Banco Santander, S.A.

Good morning, everyone, and thank you for this Q1 2026 results presentation. Today's presentation will follow the usual structure. First, Hector will talk about our results with a special focus on the performance of our global businesses in the context of our new strategic cycle. Then, Jose will give a deep dive on our financials, and then Hector will close the presentation with his final remarks before opening up for Q&A. Before we start, let me remind you that this is the first quarter that we are presenting our results after the disposal of Santander Polska and using the new group reporting structure we announced in February. As a result, all underlying metrics exclude impacts from Poland, both in 2025 and 2026, to make the accounts comparable. Now, Hector, the floor is yours.

Thanks, Raúl, and good morning, everyone. Q1 was another excellent quarter for Santander, demonstrating the strength of our strategy and the resilience of our business model. Profit reached a new record of 3.6 billion, up 12% versus Q1 2025, supported by all of our global businesses, even after a 210 million modern finance provision in the U.K. on the back of our solid franchise with a growing customer base as we continue to enhance customer experience leveraging on our global platforms. We achieve this as we continue to execute one transformation, making excellent progress towards a simpler and more integrated model. This is translating into tangible results, with our efficiency improving by 2 percentage points and underlying ROTE increasing to 15.2%. Our balance sheet remains very solid, with robust credit quality and a strong CET1 capital ratio, which reached another all-time high of 14.4%. In this concept of high capital levels, our underlying ROTE adjusted for excess capital would be around 16.5%. All this contributed to strong shareholder value creation within a plus dividend per share growing at 19%. Going into more detail into our income statement, our P&L was very strong from top to bottom, with underlying profit growing double digits year on year. We delivered strong top-line growth, with revenue up 6% in constant euros, supported by all global businesses. NII and fees up 5% and 7%, respectively, accounted for around 95% of total income. supported by a significant increase of 8 million customers and the network benefits we are capturing through our global businesses. Revenue grew while expenses fell, showcasing the positive effects of our transformation. LLPs were affected by Argentina, reflecting sector-wide trends in the country. Excluding Argentina, provisions declined 2% year-on-year. Finally, as I have just mentioned, we have the impact of the $210 million related to the motor finance in the U.K., All in all, as we have shown over time, our results are sustainable and less volatile than peers, even in the current uncertain geopolitical environment. What we are seeing in our results clearly reflects the strategy we outlined at the investor day. Our business model is unique as it combines global and in-market scale with customer focus and diversification across Europe and the Americas. This, together with our three-pillar core and supported by disciplined capital allocation and investment in data and AI, is delivering consistent results. This is not just a framework. It is a model that is already delivering higher revenue, lower cost, improved profitability, and strong value creation. Let me start with our customers. We are adding 8 million new customers year-on-year, making good progress towards our target of reaching 210 million customers by 2028, including the expected contribution of 8 million customers from TSV and Webster. At the same time, we're improving the economics per active customer, with revenue growing 3% and cost increasing 4%, driven by OneTransformation. So, we're not only adding customers, but also increasing their value, exactly as we set out our investor day. We continue to deliver on OneTransformation, driving operational leverage. At the investor day, we introduced a more granular cost-to-income framework with clear levels to track efficiency across the group. Simplification and automation have already delivered one percentage point of efficiencies. Our network businesses are also contributing one percentage point by driving customer primacy and capturing scale benefits. Our global approach to technology is enhancing productivity by building once and deploying across the group, while we start to capture the benefits from AI, even in an initial investment phase. And all of this is something that is entirely under our control. All our global businesses contributed to group growth as we continue to improve profitability. Customer activity and diversification drive revenue growth. Our customer focus and active balance sheet management continue to support our solid performance in retail. OpenBank keeps delivering strong revenue growth backed by an improved funding mix. Our network businesses are also performing strongly, especially CIB and payments, with double-digit revenue growth. At the same time, we're extracting the full potential from our scale. We're improving efficiency across the group, delivering positive operational leverage. Combined with our focus on profitability and disciplined capital allocation is driving higher returns. The combination of global businesses and our geographical diversification puts us in a unique position to navigate the challenges for 26. For example, higher interest rates benefits some part of our business, while other franchises and developed economies, such as Open Bank of Brazil, perform better with lower rates. In retail, We continue to transform our model to become a digital bank with branches, combining cutting-edge technology with the expertise and proximity of our teams. We are making strong progress in the rollout of our global platforms. Gravity is now fully implemented in Spain, Mexico, and Chile, and is ready to be deployed in Brazil during the year. At the same time, we're scaling our customer interaction platform, enabling greater personalization and increasing customer engagement and primacy. This is translating into tangible results. Fees grew 7%, cost per active customer declined 7%, and productivity keeps improving. As a result, retail's underlying profit grew 9% year-on-year, driven by strong operational leverage with good revenue growth, both NAI and fees, and costs down 5%. At the same time, asset quality trends remained robust, in line with our expectation with cost-for-risk improving year-on-year to 1.07%, excluding Argentina. Looking ahead, we expect further profitable growth as we continue to scale our platforms, deepen customer relationships, and capture additional efficiencies from TSB and Webster. With OpenBank, we are building a more integrated, scalable, and efficient business supported by a global digital platform. We are transferring the business by simplifying the model, with a single legal entity in Europe accelerating cross-selling and AI deployment and the integration of our U.S. businesses. Our focus on deposit gathering is improving our funding mix and supporting profitability. As a result, we are already seeing strong benefits, particularly in the U.S., where the digital bank has gathered 11 billion in deposits since launch, delivering around 150 million net funding cost savings annually. We're also strengthening our position in mobility finance, expanding beyond traditional auto lending. In parallel, we're scaling our embedded finance capabilities through open bank pay and new partnerships. This is translating into progress on our performance operating targets. and into a solid underlying financial performance, driven by strong revenue growth, continued efficiency gains, and credit quality under control, resulting in a 15% PVT growth excluding motor finance. As anticipated, Profit growth was impacted by the end of electric vehicle tax incentives in the U.S., with the tax rate now expected to remain stable. Looking ahead, we expect profit and ROTE to improve as we continue to scale the business, optimize funding, and deliver more efficiencies. In CIB, we continue to build a world-class business for our corporate and institutional clients, leveraging our global network and diversified model. We are deepening client relationships and strengthening our advisory capabilities, taking more relevant roles in complex and cross-border transactions supported by our integrated coverage model. At the same time, we are improving connectivity across markets and products. enabling us to serve clients more seamlessly and operate more efficiently. Collaboration across global banking, global markets, GTV, and commercial remains a key driver of our value creation and is increasingly extending across the group. A clear example of this is that GTV solutions are now embedded in more than half of our leveraged buyout and M&A mandates. Even in a more challenging context, CIV continues to deliver strong results with a profit of 16% year-on-year. At the same time, CIV continues to deliver one of the best efficiency ratios in the sector and an ROTE of 21%, reflecting our focus on profitability and capital discipline. In wealth, we continue to build the best wealth and insurance manager in Europe and the Americas, leveraging our global scale and capabilities. We have simplified the model into two clear verticals, enabling us to capture synergies and strengthen collaboration across the value chain. In private banking, we are reinforcing our global positioning, particularly in the ultra-high network threat segment supported by more specialized coverage. As a result, customer assets and liabilities grew 11% year-on-year. We are consolidating our insurance and asset management solutions, bringing together liquid and insurance products. We are building an integrated insurance platform across life, pensions, and protection, and could become one of the biggest deltas in the future. Collaboration across global businesses remains a key driver of growth, with distribution fees up 7% year-on-year. In summary, This is supporting strong growth. Profit rose 11% driven by solid revenue performance across businesses lines on the back of the strong commercial activity. Finally, payments, our high growth platform business. We continue to scale our global platforms and strengthen our position across acquiring, processing, and cross-border payments. In GetNet, we're expanding internationally and simplifying integration through a single API, enabling companies to easily scale across markets. Our platforms continue to enhance capabilities, supporting multiple payment methods and improving efficiency, while Ivory keeps expanding its customer base and geographical footprint. This is translating into strong results, with revenue up 20%, a higher EBITDA margin, and a lower cost per transaction, with profit up fourfold year on year. Overall, the business is building a strong momentum with clear upside as we continue to scale. Yeah. Our strong operational and financial performance is driving higher profitability and double-digit value creation for the 12th consecutive quarter. Underlying ROTE improved to 15.2%, reflecting our disciplined capital allocation strategy. At current capital levels, this is even more compelling, as it would be around 16.5% at normalized CET1, with further upside from M&A and OneTransformation. Underlying earnings per share grew 17% as a result of TNAP plus cash dividend per share increased 19%, reflecting a strong profit generation and the impact of buybacks. Including the full buyback currently underway, we have already returned €7 billion to our shareholders out of our commitment to distribute at least €10 billion for 2025 and 2026. I will now hand over to Jose, who will go through the financials in more detail.

Thank you, Hector, and good morning, everyone. I will take you through the group's P&L and capital performance in more detail. But first, let me remind you, as Raúl explained in his introduction, that this is the first quarter we are reporting after the disposal of Poland and under the new cost structure that we announced in February. As a result, the impact of Poland is reported in the non-recurring items line in both 2025 and 2026. We will also book in this line the M&A-related charges from TSB at Webster that will arise in the coming quarters. As usual, we present growth rates in both current and constant euros. The difference this quarter was around 2 percentage points, mainly due to the depreciation of the U.S. dollar. Turning to performance. As Hector mentioned, we are yet again delivering record results for the eighth consecutive quarter, with our transformation driving strong operational leverage and profitable growth. Revenue grew 6%, supported by solid business activity, while costs declined, both in line with our public targets for 2026. Loan loss provisions were impacted by portfolio deterioration in Argentina, reflecting sector trends in the country. In the rest of the group, provisions declined 2% year-on-year. The other results line includes a motor finance provision in Open Bank Europe of €210 million. As a result, profit continued its upward trend, growing 14% year-on-year in constant euros. Total revenue increased 6% year-on-year to 15 billion euros in line with the target we set for 2026. This growth was underpinned by customer activity and 8 million new customers we gained in the last 12 months. All global businesses contributed to revenue growth, which was mainly supported by another record quarter in CIB, up 15%, driven by strong client activity, especially in global markets. Open Bank, which also performed well due to strong net interest income growth, especially in Europe. and retail on the back of solid NII performance and our increased focus on fees. Payments and wealth also showed very good figures, with payments up 20 percent, driven by higher activity across business lines, and wealth growing, supported by higher assets under management and focus on value-added products and services. The group's net interest income increased 5% year-on-year. The vast majority of this improvement comes from retail and consumer, but corporate investment banking also contributed to the overall growth this quarter. Additionally, NII was resilient in retail across most countries, even with less favorable interest rates in general, supported by higher volumes. Open Bank delivered solid NII growth, driven by higher volumes in Europe and South America, and an improved funding mix. In wealth, NII was impacted by deposit costs, reflecting the nature of the business in a lower-rate environment, while in the corporate center, we see the expected sensitivity to lower rates. On a quarter-on-quarter basis, net interest income was slightly up for similar reasons, despite the usual seasonality in South America and a lower day count. Overall, this performance is ahead of our investor day guidance for NII. We had another strong quarter in fees, up 7% year-on-year. supported by customer growth, increased activity, and a better mix towards higher value-added products, driven by our network businesses and one transformation. Growth was well diversified across our businesses. In wealth, fees grew double digits, supported by strong commercial activity across business lines and favorable markets performance. retail delivered solid numbers across our footprint, supported by customer growth. Open bank fees increased across our core markets as well, mainly Brazil, driven by portfolio expansion and higher insurance activity. And we saw double-digit growth also in payments, supported by high activity levels with GetNet's total payment volumes increasing 11%. In CIB, fees were impacted by a softer performance in European countries after a record first quarter 2025, although the pipeline remains solid and supports trends going forward. One transformation remains a key driver of our profitability improvement, leveraging our global platforms and connectivity to deliver operational leverage. This is reflected in our efficiency ratio, which improved further to 42.8% this quarter, supported by strong underlying business dynamics, with revenue increasing and cost declining 1% year-on-year in constant euros, or 4% down in real terms. In retail and open bank, which are leading sectors, Our transformation represents 75% of our cost base, costs declined by 3%, even in the context of the ongoing rollout of our global platforms, and revenue grew 3%, resulting in very positive operational jobs. In our network businesses, CIB wealth and payments costs grew below total revenue and broadly in line with the income, reflecting targeted investments in capabilities to drive low capital intensive growth, maintaining high recurrency levels. This excellent performance resulted in an 11% rise in net operating income from already very high levels last year. Looking ahead, even in a scenario of higher inflation, we expect to deliver cost reductions supported by the tangible benefits of one transformation and additional mitigating actions, both firmly under our control. Our balance sheet's risk profile remains low, with solid credit quality across our footprint, even in a more challenging environment, supported by prudent risk management and resilient labor markets in general. Having said that, some of the reported metrics this quarter are impacted by Argentina. reflecting sector-wide trends in the country in a less favorable context and should improve gradually as the effect of lower originations comes through. Excluding Argentina, credit quality remained very solid. Loan loss provisions were 2% down year-on-year, with resilient performance across the group in general. Cost of risk improved two basis points and the NPL ratio five basis points to 2.94% with a stable coverage ratio. In addition, our NPL portfolio has collateral guarantees and provisions that account for almost 90% of its total exposure. Stages grew in line with our portfolio with a stable distribution across buckets. Retail and consumer represent 90% of the group's loan loss provisions. In retail, we saw a strong cost-of-risk improvement, excluding Argentina, with solid underlying trends in key markets such as Spain and Brazil. In open bank, cost of risk also improved, supported by strong performance in the U.S. and resilient trends in Europe, even with the impact of Argentina. In corporate investment banking, provisions were affected by some single names in Brazil and in Europe. As of today, we're not seeing significant deterioration in employment, and credit quality remains stable. Moreover, it is in periods of higher instability when diversification becomes more relevant. Looking ahead, it is still too early to draw conclusions on the geopolitical environment, given the level of uncertainty at the moment. However, as long as labor markets are not significantly affected, we would not expect material impacts on our credit quality targets. Moving on to capital, we continue to generate capital at a strong pace while growing the business. In the quarter, our CET1 ratio increased by 90 basis points to 14.4%. We generated 29 basis points of net organic capital. This was mainly driven by disciplined capital allocation to high return new opportunities, with a new business return on tangible equity of around 21%, and a strong contribution from our risk transfer initiatives, which offset 20 basis points of risk-weighted asset growth. The disposal of Poland added 39 basis points to CT1, net of the 3.2 billion additional share buyback, corresponding to around half of the capital generated from the transaction. In addition, regulatory and model updates contributed 20 basis points. Overall, the strong capital generation in the quarter puts us on track to end the year above 12.8% in line with our target. The impact from TSB and Webster, which we now estimate at around 210 basis points, will be faced across the second and the third quarter. Importantly, our performance in these countries is not dependent on integration execution alone. Our transformation plans are already delivering tangible improvements. For instance, in the U.S., return on tangible equity has reached around 12%, one of the highest levels in recent years, while in the U.K. we're also seeing improving trends in both efficiency and profitability. All in all, our capital position remains very strong, supported by sustainable capital generation and profitable growth, with TSB and Webster strengthening our capital generation capacity going forward. Hector, back to you.