SAN

Business Context and Reporting Period

This Form 6-K filing by Banco Santander, S.A. reports financial results for the first half of 2026 (H1'26), ending June 30, 2026. The report highlights the successful integration of the TSB acquisition in the UK, completed on April 30, 2026, and the disposal of Santander Bank Polska in January 2026. The bank serves 182 million customers globally and operates across Retail & Commercial Banking, Openbank, Corporate & Investment Banking (CIB), Wealth Management & Insurance, and Payments.

Key Financial Metrics

Balance Sheet: Loans grew 9% and customer funds grew 11% in constant euros. The bank generated €84 million in business value from AI deployment in H1'26.

Material Changes vs. Prior Period

• Profitability Surge: Attributable profit rose 31% to €8.97 billion, driven by a €1.9 billion net capital gain from the Poland disposal, partially offset by €250 million in TSB restructuring costs. Underlying profit, excluding these items, grew 15% to €7.33 billion.
• Revenue Growth: Total revenue increased 6% to €30.8 billion, supported by a 7% rise in net interest income and a 9% rise in net fee income.
• Cost Efficiency: Total costs remained flat year-over-year but decreased 2% in constant euros excluding TSB, improving the efficiency ratio to 42.8%.
• Customer Base: The bank added 12 million customers year-over-year, reaching 182 million total, including over 4 million from the TSB acquisition.
• Capital Generation: The CET1 ratio stood at 14.0%. Excluding the -55 basis point impact from TSB, the group generated 20 basis points of organic capital in Q2.

Guidance, Outlook, and Risks

Outlook and Targets: Management reaffirmed all 2026 targets (excluding M&A impacts): mid-single-digit revenue growth, lower costs in constant euros, higher profit than the €14.1 billion reported in 2025, and a CET1 ratio between 12.8% and 13%. The three-year plan targets a RoTE above 20%, profit above €20 billion, and over 210 million customers by 2028.

Shareholder Returns: The bank is on track to distribute at least €10 billion via share buybacks for 2025 and 2026. As of H1'26, approximately €9 billion has been delivered. An additional €1.8 billion buyback against H1'26 results has been approved by the ECB.

Risks and Contingencies:

• Geopolitical & Economic: Risks include armed conflicts in Ukraine and the Middle East, inflation, and political instability in key markets (Spain, UK, Latin America, US).
• Integration Risks: Execution risks related to the integration of TSB and the pending acquisition of Webster Financial Corporation, including potential delays or failure to realize synergies.
• Operational & Regulatory: Exposure to cyberattacks, data breaches, and changes in regulatory capital or liquidity requirements.
• Market Risks: Volatility in interest rates, foreign exchange rates, and equity prices.

Investor Verification Checklist

• Verify the €1.9 billion capital gain from the Santander Bank Polska disposal and its classification as a non-recurring item.
• Confirm the €250 million restructuring costs associated with the TSB integration.
• Review the specific terms and regulatory approval status of the pending Webster Financial Corporation acquisition.
• Validate the €1.8 billion share buyback program against H1'26 results approved by the ECB and its implementation timeline.
• Assess the impact of Argentina's market trends on the 9% increase in loan-loss provisions.
• Monitor the progress of the ONE Transformation initiative in delivering the projected cost synergies and efficiency ratio improvements.