Banco Santander S A : 9M'22 Financial Report

January - September

2022

Index

Key consolidated data	3
Business model	5
Group financial information	6
Group performance	6
Income statement and balance sheet	8
Solvency ratios	17
Risk management	18
General background	21
Financial information by segment	22
Primary segments	22
Secondary segments	40
Responsible banking	47
Corporate governance	49
The Santander share	50
Appendix	52
Financial information	53
Alternative performance measures	74
Interim condensed consolidated financial statements	84
Glossary	87
Important information	88

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

Key consolidated data	Group financial	Financial information	Responsible banking
Corporate governance	Appendix
Business model	information	by segment	Santander share

Key consolidated data

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

Note: Total funds includes customer deposits, mutual funds, pension funds and managed portfolios.

INCOME STATEMENT (EUR million)	Q3'22	Q2'22	%	9M'22	9M'21	%	2021
Net interest income	10,051	9,554	5.2	28,460	24,654	15.4	33,370
Total income	13,474	12,815	5.1	38,594	34,626	11.5	46,404
Net operating income	7,314	6,915	5.8	20,999	18,848	11.4	24,989
Profit before tax	3,846	3,744	2.7	11,761	10,716	9.8	14,547
Profit attributable to the parent	2,422	2,351	3.0	7,316	5,849	25.1	8,124

Changes in constant euros:

Q3'22 / Q2'22: NII: +5.4%; Total income: +5.2%; Net operating income: +5.7%; Profit before tax: +2.5%; Attributable profit: +2.5%.

9M'22 / 9M'21: NII: +8.2%; Total income: +4.6%; Net operating income: +3.2%; Profit before tax: +0.1%; Attributable profit: +13.7%.

EPS, PROFITABILITY AND EFFICIENCY (%)	Q3'22	Q2'22	%	9M'22	9M'21	%	2021
EPS (euros)	0.137	0.131	4.9	0.409	0.313	30.5	0.438
RoE	10.64	10.44		10.86	9.54		9.66
RoTE	13.38	13.10		13.57	11.82		11.96
RoA	0.61	0.63		0.64	0.61		0.62
RoRWA	1.75	1.76		1.82	1.66		1.69
Efficiency ratio	45.6	46.0		45.5	45.6		46.2

UNDERLYING INCOME STATEMENT (1) (EUR million)	Q3'22	Q2'22	%	9M'22	9M'21	%	2021
Net interest income	10,051	9,554	5.2	28,460		24,654	15.4	33,370
Total income	13,509	12,815	5.4	38,629		34,626	11.6	46,404
Net operating income	7,349	6,915	6.3	21,034		18,848	11.6	24,989
Profit before tax	3,846	3,744	2.7	11,761		11,432	2.9	15,260
Profit attributable to the parent	2,422	2,351	3.0	7,316		6,379	14.7	8,654
Changes in constant euros:
Q3'22 / Q2'22: NII: +5.4%; Total income: +5.5%; Net operating income: +6.3%; Profit before tax: +2.5%; Attributable profit: +2.5%.
9M'22 / 9M'21: NII: +8.2%; Total income: +4.7%; Net operating income: +3.3%; Profit before tax: -5.7%; Attributable profit: +5.0%.

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

January - September 2022

3

Key consolidated data	Group financial	Financial information	Responsible banking
Corporate governance	Appendix
Business model		information	by segment	Santander share
SOLVENCY (%)		Sep-22	Jun-22		Sep-22	Sep-21		Dec-21
Fully-loaded CET1 ratio		12.10	12.05		12.10		11.85		12.12
Fully-loaded total capital ratio		16.00	15.95		16.00		15.82		16.41
CREDIT QUALITY (%)		Q3'22	Q2'22		9M'22	9M'21		2021
Cost of risk2		0.86	0.83		0.86		0.90		0.77
NPL ratio		3.08	3.05		3.08		3.18		3.16
Total coverage ratio		70	71		70		74		71
MARKET CAPITALIZATION AND SHARES	Sep-22	Jun-22	%	Sep-22	Sep-21	%	Dec-21
Shares (millions)		16,794	16,794	0.0	16,794		17,341	(3.2)	17,341
Share price (euros)		2.398	2.688	(10.8)	2.398		3.137	(23.6)	2.941
Market capitalization (EUR million)	40,265	45,143	(10.8)	40,265		54,389	(26.0)	50,990
Tangible book value per share (euros)	4.31	4.24		4.31		3.99		4.12
Price / Tangible book value per share (X)	0.56	0.63		0.56		0.79		0.71
CUSTOMERS (thousands)		Q3'22	Q2'22	%	9M'22	9M'21	%	2021
Total customers		159,384	156,896	1.6	159,384		151,433	5.3	152,943
Loyal customers		26,841	26,494	1.3	26,841		24,742	8.5	25,548
Loyal retail customers		24,674	24,361	1.3	24,674		22,588	9.2	23,359
Loyal SME & corporate customers	2,167	2,133	1.6	2,167		2,154	0.6	2,189
Digital customers		50,451	49,870	1.2	50,451		46,693	8.0	47,489
Digital sales / Total sales (%)		55.5	54.6		55.5		54.0		54.4

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

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

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

(2) Allowances for loan-loss provisions over the last 12 months / Average loans and advances to customers over the last 12 months.

4	January - September 2022

Key consolidated data	Group financial	Financial information	Responsible banking
Corporate governance	Appendix
Business model	information	by segment	Santander share

Our business model is based on three pillars

01. Customer focus		02. Our scale		03. Diversification
Deepening the relationships		Local scale and global reach		Geographic and business
with our customers				diversification

Top 3 NPS1	Top 3 in lending2	Balanced profit distribution3
in 6 out of 9 markets	in 10 of our markets

159 mn

total customers

1. NPS - internal benchmark of individual customers' satisfaction audited by Stiga / Deloitte in H1'22.

1. Market share in lending as of June 2022 including only privately-owned banks. UK benchmark refers to the mortgage market. Digital Consumer Bank (DCB) refers to auto in Europe.

1. 9M'22 underlying attributable profit by region. Operating areas excluding Corporate Centre.

Our business model remains a source of great strength and resilience

Our corporate culture

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

Our purpose

To help people and businesses prosper.

Our aim

To be the best open financial services platform, by acting responsibly and earning the lasting loyalty of our people, customers, shareholders and communities.

Our how

Everything we do should be

Simple, Personal and Fair.

January - September 2022

5