Banco Santander S A : México FY'23

31 January 2024

Mexico

2023

Earnings Presentation

Important Information

Non-IFRS and alternative performance measures

This presentation contains financial information prepared according to International Financial Reporting Standards (IFRS) and taken from our consolidated financial statements, as well as 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. The APMs and non- IFRS measures were calculated with information from Grupo Santander; however, they are neither defined or detailed in the applicable financial reporting framework nor audited or reviewed by our auditors. We use these APMs and non-IFRS measures when planning, monitoring and evaluating our performance. We consider them to be useful metrics for our management and investors to compare operating performance between periods. APMs we use are presented unless otherwise specified on a constant FX basis, which is computed by adjusting comparative period reported data for the effects of foreign currency translation differences, which distort period-on-period comparisons. Nonetheless, the APMs and non-IFRS measures are supplemental information; their purpose is not 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. APMs using ESG labels have not been calculated in accordance with the Taxonomy Regulation or with the indicators for principal adverse impact in SFDR. For further details on APMs and Non-IFRS Measures, including their 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 2022 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (the SEC) on 1 March 2023 (https://www.santander.com/content/dam/santander-com/en/documentos/informacion-sobre-resultados-semestrales-y-anuales-suministrada-a-la-sec/2023/sec-2022-annual-20-f-2022-en.pdf), as well as the section "Alternative performance measures" of Banco Santander, S.A. (Santander) Q4 2023 Financial Report, published on 31 January 2024 (https://www.santander.com/en/shareholders-and-investors/financial-and-economic-information#quarterly-results). Underlying measures, which are included in this document, 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 businesses included 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.

Non-financial information

This presentation contains, in addition to financial information, non-financial information (NFI), including environmental, social and governance-related metrics, statements, goals, commitments and opinions.

NFI is included to comply with Spanish Act 11/2018 on non-financial information and diversity and to provide a broader view of our impact. NFI is not audited nor reviewed by an external auditor. NFI is prepared following various external and internal frameworks, reporting guidelines and measurement, collection and verification methods and practices, which are materially different from those applicable to financial information and are in many cases emerging and evolving. NFI is based on various materiality thresholds, estimates, assumptions, judgments and underlying data derived internally and from third parties. NFI is thus subject to significant measurement uncertainties, may not be comparable to NFI of other companies or over time or across periods and its inclusion is not meant to imply that the information is fit for any particular purpose or that it is material to us under mandatory reporting standards. NFI is for informational purposes only and without any liability being accepted in connection with it except where such liability cannot be limited under overriding provisions of applicable law.

Forward-looking statements

Santander hereby warns that this presentation contains "forward-looking statements" as per the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such statements can be understood through words and expressions like "expect", "project", "anticipate", "should", "intend", "probability", "risk", "VaR", "RoRAC", "RoRWA", "TNAV", "target", "goal", "objective", "estimate", "future", "commitment", "commit", "focus", "pledge" and similar expressions. They include (but are not limited to) statements on future business development, shareholder remuneration policy and NFI.

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Important Information

While these forward-looking statements represent our judgement and future expectations concerning our business developments and results may differ materially from those anticipated, expected, projected or assumed in forward-looking statements.

In particular, forward looking statements are based on current expectations and future estimates about Santander's and third-parties' operations and businesses and address matters that are uncertain to varying degrees and may change, including, but not limited to (a) expectations, targets, objectives, strategies and goals relating to environmental, social, safety and governance performance, including expectations regarding future execution of Santander's and third-parties' (including governments and other public actors) energy and climate strategies, and the underlying assumptions and estimated impacts on Santander's and third-parties' businesses related thereto; (b) Santander's and third-parties' approach, plans and expectations in relation to carbon use and targeted reductions of emissions, which may be affected by conflicting interests such as energy security; (c) changes in operations or investments under existing or future environmental laws and regulations; (d) changes in rules and regulations, regulatory requirements and internal policies, including those related to climate-related initiatives ; (e) our own decisions and actions including those affecting or changing our practices, operations, priorities, strategies, policies or procedures; and (f) the uncertainty over the scope of actions that may be required by us, governments and others to achieve goals relating to climate, environmental and social matters, as well as the evolving nature of underlying science and industry and governmental standards and regulations.

In addition, the important factors described in this presentation and other risk factors, uncertainties or contingencies detailed in our most recent Form 20-F and subsequent 6-Ks filed with, or furnished to, the SEC, as well as other unknown or unpredictable factors, could affect our future development and results and could lead to outcomes materially different from what our forward-looking statements anticipate, expect, project or assume.

Forward-looking statements are therefore aspirational, should be regarded as indicative, preliminary and for illustrative purposes only, speak only as of the date of this presentation, are informed by the knowledge, information and views available on such date and are subject to change without notice. Santander is not required to update or revise any forward-looking statements, regardless of new information, future events or otherwise, except as required by applicable law. Santander does not accept any liability in connection with forward-looking statements except where such liability cannot be limited under overriding provisions of applicable law.

Not a securities offer

This presentation and the information it contains does not constitute an offer to sell nor the solicitation of an offer to buy any securities.

Past performance does not indicate future outcomes

Statements about historical performance or growth rates must not be construed as suggesting that future performance, share price or results (including earnings per share) will necessarily be the same or higher than in a previous period. Nothing in this presentation should be taken as a profit and loss forecast.

Third Party Information

In this presentation, Santander relies on and refers to certain information and statistics obtained from publicly-available information and third-party sources, which it believes to be reliable. Neither Santander nor its directors, officers and employees have independently verified the accuracy or completeness of any such publicly-available and third-party information, make any representation or warranty as to the quality, fitness for a particular purpose, non-infringement, accuracy or completeness of such information or undertake any obligation to update such information after the date of this presentation. In no event shall Santander be liable for any use by any party of, for any decision made or action taken by any party in reliance upon, or for inaccuracies or errors in, or omission from, such publicly-available and third-party information contained herein. Any sources of publicly-available information and third-party information referred or contained herein retain all rights with respect to such information and use of such information herein shall not be deemed to grant a license to any third party.

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Index

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2

3

4

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Financial	Strategy and	Results	Concluding	Appendix
system	business		remarks

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System loan and deposit growth continued to expand

Total loans (Constant € bn1)

329 335 339 351 358

12.4%	11.8%	10.6%	9.9%
YoY	9.1%

(%)

Dec-22Mar-23Jun-23Sep-23Nov-23

Total customer funds (Constant € bn1)

366 367 372 383 395

11.4%	8.1%	10.7%	10.2%
YoY	7.4%

(%)

Dec-22Mar-23Jun-23Sep-23Nov-23

1. End period exchange rate as of Nov-23. Source: CNBV Banks as of Nov-23.

• Total system loans grew 10% YoY as of November 2023, driven by loans to individuals and corporates.
• Positive performance in consumer loans remains the main growth driver.
• Total system deposits rose +10% year-on-year.
• Growth in total deposits driven by time (+20%) due to the high interest rate environment. Demand deposits also rose, but by less (+6%).

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Index

1

2

3

4

5

Financial	Strategy and	Results	Concluding	Appendix
system	business		remarks

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Santander México: one of the leading financial groups in the country

KEY DATA			2023	YoY Var.4
1			€48.7bn	+6.1%
Customer loans
2			€62.8bn	+9.9%
Customer funds
Attributable profit			€1,560mn	+16.6%
RoTE			17.7%	+0.8pp
Efficiency ratio			43.9%	-1.0pp
Loans market share	3		12.7%	-60bps
Deposits market share	3	12.1%	+79bps
Total customers			20.5mn	+1.4%
Digital customers			6.9mn	+14.2%
Branches			1,369	0.0%
Employees			30,876	+7.1%

1. Gross loans excluding reverse repos.
2. Excluding repos.
3. As at September 2023.
4. Constant euros.

Strategic Priorities

• Advance our technological transformation to improve our digital channels
• Simplify our products, processes and operations to transform our service model, building on technology and data to improve customer experience
• Grow our customer base and increase loyalty through integrated digital products and offerings, new service models and mass market value proposition
• Remain the market leader with value-added products for corporates and by building on existing relationships to attract more customers, particularly individuals
• Improve deposit mix and contribute to better cost of deposits

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Solid progress in the digitalization and simplification of our products and operations while growing our active and digital customer bases

Total customers (mn)	Active customers (mn)	Digital customers (mn)
+1%	+6%	+14%

20.2 20.5

9.7	10.3		6.9
	6.0

Dec-22

Dec-23

Dec-22

Dec-23

Dec-22

Dec-23

• Continued focus on increasing loyalty while attracting new customers through innovative products
• Total customers: +1% YoY reflecting consistent improvement across our large number of products and services
• 14% increase in digital customers, reaching 6.9 million. Digital sales accounted for 65% of total sales
• Improvements to our app to offer the best customer experience by adding new functionalities

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Fostering innovation in our value-added products to drive the best customer experience

Mortgages

We formalized the first Green Mortgage in the country, offering attractive financial conditions to

customers who purchase a home with a sustainable construction certificate

LikeU

Cash Back Baby, the first loyalty programme that gives money back to customers for using their LikeU credit card or payroll card. c.1.2mn cards issued since its launch in Sep-21

Auto

New alliances with BYD, a leading global new energy vehicle company to offer accessible financing for sustainable vehicles and with GAC Motor, a Chinese car company. ~17% market share reached in Nov-23 (+173 bps YoY), the #3 player in the market

Distribution model

Getting more service alternatives by adding new convenience store chains: "Yastás" and "Kiosko", as correspondent banking. +40k points of service

Corporate & Investment Banking

We continue to position our Corporate & Investment Banking business as one of the top three players in Mexico.

Santander México led the ranking of

Local Debt Capital Markets in 2023 for

second consecutive year, according to Bloomberg statistics

Digitalization

New functionalities added to our SuperMóvil app including virtual branch and improved costumer experience with digital account (N2). In addition, we launched Santander Evolution site to help young customers with their financial growth.

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Loan portfolio growth continued to be driven mainly by loans to individuals, especially cards, consumer credit and mortgages, as we focus on increasing profitability

Total customer loans (Constant € bn)1

45.9 45.7 46.5 48.1 48.7

Dec-22Mar-23Jun-23Sep-23Dec-23

Group criteria.

1. Excludes reverse repos. End period exchange rate as at Dec-23.
2. Includes Private Banking.
3. Government loans in local GAAP.

	Dec-23	Dec-22 YoY (%)	QoQ (%)
Individuals2	21.4	18.8	13.8	2.2
o/w Mortgages	11.7	11.0	6.6	1.9
o/w Consumer credit	3.4	2.9	14.4	-2.2
o/w Cards	3.9	3.3	18.3	0.4
Consumer Finance	2.0	1.4	35.0	9.2
SMEs	2.8	2.7	2.3	1.5
Corporates & Institutions	15.9	14.8	7.2	3.0
CIB	6.7	8.1	-17.6	-6.9
Total customer loans*	48.7	45.9	6.1	1.3
*o/w Government3	4.4	4.7	-2.7	1.2

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