Santander Financial Results

+ Concluding remarks Financial System ▸ The UK economy has faced a range of challenges over recent years. The latest is a cost of living crisis caused by higher inflation and increased base rate, together with the impacts from the war in Ukraine GDP fell in Q3 and the prospect of a recession seems likely. The outlook remains uncertain with inflation significantly above the 2% target rate creating negative real disposable income. Although the energy price guarantee scheme has mitigated some of the effects of rising energy costs, utility bills for households and businesses are likely to remain substantially higher than a year ago. With the cost of food, mortgages and rent also increasing, and with house prices starting to fall, this will create further challenges for households and businesses well into 2023. Strategy & Business ▸ We have a well-established market position: 14mn active customers, 449 branches, 3rd largest retail mortgage provider and 5th largest commercial lender Enhanced digital capability attracted a further >344k digital customers in the year 76% of our refinanced mortgages were retained online, 92% of current account openings and 99% of credit card openings were made through digital channels 001 Results oo ▸ Strong NII performance from higher mortgage volumes and cost of deposit management in a rising base rate environment ▸ NII performance and cost management led to a 4.3pp efficiency improvement and 22% growth in net operating income Cost of risk remained low, absorbing higher provisions related to macro update. Improved NPL and coverage ratios ▸ Profit affected by the settlement agreed with the FCA regarding AML controls prior to 2017 and the Bank Levy charge Santander 21

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