Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k)

Key consolidated data Business model

Group financial information

Financial information by segment

Responsible banking Corporate governance Santander share

Appendix

Key consolidated data

BALANCE SHEET (EUR million)			Sep-21			Jun-21			%			Sep-21			Sep-20			%			Dec-20
Total assets			1,578,295			1,568,636			0.6			1,578,295			1,514,242			4.2			1,508,250
Loans and advances to customers			958,311			954,518			0.4			958,311			910,714			5.2			916,199
Customer deposits			909,034			894,127			1.7			909,034			842,899			7.8			849,310
Total funds			1,140,322			1,121,969			1.6			1,140,322			1,039,608			9.7			1,056,127
Total equity			95,624			95,745			(0.1)			95,624			91,310			4.7			91,322
Note: Total funds includes customer deposits, mutual funds, pension funds and managed portfolios

INCOME STATEMENT (EUR million)			Q3'21			Q2'21			%			9M'21			9M'20			%			2020
Net interest income			8,458			8,240			2.6			24,654			23,975			2.8			31,994
Total income			11,931			11,305			5.5			34,626			33,355			3.8			44,279
Net operating income			6,530			6,046			8.0			18,848			17,569			7.3			23,149
Profit before tax			3,802			3,812			(0.3)			10,716			(3,271)			—			(2,076)
Attributable profit to the parent			2,174			2,067			5.2			5,849			(9,048)			—			(8,771)
Changes in constant euros:
Q3'21 / Q2'21: NII: +1.5%; Total income: +4.3%; Net operating income: +6.5%; Profit before tax: -1.9%; Attributable profit: +3.3%
9M'21 / 9M'20: NII: +7.4%; Total income: +8.4%; Net operating income: +13.2%; Profit before tax: -/+; Attributable profit: -/+

EPS, PROFITABILITY AND EFFICIENCY (%)			Q3'21			Q2'21			%			9M'21			9M'20			%			2020
EPS (euros) (2)			0.117			0.112			4.4			0.313			(0.546)			—			(0.538)
RoE			10.16			9.91						9.54			(8.54)						(9.80)
RoTE			12.56			12.29						11.82			3.30						1.95
RoA			0.65			0.64						0.61			(0.44)						(0.50)
RoRWA			1.76			1.74						1.66			(1.17)						(1.33)
Efficiency ratio			45.3			46.5						45.6			46.8						47.0

UNDERLYING INCOME STATEMENT (1) (EUR million)			Q3'21			Q2'21			%			9M'21			9M'20			%			2020
Net interest income			8,458			8,240			2.6			24,654			23,975			2.8			31,994
Total income			11,931			11,305			5.5			34,626			33,605			3.0			44,600
Net operating income			6,530			6,046			8.0			18,848			17,879			5.4			23,633
Profit before tax			3,804			3,815			(0.3)			11,432			7,016			62.9			9,674
Attributable profit to the parent			2,174			2,067			5.2			6,379			3,658			74.4			5,081
Changes in constant euros:
Q3'21 / Q2'21: NII: +1.5%; Total income: +4.3%; Net operating income: +6.5%; Profit before tax: -1.9%; Attributable profit: +3.3%
9M'21 / 9M'20: NII: +7.4%; Total income: +7.6%; Net operating income: +11.1%; Profit before tax: +73.6%; Attributable profit: +86.6%

UNDERLYING EPS AND PROFITABILITY (1) (%)			Q3'21			Q2'21			%			9M'21			9M'20			%			2020
Underlying EPS (euros) (2)			0.117			0.112			4.4			0.344			0.187			83.7			0.262
Underlying RoE			10.16			9.91						10.18			5.32						5.68
Underlying RoTE			12.56			12.29						12.61			7.08						7.44
Underlying RoA			0.65			0.64						0.65			0.38						0.40
Underlying RoRWA			1.76			1.74						1.76			1.01						1.06

January - September 2021						3

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Appendix

SOLVENCY (%)			Sep-21			Jun-21						Sep-21			Sep-20						Dec-20
Fully-loaded CET1 ratio			11.85			11.70						11.85			11.57						11.89
Fully-loaded total capital ratio			15.82			15.42						15.82			15.15						15.73

CREDIT QUALITY (%)			Q3'21			Q2'21						9M'21			9M'20						2020
Cost of credit (3)			0.90			0.94						0.90			1.27						1.28
NPL ratio			3.18			3.22						3.18			3.15						3.21
Total coverage ratio			74			73						74			76						76

MARKET CAPITALIZATION AND SHARES			Sep-21			Jun-21			%			Sep-21			Sep-20			%			Dec-20
Shares (millions)			17,341			17,341			0.0			17,341			16,618			4.3			17,341
Share price (euros) (2)			3.137			3.220			(2.6)			3.137			1.533			104.6			2.538
Market capitalization (EUR million)			54,389			55,828			(2.6)			54,389			26,582			104.6			44,011
Tangible book value per share (euros) (2)			3.99			3.98						3.99			3.82						3.79
Price / Tangible book value per share (X) (2)			0.79			0.81						0.79			0.40						0.67

CUSTOMERS (thousands)			Q3'21			Q2'21			%			9M'21			9M'20			%			2020
Total customers			152,365			150,447			1.3			152,365			147,312			3.4			148,256
Loyal customers			24,687			24,169			2.1			24,687			22,058			11.9			22,838
Loyal retail customers			22,587			22,100			2.2			22,587			20,189			11.9			20,901
Loyal SME & corporate customers			2,100			2,069			1.5			2,100			1,869			12.4			1,938
Digital customers			46,623			45,352			2.8			46,623			41,365			12.7			42,362
Digital sales / Total sales (%)			57			54						54			44						44

OTHER DATA			Sep-21			Jun-21			%			Sep-21			Sep-20			%			Dec-20
Number of shareholders			3,817,454			3,879,232			(1.6)			3,817,454			4,103,069			(7.0)			4,018,817
Number of employees			193,303			190,751			1.3			193,303			192,578			0.4			191,189
Number of branches			9,904			10,073			(1.7)			9,904			11,520			(14.0)			11,236

(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 attributable profit to the parent. Further details are provided in the “Alternative performance measures” section of the appendix to this report. For further details of the APMs and non-IFRS measures used, including its 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 2020 Annual Financial Report, published in the CNMV on 23 February 2021, our 20-F report for the year ending 31 December 2020 filed with the SEC in the United States on 26 February 2021, as updated by the Form 6-K filed with the SEC on 14 April 2021 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) Data adjusted for the capital increase in December 2020.
(3) Allowances for loan-loss provisions over the last 12 months / Average loans and advances to customers over the last 12 months

4						January - September 2021

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Appendix

Our business model is based on three pillars

1. Our scale Local scale and leadership. Worldwide reach through our global businesses

2. Customer focus Unique personal banking relationships strengthen customer loyalty

3. Diversification Our geographic and business diversification makes us more resilient under adverse circumstances

•Geographic diversification3 balanced between mature and emerging markets

total customers in Europe and the Americas

•Business diversification between customer segments (individuals, SMEs, mid-market companies and large corporates)

1. Market share in lending as of June 2021 including only privately-owned banks. UK benchmark refers to the mortgage market. DCB refers to auto in Europe.

2. NPS – Customer Satisfaction internal benchmark of active customers’ experience and satisfaction audited by Stiga / Deloitte.

3. 9M'21 underlying attributable profit by region. Operating areas excluding Corporate Centre.

Our corporate culture

The Santander Way remains unchanged to continue to deliver for all our stakeholders.

			Our purpose To help people and businesses prosper.
			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.

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Group performance

			HIGHLIGHTS OF THE PERIOD

u    In the quarter, the strength of our model once again enabled us to deliver another strong set of results in an environment marked by the recovery of activity in all regions, following progress in the vaccination process and the gradual lifting of covid-19 measures.

u    In view of the lifting of the European Central Bank's (ECB) recommendation that had limited shareholder remuneration until 30 September 2021, the board of directors approved the shareholder remuneration policy to be applied to 2021 results, with the following objectives:

•Total remuneration of 40% of the Group's underlying profit.

•Split in equal parts between cash dividends and share buybacks.

•Two payment cycles: interim distributions around November and, subject to the appropriate corporate and regulatory approvals, a final distribution around May.

In line with this policy, the board decided to make an interim distribution from 2021 earnings amounting to a total value of c. EUR 1.7 billion, equivalent to 40% of underlying profit for the first half of 2021, which will be made in two parts:

•A cash dividend of EUR 4.85 cents per share, to be paid from 2 November 2021.

•A buyback programme that will have a maximum amount of EUR 841 million, equivalent to 20% of the Group's underlying profit in the first half of 2021, already approved by the ECB and included in the inside information disclosed on 6 October 2021.

u    In late July, the European Banking Authority (EBA) published the the results of its 2021 EU-wide stress test, which involved the main banks from the EU. According to these results, under the adverse scenario Santander would destroy 240 bps of phased-in CET1 capital compared to the peer average of almost 480 bps and to the average of European banking system of nearly 500 bps. In addition, in the adverse scenario, the cumulative projections of Grupo Santander's income statement show a profit of almost EUR 1 billion. This makes it the only bank among its peers capable of recording a positive accumulated result under this scenario.

			GROWTH

u    Digital adoption continued to accelerate: in 9M'21, 54% of sales were made through digital channels (57% in the third quarter) compared to 44% in 9M'20. The number of digital customers increased by more than 1 million in the quarter, reaching 47 million (+13% year-on-year).

u    Loyal customers have risen by 2.6 million since September 2020, totalling 25 million, and represented 33% of total active customers.

u    Business volumes grew at a good pace in a context of normalization, although high liquidity in the markets continued. In this environment, and excluding the exchange rate impact, loans and advances to customers rose more than EUR 8 billion (+1%) in the quarter and 4% year-on-year. Customer funds were up over EUR 21 billion, +2% in the quarter and +7% year-on-year.

			PROFITABILITY

u    Attributable profit amounted to EUR 2,174 million in Q3'21, with no net results recorded in the net capital gains and provisions line. Compared to the previous quarter, profit was 5% higher (+3% in constant euros).

u    9M'21 attributable profit was EUR 5,849 million. Excluding the EUR 530 million charge recorded in Q1'21 from bringing forward restructuring costs for the year as a whole, underlying attributable profit stood at EUR 6,379 million, 74% higher than in 9M'20 (+87% in constant euros), underpinned by the positive performance across regions, Digital Consumer Bank (DCB) and the global businesses.

u    These results were reflected in higher profitability: underlying RoTE of 12.6% (7.1% in 9M'20), underlying RoRWA was 1.76% (1.01% in 2020) and underlying earnings per share of EUR 0.344 (EUR 0.187 in 2020).

			STRENGTH

u    Cost of credit continued to improve reaching 0.90% in 9M'21 (1.28% in FY20 and 0.94% in June 2021). Total loan-loss reserves reached EUR 24.5 bn and total coverage of credit impaired loans increased in the quarter to 74%.

u    The fully-loaded CET1 ratio was 11.85%, with an organic generation of 48 bps. On the other hand, it was affected by regulatory impacts and models (-16 bps) and markets and others (-17 bps). On the other hand, the phased-in CET1 ratio rose to 12.26%.

u    TNAV per share was EUR 3.99 in September 2021. Including the EUR 2.75 cents dividend paid in May, and the approved in September (EUR 4.85 cents), growth was 1.4% in the quarter and 6.5% year-on-year.

6						January - September 2021

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Income statement

			GRUPO SANTANDER RESULTS

Grupo Santander. Summarized income statement
EUR million
									Change												Change
			Q3'21			Q2'21			%			% excl. FX			9M'21			9M'20			%			% excl. FX
Net interest income			8,458			8,240			2.6			1.5			24,654			23,975			2.8			7.4
Net fee income (commission income minus commission expense)			2,641			2,621			0.8			(0.4)			7,810			7,559			3.3			8.1
Gains or losses on financial assets and liabilities and exchange differences (net)			326			243			34.2			31.7			1,220			1,725			(29.3)			(26.6)
Dividend income			95			244			(61.1)			(61.2)			404			322			25.5			26.2
Share of results of entities accounted for using the equity method			132			87			51.7			52.0			295			(90)			—			—
Other operating income / expenses			279			(130)			—			—			243			(136)			—			—
Total income			11,931			11,305			5.5			4.3			34,626			33,355			3.8			8.4
Operating expenses			(5,401)			(5,259)			2.7			1.8			(15,778)			(15,786)			(0.1)			3.3
Administrative expenses			(4,718)			(4,561)			3.4			2.5			(13,714)			(13,686)			0.2			3.6
Staff costs			(2,767)			(2,750)			0.6			(0.2)			(8,205)			(8,098)			1.3			4.4
Other general administrative expenses			(1,951)			(1,811)			7.7			6.7			(5,509)			(5,588)			(1.4)			2.4
Depreciation and amortization			(683)			(698)			(2.1)			(2.9)			(2,064)			(2,100)			(1.7)			1.4
Provisions or reversal of provisions			(516)			(531)			(2.8)			(3.4)			(2,006)			(1,014)			97.8			109.5
Impairment or reversal of impairment of financial assets not measured at fair value through profit or loss (net)			(2,196)			(1,748)			25.6			24.4			(6,000)			(9,538)			(37.1)			(34.0)
Impairment on other assets (net)			(4)			8			—			—			(134)			(10,256)			(98.7)			(98.7)
Gains or losses on non financial assets and investments, net			(9)			51			—			—			43			89			(51.7)			(50.1)
Negative goodwill recognized in results			—			—			—			—			—			9			(100.0)			(100.0)
Gains or losses on non-current assets held for sale not classified as discontinued operations			(3)			(14)			(78.6)			(81.9)			(35)			(130)			(73.1)			(73.1)
Profit or loss before tax from continuing operations			3,802			3,812			(0.3)			(1.9)			10,716			(3,271)			—			—
Tax expense or income from continuing operations			(1,251)			(1,331)			(6.0)			(7.7)			(3,725)			(5,020)			(25.8)			(23.6)
Profit from the period from continuing operations			2,551			2,481			2.8			1.2			6,991			(8,291)			—			—
Profit or loss after tax from discontinued operations			—			—			—			—			—			—			—			—
Profit for the period			2,551			2,481			2.8			1.2			6,991			(8,291)			—			—
Attributable profit to non-controlling interests			(377)			(414)			(8.9)			(9.3)			(1,142)			(757)			50.9			56.5
Attributable profit to the parent			2,174			2,067			5.2			3.3			5,849			(9,048)			—			—
EPS (euros) (1)			0.117			0.112			4.4						0.313			(0.546)			—
Diluted EPS (euros) (1)			0.116			0.111			4.4						0.312			(0.546)			—
Memorandum items:
Average total assets			1,575,975			1,557,364			1.2						1,550,943			1,543,361			0.5
Average stockholders' equity			85,608			83,429			2.6						83,574			91,639			(8.8)

(1) Data adjusted for the capital increase in December 2020.

January - September 2021						7

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Income statement

Executive summary

Profit (9M'21 vs. 9M'20)

Performance (9M'21 vs. 9M'20). In constant euros

Strong profit growth across regions and businesses

Higher underlying profit driven by total income, cost control and significantly lower provisions

Attributable profit

Underlying attrib. profit

Total income

Costs

Provisions

EUR 5,849 mn

EUR 6,379 mn

-EUR 9,048 mn in 9M'20

EUR 3,658 mn in 9M'20

+7.6%

+3.7%

-34.5%

Efficiency

Profitability

The Group's efficiency ratio improved strongly, mainly driven by Europe

Strong profitability improvement compared to 9M'20 and FY'20.

Group

Europe

RoTE

Underlying RoTE

RoRWA

Underlying RoRWA

45.6%

50.3%

11.8%

12.6%

1.66%

1.76%

q 1.2 pp vs 9M'20

q 6.6 pp vs 9M'20

p 8.5 pp

p 5.5 pp

p 2.8 pp

p 0.8 pp

Changes vs. 9M'20

è Results performance compared to 9M'20

The Group presents, both at the total level and for each of the business units, the real 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. For the Group as a whole, exchange rates had a significant impact on revenue (-5 percentage points) and costs (-3 percentage points).

u Total income

Total income of EUR 34,626 million in the first nine months of 2021, up 4% with respect to 9M'20. If the FX impact is excluded, total income increased 8%, with growth in all regions and main countries, except Mexico, showing the strength provided by our geographic and business diversification. Net interest income and net fee income accounted for 94% of total income. By line:

•Net interest income amounted to EUR 24,654 million, 3% higher compared to 9M'20. Stripping out the exchange rate impact, growth was 7%, mainly due to the net effect of higher average lending and deposit volumes and the lower cost of the latter, partly offset by the reduction in revenue from low interest rates, which fell even further in most markets.

Net interest income
EUR million
			constant euros

By country, growth was recorded in the UK (+27%), through decisive management deposit repricing actions (mainly the 1I2I3 current account) as well as higher volumes (especially mortgages), Spain (+4%), driven by margin management; Brazil (+12%), due to greater volumes; and Chile (+12%), due to margin management and inflation.

The US remained flat due to volume pressures mainly due to the disposals made in previous quarters (Puerto Rico and Bluestem portfolio). Excluding these disposals, growth was 7%.

Mexico fell 4%, due to lower average interest rates and a smaller loan portfolio, mainly in corporates.

•Net fee income rose 3% year-on-year to EUR 7,810 million. Excluding the exchange rate impact, they were 8% higher, showing a recovery path from the lows in Q2'20.

Transactional fees continued to be affected by lower activity in early 2021, while those from card turnover and points of sale increased (+25% and +40%, respectively). Asset management and insurance businesses, as well as SCIB, also recorded double-digit growth.

Net fee income
EUR million
			constant euros

8						January - September 2021

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Income statement

Santander Corporate & Investment Banking surged 19% year-on-year driven by strong markets growth and the positive performance in banking businesses. Wealth Management & Insurance rose 11% (including fees ceded to the branch network). Overall, both businesses together accounted for approximately 50% of the Group’s total net fee income (SCIB: 17%; WM&I: 32%).

By region, Europe was up 7%, with generalized increases in all markets except the UK, due to regulatory changes affecting overdrafts since April 2020. North America was stable, affected by the disposals carried out in the US. Excluding them, growth was 7% in the region and 8% in the US. Mexico up 5% driven by transactional fees. South America increased 13% with overall growth in all markets.

•Gains on financial transactions, accounted for 4% of total income and stood at EUR 1,220 million (EUR 1,725 million in the first nine months of 2020), with falls in Spain (-42%), Mexico (-43%), Chile (-31%) and the Corporate Centre. This was due to the favourable impact of foreign exchange hedging, higher portfolio sales and increased market volatility in 2020.

•Dividend income was EUR 404 million, 25% higher than in the same period of 2020 (+26% excluding the exchange rate effect), having recovered several dividend payments, mainly in Europe, following reductions, delays or cancellations last year amid the pandemic.

•The results of entities accounted for using the equity method amounted to EUR 295 million, due to the higher contribution from the entities associated to the Group.

•Other operating income recorded a gain of EUR 243 million compared to a loss of EUR 136 million in the first nine months of 2020 due to higher results from leasing and insurance.

Total income
EUR million
			constant euros

u Costs

Operating costs amounted to EUR 15,778 million, in line with the same period last year. Excluding the exchange rate impact, costs rose 4% due to the general upturn in inflation in 2021 and broad-based investments in technology and digital developments, including PagoNxt. Excluding inflation (i.e. in real terms) costs dropped 1%.

The efficiency ratio was 45.6%, improving 1.2 pp versus last year, mainly driven by Europe. This enabled Santander to remain one of the most efficient global banks in the world.

The cost trends by region and market in constant euros were as follows:

•In Europe, costs were 1% lower year-on-year, -3% in real terms (excluding average inflation), making headway in our cost reduction plan. In real terms, falls were recorded in Spain (-9%), the UK (-4%), Portugal (-3%) and Poland rose 1% due to higher personnel expenses. The efficiency ratio in the region stood at 50.3% (-6.6 pp year-on-year).

•In North America, costs rose 8%. In real terms, they were 5% higher driven by digitalization investments, the 5% increase in the US and the 2% fall in Mexico. The efficiency ratio in the region stood at 43.8%.

•In South America, the rise in costs (+9%) was greatly distorted by the very high inflation in Argentina. In real terms, costs reduced 3% in the region: Brazil (-6%), Chile (-1%) and Argentina remained flat. The efficiency ratio in the region stood at 34.6%.

•In Digital Consumer Bank, costs increased 4% due to perimeter and digital transformation investments. In real terms, costs rose 2%. The efficiency ratio stood at 45.4%.

Operating expenses
EUR million
			constant euros

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Income statement

u Provisions or reversal of provisions

Provisions (net of provisions reversals) rose to EUR 2,006 million (EUR 1,014 million in 9M'20). This line item includes the charges for restructuring costs, as well as charges related to CHF mortgages in Poland and Digital Consumer Bank (EUR 185 million in 9M'21).

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) was EUR 6,000 million, down 37% year-on-year in euros and 34% in constant euros, mainly from additional provisions recorded in 2020 based on the IFRS 9 forward-looking view and the collective and individual assessments to reflect expected credit losses arising from covid-19.

u Impairment on other assets (net)

Impairment on other assets (net) stood at EUR 134 million. In 9M'20, this line item was EUR 10,256 million due to the valuation adjustment of goodwill of -EUR 10,100 million recorded in the second quarter.

Net loan-loss provisions
EUR million
			constant euros

u Gains or losses on non-financial assets and investments (net)

This line item recorded EUR 43 million in the first nine months of 2021, compared to EUR 89 million in the same period of 2020.

u Negative goodwill recognized in results

This line item recorded EUR 0 million in 9M'21 (EUR 9 million in 9M'20).

u Gains or losses on non-current assets held for sale not classified as discontinued operations

This line item, which mainly includes impairment of foreclosed assets recorded and the sale of properties acquired upon foreclosure, totalled -EUR 35 million in the first nine months of 2021, compared to -EUR 130 million in the same period of 2020.

u Profit before tax

Profit before tax amounted to EUR 10,716 million in the first nine months of 2021, increasing from -EUR 3,271 million in the same period of 2020, spurred by growth in total income and lower provisions in 2021 and the valuation adjustment of goodwill in 2020.

u Income tax

Total corporate income tax was EUR 3,725 million (EUR 5,020 million in the first nine months of 2020, which recorded the EUR 2,500 million valuation adjustment to deferred tax assets).

u Attributable profit to non-controlling interests

Attributable profit to non-controlling interests amounted to EUR 1,142 million, up 51% year-on-year (+56% excluding the exchange rate impact).

u Attributable profit to the parent

Attributable profit to the parent amounted to EUR 5,849 million in 9M'21, compared with a loss of EUR 9,048 million in 9M'20.

RoTE stood at 11.8% (3.3% in 9M'20), RoRWA of 1.66% (-1.17% in 9M'20) and earnings per share stood at EUR 0.313 (-EUR 0.546 in 9M'20).

10						January - September 2021

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Income statement

u Underlying attributable profit to the parent

Attributable profit to the parent recorded in the first nine months of 2021 and 2020 was affected by results that are outside the ordinary course of our business and distort the year-on-year comparison, and are detailed below:

•In 9M'21, these results totalled -EUR 530 million for restructuring costs, fully recorded in Q1'21, as follows: -EUR 293 million in the UK, -EUR 165 million in Portugal, -EUR 16 million in Digital Consumer Bank and -EUR 56 million in the Corporate Centre.

•In 9M'20, these results amounted to -EUR 12,706 million from the valuation adjustment of goodwill ascribed to various Group units (-EUR 10,100 million) and the valuation adjustment to deferred tax assets of the Spanish consolidated fiscal group with an impact of -EUR 2,500 million. In addition, restructuring costs and other provisions had a net impact of -EUR 106 million.

For further information see the 'Alternative performance measures' section of this report.

Excluding these results from the various P&L lines where they are recorded, and incorporating them separately in the net capital gains and provisions line, the adjusted or underlying attributable profit to the parent was EUR 6,379 million in the first nine months of 2021 and EUR 3,658 million in the same period last year.

The Group’s cost of credit (considering the last 12 months) stood at 0.90%.

Considering the first nine months of the year, it was 0.83%, performing better than expected, due to lower provisions in most markets, mainly in the US, Digital Consumer Bank, Brazil and Chile, together with the net releases in the UK.

Before the recording of loan-loss provisions, the Group's underlying net operating income (total income less operating expenses) was EUR 18,848 million, a 5% increase year-on-year +11% excluding the FX impact, with the following performance of the latter by line and region:

By line:

•Total income up primarily driven by net interest income (+7%) and net fee income (+8%), which continued on the path of recovery.

•Costs grew driven by the upturn in inflation. In real terms, broad-based declines across markets except Poland and the US.

By region:

•In Europe, net operating income increased 29% with rises in all markets.

•In North America, net operating income dropped 1%, with a 6% increase in the US and a 10% fall in Mexico. Excluding the disposals mentioned in other sections of this report, growth was 17% in the US and +5% in the region.

•In South America, growth was 12% with rises in Brazil (+14%), Chile (+11%) and Argentina (+17%).

•In Digital Consumer Bank, net operating income increased 4%.

In the first nine months of 2021, the Group’s underlying RoTE was 12.6% (7.1% in 9M'20), underlying RoRWA was 1.76% (1.01% in 9M'20) and underlying earnings per share EUR 0.344 (EUR 0.187 in 9M'20).

Summarized underlying income statement
EUR million									Change												Change
			Q3'21			Q2'21			%			% excl. FX			9M'21			9M'20			%			% excl. FX
Net interest income			8,458			8,240			2.6			1.5			24,654			23,975			2.8			7.4
Net fee income			2,641			2,621			0.8			(0.4)			7,810			7,559			3.3			8.1
Gains (losses) on financial transactions (1)			326			243			34.2			31.7			1,220			1,725			(29.3)			(26.6)
Other operating income			506			201			151.7			149.8			942			346			172.3			178.7
Total income			11,931			11,305			5.5			4.3			34,626			33,605			3.0			7.6
Administrative expenses and amortizations			(5,401)			(5,259)			2.7			1.8			(15,778)			(15,726)			0.3			3.7
Net operating income			6,530			6,046			8.0			6.5			18,848			17,879			5.4			11.1
Net loan-loss provisions			(2,220)			(1,761)			26.1			24.8			(5,973)			(9,562)			(37.5)			(34.5)
Other gains (losses) and provisions			(506)			(470)			7.7			7.1			(1,443)			(1,301)			10.9			14.5
Profit before tax			3,804			3,815			(0.3)			(1.9)			11,432			7,016			62.9			73.6
Tax on profit			(1,253)			(1,334)			(6.1)			(7.7)			(3,911)			(2,596)			50.7			60.8
Profit from continuing operations			2,551			2,481			2.8			1.2			7,521			4,420			70.2			81.1
Net profit from discontinued operations			—			—			—			—			—			—			—			(100.0)
Consolidated profit			2,551			2,481			2.8			1.2			7,521			4,420			70.2			81.1
Non-controlling interests			(377)			(414)			(8.9)			(9.7)			(1,142)			(762)			49.9			55.4
Net capital gains and provisions			—			—			—			(36.1)			(530)			(12,706)			(95.8)			(95.8)
Attributable profit to the parent			2,174			2,067			5.2			3.3			5,849			(9,048)			—			—
Underlying attributable profit to the parent (2)			2,174			2,067			5.2			3.3			6,379			3,658			74.4			86.6

(1) Includes exchange differences.

(2) Excludes net capital gains and provisions.

January - September 2021						11

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Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Income statement

è Results performance compared to the previous quarter

In the third quarter, attributable profit to the parent amounted to EUR 2,174 million, with no net results recorded in the net capital gains and provisions line.

Attributable profit to the parent recorded a 5% increase in euros (+3% in constant euros) compared to the second quarter.

Attributable profit to the parent and underlying attributable profit, both in the second and third quarters, recorded the same amount as there were no items recorded outside the ordinary performance of our business.

The performance of the main lines of the income statement in constant euros was as follows:

•Total income was 4% higher quarter-on-quarter driven by the positive performance by line.

Net interest income grew 1%, maintaining its upward trend; net fee income remained broadly stable, affected by some seasonality; gains on financial increased mainly driven by SCIB; and other operating income rose benefitting from the SRF contribution recorded in the second quarter.

Net operating income
EUR million
			constant euros

•Continued rigorous expense management. However, the continued upturn in inflation in Q3 (especially in North and South America), and the signing and update of collective labour agreements in Brazil and Argentina, led to a 2% rise in the Group. In Europe, decreases were recorded in Spain, Portugal and the UK, on the back of the ongoing efficiency programmes.

•Net loan-loss provisions increased 25% mainly due to the US (positive net charge-offs recorded in Q2), the UK, which registered releases in the second quarter, and Brazil, due to higher volumes and growth in retail.

•Other gains (losses) and provisions recorded a -EUR 31 million charge related to CHF mortgages in Poland and Digital Consumer Bank.

Underlying attributable profit to the parent*
EUR million
			constant euros

(*) Excluding net capital gains and provisions.

12						January - September 2021

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Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Balance sheet

Grupo Santander. Condensed balance sheet
EUR million
									Change
Assets			Sep-21			Sep-20			Absolute			%			Dec-20
Cash, cash balances at central banks and other demand deposits			191,035			148,175			42,860			28.9			153,839
Financial assets held for trading			122,967			117,654			5,313			4.5			114,945
Debt securities			30,834			34,107			(3,273)			(9.6)			37,894
Equity instruments			14,586			7,235			7,351			101.6			9,615
Loans and advances to customers			3,651			247			3,404			—			296
Loans and advances to central banks and credit institutions			17,246			—			17,246			—			3
Derivatives			56,650			76,065			(19,415)			(25.5)			67,137
Financial assets designated at fair value through profit or loss			42,126			67,007			(24,881)			(37.1)			53,203
Loans and advances to customers			22,930			29,215			(6,285)			(21.5)			24,673
Loans and advances to central banks and credit institutions			11,876			30,850			(18,974)			(61.5)			21,617
Other (debt securities an equity instruments)			7,320			6,942			378			5.4			6,913
Financial assets at fair value through other comprehensive income			109,570			117,461			(7,891)			(6.7)			120,953
Debt securities			98,016			105,574			(7,558)			(7.2)			108,903
Equity instruments			2,690			3,075			(385)			(12.5)			2,783
Loans and advances to customers			8,864			8,812			52			0.6			9,267
Loans and advances to central banks and credit institutions			—			—			—			—			—
Financial assets measured at amortised cost			1,011,994			950,571			61,423			6.5			958,378
Debt securities			34,079			27,316			6,763			24.8			26,078
Loans and advances to customers			922,867			872,440			50,427			5.8			881,963
Loans and advances to central banks and credit institutions			55,048			50,815			4,233			8.3			50,337
Investments in subsidiaries, joint ventures and associates			7,684			7,679			5			0.1			7,622
Tangible assets			32,446			33,277			(831)			(2.5)			32,735
Intangible assets			16,246			15,698			548			3.5			15,908
Goodwill			12,645			12,359			286			2.3			12,471
Other intangible assets			3,601			3,339			262			7.8			3,437
Other assets			44,227			56,720			(12,493)			(22.0)			50,667
Total assets			1,578,295			1,514,242			64,053			4.2			1,508,250
Liabilities and shareholders' equity
Financial liabilities held for trading			80,147			88,128			(7,981)			(9.1)			81,167
Customer deposits			4,809			—			4,809			—			—
Debt securities issued			—			—			—			—			—
Deposits by central banks and credit institutions			5,350			—			5,350			—			—
Derivatives			55,086			73,044			(17,958)			(24.6)			64,469
Other			14,902			15,084			(182)			(1.2)			16,698
Financial liabilities designated at fair value through profit or loss			47,900			59,459			(11,559)			(19.4)			48,038
Customer deposits			36,694			40,469			(3,775)			(9.3)			34,343
Debt securities issued			5,401			4,362			1,039			23.8			4,440
Deposits by central banks and credit institutions			5,805			14,628			(8,823)			(60.3)			9,255
Other			—			—			—			—			—
Financial liabilities measured at amortized cost			1,317,759			1,237,314			80,445			6.5			1,248,188
Customer deposits			867,531			802,430			65,101			8.1			814,967
Debt securities issued			238,882			240,195			(1,313)			(0.5)			230,829
Deposits by central banks and credit institutions			180,221			169,646			10,575			6.2			175,424
Other			31,125			25,043			6,082			24.3			26,968
Liabilities under insurance contracts			779			970			(191)			(19.7)			910
Provisions			9,815			10,118			(303)			(3.0)			10,852
Other liabilities			26,271			26,943			(672)			(2.5)			27,773
Total liabilities			1,482,671			1,422,932			59,739			4.2			1,416,928
Shareholders' equity			118,380			114,493			3,887			3.4			114,620
Capital stock			8,670			8,309			361			4.3			8,670
Reserves			104,702			116,894			(12,192)			(10.4)			114,721
Attributable profit to the Group			5,849			(9,048)			14,897			—			(8,771)
Less: dividends			(841)			(1,662)			821			(49.4)			—
Other comprehensive income			(32,992)			(32,747)			(245)			0.7			(33,144)
Minority interests			10,236			9,564			672			7.0			9,846
Total equity			95,624			91,310			4,314			4.7			91,322
Total liabilities and equity			1,578,295			1,514,242			64,053			4.2			1,508,250

January - September 2021						13

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Group financial information

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Responsible banking Corporate governance Santander share

Appendix

Balance sheet

			GRUPO SANTANDER BALANCE SHEET

Executive summary *

Loans and advances to customers (excl. reverse repos)

Customer funds (deposits excl. repos + mutual funds)

Credit normalization following the uptick at the beginning of the pandemic, due to high liquidity in the system

Strong increase in customer funds benefiting from the higher propensity to save derived from the health crisis

942

p 1% QoQ

p 4% YoY

1,049

p 2% QoQ

p 7% YoY

billion

billion

è By segment (YoY change):

è By product (YoY change):

Growth backed by individuals and large corporates

Of note were demand deposits (which account for 66% of customer funds) and mutual funds

Individuals

SMEs and corporates

CIB and institutions

Demand

Time

Mutual funds

+4%

-2%

+9%

+10%

-9%

+17%

(*) Changes in constant euros

è Loans and advances to customers

Loans and advances to customers stood at EUR 958,311 million in September, virtually unchanged in the quarter and 5% higher year-on-year.

The Group uses gross loans and advances to customers excluding reverse repos (EUR 941,739 million) for the purpose of analyzing traditional commercial banking loans. In addition, in order to facilitate the analysis of the Group's management, the comments below do not include the exchange rate impact.

In the third quarter, gross loans and advances to customers excluding reverse repos and without the exchange rate impact, increased 1%, as follows:

•In Europe Portugal and Poland increased while Spain and the UK had no material change. The region as a whole increased 1%.

•North America volumes remained flat both in the US and Mexico.

•South America growth of 3% with all markets increasing, notably Argentina and Uruguay (+5% each) and Chile (+3%).

•Digital Consumer Bank (DCB) was 1% lower, due to lower new auto lending. Openbank grew 10%.

Compared to September 2020, gross loans and advances to customers (excluding reverse repos and the FX impact) grew 4%, as follows:

•In Europe, 3% growth with all markets increasing except for Spain that remained flat. Rises were recorded in Portugal (+4%), driven by mortgages and SMEs, Poland (+4%) due to mortgages, SMEs and CIB, and the UK (+1%), driven by residential mortgage activity. Growth was also recorded in SCIB branches.

•In North America, Mexico decreased 2% weighed down by the fall in corporates, partly offset by the increase in individuals (mainly mortgages). Balances in the US increased 1%, even with the impact of the Bluestem portfolio disposal (+2% excluding this impact). The region as a whole recorded no material change (+1% excluding the aforementioned disposal).

•Growth in South America was 10%. Argentina was up 33% mainly driven by SMEs and cards, Brazil +13% with positive performance in all segments and Uruguay rose 12%. Chile remained largely stable, as growth in mortgages was offset by the fall in corporates and consumer lending.

•Digital Consumer Bank dropped 1% affected by the lower activity at the begining of the year due to the lockdown measures. Mixed performance across countries, with growth recorded in the UK, France and Italy. Openbank increased 41%.

As of September 2021, gross loans and advances to customers excluding reverse repos maintained a balanced structure: individuals (62%), SMEs and corporates (22%) and CIB (15%).

Gross loans and advances to customers (excl. reverse repos)
EUR billion

Gross loans and advances to customers (excl. reverse repos)
% operating areas. September 2021

+6		%	*
Sep-21 / Sep-20

(*) In constant EUR: +4%

14						January - September 2021

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Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Balance sheet

è Customer funds

Customer deposits amounted to EUR 909,034 million in September 2021, increasing 2% quarter-on-quarter and 8% year-on-year.

The Group uses customer funds (customer deposits excluding repos, plus mutual funds) for the purpose of analyzing traditional retail banking funds, which amounted to EUR 1,049,188 million.

•In the quarter, customer funds increased 2%, with the following performance excluding exchange rate impacts:

–By product, rises were recorded in demand deposits (+2%), time deposits (+1%) and mutual funds (+3%).

–By primary segment, customer funds increased in all regions and most countries, notably in Argentina (+15%), Chile (+3%) and the US (+2%). Digital Consumer Bank rose 1%.

•Compared to September 2020, customer funds were up 7%, excluding the exchange rate impact:

–By product, deposits excluding repos rose 6%. Demand deposits grew 10% with rises in all markets, and time deposits fell 9%, with broad-based declines except Brazil, Chile and Argentina. Mutual funds surged 17% underpinned by net inflows and markets recovery.

–By country, customer funds increased in all regions and countries. Of note was double-digit growth in Argentina (+53%), Chile (+17%), the US and Uruguay (both +13%) and Poland (+11%). More moderate growth was recorded in Portugal (+7%), Spain (+6%), Mexico (+5%), the UK and Brazil (+3% each).

–Positive performance also in DCB, which rose 11%. Openbank increased 27%.

With this performance, the weight of demand deposits as a percentage of total customer funds rose 1 pp in the last 12 months to 66%, which resulted in a better cost of deposits.

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 2021, the Group issued:

•Medium- and long-term senior debt amounting to EUR 9,369 million and EUR 178 million of covered bonds placed in the market.

•There were EUR 16,433 million of securitizations placed in the market.

•In order to strengthen the Group’s situation, issuances to meet the TLAC requirement amounting to EUR 12,259 million (EUR 9,676 million of senior non-preferred; EUR 2,583 million of preferred).

•Maturities of medium- and long-term debt of EUR 20,516 million.

The net loan-to-deposit ratio was 105% (108% in September 2020). The ratio of deposits plus medium- and long-term funding to the Group’s loans was 117%, 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 (long-term senior non-preferred debt at A- and short-term at F2), Moody's (A2 for long term debt and P-1 for short-term), Standard & Poor’s (A for long term debt and A-1 for short term) and DBRS (A high for long term debt and R-1 Middle for short-term), in all cases with a stable outlook. During the year, Moody's and DBRS confirmed their outlook, while Fitch and Standard & Poor's upgraded their outlooks from negative to stable.

While sometimes the methodology applied by the agencies limits a bank's rating to the sovereign rating assigned to 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 and DBRS and at the same level by Fitch and S&P, which demonstrates our financial strength and diversification.

Customer funds
EUR billion

Customer funds
% operating areas. September 2021

+10		%	*
+19		%
+8		%
•Total
•Mutual funds
•Deposits exc. repos
Sep-21 / Sep-20

(*) In constant EUR: +7%

January - September 2021						15

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Appendix

Solvency ratios

			SOLVENCY RATIOS

Executive summary

Fully-loaded capital ratio

Fully-loaded CET1 ratio

The fully-loaded CET1 ratio was at the top of our 11-12% target range, following a strong quarterly increase

In the quarter, strong organic generation driven by profit and RWA management

Organic generation

+48 bps

TNAV per share

TNAV per share was EUR 3.99, 1.4% higher quarter-on-quarter and +6.5% year-on-year including dividends

At the end of the quarter, the total fully-loaded capital ratio stood at 15.82% and the fully-loaded CET1 ratio at 11.85%, having increased 15 pp in the quarter.

This growth is driven by strong organic generation (+48 bps), due to the profit in the quarter and a 11 bp uplift from the decrease in risk-weighted assets (increased securitizations and optimization exercises).

Additionally in the quarter there was a 16 bp reduction stemming from regulatory and model impacts (market risk, NPL backstop, New Default Definition anticipation) and -17 bps from other concepts, mainly market performance.

Applying the IFRS 9 transitional arrangements, the phased-in CET1 ratio was 12.26% and the total phased-in capital ratio was 16.20%. We have a strong capital base, comfortably meeting the minimum 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 CET1 management buffer of 340 bps, compared to the pre-covid-19 buffer of 189 bps.

The fully-loaded leverage ratio stood at 5.05%, and the phased-in at 5.20%.

Finally, the TNAV per share in Q3'21 was EUR 3.99, a 1.4% increase quarter-on-quarter and a 6.5% increase year-on-year. These growth rates include the EUR 4.85 cent dividend to be paid in November, but which has already been deducted from shareholder's equity in September, and the EUR 2.75 cents paid last May.

Eligible capital. September 2021
EUR million
			Fully-loaded			Phased-in*
CET1			68,467			70,787
Basic capital			78,264			80,897
Eligible capital			91,423			93,537
Risk-weighted assets			577,790			577,209
CET1 capital ratio			11.85			12.26
Tier 1 capital ratio			13.55			14.02
Total capital ratio			15.82			16.20

Fully-loaded CET1 ratio performance
%

1.No net impact from shareholder remuneration in Q3 as the dividend accrual in September (corresponding to 20% of 9M’21 underlying profit plus the total amount of the first share buyback already approved) is equivalent to the accrual made in H1'21 (50% of H1’21 underlying profit).

2.Market risk, NPL backstop, New Default Definition anticipation.

3.Mainly HTC&S.

(*) The phased-in ratio includes the transitory treatment of IFRS 9, calculated in accordance with article 473 bis of the Capital Requirements Regulation (CRR) and subsequent modifications introduced by Regulation 2020/873 of the European Union. Total phased-in capital ratios include the transitory treatment according to chapter 2, title 1, part 10 of the CRR.

16						January - September 2021

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Group financial information

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Responsible banking Corporate governance Santander share

Appendix

Solvency ratios

			STRESS TEST

u    In late July, the European Banking Authority (EBA) published the results of its 2021 EU-wide stress test, which involved the main banks from the EU.

This exercise assesses the resilience of these banks' main balance sheet and income statement items under two different macroeconomic scenarios (baseline and adverse).

To this end, the balance sheets at the end of 2020 were taken as a starting point and the expected behaviour of business models was compared in order to gauge the expected losses and the ability of the balance sheet to withstand such losses without requiring external support.

On this occasion, as with previous exercises, there was no minimum capital threshold to meet. Instead, results will be taken into account when determining the SREP requirements.

The baseline scenario assumes the most likely economic performance according to the models used by the EBA. On the other hand, the very unlikely adverse scenario assumes a severe deterioration in both macroeconomic and global financial market conditions.

This year, the scenarios used to project the evolution of the Group's main businesses were as follows:

Gross Domestic Product (GDP)
Change (%)
						Eurozone												UK												US												Brazil
			2021						2021-23						2021						2021-23						2021						2021-23						2021						2021-23
Baseline scenario			3.9					%	11.0		%				5.9					%	11.0		%				3.1					%	8.0		%				2.8					%	8.0		%
Adverse scenario			-1.5					%	-4.0		%				-3.6					%	-4.0		%				-3.5					%	-4.0		%				-5.2					%	-5.0		%

			Santander: resilience of our income statement was reflected in greater capital stability

In the last thirteen years, the Group has been submitted to eight stress tests, in all of which it has demonstrated the strength of its business model and, consequently, that its solvency levels would be sufficient to face the most severe macroeconomic scenarios.

Our geographic and business diversification enables us to have more stable and non-interrelated sources of income, so that even if the macroeconomic situation were to deteriorate globally, we would be capable of generating profit for our shareholders and thereby ensure an adequate capital position in line with regulatory requirements.

According to the results obtained in this stress test, under the adverse scenario Santander would destroy 240 bps of phased-in

CET1 capital compared to the peer average of almost 480 bps and to the average of European banking system of nearly 500 bps.

This implies that, in terms of legal enforceability, the Group would have a solvency position 30 bps better than the average of its European peers.

It is also worth noting that even in the adverse scenario, the cumulative projections of the Group's income statement show a profit of almost EUR 1 billion. This makes it the only bank among its peers capable of avoiding a negative accumulated result under this scenario.

Phased-in CET1 ratio 2020 vs. 2023
Adverse scenario. Basis points

Profit after tax (accumulated 3 years)
Adverse scenario. EUR million

Peer average

System

January - September 2021						17

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Responsible banking Corporate governance Santander share

Appendix

Risk management

			RISK MANAGEMENT

Executive summary

Credit risk

Market risk

Credit quality indicators maintained the positive trend of the first half of the year

Market risk profile remained low, with stable VaR in a context of economic recovery amid increased volatility

Cost of credit2

NPL ratio

Coverage ratio

0.90%

3.18%

74%

Q3'21

Average VaR

EUR 10.6 million

q 4 bps vs Q2'21

q 4 bps vs Q2'21

p 1 pp vs Q2'21

Structural and liquidity risk

Operational risk

Robust and diversified liquidity buffer, with ratios well above regulatory limits

Losses continued to be within expected levels and were lower than Q2'21 in relative terms by Basel categories

LCR 164% 0 pp vs Q2'21

u Credit risk management

As of September 2021, Grupo Santander’s NPL ratio stood at 3.18%, a 4 bp decrease compared to June 2021 and a 3 bp increase year-on-year. The reduction in the quarter was mainly due to the positive performance in Europe with a reduction in its NPL ratio of 16 bps vs. Q2'21. This was partially offset by the increases in North and South America, as their NPL ratio increased by 27 bps and 2 bps, respectively, vs. the previous quarter.

Credit impaired loans amounted to EUR 33,046 million, in line with the previous quarter (in constant euros), while our loan book grew by 1% quarter-on-quarter.

Regarding loan-loss provisions, they amounted to EUR 2,220 million in the third quarter, a 25% increase vs. Q2’21 in constant euros, mainly explained by seasonality and normalization trends after stimulus policies deployed by governments to fight the effects of the pandemic, especially in the US, which are gradually starting to recede.

Considering the first nine months of the year, loan-loss provisions amounted to EUR 5,973 million, a 34% increase in constant euros, on a year-on-year basis, explained by provisions made in 2020 to cover the potential additional losses that could arise as a result of the covid-19 pandemic.

The Group's cost of credit stood at 0.90%, a 4 bp reduction compared to the previous quarter, and -37 bps year-on-year, supported by the good performance of the portfolio and the previously explained additional provisions in 2020.

Total loan-loss reserves in the third quarter stood at EUR 24,462 million, a 2% increase, in constant euros, compared to the previous quarter, with the total coverage of credit impaired loans at 74%, a 1 pp increase compared to the previous quarter.

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 provisions 1									Cost of credit (%) 2									NPL ratio (%)									Total coverage ratio (%)
			9M'21						Chg (%) / 9M'20						9M'21						Chg (bps) / 9M'20						9M'21			Chg (bps) / 9M'20						9M'21			Chg (pp) / 9M'20
Europe			1,877						(22.5)						0.48						0						3.15			(14)						51.1			2.4
Spain			1,390						0.0						1.01						21						5.99			1						48.8			2.8
United Kingdom			(67)						—						0.01						(25)						1.27			(6)						36.6			(5.1)
Portugal			95						(37.6)						0.35						(7)						3.44			(81)						75.5			11.3
Poland			161						(33.7)						0.82						(17)						4.34			(24)						74.6			3.8
North America			1,095						(63.6)						1.46						(161)						2.56			59						139.3			(62.3)
USA			450						(79.8)						1.06						(202)						2.36			51						161.5			(67.3)
Mexico			645						(16.9)						2.69						(28)						3.14			80						90.1			(42.5)
South America			2,384						(17.8)						2.52						(97)						4.38			(2)						98.8			1.5
Brazil			1,980						(9.7)						3.60						(98)						4.72			8						111.8			(3.1)
Chile			266						(48.0)						0.89						(69)						4.36			(40)						64.1			4.4
Argentina			88						(36.4)						3.51						(203)						3.85			98						149.3			(37.0)
Digital Consumer Bank			449						(40.7)						0.57						(22)						2.15			(14)						112.8			2.3
TOTAL GROUP			5,973						(34.5)						0.90						(37)						3.18			3						74.0			(1.9)
(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

18						January - September 2021

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Risk management

Regarding moratoria programmes, which were put in place to tackle the effects of covid-19, 99% of the total amount granted had already expired by the end of the third quarter, showing a payment performance aligned with expectations, with 6% classified in stage 3 (IFRS 9).

The outstanding moratoria at the end of the quarter amounted to EUR 1.3 billion (mainly Spain), the majority of which will expire next quarter, following the expiration of a significant volume of operations in Portugal in Q3.

Regarding IFRS 9 stages evolution:

•Stage 1 exposures increased by 1% vs. the previous quarter, mainly due to new loan originations in Europe and South America.

•Exposures in stage 2 decreased by 3% in the quarter, in line with the normalization trend observed after the increase recorded last year, which was mostly driven by macroeconomic deterioration caused by the pandemic.

•Stage 3 remained stable in the quarter.

Coverage ratio by stage
EUR billion
			Exposure1												Coverage
			Sep-21			Jun-21			Sep-20						Sep-21			Jun-21			Sep-20
Stage 1			912			904			862						0.5		%	0.5		%	0.6		%
Stage 2			67			70			60						8.6		%	8.2		%	8.8		%
Stage 3			33			33			31						43.0		%	42.2		%	43.3		%

(1) Exposure subject to impairment. Additionally, in September 2021 there are EUR 27 billion in loans and advances to customers not subject to impairment recorded at mark to market with changes through P&L (EUR 26 billion in June 2021 and EUR 29 in September 2020).

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 (%)
			Q3'21			QoQ			YoY
Balance at beginning of period			33,266			2.4			1.5
Net additions			2,188			(14.6)			37.2
Increase in scope of consolidation			—			—			(100.0)
Exchange rate differences and other			(368)			—			(78.0)
Write-offs			(2,040)			(3.7)			15.5
Balance at period-end			33,046			(0.7)			7.0
Loan-loss allowances			24,462			0.9			4.2
For impaired assets			14,205			1.25			6.12
For other assets			10,257			0.47			1.77

u Market risk

The global corporate banking trading activity risk is mainly interest rate driven, focused on servicing our customer's needs and measured in daily VaR terms at 99%.

In the third quarter, VaR fluctuated around an average value of EUR 10.6 million, increasing slightly at the end of September after market volatility increased over concerns around a potential slowdown in global growth in H2’21, mainly due to supply chain disruptions and the surge in energy prices. The quarter’s closing VaR was EUR 14.9 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
			2021									2020
Third quarter			Average			Latest						Average
Total			10.6			14.9						10.2
Europe			9.9			13.7						9.0
North America			2.6			2.0						6.9
South America			5.9			6.1						4.8

(1) Activity performance in Santander Corporate & Investment Banking markets.

Trading portfolios (1). VaR by market factor
EUR million
Third quarter			Min.			Avg.			Max.			Last
VaR total			7.8			10.6			15.2			14.9
Diversification effect			(10.1)			(13.8)			(17.3)			(13.8)
Interest rate VaR			7.1			9.9			14.1			12.6
Equity VaR			2.2			3.3			6.5			3.3
FX VaR			2.4			3.3			6.2			4.5
Credit spreads VaR			2.9			6.0			7.9			7.2
Commodities VaR			1.1			1.9			3.5			1.1

(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 2021						19

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Risk management

Trading portfolios1. VaR performance
EUR million

(1) Corporate & Investment Banking performance in financial markets.

u Structural and liquidity risk

•Regarding structural exchange rate risk, it is 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 on the core capital ratio of foreign exchange rate movements. In the quarter, the ratio’s hedging stayed close to 100%.

•In terms of structural interest rate risk, inflation pressures continued globally, leading to expectations of earlier interest rate hikes than previously thought. This, coupled with continued political instability in Latin America, added volatility to the markets, although no material events were detected and risk levels remained at comfortable levels.

•In liquidity risk during the third quarter, the Group maintained a comfortable position, supported by a robust and diversified liquidity buffer, with ratios well above regulatory limits.

u Operational risk

•Overall, our operational risk profile continued to be stable during the third quarter of 2021. The following aspects were closely monitored during this period:

–Fraud and cyber risk threats across the financial industry, that lead to the reinforcement of the control environment (i.e., patching, browsing control, data protection controls, etc.), as well as reinforcing monitoring as a preventive measure. Development of the external fraud plans in our different country units.

–Third party risk exposure, maintaining close oversight on critical providers, with focus on business continuity capabilities and compliance with service level agreements.

–IT risk, mainly related to transformation plans, new system releases, as well as challenges related to IT services outsourcing.

–People risk, due to our employees returning to offices and/or work from home situations. Measures have been implemented to ensure a suitable and safe working environment across our subsidiaries.

–Regulatory compliance, due to increasing regulatory requirements (such as ESG, operational resilience, crypto-assets and others) across the Group.

•As the situation continues to evolve, we are also monitoring the changes in the environment as well as the transition to digital banking in order to identify potential risk exposures and anticipate actions to reduce their impact.

•In terms of the third quarter performance, level of losses in relative terms by Basel categories were lower than in the previous quarter.

20						January - September 2021

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General background

			GENERAL BACKGROUND

Grupo Santander conducted its business in the third quarter of 2021 in an environment marked by significant economic dynamism and progress in vaccination, but at the same time by a pronounced impact from the Delta variant and higher-than-expected inflation. The trend in pricing was the most relevant risk factor. The most likely scenario is a temporary rise that, in general, will not call for a tightening of monetary policy, although countries such as Mexico and especially Brazil and Chile have raised interest rates. The general tone of economic policy continued to be expansionary although uneven - more so in the mature economies - which, together with the adjustments the Chinese economy is going through, could lead to a more differentiated economic performance in the coming quarters.

			Country			GDP Change1			Economic performance
			Eurozone			+6.0%			The reopening of economic activities restricted by the pandemic continued to boost GDP growth, which could return to pre-crisis levels by the end of 2021. The unemployment rate fell to 7.5% in August. Inflation rose to 3.4% in September due to temporary factors. The ECB insists that it will maintain loose funding conditions to consolidate the economic recovery.
			Spain			+5.6%			Restrictions to economic activity continued to ease, driving GDP growth. Inflation (4% in September) picked up due to the impact of energy prices and the normalization of some prices that had fallen due to the pandemic. Employment rose, bringing back to work a significant amount of employees who had been on the temporary workforce reduction scheme (ERTE) and reducing the unemployment rate (to 15.3% in Q2'21).
			United Kingdom			+7.3%			UK economic recovery stalled in July amid worker shortages and bottlenecks. The labour market continued to improve (unemployment was 4.5% in August). Inflation (3.1% in September) exceeded the BoE's target, which kept interest rates stable (0.1%) and maintained the bond-buying target, although it expressed its willingness to bring forward monetary policy normalization.
			Portugal			+4.3%			The reopening of the economy, supported by a high vaccination rate (83% of the population) has enabled economic growth to progress towards pre-pandemic levels (still 5.8% below Q4'19), with private consumption as the main driver. The labour market improved (unemployment rate at 6.7% in Q2'21) and inflation picked up (1.5% in September), but without showing a clear acceleration pattern.
			Poland			+5.1%			The economy started to return to normal in Q2'21, with rapid GDP growth supported by domestic demand, especially consumption, but accompanied by high inflation (5.9% in September). The labour market remained solid (unemployment rate at 3.5%). In this context, the central bank raised Poland's official interest rate by 40 bps to 0.50% in early October.
			United States			+6.1%			GDP continued to grow strongly in Q2'21, thanks to the fiscal impulse and the reopening of the economy. Inflation rebounded (5.4% in September) due to higher prices in the areas most affected by the pandemic and supply-side problems. The spike in covid-19 cases in the summer somewhat delayed the recovery of the labour market, but the Fed considers this improvement to be sufficient and will start to tighten monetary policy with the announcement of tapering this year.
			Mexico			+6.9%			Economic growth gained momentum in Q2'21, driven by the reopening of the services sector and exports, but with some weakness in industry. Inflation rebounded sharply (6.0% in September), with widespread pressure on the prices of goods and services, leading the central bank to continue raising Mexico's official interest rate (+50 bps in Q3'21 to 4.75%).
			Brazil			+6.4%			Economic recovery continued to be driven by the reopening of the services sector, thanks to progress in vaccination and improved mobility, but international supply problems dampened growth in the industry. Inflation continued to pick up (10.25% in August) and the central bank continued to raise Brazil's interest rate, by 200 bps in Q3'21 (6.25%), and indicated that the hikes will continue.
			Chile			+8.8%			Strong GDP growth in H1'21 driven by progress in vaccination and high fiscal impulses and liquidity (via partial withdrawals of savings from pension plans). Inflation picked up (5.3% in September) and the central bank started to raise the official interest rate in Q3'21, increasing it by 100 bps to 1.5%, and in October by 125 bps to 2.75%.
			Argentina			+10.3%			After starting Q2'21 with a slight relapse due to the tighter restrictions imposed in the second wave of covid-19, economic growth resumed its recovery in the last few months, boosted by progress in vaccination and increased mobility. Inflation remains high (3.5% in September).

(1) Year-on-year change H1'21

January - September 2021						21

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			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.

Grupo Santander has aligned the information in this chapter with the underlying information used internally for management reporting and with that presented in Grupo Santander's other public documents.

Grupo Santander's executive committee has been selected to be its chief operating decision maker. Grupo Santander'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 by type of business. We prepare the information by aggregating the figures for Grupo 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 general principles applied are the same as those used in Grupo Santander.

On 9 April 2021, we announced that, starting and effective with the financial information for the first quarter of 2021, we would carry out a change in our reportable segments to reflect our new organizational and management structure.

These changes in the reportable segments aim to align the segment information with their management and have no impact on the group’s accounting figures.

a.Main changes in the composition of Grupo Santander's segments

The main changes, which have been applied to management information for all periods included in the consolidated financial statements, are the following:

Primary segments

1.Creation of the new Digital Consumer Bank (DCB) segment, which includes:

•Santander Consumer Finance (SCF), previously included in the Europe segment, and the consumer finance business in the United Kingdom, previously recorded in the country.

•Our fully digital bank Openbank and the Open Digital Services (ODS) platform, which were previously included in the Santander Global Platform segment.

2.Santander Global Platform (SGP), which incorporated our global digital services under a single unit, is no longer a primary segment. Its activities have been distributed as follows:

•Openbank and Open Digital Services (ODS), which, as mentioned above, are now included under the new Digital Consumer Bank reporting segment.

•The business recorded in Global Payment Services (Merchant Solutions -GMS-, Trade Solutions -GTS- and Consumer Solutions -Superdigital and Pago FX-) has been allocated to the three main geographic segments, Europe, North America and South America, with no impact on the information reported for each country.

Secondary segments

1.Creation of the PagoNxt segment, which incorporates simple and accessible digital payment solutions to drive customer loyalty and allows us to combine our most disruptive payment businesses into a single autonomous company, providing global technology solutions for our banks and new customers in the open market, and which has been structured into three businesses, previously included in SGP:

•Merchant Solutions: acquiring solutions for merchants.

•Trade Solutions: solutions for SMEs and companies operating internationally.

•Consumer Solutions: payment solutions for individuals, including the Superdigital platform, aimed at underbanked populations, and PagoFX, an international payment service in the open market.

2.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.

3.Elimination of the Santander Global Platform reporting segment:

•Openbank and ODS are now recorded in the Retail Banking segment.

•Merchant Solutions, Trade Solutions, Superdigital and PagoFX form the new PagoNxt reporting segment.

The Group recasted the corresponding information of earlier periods considering the changes included in this section. As stated above, group consolidated figures remain unchanged.

22						January - September 2021

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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: which 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: which 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, the specialized business unit Banco Santander International, Santander Investment Securities (SIS) and the New York branch.

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, 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 (SCIB): 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 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 in three businesses: Merchant Solutions, Trade Solutions and Consumer Solutions.

In addition to these operating units, both primary and secondary segments, the Group continues to maintain the area of 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 of shareholders’ equity via issuances.

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 amortization of goodwill 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 segments and business areas 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. As described on the previous page, 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 actual changes in the performance of our business areas, we provide and discuss the year-on-year changes to our results excluding such impact. On the other hand, 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 2021						23

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January-September 2021
Main items of the underlying income statement
EUR million
Primary segments			Net interest income			Net fee income			Total income			Net operating income			Profit before tax			Underlying attributable profit to the parent
Europe			8,140			3,236			12,299			6,108			3,377			2,293
Spain			3,009			1,821			5,359			2,822			995			730
United Kingdom			3,268			352			3,625			1,688			1,623			1,145
Portugal			569			325			1,042			613			492			339
Poland			741			386			1,179			696			281			125
Other			553			354			1,095			289			(14)			(46)
North America			6,085			1,247			8,266			4,649			3,504			2,288
US			4,022			606			5,586			3,240			2,784			1,788
Mexico			2,063			617			2,662			1,485			828			602
Other			0			24			18			(77)			(108)			(102)
South America			8,254			2,726			11,302			7,386			4,691			2,471
Brazil			5,782			2,027			8,085			5,719			3,526			1,762
Chile			1,476			294			1,834			1,125			857			463
Argentina			708			272			929			375			193			180
Other			289			133			454			167			115			65
Digital Consumer Bank			3,207			616			3,975			2,170			1,602			935
Corporate Centre			(1,033)			(15)			(1,216)			(1,465)			(1,741)			(1,607)
TOTAL GROUP			24,654			7,810			34,626			18,848			11,432			6,379
Secondary segments
Retail Banking			23,206			5,208			29,520			16,780			9,759			5,750
Corporate & Investment Banking			2,207			1,335			4,352			2,709			2,640			1,744
Wealth Management & Insurance			275			933			1,637			969			966			698
PagoNxt			(2)			349			334			(145)			(191)			(206)
Corporate Centre			(1,033)			(15)			(1,216)			(1,465)			(1,741)			(1,607)
TOTAL GROUP			24,654			7,810			34,626			18,848			11,432			6,379

Underlying attributable profit to the parent distribution*
9M'21

(*) As a % of operating areas. Excluding the Corporate Centre.

Underlying attributable profit to the parent. 9M'21
EUR million. % change YoY in constant euros

Europe
North America
South America
Digital Consumer Bank						DCB
Global businesses

+407		%
+47		%
+39		%
-9		%
+305		%
+1		%
+29		%
+68		%
+43		%
+17		%
+26		%
+24		%
n.a.

24						January - September 2021

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January-September 2020
Main items of the underlying income statement
EUR million
Primary segments			Net interest income			Net fee income			Total income			Net operating income			Profit before tax			Underlying attributable profit to the parent
Europe			7,241			3,032			10,998			4,739			1,724			1,157
Spain			2,890			1,740			5,150			2,417			696			497
United Kingdom			2,521			398			2,932			994			308			220
Portugal			592			285			979			538			350			243
Poland			794			332			1,136			661			303			142
Other			445			276			801			129			66			56
North America			6,415			1,282			8,335			4,873			1,653			1,055
US			4,297			682			5,559			3,252			820			470
Mexico			2,118			584			2,760			1,629			844			591
Other			0			16			15			(9)			(11)			(6)
South America			8,157			2,704			11,346			7,324			3,836			2,113
Brazil			5,840			2,148			8,322			5,677			2,973			1,545
Chile			1,293			240			1,669			988			500			269
Argentina			721			202			902			411			185			161
Other			304			114			454			248			178			138
Digital Consumer Bank			3,190			566			3,814			2,081			1,371			787
Corporate Centre			(1,029)			(26)			(889)			(1,137)			(1,567)			(1,455)
TOTAL GROUP			23,975			7,559			33,605			17,879			7,016			3,658
Secondary segments
Retail Banking			22,557			5,301			28,673			15,667			5,620			3,108
Corporate & Investment Banking			2,153			1,167			4,079			2,564			2,217			1,482
Wealth Management & Insurance			294			857			1,486			830			801			584
PagoNxt			0			259			256			(45)			(55)			(61)
Corporate Centre			(1,029)			(26)			(889)			(1,137)			(1,567)			(1,455)
TOTAL GROUP			23,975			7,559			33,605			17,879			7,016			3,658

January - September 2021						25

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Group financial information

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Responsible banking Corporate governance Santander share

Appendix

Primary segments

			EUROPE			Underlying attributable profit
						EUR 2,293 mn
Executive summary (changes in constant euros) → We are accelerating our One Santander business transformation in Europe to achieve superior growth and a more efficient operating model that should allow us to progress towards our medium-term underlying RoTE target of 10-12%1. → Positive P&L performance, with higher revenue (+12%) and lower costs (-1%) and provisions (-23%), which led to an underlying attributable profit of EUR 2,293 million (+98% year-on-year). → Volume growth in the last 12 months in almost all markets: loans grew 3% and deposits rose 4%, with positive trends since the beginning of the year.

Unless otherwise indicated, changes in the region and in countries with currencies other than the euro are reported at constant exchange rates. The balance sheet and P&L ratios, together with the changes at current exchange rates, are included in the appendix.

Strategy

Our goal with One Santander in Europe is to create a better bank where customers and our people feel a deep connection while delivering sustainable value for our shareholders. We aim to deliver a c.10-12% underlying RoTE in the medium term1 and make progress in the business transformation through our action plan, defined around three main blocks:

•Grow our business by better serving our customers, focusing on capital efficient opportunities, which include SCIB and WM&I, simplifying our mass market value proposition, improving customer experience and engaging with PagoNxt.

•Redefine how we interact with our customers, accelerating our digital agenda with one common mobile experience, re-imagining our branch network and transforming our contact centres, building a common solution for the region.

•Create a common operating model, to serve our businesses through a common technology platform and automated operations, leveraging shared services and with one aligned team across Europe.

The key areas of progress by country in the quarter were:

Loyal customers. September 2021
Thousands. % loyal / active customers
37		%	/ active customers						36		%	31%			50%			55%
			10,197

•Spain: our priorities are to strengthen our customer base, increase customer satisfaction, simplify our offering to achieve profitable growth, and actively manage credit risk in the current market environment. We continued to improve our digital services, for which were named by Global Banking & Finance Review as Best Bank in Digital Services and Most Innovative Retail Banking app in Spain in 2021 .

•United Kingdom: we continued to increase our digital customer base and foster mass market simplification through our customer journey. Customer margin management and better operational efficiency, backed by our Transformation for Success programme, helped to deliver strong profit growth.

•Portugal: launch of OneApp just five months into the project; a big step forward in building One Santander in Europe. Our IT transformation programme continued its path. Although Q3 was still affected by the covid-19 pandemic, the end of moratoria did not have significant impacts due to proactive management supported by data and digital tools. In short, the Bank maintains its solid commitment to the transformation plan, aiming to provide the best customer experience in the market.

Digital customers. September 2021

Thousands. YoY % change

+6

%

YoY

+3

%

+5%

+9%

+8%

15,884

1.Medium-term goals for underlying RoTE do not represent guidance. The actual underlying RoTE may vary materially in the medium term.

26						January - September 2021

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Appendix

Primary segments

•Poland: we continued to progress in our business and strategic transformation to become a simpler, faster, more efficient and more costumer centric organization. Our recent achievements include: maintaining our top 3 position in NPS among Polish banks; 16% growth in active mobile customers to 2.1 million; and the launching of new solutions and functionalities, such as online and mobile loan applications, Santander Future Wealth and a new website for brokerage customers with an enhanced UX.

We incorporate ESG management in our strategy and day-to-day activities: in Environment, by supporting the green transition and aiming to become a leader in Green Finance; in Social by building a more diverse and inclusive society and in Governance by performing our business responsibly.

In the first nine months of the year, we have focused on green buildings (prioritizing funding for houses with highest energy efficiency and we were the first mortgage provider in the UK to launch EnergyFact, a free home energy report) and supporting agribusinesses transition towards more sustainable use of resources (e.g. financing for irrigation modernization, machinery renewals).

Business performance

Gross loans and advances to customers excluding reverse repurchase agreements were 3% higher year-on-year, backed by the mortgage business, mainly in the UK and retail banking in Poland, Portugal and Spain. We had a very strong third quarter, despite usual seasonality, achieving very high levels of mortgage and UPL originations. Corporate activity slowed down as a result of government aid programmes and lower demand in recent months.

Customer deposits excluding repurchase agreements grew 4% year-on-year, with broad-based increases in all countries. Mutual funds +20%.

Results

Underlying attributable profit in the first nine months was EUR 2,293 million, 98% higher than in the same period of 2020, with the following detail:

•Higher total income (+12%) spurred by a very positive NII performance in mortgages in the UK, sharp net fee income growth in Poland, strong results in SCIB and a solid management of funding costs.

Business performance. September 2021

EUR billion and YoY % change in constant euros

567

+3%

695

+6%

Gross loans and advances to customers excl. reverse repos

Customer deposits excl. repos + mutual funds

•Costs decreased 1.5% as a result of the ongoing optimization plans in all countries, aligned with our savings targets for the region and after absorbing costs related to the development of technology platforms.

•Loan-loss provisions dropped 23% compared to the first nine months of 2020, which was strongly affected by covid-19 related provisions.

By country:

•Spain: underlying attributable profit in the first nine months surged 47% year-on-year, predominantly driven by the strong cost reductions. Total income rose 4% driven by effective NII management and net fee income (transactional, insurance and mutual funds), although they slowed in the quarter.

•United Kingdom: underlying attributable profit was five times that of the same period of 2020, reflecting the benefits from provision releases, lower cost of deposits and greater mortgage and SME volumes.

•Portugal: underlying attributable profit rose 39% compared to the previous year, driven by ALCO portfolio sales, lower costs and improved cost of credit performance, which remained solid despite the end of moratoria programmes.

•Poland: underlying attributable profit was affected by interest rate cuts and charges related to CHF-indexed and based mortgages. These impacts were partially mitigated by net fee income growth, dividends and lower loan-loss provisions.

•Other Europe: SCIB had an excellent performance in the first nine months of the year, on the back of strong Markets results (which started to normalize in recent months due to reduced market volatility).

In the quarter, underlying attributable profit increased 44%, primarily driven by continued cost savings, in line with our restructuring plan and the increase in total income, partly due to the contribution to the SRF recorded in Q2'21.

Europe. Underlying income statement

EUR million and % change

/

Q2'21

/

9M'20

Q3'21

%

excl. FX

9M'21

%

excl. FX

Revenue

4,208

+7

+7

12,299

+12

+12

Expenses

-2,048

-1

-1

-6,191

-1

-1

Net operating income

2,160

+16

+15

6,108

+29

+29

LLPs

-676

+11

+12

-1,877

-22

-23

PBT

1,227

+33

+33

3,377

+96

+96

Underlying attrib. profit

867

+45

+44

2,293

+98

+98

Detailed financial information on page 55

January - September 2021						27

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Appendix

Primary segments

			Spain			Underlying attributable profit
						EUR 730 mn

Commercial activity and business performance

The pick up of activity in individuals was consolidated in the third quarter. Of note was new residential mortgage lending, where we once again exceeded the highest monthly new business volumes of the past 3 years, and consumer lending, which exceeded pre-pandemic levels. As a result, by July we had doubled our new business market share in both of these markets compared to the previous year. In addition, the good commercial dynamism in protection insurance was maintained and of note was the increase in cards turnover (+16%), transfers (+13%) and direct debits (+6%).

Regarding the self-employed, SMEs and corporates, positive working capital trends were also maintained (+12% in the quarter) while the slowdown in the demand for loans continued, mainly due to corporates.

In transactional products, we continued to grow in PoS with significant market share and customer base expansion, which was reflected in a 40% increase in turnover compared to the previous year.

Loans and advances to customers excluding reverse repos remained stable both quarter-on-quarter and year-on-year, with growth in individuals, institutions and private banking.

Customer deposits excluding repos increased 3% compared to the same period of 2020. Mutual funds were 18% higher, driven by sustained net positive inflows in the last 6 quarters.

Results

Underlying attributable profit in the first nine months amounted to EUR 730 million, 47% higher year-on-year. By line:

•Total income increased 4% year-on-year, underpinned by net interest income (+4%) and net fee income (+5%) on the back of insurance, mutual funds and transactional fees.

•We continued our cost reduction efforts (-7% year-on-year), on the back of the transformation of our operating model, which enabled net operating income to grow 17%.

•Loan-loss provisions remained stable compared to the same period of 2020, after the start of an upward trend in the third quarter.

Compared to the second quarter, underlying attributable profit more than doubled due to the contribution to the SRF recorded in Q2, further efficiency improvements and lower loan-loss provisions.

			Spain. Underlying income statement
			EUR million and % change
						Q3'21			/ Q2'21						9M'21			/ 9M'20
			Revenue			1,881			+11						5,359			+4
			Expenses			-818			-4						-2,537			-7
			Net operating income			1,063			+26						2,822			+17
			LLPs			-449			-9						-1,390			0
			PBT			453			+124						995			+43
			Underlying attrib. profit			340			+130						730			+47

Detailed financial information on page 56

			United Kingdom			Underlying attributable profit
						EUR 1,145 mn

Commercial activity and business performance

We continue our focus on building deeper customer relationships and a seamless customer experience. Our priorities are aligned to the One Santander strategy, which include accelerated customer digital adoption, reshaping of our property footprint and faster digitalization and automation.

Our strategic transformation programme continues. We have closed 111 branches this year, reflecting the shift by customers towards online and mobile banking. This shift was also evidenced by further gains in digital and mobile customers (+5% and +11%, respectively), continued increases in digital transactions (+17%) and digital sales accounting for nearly 85% of all sales. We also confirmed a 40% reduction in head office space.

Gross loans excluding reverse repos grew 1% since September 2020, reflecting growth in our residential mortgage portfolio from strong application volumes and GBP 30 bn of gross lending. This was partially offset by lower Corporate and CIB lending.

Customer funds excluding repos increased 3% year-on-year following strong growth in retail banking, retail savings and corporate deposits, mainly driven by lower consumer spending patterns during the covid-19 pandemic. This growth was partially offset by lower CIB deposits.

Results

Underlying attributable profit in the first nine months of 2021 of EUR 1,145 million, five times that of the same period in 2020. By line as follows:

•Total income was up 21%, with increased net interest income driven by the repricing of deposits (1I2I3 Current Account), higher customer balances, higher mortgage and SME volumes. This was partly offset by base rate cuts, back-book mortgage margin pressure and regulatory changes to overdrafts that took effect in April 2020.

•Costs reduced 2%, continuing to reflect efficiency savings from our transformation programme, partly offset by technology investments. As a result, the efficiency ratio improved significantly (-12.7 pp) to 53.4%.

•Releases in loan-loss provisions totalling EUR 67 million in the first nine months of 2021, reflecting the improved economic forecast and the reduction in covid-19-related provisioning.

•Cost of credit remained close to 0% and the NPL ratio was 1.27%.

Against Q2'21, underlying attributable profit increased 12% driven by higher NII (higher mortgage volumes) and further efficiency improvements, driven by higher revenue and an acceleration in cost reduction.

			United Kingdom. Underlying income statement
			EUR million and % change
									/			Q2'21									/			9M'20
						Q3'21			%			excl. FX						9M'21			%			excl. FX
			Revenue			1,303			+8			+7						3,625			+24			+21
			Expenses			-638			-2			-2						-1,937			0			-2
			Net operating income			665			+18			+17						1,688			+70			+66
			LLPs			-1			—			—						67			—			—
			PBT			625			+6			+6						1,623			+426			+414
			Underlying attrib. profit			452			+13			+12						1,145			+420			+407

Detailed financial information on page 57

28						January - September 2021

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Responsible banking Corporate governance Santander share

Appendix

Primary segments

			Portugal			Underlying attributable profit
						EUR 339 mn

Commercial activity and business performance

We continued with our transformation strategy, simplifying our processes and commercial proposition, in order to provide the best customer service:

•Positive business activity and volume performance, in line with economic recovery. New mortgage lending reached record levels.

•The end of private moratoria (for individuals) had no impact on credit quality. Further NPL improvements.

•The number of digital customers increased 9% year-on-year and digital sales now account for 58% of the total (+19 pp year-on-year).

Loans and advances to customers excluding reverse repos increased 4% year-on-year, backed by positive new lending performance in the quarter (preserving 20% market shares in new mortgage and SMEs lending in a growing market).

Customer funds excluding repos rose 7%. Of note was the increase in mutual funds, reflecting our diversification strategy towards off-balance sheet funds.

Results

Underlying attributable profit in the first nine months was 39% higher year-on-year at EUR 339 million, driven by:

•Customer revenue increased 2% as net fee income (+14%) more than offset the impact of low interest rates on NII. Total income rose 6% year-on-year driven by ALCO portfolio sales and despite the higher SRF contribution.

•Costs dropped 3% favoured by the ongoing transformation process, which resulted in a 3.9 pp efficiency improvement to 41.2%.

•Loan-loss provisions declined 38% year-on-year. Credit quality indicators improved: the cost of credit down 7 bps to 0.35%, the NPL ratio fell 81 bps to 3.44% and coverage was higher.

Compared to the previous quarter, underlying attributable profit was 27% higher, due to higher net fee income, lower costs and provisions, and the SRF contribution in Q2.

			Portugal. Underlying income statement
			EUR million and % change
						Q3'21			/ Q2'21						9M'21			/ 9M'20
			Revenue			312			+3						1,042			+6
			Expenses			-140			-2						-429			-3
			Net operating income			172			+7						613			+14
			LLPs			-25			-28						-95			-38
			PBT			145			+27						492			+41
			Underlying attrib. profit			100			+27						339			+39

Detailed financial information on page 58

			Poland			Underlying attributable profit
						EUR 125 mn

Commercial activity and business performance

Retail and SME banking activity continued to recover in the quarter, reflected in new customer acquisition, record mortgage loan sales (more than doubling the same quarter in 2020) and positive trends in personal accounts, bancassurance and leasing.

In Business Corporate Banking, there were positive performances in the corporate treasury and FX businesses in the context of customer activity. Additionally, CIB maintained its leading position in the Polish market.

Our responsible banking commitments continue to be a priority and we look to participate in green energy projects. For example, we financed a solar farm portfolio (>PLN 200 million) in the quarter.

Loans and advances to customers excluding reverse repos increased 4% year-on-year driven by solid growth in mortgages (+4%), SMEs (+5%) and SCIB (+19%), while cash loans and business banking were practically stable.

Customer deposits excluding repos were up 8% year-on-year with a marked increase in demand deposits (+20%) as our strategy to optimize funding costs continued. In particular, there was double-digit growth in individuals, SMEs and business banking. Mutual funds also jumped, up 33%.

Results

In the first nine months of 2021, underlying attributable profit was EUR 125 million, 9% lower year-on-year as results continued to be impacted by charges relating to Swiss franc mortgages (EUR 148 million) as net operating income after loan-loss provisions was up 34%:

•Total income was 7% higher YoY as a surge in net fee income (+19%, transactional and asset management), was enough to more than offset NII pressure (-4%) stemming from several central bank rate cuts.

•Total operating expenses were higher by 5% than last year, mainly driven by staff costs but also higher general and administrative costs due to the rebound in activity in 2021.

•Loan-loss provisions decreased by 34% YoY, spread across all segments.

Compared to the previous quarter, underlying attributable profit doubled, mainly as a result of higher customer revenue, lower CHF mortgage related charges and cost control.

			Poland. Underlying income statement
			EUR million and % change
									/			Q2'21									/			9M'20
						Q3'21			%			excl. FX						9M'21			%			excl. FX
			Revenue			405			-3			-2						1,179			+4			+7
			Expenses			-162			-1			0						-483			+2			+5
			Net operating income			243			-4			-4						696			+5			+8
			LLPs			-47			+4			+5						-161			-36			-34
			PBT			140			+69			+70						281			-7			-5
			Underlying attrib. profit			70			+109			+110						125			-12			-9

Detailed financial information on page 59

January - September 2021						29

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Appendix

Primary segments

			NORTH AMERICA			Underlying attributable profit
						EUR 2,288 mn
Executive summary (changes in constant euros) → In North America, the Group's strategy is to accelerate profitable growth in the US, increase collaboration between countries and implementing local priorities. → In activity, customer funds surged 10% boosted by higher retail and corporate deposits in the US and mutual funds. Loans and advances to customers increased 1% (excluding the Bluestem portfolio disposal) driven by mortgage lending in Mexico and auto in the US. → Underlying attributable profit surged 122% year-on-year, driven largely by higher revenue in the US and lower LLPs in the region.

Unless otherwise indicated, changes in the region and countries are reported at constant exchange rates. The balance sheet and P&L ratios, together with the changes at current exchange rates, are included in the appendix.

Strategy

In line with our strategy to deploy capital to the most profitable businesses, in the quarter:

•On 24 August, Santander Holdings USA, Inc. (SHUSA) and SC USA entered into a definitive agreement pursuant to which SHUSA will acquire all outstanding shares of common stock of SC USA that it does not own through a tender offer for USD 41.50 per share. SHUSA currently owns approximately 80% of SC USA's outstanding shares, and, once the transaction is completed, SC USA will become a wholly owned subsidiary of SHUSA. This transaction is subject to, among other customary conditions, Federal Reserve approval and is expected to close in the fourth quarter of 2021.

•On 15 July, Banco Santander announced that SHUSA had reached an agreement to acquire Amherst Pierpont Securities, through the acquisition of its parent holding company, Pierpont Capital Holdings LLC, for a total consideration of c. USD 600 million. This acquisition is expected to be c.1% accretive to group EPS and generate a return on invested capital of c.11% by year 3 (post-synergies). The transaction is expected to have a -9 bp impact on Group capital at closing expected by the end of Q1'22, subject to regulatory approvals and customary closing conditions.

Regarding our regional strategy, synergies across countries are backed by joint initiatives that include:

•Further development of the USMX trade corridor. SCIB and Commercial Banking continued to work to deepen relationships with existing customers, which was reflected in revenue growth.

Loyal customers. September 2021
Thousands. % loyal / active customers
38		%	/ active customers						23%						40%
			4,144

•Boost customer attraction and retention through loyalty strategies (such as initiatives to attract payrolls) and broadening our tailored service and product proposition for a better and simpler customer experience. At the same time, we are working on the development of payment alternatives for the USMX trade corridor and we are leveraging our global digital platform PagoNxt.

•Improve customer interaction through improved segmentation. In the US, we set up a value proposition for affluent customers: Select and Private, and, in Mexico, we designed a service model for high-income customers, with the aim of differentiating the value proposition to its three segments: Select Black, Select and Evolution for young customers.

•Drive cultural transformation and share best practices to improve customer and employee experience, such as the success in implementing loyalty programmes in Mexico and the Consumer Banking transformation programme at Santander Bank (SBNA), as well as SC USA's experience in the auto business.

To this end, we are consolidating IT functions in North America: operations know-how, digitalization, hubs, front-office and back-office, and addressing common challenges, together with the integration of the regional IT platform (MEXUS).

Digital customers. September 2021

Thousands. YoY % change1

+11

%

YoY

+4%

+11%

6,485

(1) Excluding Puerto Rico disposal impact

30						January - September 2021

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Appendix

Primary segments

In addition, in terms of their local priorities:

United States

As the covid-19 crisis moves though different stages, we remain focused on customer experience and growing core customers and deposits through commercial, branch and digital transformation initiatives while continuing to leverage our deposit base to support our profitable growth in auto finance, CRE and CIB businesses.

The auto business, in particular, is ideally positioned to capture significant growth from the sustained demand for used vehicles and the strength of SC USA through its national dealer network.

Mexico

The multichannel innovation and boost to digital channels continued to strengthen our value proposition with new products and services, allowing us to make headway with our customer attraction and loyalty strategy.

In line with our goal to enhance customer experience and the distribution model, we continued to run projects to generate synergies between all commercial areas. Of note was the project to increase branch profitability by attracting new payrolls and portability. In addition, we improved the value proposition of our collections and payments business by including new commercial alliances with the main convenience store chains, with more than 28,000 points of service, which allow us to increase our capacity to receive payments and deposits from our customers.

We continued to promote the use of digital channels through campaigns and incentive programmes to boost the activation of the electronic signature and the use of digital cards with the launch of Like U, a credit card with a fully online contracting process, immediately available for use. It allows customers to make online purchases, tailor its benefits and support social causes.

In mortgages, we continued with the consolidation of the Hipoteca Online platform, with more than 96% of transactions processed through digital channels in the quarter.

In payroll loans, we remained focused on renewal offerings, with open term options for customers to choose the one that best suits their needs.

Business performance. September 2021

EUR billion and YoY % change in constant euros1

127

+1%

134

+10%

Gross loans and advances to customers excl. reverse repos

Customer deposits excl. repos + mutual funds

(1) Excluding Puerto Rico and Bluestem portfolio disposal impact

In SMEs, the digital strategy and customer-centric approach continue to be relevant levers for customer attraction through the partnership with Contpaqi and the ISOS strategy for POS placement. In addition, we signed commercial alliances with the country's main business chambers through the Oferta Integral Pyme. Moreover, we introduced the TDC Agro offer, providing financing with payment schemes adapted to the production cycles of this sector.

Business performance

Gross loans and advances to customers excluding reverse repos were 1% higher year-on-year boosted by mortgages in Mexico and lending growth in auto in the US. Considering the impact of Bluestem portfolio disposal, loans remained flat.

Solid year-on-year growth in customer funds (+10%) mainly driven by retail and corporate deposits in the US and the positive performance in mutual funds in both countries.

Results

In the first nine months of 2021, underlying attributable profit was 122% higher year-on-year at EUR 2,288 million (29% of the Group’s total operating areas). On a like-for-like basis, excluding the impact of Bluestem portfolio and Puerto Rico disposals, growth of 125%, as follows:

•Total income increased 7%. Net interest income grew 3% as price management and hedging in the US more than offset lower net interest income in Mexico due to the contraction in lending and the negative impact of lower interest rates. Lease income increased 72% and net fee income grew 7%.

•Costs rose 11%, primarily due to inflation and investments in digitalization. The efficiency ratio stood around 44%.

•Loan-loss provisions plummeted by 61%. The cost of credit improved to 1.46%, the NPL ratio stood at 2.56% and coverage was 139%.

Compared to the previous quarter, underlying attributable profit decreased 25% primarily due to seasonality in LLPs in the US.

			North America. Underlying income statement
			EUR million and % change
									/			Q2'21									/			9M'20
						Q3'21			%			excl. FX						9M'21			%			excl. FX
			Revenue			2,779			+2			0						8,266			-1			+3
			Expenses			-1,275			+7			+5						-3,617			+4			+8
			Net operating income			1,504			-1			-4						4,649			-5			-1
			LLPs			-506			+160			+157						-1,095			-65			-64
			PBT			959			-28			-30						3,504			+112			117
			Underlying attrib. profit			661			-23			-25						2,288			+117			+122

Detailed financial information on page 61

January - September 2021						31

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Appendix

Primary segments

			United States			Underlying attributable profit
						EUR 1,788 mn

Commercial activity and business performance

Santander US remains focused on supporting its customers and advancing its strategic initiatives, centred on improving customer experience and accretive capital allocation across its different businesses.

The work conducted over the last several years, the resilience of its core business lines, and the strength of its balance sheet has allowed Santander US to be uniquely positioned to benefit from current market conditions.

Auto originations increased 16% versus 9M'20 as Santander US continues to leverage its strong deposit base to support originations across the full credit spectrum.

Gross loans and advances excluding reverse repos and the impact of Bluestem portfolio disposal grew 2% year-on-year as lending growth in auto more than offset tepid corporate demand. Considering the Bluestem portfolio disposal impact, loans increased 1%.

Customer funds excluding repos again exhibited a strong performance, growing 13% year-on-year boosted by both retail and corporate deposits.

Results

Underlying attributable profit in the first nine months of 2021 was EUR 1,788 million (4x 9M'20 profit), supported by the 17% year-on-year increase in net operating income excluding the impact of Bluestem portfolio and Puerto Rico disposals (+6% considering them) and significantly improved cost of credit. By line, on a like-for-like basis:

•Total income up 14%. Net interest income growth was 7% due to price management and hedging. Net fee income increased 8%. Other operating income improved 93%, primarily due to outstanding auto leasing results.

•Expenses increased 12% because of higher activity and investments to execute strategic initiatives, including digital transformation, as well as a USD 50 million donation to our community foundation.

•Loan-loss provisions decreased 79%, driven by the decrease in net charge-offs, as the improved macroeconomic outlook, customer loan relief and strong used car prices led to credit growth on a like-for-like basis.

Q3’21 underlying attributable profit was 28% lower QoQ, primarily driven by sequential normalization in CIB fees and auto leasing income, higher provisions in the quarter (releases in Q2) and the USD 50 million donation to our community foundation.

			United States. Underlying income statement
			EUR million and % change
									/			Q2'21									/			9M'20
						Q3'21			%			excl. FX						9M'21			%			excl. FX
			Revenue			1,849			1			-2						5,586			0			+7
			Expenses			-815			+4			+2						-2,346			+2			+8
			Net operating income			1,034			-2			-4						3,240			0			+6
			LLPs			-294			—			—						-450			-81			-80
			PBT			734			-32			-34						2,784			+240			+261
			Underlying attrib. profit			498			-26			-28						1,788			+280			+305

Detailed financial information on page 62

			Mexico			Underlying attributable profit
						EUR 602 mn

Commercial activity and business performance

Gross loans and advances to customers, excluding reverse repurchase agreements, were down 2% year-on-year, driven by the reduction in corporate loans, somewhat offset by the 11% increase in individuals. Within individuals, cards fell 7%, although there seems to be a recent positive shift in trend and mortgages continued to increase strongly (+14%).

In this segment, we have innovative products and services such as Hipoteca Plus, which rewards customer relationships and reduces interest rates if they meet certain requirements, and Hipoteca Free, Mexico's first commission-, appraisal- and insurance-free mortgage. We were the first bank in Mexico to offer a tailored interest rate based on the customer’s profile, making us one of the top mortgage lenders in the market.

Customer deposits excluding repos were 4% higher year-on year, propelled by demand deposits (+11%). Mutual funds were up 7%.

Results

Underlying attributable profit in the first nine months of 2021 of EUR 602 million, 1% higher year-on-year. By line:

•Total income was 5% lower impacted by the falls observed in gains on financial transactions (ALCO portfolio sales in 2020) and net interest income (-4%), the latter as a result of interest rate cuts and lower portfolio volumes. Net fee income was up 5% mainly from transactional fees.

•Operating expenses increased 3% in nominal terms, mainly driven by technology costs and the increase in amortizations. In real terms, costs fell 2%.

•Loan-loss provisions dropped 17% due to higher covid-19 related charges in 2020.

Against the previous quarter, underlying attributable profit increased 3% driven by the upturn in net interest income and gains on financial transactions, which offset the rise in costs, which were affected by IT projects and the insourcing of employees.

			Mexico. Underlying income statement
			EUR million and % change
									/			Q2'21									/			9M'20
						Q3'21			%			excl. FX						9M'21			%			excl. FX
			Revenue			919			+5			+2						2,662			-4			-5
			Expenses			-425			+12			+10						-1,177			+4			+3
			Net operating income			494			-1			-3						1,485			-9			-10
			LLPs			-213			+4			+2						-645			-16			-17
			PBT			280			-3			-5						828			-2			-3
			Underlying attrib. profit			215			+5			+3						602			+2			+1

Detailed financial information on page 63

32						January - September 2021

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Responsible banking Corporate governance Santander share

Appendix

Primary segments

			SOUTH AMERICA			Underlying attributable profit
						EUR 2,471 mn
Executive summary (changes in constant euros) → We continued with our strategy to strengthen connectivity across the region and enable the exportation of positive experiences across units, capturing new business opportunities. → We remain focused on delivering profitable growth, increasing loyalty and customer attraction, and controlling costs, amid high inflation, and risks. → Double-digit growth year-on-year in both gross loans and advances to customers and customer deposits, underpinned by innovation in our product and service proposition. In addition, we are expanding ESG initiatives in the region. → Underlying attributable profit increased 31% year-on-year backed by positive customer revenue performance, improved efficiency and lower provisions.

Unless otherwise indicated, changes in the region and countries are reported at constant exchange rates. The balance sheet and P&L ratios, together with the changes at current exchange rates, are included in the appendix.

Strategy

South America is a region with great growth potential and opportunities for banking penetration and progress in financial inclusion. In this environment, we remained focused on growing the number of customers leveraging business opportunities, exchanging positive experiences across countries and enhancing digitalization and customer loyalty.

We maintained our strategy of capturing synergies across business units:

•In consumer finance, Santander Brasil exported its new and used vehicle financing platform to other countries, as well as Cockpit, a platform to streamline management of car dealerships, is being rolled out in Argentina and Peru. These two countries also made progress in expanding the digital strategy for financing consumer loans and used vehicles. Santander Chile achieved favourable results in insurance sales and Colombia and Uruguay recorded strong activity in vehicle financing.

•In payment methods, we are focused on e-commerce strategies and on providing immediate national and international transfers. We continued to consolidate Getnet in several countries, based on Santander Brasil's successful model. For example, in Chile, we reached a 15% market share in PoS in just seven months and in Brazil, we issued more than 650,000 cards per month, focusing on digital (99% through this channel).

Loyal customers. September 2021
Thousands. % loyal / active customers
29		%	/ active customers						26%			41%			52%			23%
			10,043

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, our micro-credit programme in Brazil (with 667,000 active customers), Uruguay and Colombia (present in 110 municipalities), and with the launch of Surgir in Peru, a microfinance entity. In Chile, we launched the green SME product and in Uruguay we rolled out the first vehicle loan that seeks to neutralize emissions by acquiring neutral carbon credits. As a result, we were named the Best Bank for Sustainable Finance in Latin America by Euromoney and Santander Chile and Santander México were both recognized by Global Finance as Outstanding Leader in Sustainable Finance in Latin America.

The main initiatives by country were:

•Brazil: we continued to significantly grow our customer base, gaining more than 1.5 million customers in the last quarter, and increased loyalty. Record customer acquisition and turnover in cards, and we established an important alliance with American Express focused on the high income segment. We maintained the strong growth rate of mortgage business and were leaders in the home equity segment with a 25% market share in new lending. Our digital business continued to grow and digital transactions already account for 90% of the total. In addition, Gente, an artificial intelligence channel, registered more than 18 million interactions per month.

Digital customers. September 2021

Thousands. YoY % change

+18

%

YoY

+20%

+30%

+1%

+13%

23,531

January - September 2021						33

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Responsible banking Corporate governance Santander share

Appendix

Primary segments

On the other hand, our leadership in the wholesale sector consolidates our position as one of the best corporate banks, thanks to our experience as a global bank (being the largest bank in FX transactions for the last eight years), in infrastructure, in agribusiness (the largest agricultural commodities desk in the country) and equities.

•Chile: we remained focused on digital banking and enhancing customer service. As a result, growth in current account openings doubled that of the Chilean financial system in the last twelve months, strongly supported by Santander Life. Superdigital also recorded strong growth in customer acquisition. In the acquiring business, we continued with Getnet's expansion. Also of note was the increase of Autocompara, reaching a 17% market share.

•Argentina: we continued to improve our customer care model through digital transformation. Our app was rated as the best on iOS and Android, and, in addition, we launched Superdigital. Santander Consumer launched a 100% online platform to boost access to credit and consumption and Getnet continued to expand in the country.

•Uruguay: we strengthened our position as the country's leading privately-owned bank while making headway in our technological transformation through measures such as market disruptive instant credit card issuances, and the roll-out of Soy Santander, a fully digital customer loyalty proposition for individuals. Our financial entities continued their positive performance, ranking first in consumer finance in the country.

•Peru: we continued to progress on the digitalization of our services and internal processes; 86% of transactions are processed digitally through our office banking platform and Nexus, and introduced initiatives such as the digital onboarding of customers and the purchase of a digital platform for consumer and used vehicle financing.

•Colombia: we continued to conduct infrastructure-related transactions, where we ranked top 5 in the market. We made progress in joint initiatives between SCIB and Corporates, with a particular focus on customer attraction and loyalty. In consumer finance, we hit an all-time record in new auto lending, with portfolio growth of 50% year-on-year.

Business performance. September 2021

EUR billion and YoY % change in constant euros

126

+10%

163

+10%

Gross loans and advances to customers excl. reverse repos

Customer deposits excl. repos + mutual funds

Business performance

Gross loans and advances to customers (excluding reverse repos) increased 10% year-on-year, with double-digit rises in all country units except Chile, which remained stable.

Customer deposits excluding repos grew 11% boosted by demand deposits (+16%) and, to a lesser extent, time deposits (+7%). Mutual funds rose 7%.

Results

Underlying attributable profit in the first nine months of 2021 amounted to EUR 2,471 million, up 31% year-on-year, as follows:

•Total income increased 11% underpinned by net interest income (+13%) and net fee income (+13%).

•Costs rose at a slower pace than total income, pushed up mainly by Argentina (affected by inflation). Of note was cost management in Brazil and Chile (+1% and +2%, respectively in nominal terms; -6% and -1% in real terms). The efficiency ratio improved 81 bps year-on-year to 34.6% enabling net operating income to increase 12%.

•Loan-loss provisions dropped by 18% driven by covid-19 related provisions recorded in 2020. In credit quality, the NPL ratio fell to 4.38%, coverage increased to 99% and the cost of credit improved to 2.52%.

By country, double-digit underlying attributable profit growth in constant euros in all countries (except Uruguay), due to the positive performance in total income and lower provisions (except Peru and Colombia, which recorded increases). In Uruguay, the fall in profit was primarily due to lower net interest income (interest rate cuts).

Compared to the second quarter, underlying attributable profit dropped 7%, dampened by the rise in costs, partly driven by higher inflation, collective labour agreements in Brazil and wage adjustments in Argentina, and higher provisions, somewhat mitigated by positive NII performance and gains on financial transactions.

			South America. Underlying income statement
			EUR million and % change
									/			Q2'21									/			9M'20
						Q3'21			%			excl. FX						9M'21			%			excl. FX
			Revenue			3,991			+6			+4						11,302			0			+11
			Expenses			-1,398			+8			+6						-3,916			-3			+9
			Net operating income			2,593			+5			+3						7,386			+1			+12
			LLPs			-892			+10			+8						-2,384			-26			-18
			PBT			1,577			-2			-4						4,691			+22			+36
			Underlying attrib. profit			826			-5			-7						2,471			+17			+31

Detailed financial information on page 65

34						January - September 2021

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Responsible banking Corporate governance Santander share

Appendix

Primary segments

			Brazil			Underlying attributable profit
						EUR 1,762 mn

Commercial activity and business performance

We continued to make headway with our commercial strategy:

•In auto, we continued to develop a platform focused on end-to-end customer experience. As a result, we reached 20% market share in vehicles, including individuals and companies, and Santander Auto began to sell insurance to the corporate segment, achieving a penetration of 19%.

•In cards, we reached a record high in customer acquisition, remaining third in terms of market share.

•In mortgages, new lending to individuals continued to grow at a strong pace, +74% year-on-year, and we acquired a company to accelerate the development of integrated solutions for all customers. We remained leaders in the home-equity segment, with Usecasa.

•Within the ESG sphere, we are the leader in sustainable solutions. We channelled BRL 33 billion into social and environmental businesses and continued to make progress on Plano Amazônia, in collaboration with the two other largest private-sector banks in Brazil. In addition, we created a new business unit in the region, which has already channelled BRL 270 mn. As a result, GPTW put Santander Brasil as the 8th best company to work for in Latin America.

As for volumes, gross loans and advances to customers excluding reverse repos grew 13% year-on-year. We saw positive performances in individuals and SMEs.

Customer deposits excluding repos increased 3%, driven by the increase in time deposits (+4%). Mutual funds were 4% higher.

Results

First nine months underlying attributable profit amounted to EUR 1,762 million (+29% year-on-year). Of note:

•Total income rose 10% benefiting from the positive performance of net interest income (+12%, supported by larger volumes) and net fee income (+7%, driven by insurance and capital markets).

•Costs fell 1%, well below inflation, which enabled net operating income to rise 14% and the efficiency ratio to improve by 2.5 pp year-on-year to 29.3%.

•Net loan-loss provisions dropped 10%, due to higher provisions recorded in 2020 related to the pandemic. Cost of credit improved to 3.60%, the NPL ratio to 4.72% and coverage remained high at 112%.

Compared to the second quarter, underlying attributable profit was 9% lower as seasonally higher costs (collective labour agreements), higher inflation and increased provisions were only partially offset by the rise in NII and gains on financial transactions.

			Brazil. Underlying income statement
			EUR million and % change
									/			Q2'21									/			9M'20
						Q3'21			%			excl. FX						9M'21			%			excl. FX
			Revenue			2,882			7			+4						8,085			-3			+10
			Expenses			-864			+11			+7						-2,366			-11			+1
			Net operating income			2,019			+6			+3						5,719			+1			+14
			LLPs			-757			+12			+9						-1,980			-20			-10
			PBT			1,172			-2			-6						3,526			+19			+34
			Underlying attrib. profit			582			-6			-9						1,762			+14			+29

Detailed financial information on page 66    

			Chile			Underlying attributable profit
						EUR 463 mn

Commercial activity and business performance

We remained focused on gaining new customers, increasing loyalty and offering attractive returns:

•Getnet's success enabled us to install more than 46,000 PoS. SMEs account for 94% of its customers, and 65% were sold digitally.

•Santander Life continues to revolutionize the market with its proposition and digital onboarding, reaching 797,000 customers.

•Superdigital continued to steadily increase the number of current account openings and has more than 208,000 customers.

•In terms of ESG, Santander Chile became the first local bank to obtain the Iguala Conciliación Seal of Ministry of Women and Gender Equality.

•All these measures led to a year-on-year increase in loyal (+11%) and digital customers (+30%), and we ended the quarter with the best NPS in the country.

In volumes, gross loans and advances to customers excluding reverse repurchase agreements had no material change (+0.5 year-on-year), as growth in mortgages matched the fall in corporates and CIB.

Customer deposits excluding repurchase agreements surged 20%, primarily driven by growth in demand deposits (+25%). Mutual funds increased 9%. In the quarter, there was a change in the funding mix as the rise in interest rates led to a 10% increase in time deposits, while demand deposits decreased slightly.

Results

Underlying attributable profit in the first nine months of 2021 amounted to EUR 463 million, 68% higher year-on-year, as follows:

•Total income increased 8% driven by the 12% jump in net interest income (margin management and inflation) and the 20% increase in net fee income, propelled by transactional and insurance fees.

•Costs rose 2%, at a slower pace than inflation, through efficient cost management. The efficiency ratio improved to 38.7% (-2.1 pp year-on-year).

•Loan-loss provisions were 48% lower due to covid-19 related charges in 2020. Cost of credit improved to 0.89% and the NPL ratio to 4.36%.

In the quarter, profit declined 11% as the increase in net fee income did not offset the drop in net interest income due to higher cost of funding, lower gains on financial transactions (from highs in the second quarter) and greater provisions.

			Chile. Underlying income statement
			EUR million and % change
									/			Q2'21									/			9M'20
						Q3'21			%			excl. FX						9M'21			%			excl. FX
			Revenue			583			-9			-3						1,834			+10			+8
			Expenses			-229			-7			-2						-710			+4			+2
			Net operating income			354			-10			-5						1,125			+14			+11
			LLPs			-84			+3			+8						-266			-47			-48
			PBT			265			-16			-11						857			+72			+68
			Underlying attrib. profit			142			-16			-11						463			+72			+68

Detailed financial information on page 67

January - September 2021						35

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Primary segments

			Argentina			Underlying attributable profit
						EUR 180 mn

Commercial activity and business performance

We remained focused on transactional business and customer service through initiatives in innovation, an enhanced customer care model, and the digital transformation of processes and products.

In addition, we continued to progress in the development of our open financial services platform:

•We rolled out Superdigital, to contribute towards improving the lives of people who do not have access to the traditional financial system, which offers, in this first stage, a fully digital and free account and a prepaid Mastercard card.

•We enhanced Getnet's value proposition, reaching 40,000 active merchants since its launch in October 2020.

•In the consumer segment, we launched Todo en Cuotas, a 100% online platform that seeks to promote access to credit and consumption, while we continued with the implementation of the CRM Cockpit system in dealerships.

•MODO, the payment solution that promotes digital payments and financial inclusion, reached more than 2 million customers.

The sharp changes in volumes are affected by inflation, which is also reflected in the P&L variations. Gross loans and advances to customers excluding reverse repurchase agreements rose 33% year-on-year, driven by loans to corporates and cards. Dollar balances declined in the currency of origin.

Customer deposits excluding repurchase agreements rose 49% spurred on by both demand and time deposits. Mutual funds were 71% higher. Excess liquidity is placed in central bank notes.

Results

Underlying attributable profit in the first nine months was EUR 180 million, 43% higher compared tot he same period of 2020. By line:

•Total income grew 32%, underpinned by net interest income, the strong upturn in net fee income, with significant increases in transactional fees, and gains on financial transactions, which more than offset the higher impact from the inflation adjustment.

•Costs rose 44%, affected by inflation and the salary agreement. Net operating income soared 17%.

•Loan-loss provisions fell 36% following additional covid-19 related provisioning in 2020. The cost of credit improved to 3.51%, the NPL ratio was 3.85% and coverage 149%.

In the quarter, profit was 15% higher, damped by tax normalization, as PBT surged 60% driven by positive revenue performance.

Argentina. Underlying income statement

EUR million and % change

/

Q2'21

/

9M'20

Q3'21

%

excl. FX

9M'21

%

excl. FX

Revenue

365

21

+19

929

+3

+32

Expenses

-204

+14

+12

-554

+13

+44

Net operating income

161

+32

+30

375

-9

+17

LLPs

-40

+15

+15

-88

-50

-36

PBT

92

+63

+60

193

+4

+33

Underlying attrib. profit

73

+16

+15

180

+12

+43

Detailed financial information on page 68

Other South America

Uruguay

Gross loans and advances to customers, excluding reverse repurchase agreements were up 12%. Customer deposits excluding repos rose 13% primarily from demand deposits (+19%).

Underlying attributable profit in the first nine months of EUR 80 million, down 13% year-on-year, as follows:

•Total income declined 5% mainly driven by the fall in net interest income (significant drop in interest rates) and lower gains on financial transactions. Conversely, positive net fee income performance (+13%), in line with business recovery.

•Costs grew 9%, heavily affected by inflation.

•Loan-loss provisions decreased 45%, the cost of credit improved to 1.39% and coverage was 121%.

Compared to the previous quarter, underlying attributable profit rose 13% driven by the positive performance of the main revenue lines and lower provisions.

Peru

Gross loans and advances to customers excluding reverse repos rose 26% year-on-year and customer deposits excluding repos were 17% higher on the back of demand deposits.

In the first nine months of 2021 underlying attributable profit amounted to EUR 43 million, 37% higher year-on-year, as follows:

•Total income rose 39%, mainly led by customer revenue. Costs rose at a slower pace than income, improving the efficiency ratio to 28.9%.

•Loan-loss provisions rose due to pre-emptive impairments. The NPL ratio was 0.84%, cost of credit was 0.85% and coverage stood at 178%.

Colombia

Gross loans and advances to customers excluding reverse repos were 51% higher year-on-year. Customer deposits excluding repos rose 16% due to demand deposits.

In the first nine months of 2021, underlying attributable profit of EUR 17 million, 25% higher year-on-year, due to:

•Total income growth of 22% (driven by net interest income and net fee income), outpacing the 14% rise in costs.

•Higher loan-loss provisions but maintaining good credit quality: the NPL ratio was 0.37%, cost of credit of 0.72% and coverage remained high (236%).

Other South America. Underlying income statement

EUR million and % change

Net operating income

Underlying attrib. profit

/

9M'20

/

9M'20

9M'21

%

excl. FX

9M'21

%

excl. FX

Uruguay

132

-24

-15

80

-21

-13

Peru

77

+20

+42

43

+16

+37

Colombia

34

+23

+31

17

+17

+25

36						January - September 2021

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Group financial information

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Responsible banking Corporate governance Santander share

Appendix

Primary segments

DCB			DIGITAL CONSUMER BANK			Underlying attributable profit
						EUR 935 mn
Executive summary (changes in constant euros) → Ongoing execution of the strategic operations defined in 2020, aimed at increasing our business capabilities and generating significant growth. → New lending stood well above 9M'20 (+11% year-on-year), despite lockdowns in early 2021. Activity in the quarter was dampened by global production issues in the new auto market while used vehicle volumes were broadly flat. Conversely, consumer new lending increased. → Underlying attributable profit was EUR 935 million, improving 17% year-on-year, favoured by revenue growth (+4% year-on-year) and cost of credit improvement. Underlying RoTE rose to 13%, and RoRWA was 2.2% in SCF.

Unless otherwise indicated, changes are reported at constant exchange rates. In the tables below and in the appendix, these changes are included together with the changes at current exchange rates.

Strategy

Digital Consumer Bank is the leading consumer finance bank in Europe, created through the combination of Santander Consumer Finance's (SCF) scale and leadership in in consumer finance in Europe, and Openbank’s 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 has a growing number of agreements with OEMs and retail distribution groups.

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.

The aim of Digital Consumer Bank is to generate synergies for both businesses:

Digital Consumer Bank. Loan distribution
September 2021

						Germany
						Nordics
						Spain
						France
						The UK
						Italy
						Poland
						Others

•SCF will leverage Openbank's IT capabilities to further improve its digital operating system and provide a better service to its customers and partners (OEMs, car dealers, retailers and individuals) at a lower cost.

•Openbank will be able to offer retail banking products to SCF's large customer base to expand retail capabilities across Europe with lower acquisition costs.

Our main priorities for 2021 are to:

•Auto: strengthen our auto financing leadership position, reinforce the leasing business and develop subscription services across our footprint. SCF is focusing on providing advanced digital financing capabilities to its partners, OEMs and dealers in order to help their sales growth strategy. We also generated almost 1.5 million new contracts to customers in 9M’21 and had an EUR 87 billion loan book at the end of September.

•Consumer Non-Auto: gain market share in consumer financing solutions, leveraging our position to grow in e-commerce, checkout lending and Buy Now Pay Later (BNPL), serving customers through 55,000 physical and digital points of sale. We generated more than 4 million new contracts in 9M’21 and had a loan book of EUR 19 billion in September.

•Retail: improve digital capabilities to increase customer loyalty among our 3.6 million customers (Openbank and SC Germany Retail), boosting digital banking activity, which currently has EUR 37.8 billion in customer funds.

•Cost reduction and simplification: accelerate digitalization to transform the business and improve efficiency. The main drivers are:

–Organizational simplification: transition from banking licenses to branches in the Western hub.

–Streamlining IT: leveraging technology and data capabilities with Digital Banking apps (APIs) and a SaaS (Software as a Service) model.

January - September 2021						37

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Appendix

Primary segments

Thanks to all these initiatives, we have great potential to enhance our business through our 19 million active customers, by creating stronger customer relationships while integrating Santander ESG criteria. We want to serve our current and future customers with a positive environmental impact by developing business solutions, such as: financing electric vehicles, carbon compensation services (already available in all countries); financing of electric chargers, solar panels, green heating systems, etc.

Business performance

In the first nine months of the year, new lending increased 11% year-on-year, absorbing the impacts of heavy lockdowns in some countries where Digital Consumer Bank operates at the beginning of the year.

In early 2021, restrictions arising from the pandemic affected commercial activity mainly in Central Europe, which recovered to pre-covid-19 levels in Q2 (positive performance in Germany and the Nordics). The third quarter was affected by the semiconductor shortage in the new auto market. Despite this, activity in September exceeded pre-covid-19 levels and was the highest monthly total income so far this year. SCF continues to gain market share across most auto markets.

Of note in 2021 was the enhancement of our pan-European leasing proposition and the deployment of the new consumer finance solution (for mobiles and modems) via the more than 2,500 retail points of sale in Italy, thanks to the creation of the TIMFIN joint venture. Also of note was the set-up of the new Western Hub's operating structure as we transition from banking licenses to branches in order to improve efficiency, and our focus in digitalization.

In the quarter, SCF acquired a 14.7% stake in Vinturas Holding, a company that offers a blockchain-based technology solution that allows manufacturers to digitally track vehicles throughout the entire logistics process.

Activity

September 2021. EUR billion and % change in constant euros

-1%

QoQ

+1%

QoQ

114

-1%

57

+11%

YoY

YoY

Gross loans and advances to customers excl. reverse repos

Customer deposits excl. repos + mutual funds

In addition, in order to compensate lost revenue during lockdowns in Q1'21, several measures were carried out, including expense reductions and income initiatives in pricing and cost of funding.

The stock of loans and advances to customers excluding reverse repos was EUR 114 billion, slightly lower than the same period of 2020, due to the impact from covid-19 previously mentioned isolation measures.

Results

Underlying attributable profit in the first nine months was EUR 935 million, 17% higher year-on-year. By line:

•Total income increased 4% compared to 9M'20 driven by growth in net fee income (+9% due to increased volumes) and leasing. Net interest income decreased slightly.

•Costs increased 4% due to perimeter (Sixt and TIMFIN) and our digital transformation investments. The efficiency ratio improved slightly to 45.4% and net operating income grew 4%. Excluding perimeter effects, costs were flat year-on-year and 1% lower than 2019.

•Loan-loss provisions dropped 41% driven by covid-19 provisioning in 2020. Positive credit quality performance, with a cost of credit of 0.57% and an NPL ratio of 2.15% (-22 bps and -14 bps year-on-year, respectively).

•By country, the largest contribution to underlying attributable profit came from Germany (EUR 292 million), the UK (205 million), the Nordic countries (EUR 168 million) and France (EUR 111 million).

Compared to the previous quarter, underlying attributable profit increased 32% mainly due to net fee income (+7%), continued cost reductions (-3%) and the contribution to the SRF in Q2.

Digital Consumer Bank. Underlying income statement

EUR million and % change

/

Q2'21

/

9M'20

Q3'21

%

excl. FX

9M'21

%

excl. FX

Revenue

1,369

+5

+5

3,975

+4

+4

Expenses

-591

-4

-3

-1,805

+4

+4

Net operating income

778

+13

+13

2,170

+4

+4

LLPs

-141

-1

—

-449

-40

-41

PBT

594

+18

+19

1,602

+17

+16

Underlying attrib. profit

366

+32

+32

935

+19

+17

Detailed financial information on page 70

38						January - September 2021

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Responsible banking Corporate governance Santander share

Appendix

Primary segments

			Corporate Centre			Underlying attributable profit
						EUR -1,607 mn
Executive summary → In the current environment, the Corporate Centre continued to play its role supporting the Group and has gradually returned employees to the workplace, with a mixture of on-site and remote working, maintaining a high level of flexibility to meet individuals' needs. → The Corporate Centre’s objective is to aid the operating units by contributing value and carrying out the corporate function of oversight and control. It also carries out functions related to financial and capital management. → Underlying attributable loss increased 10% compared to the first nine months of 2020, mainly due to lower gains on financial transactions due to exchange rate differences from the hedging of the main units' results, as costs remained flat and other results and provisions decreased year-on-year.

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 management of costs and generating economies of scale. This enables us to be one of the most efficient banks.

•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 different 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 plus the premium which, in liquidity terms, the Group supports by immobilizing funds during the term of the operation.

–Interest rate risk is also actively managed in order to soften 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 covered by EUR 23,118 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

First nine months underlying attributable loss of EUR 1,607 million, 10% higher than in 9M'20, as follows:

•Gains on financial transactions were lower (EUR 327 million lower than in 2020) dampened by negative foreign currency hedging results in 2021 and positive results in 2020.

•On the other hand, net interest income remained stable, as well as operating expenses, driven by ongoing streamlining and simplification measures.

•Lastly, other results and provisions were lower than in 2020, due to one-off provisions recorded in 2020 for certain stakes whose value was affected by the crisis.

			Corporate centre. Underlying income statement
			EUR million
						Q3'21			Q2'21			Chg.						9M'21			9M'20			Chg.
			Total income			-416			-430			-3%						-1,216			-889			+37%
			Net operating income			-505			-511			-1%						-1,465			-1,137			+29%
			PBT			-553			-553			0%						-1,741			-1,567			+11%
			Underlying attrib. profit			-545			-535			+2%						-1,607			-1,455			+10%

Detailed financial information on page 71

January - September 2021						39

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Secondary segments

			Retail Banking			Underlying attributable profit
						EUR 5,750 mn

Executive summary

Results. (9M'21 vs. 9M'20). % change in constant euros

Business performance. EUR bn. % change in constant euros

Profit growth driven by higher volumes and total income, improving the efficiency ratio and cost of credit

Loans and advances to customers rose 2% and customer funds increased 7% year-on-year

Total income

Costs

Provisions

Loans and advances to customers

Customer funds

+7%

+1%

-35%

791

p 2% YoY

773

p 7% YoY

Customers

Unless otherwise indicated, changes are reported at constant exchange rates. In the tables below and in the appendix, these changes are included together with the changes at current exchange rates.

Commercial activity

The economic and social impacts arising from the global health crisis led us to further strengthen our commitment to our customers and society, seeking to become a key part of the business and economic recovery in the countries where we operate.

This situation has accelerated the implementation and development of our digital transformation strategy, focusing on our multi-channel strategy and the digitalization of processes and businesses. We are adapting channels to new business trends under a hybrid model that prioritizes digital customer service, and combines it with the activity carried out by physical branches, which are well equipped to handle the more complex operations and those that require greater service from our professionals.

This personalized support, tailored to the needs of each customer, also responds to one of our main goals, which is the continuous improvement of customer care and service. This orientation enabled us to rank top 3 in customer satisfaction, measured by NPS, in seven of our markets.

Our efforts to improve customer care and services, be one of the leaders of the digitalization process in the banking sector and meet our customers' needs, allowed us to exceed 152 million customers.

The number of loyal customers increased 12% year-on-year, with growth in both individuals (+12%) and corporates (+12%). Digital customers rose 13% year-on-year, an increase of more than 5 million compared to the previous year, while transactions through digital channels grew 39% year-on-year and digital sales accounted for 54% of total transactions.

Results

Underlying attributable profit in the first nine months of 2021 was EUR 5,750 million, 92% higher than in the first nine months of 2020. By line:

•Total income grew 7% driven by positive customer revenue performance, which more than offset the fall in gains on financial transactions.

•Costs increased sightly, well below total income, which enabled the efficiency ratio to improve 2.2 pp year-on-year to 43.2%.

•Loan-loss provisions plummeted by 35%, as the previous year was strongly affected by covid-19 related provisions.

Retail Banking. Underlying income statement

EUR million and % change

/

Q2'21

/

9M'20

Q3'21

%

excl. FX

9M'21

%

excl. FX

Revenue

10,173

+4

+3

29,520

+3

+7

Expenses

-4,336

+2

+1

-12,740

-2

+1

Net operating income

5,837

+5

+4

16,780

+7

+12

LLPs

-2,199

+27

+26

-5,708

-38

-35

PBT

3,194

-5

-7

9,759

+74

+82

Underlying attrib. profit

1,960

0

-1

5,750

+85

+92

Detailed financial information on page 72

40						January - September 2021

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Secondary segments

			Santander Corporate & Investment Banking			Underlying attributable profit
						EUR 1,744 mn

Executive summary

Results (9M'21 vs 9M'20). % change in constant euros

Our strategic pillars

Strong profit and profitability improvement backed by total income growth across businesses and countries

Total income

Underlying profit

RoRWA

+12%

+26%

2.4%

Revenue growth by business and region*

Other highlights in the quarter

+19%

Leading positions in the rankings of different products

-8%

Structured finance

Debt capital markets (DCM)

Equity capital markets (ECM)

+13%

Green Global

(*) EUR million and % change in constant euros

Unless otherwise indicated, changes are reported at constant exchange rates. In the tables below and in the appendix, these changes are included together with the changes at current exchange rates.

Strategy

SCIB continued to make headway in the execution of its strategy to strengthen its position as our clients' strategic advisor of choice, boosting specialized high value-added products and services, which enabled us to optimize the return on capital.

In line with this strategy, SCIB is focused on high growth potential sectors that require a high degree of specialization.

In 2020, SCIB created the global Environmental, Social and Governance (ESG) solutions team to support our clients in their business transformation towards more sustainable alternatives, such as renewable energies, zero carbon transition, etc.

Since its creation, the ESG team has been involved in a number of transactions in different sectors and markets. Of note in the third quarter of 2021 was the Vineyard Wind 1 operation, a landmark transaction for the US renewable industry, as it is the first large-scale offshore wind farm built in the country. SCIB acted as Sole Financial Advisor in the structuring and execution of the transaction, coordinator of the Green Loan, joint lead arranger and agent for the joint venture between Avangrid Renewables (Iberdrola) and Copenhagen Infrastructure Partners.

Also of note in the quarter was that Santander Argentina led the country's first Sustainability Linked Bond, issued by San Miguel.

The DSG (Digital Solutions Group) team, which was created in Q1'21 to support the development and digital transformation of our current and potential customer base, participated in several operations, such as the IPO of Robinhood in the US. It is one of the most relevant operations of the year on the NASDAQ.

In addition, the European Investment Bank first digital bond issue, which took place in the first half of 2021 and in which Santander acted as Joint Lead Manager, was recognized by the Euromoney Global Awards for Excellence 2021 with the Financial Innovation of the Year award.

We continued to back our geographic diversification by accelerating growth in the US with the acquisition of broker-dealer Amherst Pierpont, a market-leading franchise in fixed income and structured products. This acquisition, which is subject to regulatory approvals and customary closing conditions, will strengthen our product offering, value proposition and distribution capabilities in the US while boosting our global business through the incorporation of 230 experienced employees serving more than 1,300 institutional clients in New York, Chicago, San Francisco and other US locations.

Regarding product positioning, SCIB held leading positions in different rankings:

•In Structured Finance, SCIB ranked first in Latin America and Europe by number of transactions, promoting renewable energies, the cornerstone of the ESG strategy.

•In DCM (Debt Capital Markets) we are the market leaders in Spain and ranked top 5 by volume of corporate debt placed in Europe and in Latin America.

•In ECM (Equity Capital Markets) we ranked top 3 in Spain, Mexico and Poland.

January - September 2021						41

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Secondary segments

In the quarter, SCIB received numerous awards in several categories, including Global Finance and Euromoney.

Results

Underlying attributable profit in 9M'21 amounted to EUR 1,744 million, 26% more than in the same period of 2020. Total income rose 12% to EUR 4,352 million, backed by higher gains on financial transactions, driven by strong growth in markets, Corporate Finance and the positive performance of Banking businesses.

Revenue performance by business was as follows (in constant euros):

•Markets: significant revenue growth (+20% vs 9M'20) underscored by market volatility and the higher volume of client business, which we continued to support with the structuring of hedging products.

Positive performance of market results, with growth in most geographic areas, particularly the contribution of the sales business in Iberia, Brazil and Chile, as well as the books of Iberia, Argentina and Asia.

The first market products with an ESG approach were developed, such as the ESG Linked Derivatives, in which the price is linked to the KPI compliance of the corporate ESG programmes of the bank and its customers, and the first ESG Impact Derivatives, in which Santander uses part of its revenue to develop environmental projects.

•GDF (Global Debt Financing): Santander continued to support its clients in accessing liquidity sources, which was reflected in a substantial increase in funding volumes in the quarter, particularly indirect financing (distribution to other banks and institutional investors). As a result, total income was 13% higher year-on-year.

We consolidated our sustainable financing proposition through green and sustainability-linked loans and bonds. Of note was the sharp rise recorded in debt capital markets (DCM) compared to the overall decrease recorded in the global market.

Santander continued to be a global benchmark in structured finance, ranking first in Latin America and Europe.

•GTB (Global Transactional banking): income from customer balance management decreased by low interest rates in our core geographies, being partially offset by volume growth in the Export & Agency Finance and Working Capital Solutions businesses.

•CF (Corporate Finance): total income was up 42% versus 9M'20 driven by an increase in mergers and acquisitions (M&A) and equity capital markets (ECM) activity, particularly in Europe and Brazil.

The third quarter was marked by strong M&A activity in the telecommunications and technology sectors. Santander acted as Global Coordinator in the IPO of Brisanet in Brazil, a deal worth BRL 1.4 billion, as Telefónica's sole financial advisor in the creation of a FiberCo in Colombia. In the technology area, Santander acted as Joint Bookrunner in the IPO of Clearsale, which raised BRL 1.1 billion, and also as Joint Bookrunner in the follow-on of Totvs, for BRL 1.4 billion.

In the energy sector, Santander advised the Brazilian company Compass on the purchase of 51% of Gaspetro (Petrobras Gas) for USD 400 million.

In ECM, SCIB continued to consolidate its leading position in Spain as bookrunner in the IPO of Acciona Energia, and as advisor in the dissemination of Masmovil's takeover bid over Euskaltel.

In the rest of Europe, SCIB participated in the GBP 1.25 billion capital increase of the British airline easyJet. Santander also participated as advisor to Vivendi in the listing of Universal Media Group.

In Brazil, Santander completed 9 share offerings (7 IPOs and 2 follow-ons), including the IPOs of Armac Logistica (BRL 1,533 million) and Brisanet, where we were lead-left bookrunner.

Operating expenses increased 12% compared to the first nine months of 2020 due to investments in products and franchises under development. However, efficiency improved year-on-year and remained a benchmark in the sector (37.7%).

Sharp improvement in loan-loss provisions compared to 9M'20, due to the significant increases recorded in 2020 related to the widespread macroeconomic deterioration caused by the pandemic.

Compared to the previous quarter, underlying attributable profit grew 10%, mainly driven by the increase in total income and lower provisions, which offset the rise in costs.

SCIB. Underlying income statement

EUR million and % change

/

Q2'21

/

9M'20

Q3'21

%

excl. FX

9M'21

%

excl. FX

Revenue

1,414

+10

+9

4,352

+7

+12

Expenses

-574

+6

+5

-1,642

+8

+12

Net operating income

840

+13

+12

2,709

+6

+12

LLPs

-7

-65

-66

-75

-74

-73

PBT

832

+11

+10

2,640

+19

+28

Underlying attrib. profit

547

+11

+10

1,744

+18

+26

Detailed financial information on page 72

42						January - September 2021

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Secondary segments

			Wealth Management & Insurance			Underlying attributable profit
						EUR 698 mn

Executive summary

Results (9M'21 vs. 9M'20). % change in constant euros

Growth drivers 9M'21

Solid performance across our three businesses

Total fee income generated

Total contribution to profit

Assets under management

RoRWA

Net new money

Net sales

Gross written premiums

+11%

+16%

+12%

7.7%

EUR 7.9 bn

EUR 6.3 bn

+5%

vs 9M'20

Total contribution to profit by business

Other highlights in the period

Constant EUR million (incl. fee income ceded to the Group)

Private Banking

SAM

Insurance

Customer growth +13% vs. 9M'20

ESG AUM EUR 9,600 mn +75% vs. Sept. 20

Fee income EUR 1,090 mn +14% vs. 9M'20

Unless otherwise indicated, changes are reported at constant exchange rates. In the tables below and in the appendix, these changes are included together with the changes at current exchange rates.

Commercial activity

We maintain our objective to become the best responsible Wealth & Protection Manager in Europe and Latin America, with it being one of the Group's growth drivers:

•In Private Baking, we continued to renew our product offering, with a particular focus on sustainable (ESG), alternative and thematic products. 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. These platforms recorded a 13% growth in the period.

As regards the ESG investment range, through both SAM and third-party products, assets under management amounted to more than EUR 2 billion, integrating a wide range of sustainability strategies.

Santander Future Wealth is our range of thematic funds and structured products, launched with the aim of bringing customers closer to investing in innovation and disruptive technologies. This joint initiative with SAM has reached EUR 4.2 billion of investment funds alone since its launch. On the other hand, the range of alternative products (private equity, infrastructure, real estate, debt and multi-asset) exceeded EUR 1.5 billion in both SAM and third-party funds.

Total volume of shared business across our markets stood at EUR 9,450 million, 43% more than in the same period of 2020, mainly driven by operations in Mexico, Brazil, the US, the UK, Portugal and Switzerland, reflecting the success of our global platform.

Collaboration volumes

Constant EUR million

9,450

u

+43%

/ Sep 20

•In Santander Asset Management, we continued to improve and complete our local and global product proposition. Of note was the launch of Santander ON, a range of solutions aimed at covering the different investment needs of our clients. This range follows a systematic and quantitative management methodology, including different investment themes and our ESG integration model.

The Santander GO range continued to increase strongly, reaching EUR 3.7 billion and the platform in Luxembourg amounted to more than EUR 11 billion.

The Future Wealth fund has exceeded EUR 1 billion since its launch, attracting customers mainly in Spain, International Private Banking, Chile, Portugal and Mexico.

We made further headway in our ESG strategy, offering over 23 ESG products globally, and assets under management exceeded EUR 9.6 billion.

The range of alternative products aimed primarily at our institutional clients is becoming increasingly robust, with 3 funds already launched and several more planned for Q4'21.

As for operational and technological transformation, this year we fully implemented the Aladdin platform in all our countries.

•In Insurance, we maintained a positive rate of growth in premiums (+5% year-on-year) and our main growth driver continued to be the non-credit related business. Of note were the increases in net fee income in Brazil (+11%), Spain (+30%) and Argentina (+52%), recording an overall net fee income growth of 14%.

Regarding our digital strategy, we strongly increased the number of insurance policies distributed through our digital channels, which doubled and now account for 16% of the total sales volumes.

January - September 2021						43

---

Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Secondary segments

Also noteworthy was the progress in the agreement with Allianz in Poland (subject to regulatory approval and other customary conditions for this type of operation), through which we expect to strengthen our position in this market.

Of note in the Americas was the good performance of Autocompara across the region, with more than 1.7 million vehicles insured and strong revenue growth (+35% compared to the same period last year), as well as Santander Auto in Brazil, which grew at double-digit rates.

Business performance

Total assets under management amounted to EUR 396 billion, 12% higher year-on-year in constant euros, driven by the gradual recovery of activity since the months most affected by the health crisis in 2020.

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

/ Jun-21			/ Sep-20
+2		%	+12		%
+2		%	+10		%
+2		%	+7		%
+1		%	+18		%
+2		%	+23		%
+2		%	+3		%
+5		%	+25		%

Note: Total assets marketed and/or managed in 2021 and 2020.

(*) Total adjusted customer funds of private banking managed by SAM.

•In Private Banking, the volume of customer assets and liabilities grew 17% year-on-year to EUR 250 billion, boosted by market improvement and continued strong commercial activity. Net new money amounted to EUR 7.9 billion in 9M'21 (3.2% of total volume), and of note were the EUR 3.7 billion reached in funds.

Net profit in the first nine months was EUR 322 million, up 10% compared to the same period of 2020, primarily backed by growth in net fee income (15%). Private Banking customers rose 13%.

•In SAM, total assets under management increased 7% compared to September 2020 to EUR 192 billion. Cumulative net sales YTD remained at record highs at EUR 6.3 billion (3.3% of the total), mainly in Spain, Mexico, Chile, Luxembourg and Poland.

Total contribution to the Group's profit (including ceded fee income) was EUR 392 million, 8% higher year-on-year, mainly due to greater volumes and the gradual recovery of margins.

•In Insurance, the volume of gross written premiums in the first nine months amounted to EUR 6.4 billion (+5% year-on-year), despite lower loan activity stemming from the crisis. Net fee income grew 14% with 16% growth in non-credit related protection business. Total contribution to profit (including ceded fee income) increased 21% year-on-year to EUR 1,019 million.

Results

Underlying attributable profit was EUR 698 million in the first nine months of 2021, up 24% year-on-year:

•Total income increased 14% mainly driven by the higher volume of assets under management, net fee income growth, and greater insurance protection activity, notably non-credit related business.

•Total fee income generated, including fees ceded to the branch network amounted to EUR 2,494 million (+11% year-on-year) and represented 32% of the Group's total.

Total fee income generated

EUR million

2,494

u

11%

32%

vs 9M'20

/ total Group

•Operating expenses were 5% higher than in 9M'20, due to the investments carried out together with higher costs related to increased commercial activity.

The total contribution to the Group (including net profit and total fees generated net of tax) was EUR 1,733 million in the first nine months, 16% higher than in 9M'20.

Compared to the previous quarter, underlying attributable profit rose 38%, primarily driven by the positive performance in total income.

Total contribution to profit

EUR million and % change in constant euros

Q3'21

9M'21

644

1,733

+15

%

/ Q2'21

+16

%

/ 9M'20

WM&I. Underlying income statement

EUR million and % change

/

Q2'21

/

9M'20

Q3'21

%

excl. FX

9M'21

%

excl. FX

Revenue

616

+19

+18

1,637

+10

+14

Expenses

-221

-2

-3

-668

+2

+5

Net operating income

395

+35

+34

969

+17

+21

LLPs

-6

+114

+114

-14

-39

-39

PBT

405

+40

+40

966

+21

+25

Underlying attrib. profit

292

+39

+38

698

+20

+24

Detailed financial information on page 73

44						January - September 2021

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Secondary segments

						Underlying attributable profit
						EUR -206 mn

Executive summary

PagoNxt

Merchant Solutions

Combining our most innovative payments businesses into a single, autonomous company:

Through the expansion of our Getnet platform to become a leading global acquirer

SME customers in LatAm and Europe

Active merchants

Total Payments Volume

> 4 million

1.19 mn +11% YoY

EUR 81.2 bn +53% vs. 9M'20*

Trade Solutions

Consumer Solutions

For SMEs & Corporates who operate internationally and want state-of-the-art digital solutions

Delivering engaging payment solutions for individuals in emerging and developed markets

SME customers who operate internationally

Active customers Superdigital in Brazil

220,000

+13% YoY

(*) % change in constant EUR

Unless otherwise indicated, changes are reported at constant exchange rates. In the tables below and in the appendix, these changes are included together with the changes at current exchange rates.

Strategy

PagoNxt is an autonomous company within the Group, with the talent, processes, and corporate governance that provide the needed base for faster growth and achieve our ambition to build a leadership position, both in the Americas and Europe. It comprises three businesses which deliver simple and accessible digital payment solutions to drive loyalty across consumers and corporate customers.

In its early stage, PagoNxt has been deploying its initiatives within our Banks, enabling better solutions for Santander customers. We are now beginning a new phase of our journey to turn PagoNxt into a growth engine in all our markets.

Digitalization of customers' payments and accessibility to our services are at the core of PagoNxt's strategy, embracing Santander's goals as a responsible bank. Our wide range of merchant and trade solutions will contribute to the development of all type of businesses, helping them digitalize their operations and payments, and our consumer solutions will benefit the lives of our customers through financial inclusion.

PagoNxt leverages Santander's deep local knowledge of the markets where it operates, customizing its global offerings to fulfil local needs. Merchant, trade and consumer solutions are provided in partnership with Santander local banks, leveraging our customer base of 152 million individual and corporate customers.

Additionally, PagoNxt will directly pursue open market opportunities and revenue pools with new customer segments and in new geographic areas, leveraging the Group's scale.

Commercial activity

The roll-out of PagoNxt platforms by country continues to progress, as the three businesses expand their footprint:

Merchant solutions

PagoNxt Merchant solutions 2021 strategy is focused on enhancing our global acquiring platform, leveraging the Wirecard assets acquisition, and also on expanding the platform to additional countries in LatAm and Europe.

PagoNxt Merchant solutions, through its global franchise Getnet, is already one of the top 3 acquirers in Latin America. Its global strategy leverages Getnet's capabilities to enable efficient processing of in-store and e-commerce payments and provides best-in-class value added services, not only to Santander customers but also in the open market.

The Getnet franchise continues to deliver growth: despite pandemic-related challenges, the number of active merchants and total payments volume grew across all geographies, and revenue growth accelerated in the last few months in spite of margin pressures.

We continued to expand our global franchise and product offerings during the quarter and made further progress on our global merchant platform through product development across our technology hubs in Porto Alegre, Munich, Chennai and Dubai, and through selective acquisitions. In Brazil, for example, we are developing new services for large e-commerce retailers, which will provide a single integration point to operate in different markets. We acquired a majority stake in a tech company called MIT (Mercadotecnia, Ideas y Tecnología) in Mexico and a payments provider called NAD (New Age Data) in Uruguay.

Our franchise in Brazil, Getnet Brazil, has recorded very significant market share gains in the country (16% and > 30% in e-commerce).

January - September 2021						45

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Secondary segments

In Europe, Getnet incorporated Santander España Merchant Services (SEMS) and continued with the integration of Wirecard's technology assets and talent acquired last January. Europe opened a branch in Munich, which will support the provision of our integrated offerings for European customers.

Merchant solutions

Active merchants

Total Payments Volumes

Millions

EUR billion

1.19

1.07

+11%

81.2

+53%

53.0

Sep-20

Sep-21

9M'20

9M'21

Trade solutions

PagoNxt Trade delivers digital, simple and integrated trade, international payments and FX solutions for businesses of all sizes, supporting them in their international expansion.

Santander is an experienced player in payments services, with a strong customer base of 220,000 companies trading internationally, and 3.4 million international payments processed in 2020.

Our priorities for Trade Solutions in 2021 are connecting additional Santander customers to the platform, covering our entire footprint, deploying new core functionalities in all transactional services (payments, FX and trade finance), and reaching customers beyond Santander's customer base.

Active corporate / business clients

September 2021

7,300

To this end, we are leveraging our experience to develop a new global technology platform that incorporates innovative new services, bringing Santander international flows into a single platform operating under the global brand of One Trade. This platform is being connected to all our banks, and existing clients are seamlessly accessing these new services, which will also be available for new, open market customers.

The global roll-out of our One Trade platform is well underway. As of September, platform adoption grew steadily in eight countries (Brazil, Mexico, Spain, the UK, Chile, Portugal, Colombia and Poland) and active corporate and business clients increased from 4,100 in March to 7,300 in September.

Consumer solutions

PagoNxt Consumer is focused on delivering economic inclusion across Latin America, allowing underbanked customers to have access to digital financial services.

Superdigital's plan is to launch its global multi-country platform in all Santander countries in LatAm. We began to operate in Argentina in Q3.

In the year ahead, Superdigital will continue to promote financial inclusion, focusing on rolling out the platform across seven countries in the region, combining geographical expansion and efficiency

improvement across its operations, and expanding its banking services in the platform. We will continue to test new alternative payment models that enable us to offer unique solutions to our clients.

In line with its financial inclusion agenda, Superdigital joined the Regional Alliance for the Digitalization of Women in Latin America and the Caribbean, to support a significant customer base through digital skill development.

PagoNxt Results

In the first nine months of 2021, underlying attributable profit decreased year-on-year to -EUR 206 million (-EUR 61 million in 9M'20).

This fall was driven by investments in project developments and platforms, mainly in Trade, together with the integration of Wirecard's assets into Merchant solutions in January 2021.

On the other hand, total income increased 41% year-on-year, boosted by the strong jump in net fee income (+45% at constant exchange rates).

PagoNxt. Revenue performance

Constant EUR million

334

237

+41%

+49%

142

95

9M'20

9M'21

H1'21*

Q3'21

(*) H1'21 quarterly average

This performance was backed by the recovery of activity in last two quarters, with volumes exceeding pre-pandemic levels, mainly in Merchant Solutions (strong increase in the number of transactions, merchants and Total Payments Volume in most of the countries).

PagoNxt. Underlying income statement

EUR million and % change

/

Q2'21

/

9M'20

Q3'21

%

excl. FX

9M'21

%

excl. FX

Revenue

144

+18

+15

334

+30

+41

Expenses

-181

+11

+10

-479

+59

+67

Net operating income

-36

-8

-4

-145

+225

+191

LLPs

-2

+1

-2

-7

-32

-23

PBT

-73

+61

+65

-191

+248

+220

Underlying attrib. profit

-79

+42

+44

-206

+237

+223

Detailed financial information on page 73

46						January - September 2021

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

			RESPONSIBLE BANKING

Santander strives every day to contribute to the progress of people and companies in a Simple, Personal and Fair way in all that we do, to earn the confidence of our employees, customers, shareholders and society.

In order to meet our commitment to be a more responsible bank and help society address the main global challenges, we are incorporating social, environmental and good governance surrounding business decision making criteria to respond to two challenges: adapt to the new business environment and contribute to more inclusive and sustainable growth. In 2019 we set clear and ambitious goals on which we made progress in 2020 and have continued to do so during 2021. We achieved carbon neutrality in our own operations in 2020 and met our 2021 commitments a year ahead of schedule. In doing so, we continue to contribute to the achievement of the Sustainable Development Goals.

In 2021, we continued to progress towards our goals:

			Santander Responsible Banking targets

More information on our goals in responsible banking can be found on our website.

Note: H1’21 data not audited

*    9M’21 provisional and not audited data

1.Includes Santander overall contribution to green finance: project finance, syndicated loans, green bonds, capital finance, export finance, advisory, structuring and other products to help our clients in the transition to a low carbon economy. Commitment from 2019 to 2030 is EUR 220 bn.

2.In those countries where it is possible to certify renewable sourced electricity for the properties occupied by the Group.

3.According to relevant external indices in each country (Great Place to Work, Top Employer, Merco, etc.).

4.Senior positions represent 1% of total workforce.

5.Calculation of equal pay gap compares employees of the same job, level and function. Data reported annually.

6.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.

7.People supported through Santander Universities initiative (students who will receive a Santander scholarship, will achieve an internship in an SME or participate in entrepreneurship programmes supported by the bank). Commitment refreshed after early completion in 2020 (200k).

8.People helped through our community investment programmes (excluded Santander Universities and financial education initiatives).

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			9M'21 highlights

☑ Euromoney recognized Santander as the World’s Best Bank for Financial Inclusion and Best Bank for Sustainable Finance in Latin America. In addition, we were named the most innovative entity in digital banking by The Banker for our financial inclusion initiatives. In this regard, Global Finance also singled out Santander as the leading bank in Sustainable Finance in Latin America; recognizing SCIB at the Sustainable Finance Awards for its global and regional leadership.

☑ Santander Brasil was named by Great Place to Work as one of the four best places to work for women, and included Santander UK in the list of the best companies for women to work for in the super large category.

☑ We continued to contribute to the public debate on climate change at the Santander International Banking Conference 2021 and to incorporate ESG aspects into our operations.

The main initiatives are set out below:

			Environmental

♣ As part of its commitment to the transition to a green economy, Santander continued to finance green alternatives and renewable energy. We reached EUR 51 billion in green finance1 (of which EUR 17 billion in 9M'21), making progress towards our commitment to reach EUR 120 billion by 2025.

♣ SCIB acted as sole financial advisor in the merger of Enel Green Power Colombia, and its mainland energy subsidiaries, and Grupo de Empresas de Bogotá. In addition, Santander México launched its first sustainable fund with a global approach; an equity fund that invests in companies with strong ESG standards and high growth potential.

♣ Santander Argentina also led the first issuance and placement of a sustainability-linked corporate bond for more than USD 50 million. SCIB Chile executed, for the first time in Latin America, a sustainability-linked swap with the shipping company Ultranav.

♣ Lastly, Santander Uruguay launched its first carbon-neutral car loan.

			Social

Ü Thanks to Santander Finance for All, Santander's response to support financial inclusion and empowerment, we have empowered 6.2 million people1. Under this framework, Santander Perú launched Surgir, its microcredit programme to provide access to finance for micro-entrepreneurs in the country, and Santander México signed an agreement with Soriana, and now offers around 30,000 access points to banking services to its customers where they can carry out simple transactions. Superdigital joined the 'Regional Alliance for the Digitalization of Women in Latin America and the Caribbean' seeking to provide a virtual educational platform that boosts women's digital skills. Santander US joined the Financial Literacy for All initiative, a group comprising US companies that aim to promote financial inclusion.

Ü We continued to invest in the communities where we operate. Santander México introduced the new LikeU credit card, which allows customers to personalize benefits according to their needs, and promotes support for social causes, such as reforestation or the fight against breast cancer. Santander Universidades launched the Santander Skills | Upskill your talent scholarships to develop soft skills, the Santander Technology | Digital Experience Amazon Web Services initiative, which provides 1,000 scholarships to boost digital skills, and the Santander Languages Scholarships | English to boost your career together with the University of Pennsylvania.

Ü Banco Santander joined the Spanish Ministry of Equality's Punto Violeta initiative against gender violence and in favour of equality, awareness and social inclusion of victims.

We also continue to be part of several sustainability indices, providing non-financial information to markets, investors and ESG analysts.

(1) Aggregated data 2019-9M'21. Unaudited 9M'21 provisional monitoring data.

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			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

à    Changes in the organizational structure of Grupo Santander's Senior Management

Mr Javier San Félix has taken the position of Chief Executive Officer of PagoNxt, an independent digital payments entity within Grupo Santander, and has left his senior management functions at Banco Santander as Head of Santander Global Payments.

à    Amendment of the Rules and regulations of the board

On 27 July, the board of directors approved the amendment of the Rules and regulations of the board to adapt them to the new provisions introduced by Law 5/2021, of 12 April, amending the Companies Act.

The main amendments related to:

–the update of the regimen for the approval and supervision of related-party transactions and the establishment of a procedure for periodic information and control of those transactions whose approval has been delegated by the board, in accordance with the provisions of the new law; and

–the directors' remuneration regimen, introducing technical updates regarding the content of the directors' remuneration policy and the annual report.

The amendment was registered in the Commercial Registry of Cantabria on 16 August 2021 and submitted to the National Securities Market Commission.

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			SANTANDER SHARE

Banco Santander approved its shareholder remuneration policy for 2021. The updated policy targets a total shareholder remuneration of approximately 40% of the group’s underlying profit, split in equal parts between cash dividends and share buybacks. According to the revised policy, interim distributions will be made around November and final distributions around May following the bank’s annual shareholder meeting.

The board of Banco Santander announced its decision to make an interim distribution from 2021 earnings through a cash dividend and share buyback amounting to a total value c. EUR 1.7 billion - equivalent to 40% of underlying profit for the first half of 2021. The board’s decision has been taken in view of the lifting of the European Central Bank's (ECB) recommendation that had limited shareholder remuneration until 30 September 2021.

Shareholder remuneration will be made in two parts:

•A cash dividend of EUR 4.85 cents per share, which will be paid from 2 November 2021.

•A buyback programme that will have a maximum amount of EUR 841 million, equivalent to 20% of the Group's underlying profit in the first half of 2021, already approved by the ECB and included in the inside information disclosed on 6 October 2021.

The repurchase programme will have the following characteristics:

•Expected duration from 6 October 2021 to 17 December 2021, however, the Bank reserves the right to terminate the buyback programme if, prior to its expiry date, the maximum monetary amount is reached or if any other circumstances so advise.

•The average purchase price of shares will not exceed EUR 3.98, corresponding to the tangible book value per share at 30 June 2021.

•The maximum number of shares that may be acquired will depend on the average price at which they are acquired, but will not exceed 9.7% of the Bank’s share capital.

The bank plans to announce a further and final remuneration from 2021 earnings in the first quarter of 2022, subject to the appropriate corporate and regulatory approvals.

à Share price performance

The Santander share is listed in five markets, in Spain, Mexico and Poland as an ordinary share, in the US as an ADR and in the UK as a CDI. The global economy continued to recover, despite the Delta variant spreading across the board, in a context of excess liquidity and expansionary fiscal policies. This positive performance favoured the rise in commodity prices in recent months and increased inflationary pressures, which rebounded in the US and the Eurozone to the highest levels in a decade. These price increases could be transitory, and driven by supply constraints, associated with the end of the pandemic, rather than being a consequence of excess demand.

In this environment, the Federal Reserve (Fed) could announce the reduction of stimulus (tapering) soon, and, if the environment allows it, it might start raising interest rates once the tapering process concludes, around H2'22. On the other hand, the European Central Bank, after increasing its growth forecast for 2021 and estimating a return to the pre-pandemic levels by 2023, announced that it would moderately reduce its asset purchases under the pandemic programme (PEPP), maintaining its expansionary policy.

The main global equity markets ended September with significant aggregate gains in the first nine months of the year. The banking sector recorded an overall better performance, the DJ Stoxx Banks rose 30.1% while the MSCI World Banks rose 21.6%, compared to the Ibex 35 9.0% increase and the DJ Stoxx 50 12.6% growth. Santander recorded a rise of 23.6%.

Share price
START 31/12/2020									END 30/09/2021
€2.538									€3.137
Maximum 03/06/2021									Minimum 28/01/2021
€3.509									€2.375

Comparative share performance

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àMarket capitalization and trading

As at 30 September 2021, Santander was the second largest bank in the Eurozone by market capitalization and the 30th in the world among financial entities (EUR 54,389 million).

The share’s weighting in the DJ Stoxx Banks index was 7.2% and 11.7% in the DJ Euro Stoxx Banks. In the domestic market, its weight in the Ibex 35 as at end September was 11.3%.

A total of 9,283 million shares were traded in the period for an effective value of EUR 28,060 million and a liquidity ratio of 54%.

The daily trading volume was 48 million shares with an effective value of EUR 146 million.

àShareholder base

The total number of Santander shareholders at 30 September 2021 was 3,817,454, of which 3,529,544 were European (75.27% of the capital stock) and 276,578 from the Americas (23.17% of the capital stock).

Excluding the board, which holds 1.05% of the Bank’s capital stock, retail shareholders account for 39.63% and institutional shareholders account for 59.32%.

Share capital distribution by geographic area
September 2021
The Americas			Europe			Other
23.17%			75.27%			1.56%

			2nd			Bank in the Eurozone by market capitalization
			EUR 54,389 million

The Santander share
September 2021
Shares and trading data
Shares (number)			17,340,641,302
Average daily turnover (number of shares)			48,347,400
Share liquidity (%)			54
(Number of shares traded during the year / number of shares)
Stock market indicators
Price / Tangible book value (X)			0.79
Free float (%)			99.95

Share capital distribution by type of shareholder
September 2021

			Institutions
			59.32%
			Board *
			1.05%
			Retail
			39.63%

(*) Shares owned or represented by directors.

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2021 A P P E N D I X

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Group financial information

Net fee income. Consolidated
EUR million
			Q3'21			Q2'21			Change (%)			9M'21			9M'20			Change (%)
Fees from services			1,412			1,429			(1.2)			4,255			4,270			(0.4)
Wealth management and marketing of customer funds			968			931			4.0			2,751			2,543			8.2
Securities and custody			261			261			—			804			746			7.8
Net fee income			2,641			2,621			0.8			7,810			7,559			3.3

Underlying operating expenses. Consolidated
EUR million
			Q3'21			Q2'21			Change (%)			9M'21			9M'20			Change (%)
Staff costs			2,767			2,750			0.6			8,205			8,095			1.4
Other general administrative expenses			1,951			1,811			7.7			5,509			5,531			(0.4)
Information technology			548			553			(0.9)			1,596			1,551			2.9
Communications			100			102			(2.0)			299			360			(16.9)
Advertising			131			115			13.9			364			382			(4.7)
Buildings and premises			187			168			11.3			519			561			(7.5)
Printed and office material			24			23			4.3			66			76			(13.2)
Taxes (other than tax on profits)			130			124			4.8			394			386			2.1
Other expenses			831			726			14.5			2,271			2,215			2.5
Administrative expenses			4,718			4,561			3.4			13,714			13,626			0.6
Depreciation and amortization			683			698			(2.1)			2,064			2,100			(1.7)
Operating expenses			5,401			5,259			2.7			15,778			15,726			0.3

Operating means. Consolidated
			Employees												Branches
			Sep-21			Sep-20			Change						Sep-21			Sep-20			Change
Europe			62,577			69,928			(7,351)						3,265			4,700			(1,435)
Spain			23,038			27,053			(4,015)						1,948			3,110			(1,162)
United Kingdom			20,008			22,741			(2,733)						450			564			(114)
Portugal			5,716			6,431			(715)						397			499			(102)
Poland			9,776			10,698			(922)						458			515			(57)
Other			4,039			3,005			1,034						12			12			—
North America			43,135			38,289			4,846						1,888			2,014			(126)
US			15,484			16,189			(705)						514			584			(70)
Mexico			27,027			21,770			5,257						1,374			1,430			(56)
Other			624			330			294						—			—			—
South America			69,961			66,517			3,444						4,443			4,447			(4)
Brazil			47,877			43,689			4,188						3,591			3,562			29
Chile			10,570			11,200			(630)						332			354			(22)
Argentina			8,715			9,267			(552)						408			427			(19)
Other			2,799			2,361			438						112			104			8
Digital Consumer Bank			15,920			16,101			(181)						308			359			(51)
Corporate Centre			1,710			1,743			(33)
Total Group			193,303			192,578			725						9,904			11,520			(1,616)

Underlying net loan-loss provisions. Consolidated
EUR million
			Q3'21			Q2'21			Change (%)			9M'21			9M'20			Change (%)
Non-performing loans			2,548			2,054			24.1			6,901			10,388			(33.6)
Country-risk			—			—			—			(1)			(6)			(83.3)
Recovery of written-off assets			(328)			(293)			11.9			(927)			(820)			13.0
Net loan-loss provisions			2,220			1,761			26.1			5,973			9,562			(37.5)

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Group financial information

Loans and advances to customers. Consolidated
EUR million
									Change
			Sep-21			Sep-20			Absolute			%			Dec-20
Commercial bills			42,316			28,454			13,862			48.7			37,459
Secured loans			525,118			496,769			28,349			5.7			503,014
Other term loans			276,474			272,961			3,513			1.3			269,143
Finance leases			38,083			35,751			2,332			6.5			36,251
Receivable on demand			9,549			8,771			778			8.9			7,903
Credit cards receivable			18,570			17,468			1,102			6.3			19,507
Impaired assets			31,629			29,873			1,756			5.9			30,815
Gross loans and advances to customers (excl. reverse repos)			941,739			890,047			51,692			5.8			904,092
Reverse repos			40,358			43,474			(3,116)			(7.2)			35,702
Gross loans and advances to customers			982,097			933,521			48,576			5.2			939,794
Loan-loss allowances			23,786			22,807			979			4.3			23,595
Loans and advances to customers			958,311			910,714			47,597			5.2			916,199

Total funds. Consolidated
EUR million
									Change
			Sep-21			Sep-20			Absolute			%			Dec-20
Demand deposits			697,371			621,361			76,010			12.2			642,897
Time deposits			167,035			180,571			(13,536)			(7.5)			171,939
Mutual funds			184,782			155,479			29,303			18.8			164,802
Customer funds			1,049,188			957,411			91,777			9.6			979,638
Pension funds			15,828			15,073			755			5.0			15,577
Managed portfolios			30,678			26,157			4,521			17.3			26,438
Repos			44,628			40,967			3,661			8.9			34,474
Total funds			1,140,322			1,039,608			100,714			9.7			1,056,127

Eligible capital (phased in) 1. Consolidated
EUR million
									Change
			Sep-21			Sep-20			Absolute			%			Dec-20
Capital stock and reserves			115,063			125,333			(10,271)			(8.2)			125,449
Attributable profit			5,849			(9,048)			14,897			—			(8,771)
Dividends			(1,276)			—			(1,276)			—			(478)
Other retained earnings			(34,968)			(35,383)			415			(1.2)			(35,345)
Minority interests			6,658			6,741			(82)			(1.2)			6,669
Goodwill and intangible assets			(15,781)			(16,692)			910			(5.5)			(15,711)
Other deductions			(4,757)			(4,423)			(334)			7.6			(2,415)
Core CET1			70,787			66,528			4,259			6.4			69,399
Preferred shares and other eligible T1			10,110			8,963			1,147			12.8			9,102
Tier 1			80,897			75,492			5,406			7.2			78,501
Generic funds and eligible T2 instruments			12,639			10,987			1,652			15.0			12,514
Eligible capital			93,537			86,479			7,058			8.2			91,015
Risk-weighted assets			577,209			555,122			22,086			4.0			562,580
CET1 capital ratio			12.26			11.98			0.28						12.34
T1 capital ratio			14.02			13.60			0.42						13.95
Total capital ratio			16.20			15.58			0.63						16.18

(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. Additionally, the Tier 1 and total phased-in capital ratios include the transitory treatment according to chapter 2, title 1, part 10 of the aforementioned CRR.

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Financial information by segment

EUROPE																					Q
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			2,744			(0.2)			(0.5)						8,140			12.4			11.9
Net fee income			1,079			(0.6)			(0.6)						3,236			6.7			6.9
Gains (losses) on financial transactions (1)			101			20.3			15.9						569			(18.4)			(18.0)
Other operating income			284			—			—						354			—			—
Total income			4,208			6.8			6.5						12,299			11.8			11.5
Administrative expenses and amortizations			(2,048)			(1.2)			(1.3)						(6,191)			(1.1)			(1.5)
Net operating income			2,160			15.5			15.2						6,108			28.9			28.8
Net loan-loss provisions			(676)			11.4			11.6						(1,877)			(22.3)			(22.5)
Other gains (losses) and provisions			(258)			(25.0)			(25.2)						(854)			42.7			42.6
Profit before tax			1,227			33.4			32.8						3,377			95.9			96.5
Tax on profit			(328)			8.3			8.2						(1,033)			106.1			106.7
Profit from continuing operations			899			45.7			44.8						2,344			91.7			92.2
Net profit from discontinued operations			—			—			—						—			—			—
Consolidated profit			899			45.7			44.8						2,344			91.7			92.2
Non-controlling interests			(31)			80.4			71.3						(51)			(21.8)			(19.1)
Underlying attributable profit to the parent			867			44.7			44.0						2,293			98.1			98.3
Balance sheet
Loans and advances to customers			590,822			1.0			1.1						590,822			4.8			2.3
Cash, central banks and credit institutions			247,362			1.5			1.4						247,362			14.1			12.6
Debt instruments			70,762			(8.7)			(8.4)						70,762			(14.8)			(15.4)
Other financial assets			48,326			(2.2)			(2.2)						48,326			(8.9)			(9.1)
Other asset accounts			30,408			(6.9)			(6.9)						30,408			(22.8)			(23.8)
Total assets			987,681			0.0			0.0						987,681			3.3			1.4
Customer deposits			608,939			1.6			1.7						608,939			6.3			4.0
Central banks and credit institutions			194,697			(1.3)			(1.5)						194,697			10.1			9.4
Marketable debt securities			75,468			(4.5)			(4.5)						75,468			(16.2)			(19.2)
Other financial liabilities			51,041			(7.0)			(7.0)						51,041			(15.3)			(15.5)
Other liabilities accounts			11,208			(6.3)			(6.2)						11,208			(6.7)			(8.5)
Total liabilities			941,353			(0.1)			(0.1)						941,353			3.2			1.3
Total equity			46,328			1.7			1.8						46,328			6.1			4.2
Memorandum items:
Gross loans and advances to customers (2)			567,283			0.9			0.9						567,283			5.9			3.5
Customer funds			694,670			1.9			2.0						694,670			8.2			6.2
Customer deposits (3)			589,067			1.8			1.9						589,067			6.2			4.0
Mutual funds			105,603			2.9			2.9						105,603			20.9			20.4
Ratios (%), operating means and customers
Underlying RoTE			8.35			2.39									7.63			3.70
Efficiency ratio			48.7			(3.9)									50.3			(6.6)
NPL ratio			3.15			(0.16)									3.15			(0.14)
Total coverage ratio			51.06			2.7									51.1			2.4
Number of employees			62,577			(2.7)									62,577			(10.5)
Number of branches			3,265			(4.0)									3,265			(30.5)
Number of loyal customers (thousands)			10,197			0.2									10,197			2.7
Number of digital customers (thousands)			15,884			1.3									15,884			5.6

(1) Includes exchange differences.

(2) Excluding reverse repos.

(3) Excluding repos.

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Financial information by segment

Spain															Q
EUR million
						/ Q2'21									/ 9M'20
Underlying income statement			Q3'21			%						9M'21			%
Net interest income			975			(3.9)						3,009			4.1
Net fee income			616			(0.1)						1,821			4.6
Gains (losses) on financial transactions (1)			95			(22.6)						351			(41.5)
Other operating income			194			—						178			—
Total income			1,881			11.1						5,359			4.1
Administrative expenses and amortizations			(818)			(4.0)						(2,537)			(7.2)
Net operating income			1,063			26.3						2,822			16.8
Net loan-loss provisions			(449)			(8.7)						(1,390)			0.0
Other gains (losses) and provisions			(162)			9.8						(438)			32.4
Profit before tax			453			123.7						995			42.9
Tax on profit			(113)			104.9						(265)			32.7
Profit from continuing operations			340			130.7						730			47.1
Net profit from discontinued operations			—			—						—			—
Consolidated profit			340			130.7						730			47.1
Non-controlling interests			—			(93.7)						—			(15.7)
Underlying attributable profit to the parent			340			130.5						730			47.0
Balance sheet
Loans and advances to customers			193,129			0.2						193,129			0.1
Cash, central banks and credit institutions			133,062			3.5						133,062			18.4
Debt instruments			15,869			(15.9)						15,869			(27.1)
Other financial assets			2,459			(1.5)						2,459			(4.4)
Other asset accounts			17,644			0.3						17,644			(22.4)
Total assets			362,161			0.5						362,161			2.8
Customer deposits			257,488			1.7						257,488			2.8
Central banks and credit institutions			50,581			0.7						50,581			6.4
Marketable debt securities			25,840			(3.1)						25,840			(1.2)
Other financial liabilities			8,604			(20.3)						8,604			9.5
Other liabilities accounts			4,046			5.1						4,046			0.9
Total liabilities			346,559			0.5						346,559			3.2
Total equity			15,602			1.0						15,602			(4.7)
Memorandum items:
Gross loans and advances to customers (2)			199,614			0.3						199,614			0.3
Customer funds			335,646			1.9						335,646			6.0
Customer deposits (3)			257,488			1.7						257,488			2.8
Mutual funds			78,158			2.5						78,158			18.0
Ratios (%), operating means and customers
Underlying RoTE			9.01			5.08						6.48			2.27
Efficiency ratio			43.5			(6.8)						47.3			(5.7)
NPL ratio			5.99			(0.23)						5.99			0.01
Total coverage ratio			48.8			2.8						48.8			2.8
Number of employees			23,038			(2.7)						23,038			(14.8)
Number of branches			1,948			0.1						1,948			(37.4)
Number of loyal customers (thousands)			2,751			(0.3)						2,751			6.4
Number of digital customers (thousands)			5,294			(0.1)						5,294			3.3

(1) Includes exchange differences.

(2) Excluding reverse repos.

(3) Excluding repos.

56						January - September 2021

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Financial information by segment

United Kingdom																					Q
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			1,168			6.2			5.4						3,268			29.6			26.6
Net fee income			114			(2.9)			(3.7)						352			(11.7)			(13.8)
Gains (losses) on financial transactions (1)			18			—			—						2			(85.0)			(85.4)
Other operating income			3			—			—						3			—			—
Total income			1,303			7.6			6.8						3,625			23.6			20.7
Administrative expenses and amortizations			(638)			(1.5)			(2.3)						(1,937)			0.0			(2.4)
Net operating income			665			18.1			17.3						1,688			69.8			65.8
Net loan-loss provisions			(1)			—			—						67			—			—
Other gains (losses) and provisions			(39)			(38.1)			(38.9)						(132)			24.8			21.9
Profit before tax			625			6.5			5.6						1,623			426.4			413.9
Tax on profit			(174)			(7.5)			(8.3)						(478)			443.5			430.6
Profit from continuing operations			452			13.0			12.2						1,145			419.6			407.3
Net profit from discontinued operations			—			—			—						—			—			—
Consolidated profit			452			13.0			12.2						1,145			419.6			407.3
Non-controlling interests			—			—			—						—			(100.0)			(100.0)
Underlying attributable profit to the parent			452			13.0			12.2						1,145			419.6			407.3
Balance sheet
Loans and advances to customers			261,841			0.3			0.2						261,841			5.4			(0.4)
Cash, central banks and credit institutions			60,317			(3.9)			(3.9)						60,317			29.5			22.4
Debt instruments			8,032			(3.1)			(3.2)						8,032			(42.2)			(45.4)
Other financial assets			541			(40.7)			(40.7)						541			(69.5)			(71.1)
Other asset accounts			6,163			(18.0)			(18.0)						6,163			(32.5)			(36.2)
Total assets			336,894			(1.1)			(1.1)						336,894			5.3			(0.4)
Customer deposits			242,678			(0.4)			(0.4)						242,678			8.2			2.2
Central banks and credit institutions			30,699			0.3			0.3						30,699			79.0			69.1
Marketable debt securities			41,830			(6.0)			(6.0)						41,830			(26.2)			(30.3)
Other financial liabilities			2,895			7.6			7.5						2,895			(1.9)			(7.3)
Other liabilities accounts			3,213			(13.1)			(13.1)						3,213			(26.5)			(30.5)
Total liabilities			321,314			(1.2)			(1.2)						321,314			5.2			(0.6)
Total equity			15,580			0.5			0.5						15,580			9.3			3.3
Memorandum items:
Gross loans and advances to customers (2)			243,757			0.5			0.4						243,757			7.4			1.5
Customer funds			234,041			(0.7)			(0.8)						234,041			8.7			2.7
Customer deposits (3)			225,411			(0.8)			(0.8)						225,411			8.4			2.4
Mutual funds			8,630			0.4			0.4						8,630			16.3			9.9
Ratios (%), operating means and customers
Underlying RoTE			13.18			1.08									11.53			9.29
Efficiency ratio			48.9			(4.5)									53.4			(12.7)
NPL ratio			1.27			(0.03)									1.27			(0.06)
Total coverage ratio			36.6			(0.8)									36.6			(5.1)
Number of employees			20,008			(4.1)									20,008			(12.0)
Number of branches			450			(18.6)									450			(20.2)
Number of loyal customers (thousands)			4,397			(0.5)									4,397			(1.8)
Number of digital customers (thousands)			6,532			2.1									6,532			5.2

(1) Includes exchange differences.

(2) Excluding reverse repos.

(3) Excluding repos.

January - September 2021						57

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Financial information by segment

Portugal															Q
EUR million
						/ Q2'21									/ 9M'20
Underlying income statement			Q3'21			%						9M'21			%
Net interest income			185			(3.5)						569			(3.9)
Net fee income			115			4.3						325			13.9
Gains (losses) on financial transactions (1)			(2)			—						151			43.2
Other operating income			14			—						(3)			2.2
Total income			312			3.0						1,042			6.3
Administrative expenses and amortizations			(140)			(2.0)						(429)			(2.8)
Net operating income			172			7.5						613			13.9
Net loan-loss provisions			(25)			(27.8)						(95)			(37.6)
Other gains (losses) and provisions			(2)			(84.7)						(26)			(28.2)
Profit before tax			145			27.4						492			40.5
Tax on profit			(45)			27.2						(153)			43.0
Profit from continuing operations			100			27.5						339			39.4
Net profit from discontinued operations			—			—						—			—
Consolidated profit			100			27.5						339			39.4
Non-controlling interests			—			32.9						(1)			78.3
Underlying attributable profit to the parent			100			27.5						339			39.3
Balance sheet
Loans and advances to customers			39,168			1.0						39,168			4.2
Cash, central banks and credit institutions			9,177			5.2						9,177			34.9
Debt instruments			8,752			(3.0)						8,752			(25.0)
Other financial assets			1,566			7.8						1,566			5.1
Other asset accounts			1,329			(3.9)						1,329			(23.3)
Total assets			59,992			1.0						59,992			1.2
Customer deposits			41,817			0.9						41,817			4.1
Central banks and credit institutions			9,487			0.0						9,487			(2.5)
Marketable debt securities			2,651			6.8						2,651			(19.0)
Other financial liabilities			218			(0.2)						218			(17.8)
Other liabilities accounts			1,671			(1.3)						1,671			(8.2)
Total liabilities			55,844			0.9						55,844			1.0
Total equity			4,148			2.8						4,148			2.9
Memorandum items:
Gross loans and advances to customers (2)			40,204			0.9						40,204			4.0
Customer funds			45,982			1.3						45,982			6.5
Customer deposits (3)			41,817			0.9						41,817			4.1
Mutual funds			4,165			5.7						4,165			39.7
Ratios (%), operating means and customers
Underlying RoTE			9.79			1.92						11.19			2.68
Efficiency ratio			44.9			(2.3)						41.2			(3.9)
NPL ratio			3.44			(0.27)						3.44			(0.81)
Total coverage ratio			75.5			2.6						75.5			11.3
Number of employees			5,716			(5.5)						5,716			(11.1)
Number of branches			397			(5.0)						397			(20.4)
Number of loyal customers (thousands)			845			1.2						845			5.5
Number of digital customers (thousands)			980			(0.1)						980			8.6

(1) Includes exchange differences.

(2) Excluding reverse repos.

(3) Excluding repos.

58						January - September 2021

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Financial information by segment

Poland																					Q
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			251			0.4			1.3						741			(6.7)			(4.0)
Net fee income			133			4.9			5.7						386			16.2			19.5
Gains (losses) on financial transactions (1)			22			4.4			5.3						63			(1.5)			1.3
Other operating income			(1)			—			—						(11)			(80.1)			(79.6)
Total income			405			(3.0)			(2.2)						1,179			3.8			6.7
Administrative expenses and amortizations			(162)			(0.8)			0.0						(483)			1.7			4.6
Net operating income			243			(4.4)			(3.7)						696			5.3			8.3
Net loan-loss provisions			(47)			4.2			5.3						(161)			(35.5)			(33.7)
Other gains (losses) and provisions			(56)			(55.7)			(55.2)						(254)			134.7			141.4
Profit before tax			140			68.6			69.6						281			(7.3)			(4.7)
Tax on profit			(37)			10.4			11.3						(104)			6.8			9.9
Profit from continuing operations			103			108.9			109.9						177			(14.0)			(11.6)
Net profit from discontinued operations			—			—			—						—			—			—
Consolidated profit			103			108.9			109.9						177			(14.0)			(11.6)
Non-controlling interests			(32)			107.9			108.8						(52)			(18.7)			(16.4)
Underlying attributable profit to the parent			70			109.3			110.3						125			(11.9)			(9.4)
Balance sheet
Loans and advances to customers			28,925			0.1			1.9						28,925			2.5			4.1
Cash, central banks and credit institutions			1,746			(7.5)			(5.9)						1,746			(10.7)			(9.4)
Debt instruments			14,595			(3.8)			(2.1)						14,595			10.0			11.6
Other financial assets			824			5.9			7.8						824			53.2			55.6
Other asset accounts			1,277			(0.8)			1.0						1,277			(8.6)			(7.2)
Total assets			47,367			(1.4)			0.4						47,367			4.4			6.0
Customer deposits			36,247			0.6			2.4						36,247			6.8			8.4
Central banks and credit institutions			2,008			(11.8)			(10.2)						2,008			(22.8)			(21.6)
Marketable debt securities			1,944			(21.1)			(19.7)						1,944			(0.7)			0.8
Other financial liabilities			885			4.8			6.7						885			35.6			37.6
Other liabilities accounts			1,210			(2.5)			(0.7)						1,210			6.3			7.9
Total liabilities			42,293			(1.3)			0.5						42,293			4.9			6.5
Total equity			5,074			(2.0)			(0.3)						5,074			(0.1)			1.4
Memorandum items:
Gross loans and advances to customers (2)			29,955			0.2			2.0						29,955			2.6			4.1
Customer funds			41,042			0.7			2.5						41,042			9.1			10.8
Customer deposits (3)			36,247			0.6			2.4						36,247			6.8			8.4
Mutual funds			4,795			1.0			2.8						4,795			31.2			33.2
Ratios (%), operating means and customers
Underlying RoTE			8.60			4.50									5.10			(0.82)
Efficiency ratio			40.0			0.9									41.0			(0.8)
NPL ratio			4.34			(0.24)									4.34			(0.24)
Total coverage ratio			74.6			2.1									74.6			3.8
Number of employees			9,776			(1.6)									9,776			(8.6)
Number of branches			458			(2.8)									458			(11.1)
Number of loyal customers (thousands)			2,205			1.8									2,205			6.7
Number of digital customers (thousands)			2,917			2.4									2,917			7.9

(1) Includes exchange differences.

(2) Excluding reverse repos.

(3) Excluding repos.

January - September 2021						59

---

Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Financial information by segment

Other Europe
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			165			(15.2)			(15.2)						553			24.3			25.8
Net fee income			101			(11.9)			(12.5)						354			28.2			30.2
Gains (losses) on financial transactions (1)			(33)			(47.3)			(43.1)						2			—			—
Other operating income			74			4.9			7.4						187			13.0			12.6
Total income			307			(3.3)			(4.1)						1,095			36.7			38.8
Administrative expenses and amortizations			(290)			8.9			9.1						(806)			20.0			21.5
Net operating income			17			(66.7)			(69.7)						289			123.4			129.4
Net loan-loss provisions			(153)			26.8			26.4						(299)			548.0			549.4
Other gains (losses) and provisions			—			—			—						(4)			(79.8)			(80.4)
Profit before tax			(136)			103.4			105.5						(14)			—			—
Tax on profit			41			342.2			296.8						(34)			259.1			295.4
Profit from continuing operations			(95)			65.2			70.5						(47)			—			—
Net profit from discontinued operations			—			—			—						—			—			—
Consolidated profit			(95)			65.2			70.5						(47)			—			—
Non-controlling interests			1			—			—						2			—			—
Underlying attributable profit to the parent			(94)			58.2			60.4						(46)			—			—
Balance sheet
Loans and advances to customers			67,760			7.1			6.6						67,760			20.0			19.8
Cash, central banks and credit institutions			43,060			2.9			2.6						43,060			(12.4)			(12.5)
Debt instruments			23,514			(10.0)			(10.0)						23,514			4.8			4.8
Other financial assets			42,937			(1.9)			(1.9)						42,937			(8.0)			(8.0)
Other asset accounts			3,995			(18.0)			(18.3)						3,995			(9.4)			(9.8)
Total assets			181,266			0.8			0.5						181,266			1.2			1.1
Customer deposits			30,709			22.5			22.2						30,709			26.6			26.5
Central banks and credit institutions			101,922			(2.6)			(2.9)						101,922			2.2			2.0
Marketable debt securities			3,203			10.3			10.3						3,203			58.4			58.4
Other financial liabilities			38,440			(4.6)			(4.7)						38,440			(20.8)			(20.8)
Other liabilities accounts			1,069			(28.2)			(28.2)						1,069			59.7			59.6
Total liabilities			175,343			0.5			0.3						175,343			0.1			0.0
Total equity			5,923			9.4			8.7						5,923			50.5			50.0
Memorandum items:
Gross loans and advances to customers (2)			53,754			5.8			5.2						53,754			29.0			28.6
Customer funds			37,959			26.7			26.5						37,959			30.0			29.9
Customer deposits (3)			28,104			35.3			34.8						28,104			26.9			26.8
Mutual funds			9,855			7.5			7.5						9,855			39.7			39.7
Resources
Number of employees			4,039			7.2									4,039			34.4

(1) Includes exchange differences.

(2) Excluding reverse repos.

(3) Excluding repos.

60						January - September 2021

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Financial information by segment

NORTH AMERICA																					Q
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			2,070			3.0			0.7						6,085			(5.1)			(1.5)
Net fee income			386			(5.7)			(8.0)						1,247			(2.8)			—
Gains (losses) on financial transactions (1)			70			120.1			116.1						200			(16.3)			(14.5)
Other operating income			252			(5.6)			(7.8)						734			84.2			98.7
Total income			2,779			2.2			(0.1)						8,266			(0.8)			3.0
Administrative expenses and amortizations			(1,275)			6.8			4.5						(3,617)			4.5			8.5
Net operating income			1,504			(1.4)			(3.8)						4,649			(4.6)			(1.0)
Net loan-loss provisions			(506)			159.8			156.6						(1,095)			(65.2)			(63.6)
Other gains (losses) and provisions			(38)			—			—						(50)			(34.8)			(31.9)
Profit before tax			959			(28.3)			(30.4)						3,504			112.0			117.4
Tax on profit			(187)			(42.3)			(44.3)						(808)			93.1			98.3
Profit from continuing operations			772			(23.8)			(25.9)						2,696			118.4			123.8
Net profit from discontinued operations			—			—			—						—			—			—
Consolidated profit			772			(23.8)			(25.9)						2,696			118.4			123.8
Non-controlling interests			(112)			(29.8)			(31.8)						(408)			127.7			137.6
Underlying attributable profit to the parent			661			(22.7)			(24.8)						2,288			116.9			121.5
Balance sheet
Loans and advances to customers			128,339			1.6			0.1						128,339			4.5			1.4
Cash, central banks and credit institutions			37,244			0.5			(0.8)						37,244			30.7			25.1
Debt instruments			37,367			5.2			4.7						37,367			1.8			(4.0)
Other financial assets			10,919			0.5			0.4						10,919			(37.3)			(41.3)
Other asset accounts			21,040			0.4			(1.3)						21,040			0.1			(2.3)
Total assets			234,911			1.8			0.6						234,911			3.7			(0.2)
Customer deposits			122,906			6.8			5.4						122,906			13.5			9.4
Central banks and credit institutions			25,336			(17.3)			(18.0)						25,336			(14.6)			(18.6)
Marketable debt securities			40,025			4.5			2.7						40,025			0.2			(2.5)
Other financial liabilities			13,249			(6.7)			(6.6)						13,249			(28.7)			(33.3)
Other liabilities accounts			6,059			0.7			(0.4)						6,059			(5.2)			(9.1)
Total liabilities			207,575			1.6			0.4						207,575			2.3			(1.6)
Total equity			27,335			3.1			1.7						27,335			15.9			12.3
Memorandum items:
Gross loans and advances to customers (2)			127,113			1.2			(0.3)						127,113			3.6			0.5
Customer funds			133,978			3.0			1.8						133,978			14.2			10.1
Customer deposits (3)			108,528			3.2			1.9						108,528			12.2			8.4
Mutual funds			25,450			2.1			1.4						25,450			23.6			17.7
Ratios (%), operating means and customers
Underlying RoTE			11.03			(3.81)									13.39			6.71
Efficiency ratio			45.9			2.0									43.8			2.2
NPL ratio			2.56			0.27									2.56			0.59
Total coverage ratio			139.3			(13.0)									139.3			(62.3)
Number of employees			43,135			3.5									43,135			12.7
Number of branches			1,888			(1.7)									1,888			(6.3)
Number of loyal customers (thousands)			4,144			1.3									4,144			10.2
Number of digital customers (thousands)			6,485			2.9									6,485			11.0

(1) Includes exchange differences.

(2) Excluding reverse repos.

(3) Excluding repos.

January - September 2021						61

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Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Financial information by segment

United States																					Q
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			1,359			2.5			0.1						4,022			(6.4)			(0.4)
Net fee income			174			(9.2)			(11.7)						606			(11.2)			(5.5)
Gains (losses) on financial transactions (1)			34			67.5			62.6						124			14.8			22.2
Other operating income			282			(5.1)			(7.3)						834			76.5			87.8
Total income			1,849			0.7			(1.6)						5,586			0.5			6.9
Administrative expenses and amortizations			(815)			4.0			1.7						(2,346)			1.7			8.2
Net operating income			1,034			(1.7)			(4.1)						3,240			(0.4)			6.0
Net loan-loss provisions			(294)			—			—						(450)			(81.1)			(79.8)
Other gains (losses) and provisions			(6)			—			—						(6)			(89.8)			(89.1)
Profit before tax			734			(31.7)			(33.7)						2,784			239.6			261.3
Tax on profit			(141)			(45.5)			(47.3)						(634)			191.7			210.4
Profit from continuing operations			593			(27.4)			(29.4)						2,150			256.8			279.7
Net profit from discontinued operations			—			—			—						—			—			—
Consolidated profit			593			(27.4)			(29.4)						2,150			256.8			279.7
Non-controlling interests			(96)			(33.2)			(35.1)						(361)			173.4			190.9
Underlying attributable profit to the parent			498			(26.2)			(28.2)						1,788			280.3			304.6
Balance sheet
Loans and advances to customers			95,953			2.4			0.1						95,953			2.2			0.9
Cash, central banks and credit institutions			27,322			7.4			5.0						27,322			63.8			61.7
Debt instruments			16,025			0.6			(1.6)						16,025			10.7			9.2
Other financial assets			4,039			12.9			10.4						4,039			(19.0)			(20.1)
Other asset accounts			17,458			1.2			(1.1)						17,458			(1.7)			(3.0)
Total assets			160,798			3.1			0.8						160,798			8.8			7.4
Customer deposits			87,316			10.0			7.5						87,316			19.1			17.6
Central banks and credit institutions			11,675			(32.8)			(34.3)						11,675			(25.5)			(26.4)
Marketable debt securities			33,838			5.3			3.0						33,838			3.9			2.6
Other financial liabilities			4,058			4.1			1.8						4,058			(18.9)			(19.9)
Other liabilities accounts			3,938			1.5			(0.8)						3,938			2.4			1.1
Total liabilities			140,825			3.1			0.7						140,825			8.0			6.6
Total equity			19,973			3.6			1.3						19,973			15.0			13.5
Memorandum items:
Gross loans and advances to customers (2)			95,318			1.9			(0.4)						95,318			2.7			1.3
Customer funds			90,837			4.2			1.8						90,837			14.3			12.8
Customer deposits (3)			77,141			4.2			1.8						77,141			11.9			10.4
Mutual funds			13,696			4.2			1.8						13,696			30.1			28.4
Ratios (%), operating means and customers
Underlying RoTE			11.27			(4.90)									14.31			10.31
Efficiency ratio			44.1			1.4									42.0			0.5
NPL ratio			2.36			0.36									2.36			0.51
Total coverage ratio			161.5			(24.2)									161.5			(67.3)
Number of employees			15,484			(0.8)									15,484			(4.4)
Number of branches			514			(5.5)									514			(12.0)
Number of loyal customers (thousands)			360			(4.7)									360			2.1
Number of digital customers (thousands)			1,032			0.7									1,032			3.5

(1) Includes exchange differences.

(2) Excluding reverse repos.

(3) Excluding repos.

62						January - September 2021

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Financial information by segment

Mexico																					Q
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			711			3.9			1.7						2,063			(2.6)			(3.6)
Net fee income			203			(3.6)			(5.8)						617			5.7			4.6
Gains (losses) on financial transactions (1)			37			211.9			211.4						76			(41.9)			(42.5)
Other operating income			(31)			11.1			8.8						(94)			27.8			26.4
Total income			919			4.7			2.4						2,662			(3.5)			(4.5)
Administrative expenses and amortizations			(425)			12.2			9.9						(1,177)			4.1			3.0
Net operating income			494			(1.0)			(3.2)						1,485			(8.8)			(9.8)
Net loan-loss provisions			(213)			4.1			1.9						(645)			(16.0)			(16.9)
Other gains (losses) and provisions			(1)			(78.1)			(80.0)						(13)			(29.7)			(30.4)
Profit before tax			280			(3.0)			(5.2)						828			(1.9)			(2.9)
Tax on profit			(49)			(27.5)			(29.7)						(179)			(13.0)			(13.9)
Profit from continuing operations			231			4.5			2.3						649			1.7			0.6
Net profit from discontinued operations			—			—			—						—			—			—
Consolidated profit			231			4.5			2.3						649			1.7			0.6
Non-controlling interests			(16)			(0.4)			(2.6)						(47)			(1.1)			(2.1)
Underlying attributable profit to the parent			215			4.9			2.7						602			1.9			0.9
Balance sheet
Loans and advances to customers			32,368			(0.8)			0.2						32,368			12.0			2.8
Cash, central banks and credit institutions			9,682			(15.2)			(14.3)						9,682			(17.4)			(24.2)
Debt instruments			21,343			8.9			10.1						21,343			(4.0)			(11.9)
Other financial assets			6,880			(5.6)			(4.6)						6,880			(44.3)			(48.9)
Other asset accounts			3,300			(3.8)			(2.8)						3,300			8.2			(0.7)
Total assets			73,572			(1.0)			0.0						73,572			(6.0)			(13.8)
Customer deposits			35,581			(0.4)			0.6						35,581			1.9			(6.5)
Central banks and credit institutions			13,625			2.8			3.8						13,625			(2.6)			(10.6)
Marketable debt securities			6,187			0.4			1.4						6,187			(16.3)			(23.1)
Other financial liabilities			9,144			(10.9)			(10.0)						9,144			(32.6)			(38.1)
Other liabilities accounts			2,077			(1.6)			(0.6)						2,077			(17.9)			(24.7)
Total liabilities			66,615			(1.3)			(0.3)						66,615			(8.0)			(15.5)
Total equity			6,957			1.8			2.8						6,957			18.0			8.3
Memorandum items:
Gross loans and advances to customers (2)			31,777			(1.0)			0.0						31,777			6.6			(2.1)
Customer funds			43,132			0.6			1.6						43,132			14.1			4.7
Customer deposits (3)			31,377			0.9			1.9						31,377			13.1			3.8
Mutual funds			11,754			(0.1)			0.9						11,754			16.8			7.2
Ratios (%), operating means and customers
Underlying RoTE			14.06			0.15									13.56			(1.57)
Efficiency ratio			46.2			3.1									44.2			3.2
NPL ratio			3.14			0.03									3.14			0.80
Total coverage ratio			90.1			(0.5)									90.1			(42.5)
Number of employees			27,027			5.8									27,027			24.1
Number of branches			1,374			(0.1)									1,374			(3.9)
Number of loyal customers (thousands)			3,784			1.9									3,784			11.0
Number of digital customers (thousands)			5,292			3.4									5,292			11.5

(1) Includes exchange differences.

(2) Excluding reverse repos.

(3) Excluding repos.

January - September 2021						63

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Financial information by segment

Other North America
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			—			75.7			75.7						—			(29.2)			(29.2)
Net fee income			9			22.9			22.9						24			49.4			49.4
Gains (losses) on financial transactions (1)			—			—			—						—			(82.6)			(82.6)
Other operating income			1			—			—						(6)			—			—
Total income			10			92.9			92.9						18			14.7			14.7
Administrative expenses and amortizations			(35)			10.7			10.7						(94)			285.7			285.7
Net operating income			(25)			(6.1)			(6.1)						(77)			751.2			751.2
Net loan-loss provisions			—			—			—						—			—			—
Other gains (losses) and provisions			(31)			—			—						(31)			—			—
Profit before tax			(55)			106.6			106.6						(108)			870.0			870.0
Tax on profit			3			53.9			53.9						6			10.1			10.1
Profit from continuing operations			(52)			110.6			110.6						(102)			—			—
Net profit from discontinued operations			—			—			—						—			—			—
Consolidated profit			(52)			110.6			110.6						(102)			—			—
Non-controlling interests			—			(77.7)			(77.7)						—			(21.3)			(21.3)
Underlying attributable profit to the parent			(52)			111.1			111.1						(102)			—			—
Balance sheet
Loans and advances to customers			18			2.0			2.0						18			53.8			53.8
Cash, central banks and credit institutions			240			12.3			12.3						240			145.2			145.2
Debt instruments			—			—			—						—			(100.0)			(100.0)
Other financial assets			1			(59.4)			(59.4)						1			(99.2)			(99.2)
Other asset accounts			282			6.3			6.3						282			30.0			30.0
Total assets			541			8.5			8.5						541			34.9			34.9
Customer deposits			9			(9.6)			(9.6)						9			(37.8)			(37.8)
Central banks and credit institutions			36			124.7			124.7						36			32.9			32.9
Marketable debt securities			—			—			—						—			—			—
Other financial liabilities			46			(0.4)			(0.4)						46			158.6			158.6
Other liabilities accounts			44			94.7			94.7						44			219.7			219.7
Total liabilities			136			42.3			42.3						136			83.4			83.4
Total equity			406			0.5			0.5						406			24.0			24.0
Memorandum items:
Gross loans and advances to customers (2)			18			(1.3)			(1.3)						18			51.1			51.1
Customer funds			9			(9.6)			(9.6)						9			(37.8)			(37.8)
Customer deposits (3)			9			(9.6)			(9.6)						9			(37.8)			(37.8)
Mutual funds			—			—			—						—			—			—
Resources
Number of employees			624			20.7									624			89.1

(1) Includes exchange differences.

(2) Excluding reverse repos.

(3) Excluding repos.

64						January - September 2021

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Financial information by segment

SOUTH AMERICA																					Q
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			2,920			5.8			4.2						8,254			1.2			12.8
Net fee income			956			3.1			0.8						2,726			0.8			13.2
Gains (losses) on financial transactions (1)			206			16.3			15.8						589			(3.0)			6.4
Other operating income			(92)			(0.7)			(1.4)						(267)			118.5			156.5
Total income			3,991			5.8			4.0						11,302			(0.4)			11.0
Administrative expenses and amortizations			(1,398)			7.6			6.1						(3,916)			(2.7)			8.6
Net operating income			2,593			4.8			2.9						7,386			0.9			12.4
Net loan-loss provisions			(892)			10.3			8.0						(2,384)			(26.0)			(17.8)
Other gains (losses) and provisions			(124)			123.8			119.9						(312)			17.2			36.2
Profit before tax			1,577			(2.0)			(3.7)						4,691			22.3			36.3
Tax on profit			(613)			3.0			0.6						(1,807)			26.6			41.8
Profit from continuing operations			964			(4.9)			(6.1)						2,883			19.7			33.1
Net profit from discontinued operations			—			—			—						—			—			—
Consolidated profit			964			(4.9)			(6.1)						2,883			19.7			33.1
Non-controlling interests			(138)			(3.2)			(2.1)						(413)			39.8			48.6
Underlying attributable profit to the parent			826			(5.2)			(6.8)						2,471			16.9			30.8
Balance sheet
Loans and advances to customers			121,133			(2.9)			3.3						121,133			11.1			10.0
Cash, central banks and credit institutions			47,010			(6.8)			(1.3)						47,010			15.2			13.7
Debt instruments			51,730			3.6			9.8						51,730			19.4			16.5
Other financial assets			16,326			31.1			40.9						16,326			(3.8)			(4.3)
Other asset accounts			15,777			(2.9)			2.9						15,777			(1.1)			(3.0)
Total assets			251,976			(0.7)			5.5						251,976			11.4			9.9
Customer deposits			121,470			(2.4)			3.4						121,470			10.0			8.8
Central banks and credit institutions			45,869			2.5			9.1						45,869			24.6			23.2
Marketable debt securities			22,810			(0.7)			6.4						22,810			10.0			7.8
Other financial liabilities			33,881			6.8			13.9						33,881			7.4			5.3
Other liabilities accounts			8,066			(11.8)			(6.4)						8,066			2.1			(0.3)
Total liabilities			232,096			(0.4)			5.8						232,096			11.9			10.4
Total equity			19,881			(4.4)			1.3						19,881			6.5			5.1
Memorandum items:
Gross loans and advances to customers (2)			126,335			(2.9)			3.4						126,335			11.2			10.1
Customer funds			162,588			(3.4)			2.5						162,588			11.0			9.6
Customer deposits (3)			111,092			(3.9)			1.9						111,092			11.6			10.9
Mutual funds			51,496			(2.4)			3.8						51,496			9.6			6.7
Ratios (%), operating means and customers
Underlying RoTE			19.58			(1.54)									20.13			3.07
Efficiency ratio			35.0			0.6									34.6			(0.8)
NPL ratio			4.38			0.02									4.38			(0.02)
Total coverage ratio			98.8			0.6									98.8			1.5
Number of employees			69,961			4.1									69,961			5.2
Number of branches			4,443			0.1									4,443			(0.1)
Number of loyal customers (thousands)			10,043			4.5									10,043			23.5
Number of digital customers (thousands)			23,531			3.8									23,531			18.2

(1) Includes exchange differences.

(2) Excluding reverse repos.

(3) Excluding repos.

January - September 2021						65

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Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Financial information by segment

Brazil																					Q
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			2,083			8.5			5.1						5,782			(1.0)			11.9
Net fee income			696			(0.2)			(3.7)						2,027			(5.6)			6.7
Gains (losses) on financial transactions (1)			122			55.7			53.0						328			(7.3)			4.8
Other operating income			(19)			34.4			31.1						(52)			177.0			213.2
Total income			2,882			7.5			4.0						8,085			(2.8)			9.8
Administrative expenses and amortizations			(864)			10.8			7.3						(2,366)			(10.5)			1.1
Net operating income			2,019			6.1			2.7						5,719			0.7			13.9
Net loan-loss provisions			(757)			12.4			8.9						(1,980)			(20.1)			(9.7)
Other gains (losses) and provisions			(89)			215.8			222.5						(214)			(5.6)			6.7
Profit before tax			1,172			(2.3)			(5.8)						3,526			18.6			34.1
Tax on profit			(517)			0.3			(3.2)						(1,563)			24.3			40.6
Profit from continuing operations			655			(4.3)			(7.7)						1,963			14.4			29.3
Net profit from discontinued operations			—			—			—						—			—			—
Consolidated profit			655			(4.3)			(7.7)						1,963			14.4			29.3
Non-controlling interests			(73)			12.0			8.6						(201)			17.9			33.3
Underlying attributable profit to the parent			582			(6.0)			(9.5)						1,762			14.0			28.9
Balance sheet
Loans and advances to customers			70,737			(4.0)			1.8						70,737			18.2			12.7
Cash, central banks and credit institutions			29,913			(8.3)			(2.8)						29,913			6.0			1.0
Debt instruments			38,036			1.0			7.1						38,036			14.2			8.8
Other financial assets			6,178			3.7			10.0						6,178			3.2			(1.6)
Other asset accounts			11,084			(5.5)			0.2						11,084			(3.0)			(7.5)
Total assets			155,948			(3.5)			2.3						155,948			12.4			7.1
Customer deposits			73,772			(3.7)			2.1						73,772			6.2			1.2
Central banks and credit institutions			27,768			(3.7)			2.2						27,768			38.4			31.9
Marketable debt securities			14,160			4.4			10.8						14,160			17.5			12.0
Other financial liabilities			22,303			(0.6)			5.4						22,303			14.9			9.5
Other liabilities accounts			5,126			(22.8)			(18.2)						5,126			(14.6)			(18.6)
Total liabilities			143,129			(3.3)			2.5						143,129			12.7			7.4
Total equity			12,819			(5.7)			0.0						12,819			9.2			4.1
Memorandum items:
Gross loans and advances to customers (2)			74,431			(3.8)			2.1						74,431			18.3			12.7
Customer funds			103,765			(5.1)			0.7						103,765			8.6			3.5
Customer deposits (3)			63,422			(6.4)			(0.7)						63,422			8.3			3.2
Mutual funds			40,343			(2.9)			2.9						40,343			9.0			3.9
Ratios (%), operating means and customers
Underlying RoTE			20.56			(2.17)									21.64			3.27
Efficiency ratio			30.0			0.9									29.3			(2.5)
NPL ratio			4.72			0.17									4.72			0.08
Total coverage ratio			111.8			(0.5)									111.8			(3.1)
Number of employees			47,877			6.1									47,877			9.6
Number of branches			3,591			—									3,591			0.8
Number of loyal customers (thousands)			7,509			5.1									7,509			25.9
Number of digital customers (thousands)			18,247			4.5									18,247			20.0

(1) Includes exchange differences.

(2) Excluding reverse repos.

(3) Excluding repos.

66						January - September 2021

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Financial information by segment

Chile																					Q
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			467			(8.7)			(3.5)						1,476			14.1			11.8
Net fee income			104			8.5			14.0						294			22.5			20.0
Gains (losses) on financial transactions (1)			29			(39.8)			(35.9)						110			(29.5)			(31.0)
Other operating income			(17)			(3.7)			0.6						(45)			130.8			126.0
Total income			583			(8.6)			(3.5)						1,834			9.9			7.6
Administrative expenses and amortizations			(229)			(6.7)			(1.6)						(710)			4.2			2.1
Net operating income			354			(9.7)			(4.7)						1,125			13.8			11.5
Net loan-loss provisions			(84)			2.5			8.5						(266)			(46.9)			(48.0)
Other gains (losses) and provisions			(5)			—			—						(2)			—			—
Profit before tax			265			(15.9)			(11.1)						857			71.5			67.9
Tax on profit			(59)			(15.7)			(11.1)						(183)			71.4			67.9
Profit from continuing operations			206			(16.0)			(11.2)						674			71.5			68.0
Net profit from discontinued operations			—			—			—						—			—			—
Consolidated profit			206			(16.0)			(11.2)						674			71.5			68.0
Non-controlling interests			(64)			(16.3)			(11.5)						(211)			70.4			66.9
Underlying attributable profit to the parent			142			(15.9)			(11.0)						463			72.0			68.5
Balance sheet
Loans and advances to customers			37,851			(5.2)			3.4						37,851			(1.3)			0.4
Cash, central banks and credit institutions			9,573			(18.5)			(11.2)						9,573			47.0			49.5
Debt instruments			9,682			16.4			26.9						9,682			46.4			48.9
Other financial assets			9,901			57.3			71.5						9,901			(7.9)			(6.3)
Other asset accounts			3,011			4.4			13.9						3,011			(0.6)			1.2
Total assets			70,017			1.2			10.4						70,017			7.3			9.2
Customer deposits			31,509			(5.4)			3.1						31,509			17.4			19.5
Central banks and credit institutions			12,903			10.6			20.6						12,903			3.0			4.8
Marketable debt securities			8,323			(8.4)			(0.1)						8,323			(2.7)			(1.0)
Other financial liabilities			10,683			25.5			36.8						10,683			(6.5)			(4.9)
Other liabilities accounts			2,230			19.2			29.9						2,230			77.3			80.4
Total liabilities			65,648			1.9			11.1						65,648			8.3			10.2
Total equity			4,370			(7.3)			1.1						4,370			(6.4)			(4.7)
Memorandum items:
Gross loans and advances to customers (2)			38,927			(5.3)			3.2						38,927			(1.2)			0.5
Customer funds			40,165			(5.1)			3.5						40,165			15.1			17.1
Customer deposits (3)			31,480			(5.4)			3.1						31,480			17.5			19.6
Mutual funds			8,684			(3.8)			4.8						8,684			7.2			9.1
Ratios (%), operating means and customers
Underlying RoTE			18.23			(1.68)									18.46			7.47
Efficiency ratio			39.3			0.8									38.7			(2.1)
NPL ratio			4.36			(0.20)									4.36			(0.40)
Total coverage ratio			64.1			0.3									64.1			4.4
Number of employees			10,570			(0.5)									10,570			(5.6)
Number of branches			332			—									332			(6.2)
Number of loyal customers (thousands)			807			3.8									807			11.0
Number of digital customers (thousands)			1,934			3.6									1,934			29.9

(1) Includes exchange differences.

(2) Excluding reverse repos.

(3) Excluding repos.

January - September 2021						67

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Financial information by segment

Argentina																					Q
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			268			13.9			11.7						708			(1.8)			25.6
Net fee income			110			26.3			23.8						272			34.6			72.2
Gains (losses) on financial transactions (1)			43			26.6			23.6						108			113.3			172.9
Other operating income			(56)			0.5			(1.2)						(159)			122.6			184.8
Total income			365			21.3			18.9						929			3.0			31.8
Administrative expenses and amortizations			(204)			14.2			11.6						(554)			12.7			44.2
Net operating income			161			31.8			29.6						375			(8.7)			16.9
Net loan-loss provisions			(40)			15.1			15.0						(88)			(50.3)			(36.4)
Other gains (losses) and provisions			(29)			(7.4)			(9.7)						(94)			94.8			149.3
Profit before tax			92			63.4			60.3						193			4.3			33.5
Tax on profit			(19)			—			—						(11)			(50.7)			(36.9)
Profit from continuing operations			73			16.4			14.8						182			12.0			43.3
Net profit from discontinued operations			—			—			—						—			—			—
Consolidated profit			73			16.4			14.8						182			12.0			43.3
Non-controlling interests			—			18.0			16.5						(1)			(0.6)			27.2
Underlying attributable profit to the parent			73			16.4			14.8						180			12.1			43.4
Balance sheet
Loans and advances to customers			4,652			4.4			5.2						4,652			3.3			32.2
Cash, central banks and credit institutions			4,101			27.9			29.0						4,101			33.1			70.3
Debt instruments			2,394			9.4			10.4						2,394			13.4			45.1
Other financial assets			79			2.9			3.7						79			24.7			59.6
Other asset accounts			865			3.5			4.4						865			4.8			34.0
Total assets			12,092			12.3			13.3						12,092			14.2			46.2
Customer deposits			8,860			13.8			14.7						8,860			16.5			49.1
Central banks and credit institutions			834			1.3			2.1						834			(15.0)			8.8
Marketable debt securities			63			(0.8)			0.1						63			172.0			248.1
Other financial liabilities			762			12.9			13.9						762			24.0			58.7
Other liabilities accounts			356			13.7			14.7						356			(5.3)			21.2
Total liabilities			10,875			12.6			13.5						10,875			13.3			45.0
Total equity			1,216			10.3			11.3						1,216			23.6			58.1
Memorandum items:
Gross loans and advances to customers (2)			4,928			4.6			5.4						4,928			3.8			32.9
Customer funds			11,285			14.0			15.0						11,285			19.8			53.3
Customer deposits (3)			8,860			13.8			14.7						8,860			16.5			49.1
Mutual funds			2,425			15.0			15.9						2,425			33.5			70.9
Ratios (%), operating means and customers
Underlying RoTE			27.64			0.62									25.33			(3.90)
Efficiency ratio			55.9			(3.5)									59.6			5.1
NPL ratio			3.85			0.52									3.85			0.98
Total coverage ratio			149.3			(18.3)									149.3			(37.0)
Number of employees			8,715			(1.1)									8,715			(6.0)
Number of branches			408			—									408			(4.4)
Number of loyal customers (thousands)			1,604			2.3									1,604			20.1
Number of digital customers (thousands)			2,713			(0.1)									2,713			0.9

(1) Includes exchange differences.

(2) Excluding reverse repos.

(3) Excluding repos.

68						January - September 2021

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Financial information by segment

Other South America
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			102			9.5			8.3						289			(5.1)			6.2
Net fee income			45			(2.2)			(2.9)						133			16.0			27.0
Gains (losses) on financial transactions (1)			13			(26.5)			(25.6)						44			(8.7)			2.2
Other operating income			1			—			—						(11)			(10.7)			(4.9)
Total income			161			5.6			4.8						454			0.0			11.4
Administrative expenses and amortizations			(101)			5.8			4.8						(287)			38.9			52.1
Net operating income			60			5.2			4.6						167			(32.4)			(23.6)
Net loan-loss provisions			(11)			(39.9)			(39.3)						(50)			(24.1)			(15.3)
Other gains (losses) and provisions			(1)			9.7			5.4						(3)			(20.0)			(15.9)
Profit before tax			47			27.9			26.7						115			(35.7)			(26.9)
Tax on profit			(18)			12.2			12.0						(50)			22.6			39.8
Profit from continuing operations			30			39.4			37.4						65			(52.9)			(46.4)
Net profit from discontinued operations			—			—			—						—			—			—
Consolidated profit			30			39.4			37.4						65			(52.9)			(46.4)
Non-controlling interests			—			(54.3)			(53.1)						—			2.9			2.9
Underlying attributable profit to the parent			30			39.0			36.9						65			(52.7)			(46.3)
Balance sheet
Loans and advances to customers			7,893			17.5			17.6						7,893			23.7			28.3
Cash, central banks and credit institutions			3,423			20.0			17.3						3,423			14.4			17.2
Debt instruments			1,618			(9.2)			(10.1)						1,618			24.4			24.8
Other financial assets			168			31.7			35.2						168			(5.5)			(2.0)
Other asset accounts			817			2.5			2.4						817			21.9			22.6
Total assets			13,919			13.4			12.7						13,919			20.8			24.2
Customer deposits			7,329			8.0			5.8						7,329			11.9			14.1
Central banks and credit institutions			4,363			27.6			30.5						4,363			34.4			40.6
Marketable debt securities			264			1.2			0.7						264			151.1			185.1
Other financial liabilities			133			21.5			21.4						133			48.5			53.9
Other liabilities accounts			354			10.2			9.6						354			34.4			36.5
Total liabilities			12,444			14.2			13.5						12,444			21.3			24.9
Total equity			1,476			6.9			6.3						1,476			16.5			18.7
Memorandum items:
Gross loans and advances to customers (2)			8,048			17.1			17.2						8,048			23.6			28.2
Customer funds			7,373			8.0			5.8						7,373			11.9			14.1
Customer deposits (3)			7,329			8.0			5.8						7,329			11.9			14.1
Mutual funds			44			1.6			(2.4)						44			16.7			16.3
Resources
Number of employees			2,799			6.0									2,799			18.6

(1) Includes exchange differences.

(2) Excluding reverse repos.

(3) Excluding repos.

January - September 2021						69

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Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Financial information by segment

DIGITAL CONSUMER BANK																					Q
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			1,077			0.2			0.5						3,207			0.5			(0.1)
Net fee income			222			7.4			7.5						616			8.8			8.8
Gains (losses) on financial transactions (1)			(3)			—			—						7			—			—
Other operating income			73			263.5			261.0						144			144.8			140.2
Total income			1,369			5.2			5.4						3,975			4.2			3.6
Administrative expenses and amortizations			(591)			(3.6)			(3.4)						(1,805)			4.1			3.7
Net operating income			778			13.0			13.3						2,170			4.3			3.6
Net loan-loss provisions			(141)			(1.1)			(0.4)						(449)			(40.4)			(40.7)
Other gains (losses) and provisions			(43)			(3.0)			(2.4)						(119)			—			—
Profit before tax			594			18.4			18.5						1,602			16.8			16.0
Tax on profit			(132)			1.3			1.6						(398)			10.0			9.5
Profit from continuing operations			462			24.4			24.5						1,204			19.3			18.3
Net profit from discontinued operations			—			—			—						—			(100.0)			(100.0)
Consolidated profit			462			24.4			24.5						1,204			19.3			18.3
Non-controlling interests			(96)			2.6			2.5						(269)			21.4			21.4
Underlying attributable profit to the parent			366			31.8			31.9						935			18.7			17.5
Balance sheet
Loans and advances to customers			111,667			(0.9)			(1.0)						111,667			1.1			(0.5)
Cash, central banks and credit institutions			29,690			4.4			4.3						29,690			44.6			43.0
Debt instruments			5,117			(10.8)			(10.7)						5,117			(7.9)			(8.4)
Other financial assets			46			10.4			10.3						46			37.6			35.5
Other asset accounts			6,700			3.4			3.3						6,700			4.7			3.2
Total assets			153,221			(0.1)			(0.2)						153,221			7.1			5.6
Customer deposits			54,396			0.7			0.6						54,396			8.8			7.4
Central banks and credit institutions			46,553			(3.0)			(3.0)						46,553			18.9			16.6
Marketable debt securities			34,259			1.5			1.5						34,259			(4.6)			(5.6)
Other financial liabilities			1,447			(0.5)			(0.5)						1,447			(12.6)			(13.5)
Other liabilities accounts			4,335			3.0			3.0						4,335			6.0			5.1
Total liabilities			140,990			(0.3)			(0.4)						140,990			7.8			6.3
Total equity			12,231			1.8			1.7						12,231			0.1			(1.8)
Memorandum items:
Gross loans and advances to customers (2)			114,420			(1.0)			(1.0)						114,420			1.0			(0.6)
Customer funds			56,628			0.8			0.7						56,628			12.0			10.6
Customer deposits (3)			54,396			0.7			0.6						54,396			8.8			7.4
Mutual funds			2,232			3.9			3.9						2,232			291.4			291.4
Ratios (%), operating means and customers
Underlying RoTE			15.73			3.7									13.23			2.27
Efficiency ratio			43.2			(3.9)									45.4			0.0
NPL ratio			2.15			—									2.15			(0.14)
Total coverage ratio			112.8			0.9									112.8			2.3
Number of employees			15,920			0.5									15,920			(1.1)
Number of branches			308			(1.9)									308			(14.2)
Number of total customers (thousands)			19,120			(1.6)									19,120			(4.5)

(1) Includes exchange differences.

(2) Excluding reverse repos.

(3) Excluding repos.

70						January - September 2021

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Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Financial information by segment

CORPORATE CENTRE																					Q
EUR million
Underlying income statement			Q3'21			Q2'21			%						9M'21			9M'20			%
Net interest income			(354)			(355)			(0.5)						(1,033)			(1,029)			0.4
Net fee income			(2)			(8)			(76.4)						(15)			(26)			(40.6)
Gains (losses) on financial transactions (1)			(49)			(52)			(4.5)						(145)			182			—
Other operating income			(11)			(15)			(27.2)						(23)			(17)			38.4
Total income			(416)			(430)			(3.4)						(1,216)			(889)			36.8
Administrative expenses and amortizations			(89)			(81)			11.0						(249)			(248)			0.2
Net operating income			(505)			(511)			(1.1)						(1,465)			(1,137)			28.8
Net loan-loss provisions			(6)			(9)			(37.3)						(168)			(27)			522.5
Other gains (losses) and provisions			(43)			(33)			27.9						(108)			(403)			(73.1)
Profit before tax			(553)			(553)			0.0						(1,741)			(1,567)			11.1
Tax on profit			8			19			(59.0)						135			113			20.1
Profit from continuing operations			(545)			(534)			2.1						(1,606)			(1,454)			10.4
Net profit from discontinued operations			—			—			—						—			—			—
Consolidated profit			(545)			(534)			2.1						(1,606)			(1,454)			10.4
Non-controlling interests			—			(1)			(94.3)						(1)			(1)			116.7
Underlying attributable profit to the parent			(545)			(535)			1.9						(1,607)			(1,455)			10.5
Balance sheet
Loans and advances to customers			6,350			5,832			8.9						6,350			4,827			31.5
Cash, central banks and credit institutions			81,150			71,908			12.9						81,150			63,947			26.9
Debt instruments			1,423			1,605			(11.3)						1,423			2,100			(32.2)
Other financial assets			2,157			2,016			7.0						2,157			2,067			4.4
Other asset accounts			116,606			118,374			(1.5)						116,606			114,295			2.0
Total assets			207,687			199,736			4.0						207,687			187,236			10.9
Customer deposits			1,324			1,017			30.2						1,324			1,074			23.3
Central banks and credit institutions			46,173			38,914			18.7						46,173			42,654			8.3
Marketable debt securities			71,720			69,217			3.6						71,720			57,866			23.9
Other financial liabilities			1,495			534			179.9						1,495			1,143			30.8
Other liabilities accounts			7,197			8,009			(10.1)						7,197			7,645			(5.9)
Total liabilities			127,909			117,691			8.7						127,909			110,382			15.9
Total equity			79,778			82,044			(2.8)						79,778			76,854			3.8
Memorandum items:
Gross loans and advances to customers (2)			6,589			6,138			7.4						6,589			5,008			31.6
Customer funds			1,324			1,021			29.6						1,324			1,089			21.6
Customer deposits (3)			1,324			1,017			30.2						1,324			1,074			23.3
Mutual funds			—			4			(90.0)						—			15			(97.1)
Resources
Number of employees			1,710			1,743									1,710			1,743

(1) Includes exchange differences.

(2) Excluding reverse repos.

(3) Excluding repos.

January - September 2021						71

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Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Financial information by segment

RETAIL BANKING																					Q
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			7,968			2.6			1.5						23,206			2.9			7.2
Net fee income			1,746			(0.4)			(1.5)						5,208			(1.8)			3.1
Gains (losses) on financial transactions (1)			216			26.0			22.8						633			(27.8)			(27.5)
Other operating income			243			100.8			97.2						472			—			—
Total income			10,173			3.7			2.5						29,520			3.0			7.3
Administrative expenses and amortizations			(4,336)			2.1			1.2						(12,740)			(2.0)			1.3
Net operating income			5,837			4.9			3.5						16,780			7.1			12.3
Net loan-loss provisions			(2,199)			27.4			26.1						(5,708)			(38.1)			(34.9)
Other gains (losses) and provisions			(445)			(3.9)			(4.8)						(1,312)			58.3			66.3
Profit before tax			3,194			(5.4)			(6.8)						9,759			73.6			81.6
Tax on profit			(905)			(14.4)			(16.1)						(3,010)			60.8			70.7
Profit from continuing operations			2,288			(1.3)			(2.7)						6,749			80.1			86.9
Net profit from discontinued operations			—			—			—						—			—			(57.7)
Consolidated profit			2,288			(1.3)			(2.7)						6,749			80.1			86.9
Non-controlling interests			(329)			(9.6)			(10.4)						(999)			56.0			60.6
Underlying attributable profit to the parent			1,960			0.3			(1.2)						5,750			85.0			92.4

(1) Includes exchange differences.

CORPORATE & INVESTMENT BANKING																					Q
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			747			1.1			0.0						2,207			2.5			7.5
Net fee income			435			0.2			(0.8)						1,335			14.4			19.0
Gains (losses) on financial transactions (1)			144			42.7			42.6						656			7.8			18.6
Other operating income			87			888.7			928.7						154			2.0			0.8
Total income			1,414			10.2			9.2						4,352			6.7			12.1
Administrative expenses and amortizations			(574)			5.7			4.9						(1,642)			8.4			11.8
Net operating income			840			13.5			12.4						2,709			5.7			12.3
Net loan-loss provisions			(7)			(65.1)			(66.0)						(75)			(73.5)			(73.5)
Other gains (losses) and provisions			(1)			—			—						6			—			—
Profit before tax			832			10.9			9.7						2,640			19.1			27.8
Tax on profit			(245)			13.8			12.3						(779)			21.8			31.5
Profit from continuing operations			587			9.8			8.7						1,861			17.9			26.3
Net profit from discontinued operations			—			—			—						—			—			—
Consolidated profit			587			9.8			8.7						1,861			17.9			26.3
Non-controlling interests			(40)			(1.9)			(2.0)						(117)			22.1			32.0
Underlying attributable profit to the parent			547			10.7			9.5						1,744			17.7			25.9

(1) Includes exchange differences.

72						January - September 2021

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Appendix

Financial information by segment

WEALTH MANAGEMENT & INSURANCE																					Q
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			96			4.9			3.8						275			(6.6)			(2.4)
Net fee income			321			1.8			0.8						933			8.9			11.9
Gains (losses) on financial transactions (1)			17			(24.6)			(25.4)						77			33.2			40.8
Other operating income			181			102.9			102.4						351			27.2			30.4
Total income			616			18.6			17.7						1,637			10.2			13.6
Administrative expenses and amortizations			(221)			(2.4)			(3.4)						(668)			1.9			4.7
Net operating income			395			34.8			34.0						969			16.7			20.7
Net loan-loss provisions			(6)			113.9			114.2						(14)			(39.4)			(39.1)
Other gains (losses) and provisions			16			—			—						12			—			—
Profit before tax			405			40.3			39.5						966			20.7			24.9
Tax on profit			(105)			49.2			48.5						(242)			27.6			31.3
Profit from continuing operations			300			37.5			36.7						724			18.5			22.9
Net profit from discontinued operations			—			—			—						—			—			—
Consolidated profit			300			37.5			36.7						724			18.5			22.9
Non-controlling interests			(8)			(2.7)			(1.9)						(26)			(3.5)			1.6
Underlying attributable profit to the parent			292			39.2			38.2						698			19.5			23.9

(1) Includes exchange differences.

PAGONXT																					Q
EUR million
						/			Q2'21									/			9M'20
Underlying income statement			Q3'21			%			% excl. FX						9M'21			%			% excl. FX
Net interest income			—			—			—						(2)			396.4			847.6
Net fee income			141			10.5			8.0						349			34.5			45.4
Gains (losses) on financial transactions (1)			(2)			228.8			221.9						(1)			(4.1)			(13.4)
Other operating income			5			—			—						(13)			548.1			588.5
Total income			144			17.7			15.1						334			30.3			40.9
Administrative expenses and amortizations			(181)			11.4			10.4						(479)			59.2			67.0
Net operating income			(36)			(8.1)			(4.2)						(145)			224.9			191.3
Net loan-loss provisions			(2)			1.0			(2.5)						(7)			(31.7)			(23.4)
Other gains (losses) and provisions			(34)			889.8			884.9						(39)			—			—
Profit before tax			(73)			60.8			64.9						(191)			247.7			220.5
Tax on profit			(6)			(44.6)			(49.7)						(15)			110.6			198.9
Profit from continuing operations			(79)			41.6			43.3						(207)			231.8			218.8
Net profit from discontinued operations			—			—			—						—			—			—
Consolidated profit			(79)			41.6			43.3						(207)			231.8			218.8
Non-controlling interests			—			—			—						—			(57.6)			(57.6)
Underlying attributable profit to the parent			(79)			42.0			43.7						(206)			236.9			223.4

(1) Includes exchange differences.

January - September 2021						73

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Appendix

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 and 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 categorised 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 11 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 2021
			Underlying results			Adjustments			Statutory results
Net interest income			24,654			—			24,654
Net fee income			7,810			—			7,810
Gains (losses) on financial transactions (1)			1,220			—			1,220
Other operating income			942			—			942
Total income			34,626			—			34,626
Administrative expenses and amortizations			(15,778)			—			(15,778)
Net operating income			18,848			—			18,848
Net loan-loss provisions			(5,973)			—			(5,973)
Other gains (losses) and provisions			(1,443)			(716)			(2,159)
Profit before tax			11,432			(716)			10,716
Tax on profit			(3,911)			186			(3,725)
Profit from continuing operations			7,521			(530)			6,991
Net profit from discontinued operations			—			—			—
Consolidated profit			7,521			(530)			6,991
Non-controlling interests			(1,142)			—			(1,142)
Attributable profit to the parent			6,379			(530)			5,849

(1) Includes exchange differences.

Explanation of adjustments:

Restructuring costs for a net impact of -EUR 530 million: -EUR 293 million in the UK, -EUR 165 million in Portugal, -EUR 16 million in Digital Consumer Bank and -EUR 56 million in the Corporate Centre.

74						January - September 2021

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Appendix

Alternative performance measures

Reconciliation of underlying results to statutory results
EUR million
			January-September 2020
			Underlying results			Adjustments			Statutory results
Net interest income			23,975			—			23,975
Net fee income			7,559			—			7,559
Gains (losses) on financial transactions (1)			1,725			—			1,725
Other operating income			346			(250)			96
Total income			33,605			(250)			33,355
Administrative expenses and amortizations			(15,726)			(60)			(15,786)
Net operating income			17,879			(310)			17,569
Net loan-loss provisions			(9,562)			—			(9,562)
Other gains (losses) and provisions			(1,301)			(9,977)			(11,278)
Profit before tax			7,016			(10,287)			(3,271)
Tax on profit			(2,596)			(2,424)			(5,020)
Profit from continuing operations			4,420			(12,711)			(8,291)
Net profit from discontinued operations			—			—			—
Consolidated profit			4,420			(12,711)			(8,291)
Non-controlling interests			(762)			5			(757)
Attributable profit to the parent			3,658			(12,706)			(9,048)

(1) Includes exchange differences.

Explanation of adjustments:

Adjustment to the valuation of goodwill of EUR -10,100 million, adjustment has been made to deferred tax assets of the Spanish consolidated fiscal group of EUR -2,500 million and restructuring costs and other for a net impact of EUR -106 million.

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Appendix

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.

Ratio

Formula

Relevance of the metric

RoE

Attributable profit to the parent

This 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 attributable profit to the parent

This 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

Attributable profit 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 RoTE

Underlying attributable profit to the parent

This 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

RoA

Consolidated profit

This 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 RoA

Underlying consolidated profit

This 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

RoRWA

Consolidated profit

The 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 RoRWA

Underlying consolidated profit

This 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 + Attributable profit 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)			Q3'21			Q2'21			9M'21			9M'20
RoE			10.16		%	9.91		%	9.54		%	-8.54		%
Attributable profit to the parent			8,696			8,268			7,975			-7,829
Average stockholders' equity (excluding minority interests)			85,608			83,429			83,574			91,639
Underlying RoE			10.16		%	9.91		%	10.18		%	5.32		%
Attributable profit to the parent			8,696			8,268			7,975			-7,829
(-) Net capital gains and provisions			—			—			-530			-12,706
Underlying attributable profit to the parent			8,696			8,268			8,505			4,877
Average stockholders' equity (excluding minority interests)			85,608			83,429			83,574			91,639
RoTE			12.56		%	12.29		%	11.82		%	3.30		%
Attributable profit to the parent			8,696			8,268			7,975			-7,829
(+) Goodwill impairment			—			—			—			-10,100
Attributable profit to the parent (excluding goodwill impairment)			8,696			8,268			7,975			2,271
Average stockholders' equity (excluding minority interests)			85,608			83,429			83,574			91,639
(-) Average intangible assets			16,366			16,131			16,109			22,748
Average stockholders' equity (excl. minority interests) - intangible assets			69,243			67,298			67,466			68,892
Underlying RoTE			12.56		%	12.29		%	12.61		%	7.08		%
Attributable profit to the parent			8,696			8,268			7,975			-7,829
(-) Net capital gains and provisions			—			—			-530			-12,706
Underlying attributable profit to the parent			8,696			8,268			8,505			4,877
Average stockholders' equity (excl. minority interests) - intangible assets			69,243			67,298			67,466			68,892
RoA			0.65		%	0.64		%	0.61		%	-0.44		%
Consolidated profit			10,204			9,924			9,498			-6,818
Average total assets			1,575,975			1,557,364			1,550,943			1,543,361
Underlying RoA			0.65		%	0.64		%	0.65		%	0.38		%
Consolidated profit			10,204			9,924			9,498			-6,818
(-) Net capital gains and provisions			—			—			-530			-12,711
Underlying consolidated profit			10,204			9,924			10,028			5,893
Average total assets			1,575,975			1,557,364			1,550,943			1,543,361
RoRWA			1.76		%	1.74		%	1.66		%	-1.17		%
Consolidated profit			10,204			9,924			9,498			-6,818
Average risk weighted-assets			580,226			570,828			570,653			583,448
Underlying RoRWA			1.76		%	1.74		%	1.76		%	1.01		%
Consolidated profit			10,204			9,924			9,498			-6,818
(-) Net capital gains and provisions			—			—			-530			-12,711
Underlying consolidated profit			10,204			9,924			10,028			5,893
Average risk-weighted assets			580,226			570,828			570,653			583,448
Efficiency ratio			45.3		%	46.5		%	45.6		%	46.8		%
Underlying operating expenses			5,401			5,259			15,778			15,726
Operating expenses			5,401			5,259			15,778			15,786
Net capital gains and provisions impact in operating expenses			—			—			—			-60
Underlying total income			11,931			11,305			34,626			33,605
Total income			11,931			11,305			34,626			33,355
Net capital gains and provisions impact in total income			—			—			—			250
(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 annual figures (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).

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Alternative performance measures

Efficiency ratio
			9M'21									9M'20
			%			Total income			Operating expenses			%			Total income			Operating expenses
Europe			50.3			12,299			6,191			56.9			10,998			6,259
Spain			47.3			5,359			2,537			53.1			5,150			2,734
United Kingdom			53.4			3,625			1,937			66.1			2,932			1,938
Portugal			41.2			1,042			429			45.1			979			442
Poland			41.0			1,179			483			41.8			1,136			475
North America			43.8			8,266			3,617			41.5			8,335			3,462
US			42.0			5,586			2,346			41.5			5,559			2,307
Mexico			44.2			2,662			1,177			41.0			2,760			1,130
South America			34.6			11,302			3,916			35.5			11,346			4,023
Brazil			29.3			8,085			2,366			31.8			8,322			2,644
Chile			38.7			1,834			710			40.8			1,669			681
Argentina			59.6			929			554			54.5			902			491
Digital Consumer Bank			45.4			3,975			1,805			45.4			3,814			1,733

Underlying RoTE
			9M'21									9M'20
			%			Underlying attributable profit to the parent			Average stockholders' equity (excl. minority interests) - intangible assets			%			Underlying attributable profit to the parent			Average stockholders' equity (excl. minority interests) - intangible assets
Europe			7.63			3,057			40,079			3.93			1,543			39,242
Spain			6.48			973			15,021			4.21			662			15,716
United Kingdom			11.53			1,527			13,239			2.24			294			13,121
Portugal			11.19			452			4,036			8.50			324			3,810
Poland			5.10			166			3,264			5.91			189			3,193
North America			13.39			3,051			22,787			6.68			1,407			21,054
US			14.31			2,385			16,668			3.99			627			15,708
Mexico			13.56			802			5,918			15.13			787			5,205
South America			20.13			3,294			16,361			17.06			2,818			16,514
Brazil			21.64			2,349			10,856			18.37			2,060			11,217
Chile			18.46			617			3,344			10.99			359			3,264
Argentina			25.33			240			949			29.23			215			734
Digital Consumer Bank			13.23			1,246			9,419			10.96			1,050			9,580

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Appendix

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.

Ratio

Formula

Relevance of the metric

NPL ratio (Non-performing loans)

Credit impaired loans and advances to customers, customer guarantees and customer commitments granted

The 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 ratio

Total allowances to cover impairment losses on loans and advances to customers, customer guarantees and customer commitments granted

The 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 credit

Allowances for loan-loss provisions over the last 12 months

This 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-21			Jun-21			Sep-21			Sep-20
NPL ratio			3.18		%	3.22		%	3.18		%	3.15		%
Credit impaired loans and advances to customers, customer guarantees and customer commitments granted			33,046			33,266			33,046			30,894
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 impaired			31,237			31,705			31,237			29,298
POCI exposure (Purchased or Originated Credit Impaired) that is currently impaired			392			431			392			563
Customer guarantees and customer commitments granted classified in stage 3			1,409			1,122			1,409			1,022
Doubtful exposure of loans and advances to customers at fair value through profit or loss			8			8			8			11
Total risk			1,038,796			1,032,084			1,038,796			982,286
Impaired and non-impaired gross loans and advances to customers			982,097			978,096			982,097			933,509
Impaired and non-impaired customer guarantees and customer commitments granted			56,699			53,988			56,699			48,777

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Alternative performance measures

Credit risk (II)			Sep-21			Jun-21			Sep-21			Sep-20
Total coverage ratio			74		%	73		%	74		%	76		%
Total allowances to cover impairment losses on loans and advances to customers, customer guarantees and customer commitments granted			24,462			24,239			24,462			23,465
Total allowances to cover impairment losses on loans and advances to customers measured at amortised cost and designated at fair value through OCI			23,786			23,577			23,786			22,797
Total allowances to cover impairment losses on customer guarantees and customer commitments granted			676			662			676			668
Credit impaired loans and advances to customers, customer guarantees and customer commitments granted			33,046			33,266			33,046			30,894
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 impaired			31,237			31,705			31,237			29,298
POCI exposure (Purchased or Originated Credit Impaired) that is currently impaired			392			431			392			563
Customer guarantees and customer commitments granted classified in stage 3			1,409			1,122			1,409			1,022
Doubtful exposure of loans and advances to customers at fair value through profit or loss			8			8			8			11
Cost of credit			0.90		%	0.94		%	0.90		%	1.27		%
Underlying allowances for loan-loss provisions over the last 12 months			8,584			8,899			8,584			12,135
Average loans and advances to customers over the last 12 months			956,925			948,351			956,925			956,416

NPL ratio
			9M'21									9M'20
			%			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
Europe			3.15			20,088			638,207			3.29			19,914			605,380
Spain			5.99			13,283			221,787			5.98			13,159			220,032
United Kingdom			1.27			3,354			263,747			1.33			3,339			250,906
Portugal			3.44			1,437			41,833			4.25			1,711			40,291
Poland			4.34			1,415			32,586			4.58			1,452			31,711
North America			2.56			3,588			140,314			1.96			2,617			133,219
US			2.36			2,474			104,794			1.85			1,877			101,499
Mexico			3.14			1,114			35,520			2.33			740			31,707
South America			4.38			6,095			139,167			4.40			5,447			123,682
Brazil			4.72			3,947			83,610			4.64			3,240			69,886
Chile			4.36			1,801			41,278			4.76			1,976			41,483
Argentina			3.85			191			4,951			2.88			137			4,765
Digital Consumer Bank			2.15			2,469			114,781			2.29			2,599			113,607

80						January - September 2021

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Group financial information

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Responsible banking Corporate governance Santander share

Appendix

Alternative performance measures

Total coverage ratio
			9M'21									9M'20
			%			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			%			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
Europe			51.1			10,258			20,088			48.7			9,699			19,914
Spain			48.8			6,486			13,283			46.0			6,052			13,159
United Kingdom			36.6			1,226			3,354			41.6			1,389			3,339
Portugal			75.5			1,086			1,437			64.3			1,100			1,711
Poland			74.6			1,055			1,415			70.8			1,028			1,452
North America			139.3			4,999			3,588			201.6			5,277			2,617
US			161.5			3,994			2,474			228.8			4,296			1,877
Mexico			90.1			1,004			1,114			132.6			981			740
South America			98.8			6,019			6,095			97.2			5,295			5,447
Brazil			111.8			4,412			3,947			114.9			3,721			3,240
Chile			64.1			1,155			1,801			59.7			1,181			1,976
Argentina			149.3			285			191			186.3			255			137
Digital Consumer Bank			112.8			2,785			2,469			110.6			2,873			2,599

Cost of credit
			9M'21									9M'20
			%			Underlying allowances for loan-loss provisions over the last 12 months			Average loans and advances to customers over the last 12 months			%			Underlying allowances for loan-loss provisions over the last 12 months			Average loans and advances to customers over the last 12 months
Europe			0.48			2,805			585,485			0.48			2,761			578,190
Spain			1.01			2,000			198,956			0.80			1,566			196,460
United Kingdom			0.01			30			216,521			0.26			670			256,439
Portugal			0.35			136			39,473			0.42			156			37,315
Poland			0.82			241			29,586			0.99			300			30,354
North America			1.46			1,868			128,061			3.07			4,193			136,521
US			1.06			1,011			95,385			3.08			3,204			103,905
Mexico			2.69			856			31,829			2.97			989			33,285
South America			2.52			3,086			122,237			3.50			4,237			121,097
Brazil			3.60			2,519			70,034			4.58			3,291			71,837
Chile			0.89			360			40,279			1.59			629			39,660
Argentina			3.51			137			3,897			5.54			231			4,164
Digital Consumer Bank			0.57			653			115,012			0.79			908			114,757

January - September 2021						81

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Appendix

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 analyze 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.

Ratio

Formula

Relevance 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 customers

This 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 repos

In 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 repos

In 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 customers

Metric to assess Wealth Management & Insurance's total contribution to Grupo Santander profit.

(1) Tangible book value = Stockholders' equity - intangible assets

Others			Sep-21			Jun-21			Sep-21			Sep-20
TNAV (tangible book value) per share (2)			3.99			3.98			3.99			3.82
Tangible book value			69,142			68,917			69,142			66,048
Number of shares excl. treasury stock (million) (2)			17,331			17,306			17,331			17,310
Price / Tangible book value per share (X)			0.79			0.81			0.79			0.40
Share price (euros) (2)			3.137			3.220			3.137			1.533
TNAV (tangible book value) per share (2)			3.99			3.98			3.99			3.82
Loan-to-deposit ratio			105		%	107		%	105		%	108		%
Net loans and advances to customers			958,311			954,518			958,311			910,714
Customer deposits			909,034			894,127			909,034			842,899
			Q3'21			Q2'21			9M'21			9M'20
PAT + After tax fees paid to SAN (in WM&I) (Constant EUR million)			644			561			1,733			1,496
Profit after tax			299			219			724			589
Net fee income net of tax			345			342			1,008			906

(2) September 2020 data adjusted for the capital increase in December 2020.

82						January - September 2021

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Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

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 2021 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 2021 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'21			9M'20						Sep-21			Jun-21			Sep-20
US dollar			1.196			1.124						1.160			1.186			1.175
Pound sterling			0.863			0.884						0.858			0.858			0.908
Brazilian real			6.367			5.632						6.300			5.941			6.610
Mexican peso			24.069			24.318						23.826			23.587			25.963
Chilean peso			882.025			900.730						941.091			863.161			924.900
Argentine peso			111.546			75.359						114.500			113.539			89.483
Polish zloty			4.547			4.420						4.599			4.519			4.530

January - September 2021						83

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Appendix

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 2021 and 2020 (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
ASSETS			Sep-21			Dec-20			Sep-20
Cash, cash balances at central banks and other deposits on demand			191,035			153,839			148,175
Financial assets held for trading			122,967			114,945			117,654
Non-trading financial assets mandatorily at fair value through profit or loss			5,156			4,486			4,293
Financial assets designated at fair value through profit or loss			36,970			48,717			62,714
Financial assets at fair value through other comprehensive income			109,570			120,953			117,461
Financial assets at amortized cost			1,011,994			958,378			950,571
Hedging derivatives			5,404			8,325			10,866
Changes in the fair value of hedged items in portfolio hedges of interest risk			991			1,980			2,155
Investments			7,684			7,622			7,679
Joint ventures entities			1,669			1,492			1,306
Associated entities			6,015			6,130			6,373
Assets under insurance or reinsurance contracts			257			261			1,582
Tangible assets			32,446			32,735			33,277
Property, plant and equipment			31,515			31,772			32,327
For own-use			12,619			13,213			13,233
Leased out under an operating lease			18,896			18,559			19,094
Investment property			931			963			950
Of which : Leased out under an operating lease			821			793			821
Intangible assets			16,246			15,908			15,698
Goodwill			12,645			12,471			12,359
Other intangible assets			3,601			3,437			3,339
Tax assets			24,544			24,586			26,397
Current tax assets			5,008			5,340			6,405
Deferred tax assets			19,536			19,246			19,992
Other assets			8,745			11,070			11,086
Insurance contracts linked to pensions			157			174			186
Inventories			4			5			4
Other			8,584			10,891			10,896
Non-current assets held for sale			4,286			4,445			4,634
TOTAL ASSETS			1,578,295			1,508,250			1,514,242

84						January - September 2021

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Appendix

Condensed consolidated financial statements

Interim condensed consolidated balance sheet
EUR million
LIABILITIES			Sep-21			Dec-20			Sep-20
Financial liabilities held for trading			80,147			81,167			88,128
Financial liabilities designated at fair value through profit or loss			47,900			48,038			59,459
Financial liabilities at amortized cost			1,317,759			1,248,188			1,237,314
Hedging derivatives			5,821			6,869			6,099
Changes in the fair value of hedged items in portfolio hedges of interest rate risk			402			286			265
Liabilities under insurance or reinsurance contracts			779			910			970
Provisions			9,815			10,852			10,118
Pensions and other post-retirement obligations			3,337			3,976			4,034
Other long term employee benefits			1,298			1,751			1,120
Taxes and other legal contingencies			2,025			2,200			2,189
Contingent liabilities and commitments			674			700			672
Other provisions			2,481			2,225			2,103
Tax liabilities			8,516			8,282			8,667
Current tax liabilities			2,269			2,349			2,480
Deferred tax liabilities			6,247			5,933			6,187
Other liabilities			11,532			12,336			11,912
Liabilities associated with non-current assets held for sale			—			—			—
TOTAL LIABILITIES			1,482,671			1,416,928			1,422,932
EQUITY
Shareholders' equity			118,380			114,620			114,493
Capital			8,670			8,670			8,309
Called up paid capital			8,670			8,670			8,309
Unpaid capital which has been called up			—			—			—
Share premium			47,979			52,013			52,446
Equity instruments issued other than capital			650			627			619
Equity component of the compound financial instrument			—			—			—
Other equity instruments issued			650			627			619
Other equity			165			163			171
Accumulated retained earnings			60,273			65,583			67,230
Revaluation reserves			—			—			—
Other reserves			(4,336)			(3,596)			(3,499)
(-) Own shares			(29)			(69)			(73)
Profit attributable to shareholders of the parent			5,849			(8,771)			(9,048)
(-) Interim dividends			(841)			—			(1,662)
Other comprehensive income (loss)			(32,992)			(33,144)			(32,747)
Items not reclassified to profit or loss			(4,522)			(5,328)			(5,056)
Items that may be reclassified to profit or loss			(28,470)			(27,816)			(27,691)
Non-controlling interest			10,236			9,846			9,564
Other comprehensive income			(2,120)			(1,800)			(1,905)
Other items			12,356			11,646			11,469
TOTAL EQUITY			95,624			91,322			91,310
TOTAL LIABILITIES AND EQUITY			1,578,295			1,508,250			1,514,242
MEMORANDUM ITEMS: OFF BALANCE SHEET AMOUNTS
Loan commitments granted			252,301			241,230			235,812
Financial guarantees granted			12,069			12,377			12,247
Other commitments granted			78,730			64,538			71,430

January - September 2021						85

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Appendix

Condensed consolidated financial statements

Interim condensed consolidated income statement
EUR million
			9M'21			9M'20
Interest income			33,629			35,131
Financial assets at fair value through other comprehensive income			2,023			2,348
Financial assets at amortized cost			29,397			30,519
Other interest income			2,209			2,264
Interest expense			(8,975)			(11,156)
Interest income/ (charges)			24,654			23,975
Dividend income			404			322
Income from companies accounted for using the equity method			295			(90)
Commission income			10,132			9,826
Commission expense			(2,322)			(2,267)
Gain or losses on financial assets and liabilities not measured at fair value through profit or loss, net			482			893
Financial assets at amortized cost			95			(23)
Other financial assets and liabilities			387			916
Gain or losses on financial assets and liabilities held for trading, net			729			4,425
Reclassification of financial assets at fair value through other comprehensive income			—			—
Reclassification of financial assets from amortized cost			—			—
Other gains (losses)			729			4,425
Gains or losses on non-trading financial assets and liabilities mandatorily at fair value  through profit or loss			11			73
Reclassification of financial assets at fair value through other comprehensive income			—			—
Reclassification of financial assets from amortized cost			—			—
Other gains (losses)			11			73
Gain or losses on financial assets and liabilities measured at fair value through profit or loss, net			296			(91)
Gain or losses from hedge accounting, net			91			120
Exchange differences, net			(389)			(3,695)
Other operating income			1,735			1,222
Other operating expenses			(1,706)			(1,527)
Income from assets under insurance and reinsurance contracts			1,114			1,030
Expenses from liabilities under insurance and reinsurance contracts			(900)			(861)
Total income			34,626			33,355
Administrative expenses			(13,714)			(13,686)
Staff costs			(8,205)			(8,098)
Other general and administrative expenses			(5,509)			(5,588)
Depreciation and amortization			(2,064)			(2,100)
Provisions or reversal of provisions, net			(2,006)			(1,014)
Impairment or reversal of impairment of financial assets not measured at fair value  through profit or loss and net gains and losses from changes			(6,000)			(9,538)
Financial assets at fair value through other comprehensive income			(27)			(7)
Financial assets at amortized cost			(5,973)			(9,531)
Impairment of investments in subsidiaries, joint ventures and associates, net			—			—
Impairment on non-financial assets, net			(134)			(10,256)
Tangible assets			(116)			(105)
Intangible assets			(15)			(10,149)
Others			(3)			(2)
Gain or losses on non financial assets and investments, net			43			89
Negative goodwill recognized in results			—			9
Gains or losses on non-current assets held for sale not classified as discontinued operations			(35)			(130)
Operating profit/(loss) before tax			10,716			(3,271)
Tax expense or income from continuing operations			(3,725)			(5,020)
Profit/(loss) for the period from continuing operations			6,991			(8,291)
Profit/( loss) after tax from discontinued operations			—			—
Profit/(loss) for the period			6,991			(8,291)
Profit attributable to non-controlling interests			1,142			757
Profit/(loss) attributable to the parent			5,849			(9,048)
Earnings/(losses) per share
Basic			0.31			(0.55)
Diluted			0.31			(0.55)

86						January - September 2021

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Appendix

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

•APM: Alternative Performance Measures

•bps: basis points

•CDI: CREST Depository Interest

•CET1: Core equity tier 1

•CIB: Corporate & Investment Banking

•CNMV: Spanish National Securities Market Commission (Comisión Nacional del Mercado de Valores)

•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

•FX: Foreign Exchange

•GDP: Gross Domestic Product

•GPTW: Great Place to Work

•ICO: Insitituto de Crédito Oficial (Official Credit Institution)

•IFRS 9: International Financial Reporting Standard 9, regarding financial instruments

•IMF: International Monetary Fund

•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.

•LCR: Liquidity Coverage Ratio

•NPLs: Non-performing loans

•NPS: Net Promoter Score

•P/E ratio: Price / earnings per share ratio

•PBT: Profit before tax

•POS: Point of Sale

•pp: percentage points

•PPI: Payment protection insurance

•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

•SGP: Santander Global Platform

•SH USA: Santander Holdings USA, Inc.

•SMEs: Small and medium enterprises

•SPF: Simple, Personal and Fair

•SRF: Single resolution fund

•T1: Tier 1

•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

•UX: User experience

•VaR: Value at Risk

•WM&I: Wealth Management & Insurance

January - September 2021						87

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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 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 2020. 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 its 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 2020 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (the “SEC”) on 26 February 2021, as updated by the Form 6-K filed with the SEC on 14 April 2021 in order to reflect our new organizational and reporting structure, as well as the section “Alternative performance measures” of the annex to this Banco Santander, S.A. (“Santander”) Q3 2021 Financial Report, published as Inside Information on 27 October 2021. These documents are available on Santander’s website (www.santander.com). Underlying measures, which are included in this report, 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 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

Banco Santander, S.A. (“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” and similar expressions. Found throughout this report, they include (but are not limited to) statements on our future business development, economic performance and shareholder remuneration policy. However, a number of risks, uncertainties and other important factors may cause actual developments and results to differ materially from our expectations. The following important factors, in addition to others discussed elsewhere in this report, could affect our future results and could cause materially different outcomes from those anticipated 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; and the effects of the COVID-19 pandemic in the global economy); (2) 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); (3) potential losses from early repayments on our loan and investment portfolio, declines in value of collateral securing our loan portfolio, and counterparty risk; (4) political stability in Spain, the United Kingdom, other European countries, Latin America and the US (5) changes in legislation, regulations, taxes, including regulatory capital and liquidity requirements, especially in view of the UK exit of the European Union and increased regulation in response to financial crisis; (6) 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 (7) 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 group or significant subsidiaries.

Numerous factors could affect our future results and could cause those results deviating from those anticipated in the forward-looking statements. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements.

Forward-looking statements speak only as of the date of this report and are informed by the knowledge, information and views available on such date. Santander is not required to update or revise any forward-looking statements, regardless of new information, future events or otherwise.

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

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Key consolidated data Business model

Group financial information

Financial information by segments

Responsible banking Corporate governance Santander share

Appendix

Important Information

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 or accretion must not be construed to indicate that future performance, share price or future (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 particular, regarding the data provided by third parties, neither Santander, nor any of its administrators, directors or employees, either explicitly or implicitly, guarantees that these contents are exact, accurate, comprehensive or complete, nor are they obliged to keep them updated, nor to correct them in the case that any deficiency, error or omission were to be detected. Moreover, in reproducing these contents in by any means, Santander may introduce any changes it deems suitable, may omit partially or completely any of the elements of this document, and in case of any deviation between such a version and this one, Santander assumes no liability for any discrepancy.

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:    27 October 2021			By:			/s/ José García Cantera
			Name:			José García Cantera
			Title:			Chief Financial Officer