The ordinary general shareholders meeting of Banco Santander, S.A. (Banco Santander, Santander or
the Bank) held on October 27, 2020 resolved, under item Third B of its agenda, to increase the share capital of Banco Santander, with full charge to reserves, in an amount to be determined in accordance with the terms and
conditions set out in the resolution (the Increase), delegating the execution of the Increase to the board of directors, with authority to delegate in turn to the executive committee, pursuant to article 297.1.a) of the
consolidated Spanish Capital Corporations Law, as passed by means of Royal Legislative Decree 1/2010, of 2 July (Spanish Capital Corporations Law).
The executive committee of the Bank, on November 12, 2020, has resolved to execute the Increase in accordance with the terms and
conditions set out by the ordinary general shareholders meeting, and has fixed the overall market value of the Increase (Valor de Mercado de las Acciones) in 1,700 million Euro, pursuant to that
resolution of the general shareholders meeting.
In accordance with article 1.5.(g) of Regulation (EU) 2017/1129 of the
European Parliament and of the Council of June 14, 2017, the preparation and publication of a prospectus related to the admission to trading of the shares issued as a consequence of the execution of the Increase will not be necessary
provided that a document is made available containing information on the number and nature of the shares and the reasons for and details of the offer. This informative document provides such information. This
document is available at the Banks website (www.santander.com) and at the CNMVs website (www.cnmv.es).
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PURPOSE OF THE INCREASE
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The purpose of the Increase is to allow the implementation of the remuneration of 0.10 euros per share in the form of newly issued shares that
was announced on July 29, 2020.
On March 27, 2020, the European Central Bank (ECB) issued a recommendation
urging all European credit institutions under its supervision to refrain, at least until October 1, 2020, from distributing dividends with a charge to the results of the 2019 and 2020 financial years or from making irrevocable commitments to
distribute them, in order to preserve capital (the Recommendation I).
Taking into consideration Recommendation I and in
line with the Banks mission to help individuals and companies progress, on April 2, 2020, the board of directors decided to cancel the payment of the 2019 supplementary dividend and the 2020 dividend policy, agreeing, among other issues,
to remove from the agenda of the next days ordinary general meeting the proposal for the application of results and the agreement to increase capital from reserves that was to serve to implement the Santander Dividendo Elección
program in addition to the remuneration from those results. Thus, the decision on the application of the results obtained by the Bank in 2019 was postponed. The Bank informed the CNMV of all the above by means of the corresponding communication of
privileged information on April 2, 2020 and at the general shareholders meeting held on April 3, 2020.
Subsequently, on
July 27, 2020, the ECB issued a second recommendation addressed to all European credit institutions under its supervision, extending the effects of Recommendation I and urging them to refrain, until January 1, 2021, from distributing
dividends from the results of the 2019 and 2020 financial years or from making irrevocable commitments to distribute them (the Recommendation II).
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