#13 April 2019 Santander Investor Day Jose Antonio Álvarez Group CEO Santander#2Important Information Non-IFRS and alternative performance measures In addition to the financial information prepared in accordance with International Financial Reporting Standards ("IFRS"), this presentation 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 (ESMA/2015/1415en) and other non-IFRS measures ("Non-IFRS Measures"). The financial measures contained in this presentation that qualify as APMs and non-IFRS measures have been calculated using the financial information from Santander Group but are not defined or detailed in the applicable financial reporting framework 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 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 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, other companies, including companies in our industry, may calculate or use such measures differently, which reduces their usefulness as comparative measures. 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 consolidated financial statements prepared under IFRS, please see 2018 Annual Financial Report, published as Relevant Fact on 28 February 2019. These documents are available on Santander's website (www.santander.com). Forward-looking statements Santander cautions that this presentation contains statements that constitute "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as "expect", "project", "anticipate", "should", "intend", "probability", "risk", "VaR", "RORAC", "RORWA", "TNAV", "target", "goal", "objective", "estimate", "future" and similar expressions. These forward-looking statements are found in various places throughout this presentation and include, without limitation, statements concerning our future business development and economic performance and our shareholder remuneration policy. While these forward-looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. The following important factors, in addition to those discussed elsewhere in this presentation, could affect our future results and could cause outcomes to differ materially from those anticipated in any forward-looking statement: (1) general economic or industry conditions in areas in which we have significant business activities or investments, including a worsening of the economic environment, increasing in the volatility of the capital markets, inflation or deflation, and changes in demographics, consumer spending, investment or saving habits; (2) exposure to various types of market risks, principally including interest rate risk, foreign exchange rate risk, equity price risk and risks associated with the replacement of benchmark indices; (3) potential losses associated with prepayment of our loan and investment portfolio, declines in the value of collateral securing our loan portfolio, and counterparty risk; (4) political stability in Spain, the UK, other European countries, Latin America and the US (5) changes in laws, regulations or taxes, including changes in regulatory capital and liquidity requirements, including as a result of the UK exiting the European Union and increased regulation in light of the global financial crisis; (6) our ability to integrate successfully our acquisitions and the challenges inherent in diverting management's focus and resources from other strategic opportunities and from operational matters while we integrate these acquisitions; and (7) changes in our ability to access liquidity and funding on acceptable terms, including as a result of changes in our credit spreads or a downgrade in our credit ratings or those of our more significant subsidiaries. Numerous factors could affect the future results of Santander and could result in those results deviating materially 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. Santander 2#3Important Information Forward-looking statements speak only as of the date of this presentation and are based on the knowledge, information available and views taken on such date; such knowledge, information and views may change at any time. Santander does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. No offer The information contained in this presentation 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 appropriate in the circumstances and not in reliance on the information contained in this presentation. No investment activity should be undertaken on the basis of the information contained in this presentation. In making this presentation 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 presentation 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 presentation 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 as to historical performance or financial accretion are not intended to mean that future performance, share price or future earnings (including earnings per share) for any period will necessarily match or exceed those of any prior period. Nothing in this presentation should be construed as a profit forecast. Santander 3#4Our medium-term goals. · People Top 10 company to work: 6 geographies People Customers · • Customers Loyal customers³: c.26 Mn Digital customers4: c.50 Mn Top 3 in customer satisfaction: All markets² Digital sales5: >50% Communities Shareholders • Financially empowered customers1: 10 Mn Communities Shareholders · C/I: 42-45% • FL CET1: 11% -12% Santander • ROTE: 13% - 15% • RoRWA6: 1.8% -2.0% • Dividend pay-out: 40% - 50% (1) Cumulative number of people whom we serve with our financial empowerment and inclusion initiatives in any of our geographies during the period 2019-2025. These initiatives target mostly unbanked, underbanked and vulnerable groups. CSAT: Customer Satisfaction internal benchmark of active customers' experience and satisfaction audited by Stiga / Deloitte. In the medium term we will be also following NPS as indicator; Ex US; € 2 000 Active customer who receive most of their financial services from the Group according to the commercial segment that they belong to. Every physical or legal person, that, being part of a commercial bank, has logged in its personal area of internet banking or mobile phone or both in the last 30 days. The percentage of new business carried out through digital channels in the period (6) Underlying 4#501 Operational levers to enhance profitability 02 Solvency & capital allocation 03 Group medium- term goals Santander LO 5#6Operational levers to enhance profitability Santander هـ B GROUP Core Banks C Global Businesses 6#7Management team focused on further improving profitability • Operating performance • BAU cost control Outperform in integrations & restructurings New cost paradigm in Europe: high potential for new efficiencies Accelerate digitisation Digitisation driving higher customer satisfaction & market share gains Expected revenue growth above peers & high structural growth in LatAm New revenue pools: new • Capital allocation Natural reweighting towards more profitable businesses • Improve pricing: minimum profitability thresholds • Monitor & actively manage unprofitable portfolios ventures & global businesses Further alignment of senior management remuneration with capital & profitability goals Santander Profitability - capital - dividends virtuous circle 7#8Drivers behind our targeted profitability improvement: top line growth, operational efficiency & capital allocation Operational levers² to enhance underlying ROTE (%) 15-14% Key expected drivers¹ O NII and volumes growing at mid-single digit ● Fee income above volumes 12.1% ☐ 14-13% 2018 Reweight towards LatAm US profitability Efficiencies in Europe Capital efficiency Rest of businesses & Capital Medium- Interest Medium- retention BAU improvement growth and for organic term rates sensitivity term Upper regulatory range Lower range headwinds Santander (1) In constant € (2) Graph scale for illustrative purposes only Capital Efficiency COR Costs Revenues BAU cost control c.€1.2 Bn efficiencies (o/w c.€1 Bn in Europe) ° Cost of credit at lows LatAm increasing its weight Minimum return thresholds across segments 8#9Global capabilities expected to deliver c.€1.2 Bn in new efficiencies at a Group level, of which c.€1 Bn in Europe Global capabilities EUROPE1 to enhance IT & Ops c.€730Mn operating efficiency across the Group Santander Shared services & Others c.€220Mn + REST TOTAL c.€270Mn = c.€1Bn + = c.€220Mn Total c.€1Bn + c.€270Mn = c.€1.2Bn c.10% Europe's² cost base (1) Efficiencies in Europe amount to c.€1Bn, of which c.€250Mn come from Popular (including c.€180Mn from It &Ops and c.€70Mn from Shared services & Others). (2) Spain, UK, Portugal, Poland and SCF. 9#10Operational levers to enhance profitability Santander A Group B } CORE BANKS C Global Businesses 10#11Further leveraging our diversification and scale US Accelerating growth with sustainable profitability LatAm A region with structural growth and high and increasing profitability Europe Building the leading European bank in customer experience and profitability, leveraging our scale & digital Santander 11#12LatAm LatAm: a high growth & profitability region that will consequently increase its weight Key expected levers Medium-term goals High structural growth: Loans to GDP at 49% Financial (2018 > Medium-term) Commercial (2018 > Medium-term) Focus on customer experience & digitalisation C/I 38% 33-35% Loyal/Active customers¹ 28% 31% High & sustainable revenue growth (double digit expected CAGR4) ROTE³ 19% 20-22% Digital customers1 18Mn c.26Mn +c.45% Organically deploying more capital (>30% of RWAs in the medium-term) RORWA³ 3.2% c.3.5% # of countries top 3 in CSAT1,2 4 All Stable credit quality (1) Includes Brazil, Mexico, Chile, Argentina and Uruguay. (2) Latest available. CSAT: Customer Satisfaction internal benchmark of active customers' experience and satisfaction audited by Stiga / Deloitte. In the medium term we will be also following NPS as indicator. Santander (3) Underlying (4) In constant € 12#13LatAm Strong position in all of our LatAm markets with a sharp improvement in profitability since 2015 Top-tier in most countries (loans market share) High potential to increase its contribution (as % of total Group; 2018) #3 #82 #152 #31 #11 #1 #21 RWAs Loans Deposits Att. Profit 3,4 26% -18% 17% LatAm offers high structural growth & returns (ROTE4 evolution 2018 vs. 2015; local currency) 20% 14% 2015 2018 Santander (1) Including only private-owned banks. Including public banks: Brazil Top 5, Argentina Top 4 and Uruguay Top 2 CIB & auto loans franchise (3) Excluding Corporate Centre and Spain Real Estate Activity (4) Underlying 20% 13% 18% 16% 2015 2018 2015 2018 13 42%#14LatAm Brazil: we have significantly improved our commercial franchise and profitability since 2015... Performance Significant improvement of our commercial franchise Underlying RoTE 14% 20% Macro Recovery cycle picking up 2015 2018 • Orthodox macro reforms to unleash GDP growth potential Structural inflation & CoE going down since 2015 +2.6x1 Digital +65%1 Loyal Santander ⚫ C/I improving 6p.p. & catching- up vs. sector leaders' profitability Loan market share gains +110bps1 • 3 consecutive years among Best Companies To Work FOR Industry trends High growth potential • Room for improvement in banking penetration • Low rates improving customer affordability & loan growth (1) Variation since 2015 14#15LatAm ...and we expect to continue gaining market share and profitability Business priorities Continue converging towards best- in-class Sound volume growth with market share gains • Increase loyal and digital customers & sales • High focus on retail: consumer, pay-roll, cards... • Grow in retail funding, insurance and assets under management • Catch-up in mid-corporates in volumes & profitability • Grow in market niches and expand new ventures... getnet ole superdigital ben Q consignade Goals 2018 Medium-term goal ROTE1 20% > >20% Loyal/Active customers 24% 27% Note: in local currency Improve customer experience & customer satisfaction NII growth below loan growth while fees growing at double digit Strong cost discipline & improving cost of credit Santander (1) Underlying 15#16LatAm Mexico: we have significantly improved returns while heavily investing in the franchise... Performance Significantly increase in profitability while growing our retail Underlying RoTE 13% Macro 20% High growth potential 2015 2018 customer base +3.3x1 Digital +81%¹ Loyal GDP growth potential still at sound levels Low inflation environment • Solid labour market trends Santander +31%¹ in customer deposits • Operational & IT transformation through investment plan • Strong top line growth together with flattish C/I (despite high investments) leading to a strong growth in returns (1) Variation since 2015 Industry trends Sound loan and deposit growth • Low loans-to-GDP ratio providing high growth opportunities • Stable asset quality 16#17LatAm ...and we expect our investment plan to drive growth in profitability Business priorities Customer centric model highly focused on digital • Build on recent investments to gain market share • Increase loyal & digital customers & sales. Grow in individuals (payroll & demand deposits) • Maintaining SME & corporate leadership • Laying foundations to become a leading bank in profitability Goals 2018 Medium-term goal ROTE1 20% 19-21% Loyal/Active 29% - 33% customers Higher customer satisfaction leading to sustainable revenue growth Opening operational jaws as the investment plan ends in 2019 Declining cost of credit but increase in the effective tax rate Santander (1) Underlying Note: in local currency 17#18LatAm Chile: profitability improvement in the medium-term Business priorities Reinforce market leadership Sustain volume growth, with high focus on retail • Expand fee income... ⚫ ... by developing key commercial initiatives: Workcafé, insurance, consumer finance / auto loans, asset management... • Continue improving customer experience, driving growth in loyal and digital customers Goals 2018 Medium-term goal ROTE1 18% 19-20% Loyal/Active 46% > 54% customers Enhanced operating efficiency with revenues growing above costs Cost of credit improving Higher returns in the medium term Santander (1) Underlying Note: in local currency 18#19US USA: high potential to improve profitability on the back of strong operational leverage Key expected levers Medium-term goals Attractive US market: better risk return dynamics Financial (2018 > Medium-term) Commercial (2018 > Medium-term) Benefitting from Group scale Volume growth expected to be above the market to drive higher revenues Strong operational leverage Stable credit quality C/I fo (1) Adjusting for excess capital Santander (2) Only SBNA Loyal/Active 19% 20% customers² 43% 39-41% Digital customers² 0.9Mn 1.1Mn +19% ROTE4 8%1 11-13%1 Customer satisfaction #9 rank2,3 Peer Avg (3) Internal benchmark of active customers' experience and satisfaction among US peer group. In the medium term we will be also following NPS as indicator. Underlying 19#20Europe Europe: focus on improving profitability, leveraging cost efficiencies Key expected levers Low credit demand & rates: limited revenue growth... ...and CoR at lows... ...requires a cross-border approach in a fragmented market Further operational integration and cost efficiencies (c.€1Bn) Medium-term goals¹ SCF Financial (2018 > Medium-term) Commercial (2018 > Medium-term) C/I 52% 47-49% Loyal/Active customers¹ 33% 40% ROTE³ 11% 12-14% Digital customers 1,4 13Mn c.17Mn +27% 20 20 RORWA³ 1.7% c.2% Focus on customer experience & digitisation # of countries All top 3 in CSAT 1,2 Maintain Note: Europe includes Spain, UK, Portugal, Poland and SCF. (1) Excluding SCF (2) Latest available. CSAT: Customer Satisfaction internal benchmark of active customers' experience and satisfaction audited by Stiga / Deloitte. In the medium term we will be also following NPS as indicator. Underlying (4) Digital customers including Open Bank Spain and UK. Santander (3)#21Europe Leading positions in Europe, with potential for €1Bn in cost efficiencies through further operational integration Leading market shares... (loans market share) ...and key contributor for the Group (as % of total Group; 2018) #5 SCF #12 #2 #1 #2 RWAs 54% Loans 70% Solid returns despite low rates (2018 ROTE4; local currency) Deposits 16% 11% 12% 13% 9% SCF 75% Attr. Profit3,4 - 52% 2018 P&L (€ Bn) Gross income 20.8 Operating expenses -10.7 Net operating income 10.0 1 Att. Profit4 5.2 (1) Adjusted for excess capital, otherwise 10% SCF market share calculated as retail new car financing over total market passenger cars registrations. Ranking of independent car finance players. Excluding Corporate Centre and Spain Real Estate Activity Santander (2) (4) Underlying 21 21#22Europe €700Mn expected new efficiencies coming from our new cost paradigm in Europe: digital transformation & a cross-border approach IT & Operations Shared services IT Expected efficiency gains derived from further integration in Europe • Public cloud • Agile • Core system evolution • Reporting • Global platforms Global negotiation Digitalisation • Operations • Robotics • Process reengineering Expected new efficiencies from digital transformation & optimising IT&Ops outflow c.€550Mn Modelling and analytics Santander c.€150Mn Control Support 22#23Europe The integration of Popular is ahead of plan and we expect €250Mn of additional efficiencies Increasing local scale 2018 loans market share Commitments Original synergy expectation (2017) Delivering ahead of target Additional cost synergies Popular 12% 18% Popular 15% 18% Santander c.€500Mn Initial cost savings 33% of Popular cost base New c.€250Mn Increased expected cost savings from Popular integration (50% of Popular cost base) 00Û Transaction RolC goal 13-14% 23 23#24Macro Europe Spain: committed to maintaining our market leadership... Performance Reinforcement of customer loyalty and experience through digital transformation Underlying ROTE 8% 11% 2015 2018 +2.0x1,2 Digital +147%1,2 Loyal • Higher quality earnings driven by strong fee growth +56% 1,2 • Ahead of plan in Popular's integration Positive cycle expected to continue in the coming years Industry trends Challenging environment driving market consolidation >2% GDP growth above Eurozone average Falling unemployment and moderate inflation Lower for longer rates New lending growth sector deleveraging stabilising More rationale pricing • Benign credit cycle Santander (1) Change since 2015 (2) Including Popular 24#25Europe ...while delivering ongoing improvements in profitability & efficiency Business priorities Maintaining leadership while achieving best-in-class integration of Banco Popular • Maintain SME & corporate leadership leveraging on Popular's know-how • Consumer & payments growth opportunities • High potential in insurance & • wealth management Capital light growth approach • Strong effort in digitisation, boosting digital sales • New growth initiatives: Generación 81, Cuenta Smart... Goals 2018 Medium-term goal ROTE¹ 11% 14-16% Loyal/Active 30% > 43% customers Higher customer satisfaction & mid- single digit customer revenue growth Costs to decline in coming years Stable cost of credit in the medium-term Santander (1) Underlying 25 25#26Europe UK: operational & capital efficiency gains Business priorities Increasing profitability through • efficiency and capital allocation Improving customer experience & satisfaction Profitable growth in retail and improved corporate returns by focusing on selected business segments • Enhancing efficiency by simplifying, digitalising and automating the bank • Capital discipline and active RWA management Goals 2018 Medium-term goal ROTE1 9% Loyal/Active customers 10-12% 30% > 34% Solid underlying lending and attractive mid-term revenue growth opportunities Focus on cost management, with expected net reduction Continued risk discipline, with still low cost of risk Note: in local currency Santander (1) Underlying 26 26#27Europe SCF: the company of choice for auto-makers in Europe Business priorities Extracting value from our position as a specialised monoliner • Maintain our number #1 position in auto market share Market share gains in the consumer business • Strengthen digital channels: e-commerce, fintech... • Strengthen relationship with OEMS and the scope of agreements • Maintain solid profitability and sustained growth • Further operational integration Goals 2018 Medium term goal ROTE1 16% 14-15% Positive revenue growth Cost savings coming from restructuring processes Cost of credit normalisation Santander (1) Underlying Note: in constant € 27 SCF#28Europe Portugal & Poland: improving profitability and efficiency on the back of successful integrations Reinforce our position as the first privately- owned bank Business priorities • High focus on retail deposits, AuMs and insurance Grow market share in mortgages and SMEs Goals 2018 Medium term goal ROTE1 12% > 13-15% Successful integration leading to cost declines Continue to be the most profitable bank • Well-established franchise (11% market share) to capture favorable macro growth & market share gains • Deliver on DB Polska's³ integration commitments ROTE1,2 2018 Medium term goal 13% 14-16% Revenues growing in line with volumes & stable cost of credit Note: in local currency (2) Adjusted for excess capital; Otherwise, ROTE in 2018 at 10% and medium term goal 12-14%. (3) Retail & private banking business (1) Underlying Santander 28 28#29Operational levers to enhance profitability Santander A Group B Core Banks C GLOBAL BUSINESSES 29 29#30CIB & Wealth management are two well-established and highly profitable global businesses which benefit from the Group's scale & global footprint Santander Existing global businesses Payment related businesses Shared services Corporate and Investment Banking Wealth Management¹ Consumer Finance² Global Merchant Services Global Trade Services One Pay FX Digital | IT&Ops | Procurement Santander (1) Wealth Management including Insurance. Global Consumer Finance including SCF, UK, LatAm consumer finance operations and SCUSA. 30 30#31CIB: our corporate-centric business has delivered sustainable returns through the cycle Strong track-record... (RORWA²; %) 1.3% C/I 39% 2015 1.8% 41% 2018 ...which is expected to continue Enhance our tailor-made services Capital light 514 model Improve DORORWA Maintain best-in-class efficiency Focused on increasing client penetration while accelerating growth Profitable business which should carry on evolving to a capital-light model Santander (1) In constant € (2) Underlying 00Û Medium-term goals c.8% c.2.1% c.40% Revenue CAGR1 RORWA² C/I 31#32WM: capital-efficient business model which offers very high growth potential, especially in insurance Strategic priorities Weighted market share² (%, 2018) Our medium-term focus +2x Current market share³ Potential market share upside¹ potential increase in PAT if natural market share reached in the three businesses Natural 3% 3% 7% market share: 10% 10% 13% 6% Santander Private Banking Santander Asset Management Santander Insurance #1 Priority: achieve a market share that is in line with our natural share in every country Santander Insurance Santander Asset Management Capture the SME opportunity Digital distribution platforms Have the best products in our footprint Competitive edge on global capabilities Santander Capture global Private Wealth opportunity Connect local models in one platform Private Banking 00 Medium-term goals c.10% Revenue CAGR4 c.10% >60% AuM CAGR4 ROTE5 Santander (1) Potential MS upside calculated as difference between SAN natural share and current market share in each of the businesses; Natural share based on Santander bank deposit market share by country (2) Weighted by AuM by country for SPB and SAM and by GWP for Insurance in countries where the business has a relevant competitive position; Natural share weighted by deposits by country As of December 2018 (3) (4) In constant € (5) Underlying 32#3301 Operational levers to enhance profitability 02 Solvency & capital allocation 03 Group medium- term goals Santander 33 33#34FL CET1 increased by 304bps since 2014, accumulating €18Bn of capital Capital generation between December 2014 and December 2018 (bps) FL CET1 435 35 304 214 118 186 2018 11.30% 2014 8.27% Organic capital generation Perimeter exc. Dividends +AT1 Popular¹ Organic capital generation after dividends 2015 capital increase Total capital accumulated + €25.3Bn - €2.3Bn - €12.8Bn + €10.2Bn Santander | (1) Popular acquisition had a largely neutral impact on Group's solvency. + €7.5Bn + €17.7Bn 34 34#35High focus on profitability enhancement and efficient capital allocation Improved capital allocation Profitability enhancement Natural reweighting towards our most profitable geographies Minimum profitability thresholds in all segments LatAm Global + Commercial transformation & profitability Operational efficiency: simplification & further integration Medium-term RoTE¹ 13-15% + RoRWA¹ 1.8-2.0% Medium-term FL CET11 11-12% Santander | (1) Medium term goals. Underlying for ROTE and RoRWA 35#36Efficient capital allocation standards of our CIB business to be implemented in all of our businesses & segments.... CIB's strong performance... Revenues +2% CAGR ...expected to be achieved in all segments 1 2 RWAS -5% CAGR 3 RORAC-based tools to maximise the return on capital... ... ensuring that all customer relationships create value Establish a governance and methodology that rules the entire approval process for all transactions... RORWA +13% CAGR 4 5 2015 2018 Santander ...and is consistent across the Group Granular bottom-up monitoring process to analyse returns at all levels 36#37...should result in RoRWA improvements across the board RoRWA 20181 SCF <2% 2-3% >3% Medium-term RoRWA¹ SCF <2% 2-3% >3% RoRWA1 evolution SCF 2 Higher expected profitability driven by business improvement and capital allocation Santander | (1) Underlying 37#38We aim to continue generating ~40 bps per annum while remunerating our shareholders and growing the business Annual organic capital generation in the medium-term ~40 bps 13-15% ROTE² 175-190 bps 40-50% Pay-out Medium-term cumulative one-offs Headwinds to be offset with management actions 11.3% 80-100 bps 45-55 bps IFRS16 TRIM Others 11-12% 2018 FL CET1 Underlying profits 1 Shareholders & AT1- holders remuneration RWA growth & others Regulatory headwinds Management actions Medium term target High profitability drives recurrent capital generation capacity going forward Santander (1) Including minorities (2) Underlying 9.7% 2018 FL SREP 38 88#39Santander has additional levers to neutralise regulatory impacts Expected regulatory impacts... IFRS 16: c.20 bps IFRS 16 requires lease obligations to be brought on balance sheet as a liability at the present value of the future lease payments. to be offset with management actions A Minimum profitability thresholds for all segments B Active management of unprofitable portfolios TRIM & Others: c.30 bps Targeted Review of Internal Models (TRIM) project to assess whether the internal models currently used by banks comply with regulatory requirements, and whether their results are reliable and comparable. C Higher % of portfolios in IRB D Securitisations & risk transfers 2020-21e: low Others: BRRD/CRD implementation, CRR Application ... E Further alignment of senior impacts management remuneration Santander 39 39#40Strong credit fundamentals Group Liquidity Coverage Ratio (LCR) 158% Net Stable Funding Ratio (NSFR) 114% Funding Plan 2018 2019 EUR Bn issued issuance plan² Covered bonds 1.6 3-5 Senior preferred 0.5 3-5 Senior non-preferred 6.1 -- Hybrids 2.8 1.5 TOTAL 10.9 7.5-11.5 o/w Subordinated4 8.9 1.5 Santander S.A. meets current MREL III requirement¹ and Group capital הוויי requirements (AT1: >1.5%; T2: 2%)... ...so going forward we will focus more on preferred instruments and covering debt maturities. We also have the capacity to fully repay TLTROII Santander Group's CET1 levels are well above the minimum loss absorption trigger of 5.125%: >€37Bn (ADIs of €56.5Bn) FX hedging policy in place to preserve CET1 ratio. Positive sensitivity to higher interest rates Santander Santander's understanding of current policy under the existing recovery and resolution rules Issuance plan subject to, amongst other considerations, market conditions and regulatory requirements Data calculated using the IFRS9 transitional arrangements as of December 2018 (4) Including senior non-preferred 40#4101 Operational levers to enhance profitability 02 Solvency & capital allocation 03 Group medium- term goals Santander 41#42Our medium-term goals ROTE1 13-15% Efficiency 42-45% ][ FL CET1 11-12% Dividend pay-out ratio 40-50% • We are the leading LatAm bank Continue structural profitable growth • Mid-term ROTE1 20-22% • Laid foundations for accelerating growth • Mid-term ROTE1 11- 13%² • C/I 39-41% Leading European bank in profitability and growth • Mid-term ROTE¹ 12-14% • C/I 47-49% • ⚫ C/I 33-35% Santander (1) Underlying (2) Adjusted for excess capital 42#43Our medium-term goals. · People Top 10 company to work: 6 geographies Communities People Customers · • Customers Loyal customers³: c.26 Mn Digital customers4: c.50 Mn Top 3 in customer satisfaction: All markets² Digital sales5: >50% Shareholders • Financially empowered customers1: 10 Mn Communities Shareholders · C/I: 42-45% • FL CET1: 11% -12% Santander • ROTE: 13% - 15% • RoRWA6: 1.8% -2.0% • Dividend pay-out: 40% - 50% (1) Cumulative number of people whom we serve with our financial empowerment and inclusion initiatives in any of our geographies during the period 2019-2025. These initiatives target mostly unbanked, underbanked and vulnerable groups. CSAT: Customer Satisfaction internal benchmark of active customers' experience and satisfaction audited by Stiga / Deloitte. In the medium term we will be also following NPS as indicator; Ex US; Active customer who receive most of their financial services from the Group according to the commercial segment that they belong to. € 2 000 Every physical or legal person, that, being part of a commercial bank, has logged in its personal area of internet banking or mobile phone or both in the last 30 days. The percentage of new business carried out through digital channels in the period Underlying 43#44Thank You. Our purpose is to help people and businesses prosper. Our culture is based on believing that everything we do should be: Simple Personal Fair Santander MEMBER OF Dow Jones Sustainability Indices In Collaboration with RobecoSAM FTSE4Good