured			19.0			15.5		22.7	17.3
Total wholesale			56.1			42.1		33.2	3.9

Group criteria.	10
(1)	Excluding repos. End period exchange rate as at Dec-23.
(2)	Unsecured: short- and medium-term unsecured issuances and subordinated debt. Secured: Asset-Backed Security bonds placed in the market, Repos, Covered bonds and others.