Banco Santander Mexico, S.A.

Good morning and welcome to Santander's third quarter 2025 results presentation. For the call today, we will be joined by Hector Crusi, our group CEO, and Jose Garcia Cantera, our CFO. Hector, over to you.

Thanks, Rahul. Good morning, everyone, and thank you for joining Santander results presentation. We will follow the usual structure. First, I will go over our results with a special focus on the performance of our global businesses. Then, Jose, our CFO, will then provide a detailed view of the financials, and then I will wrap up with some final remarks before we open for Q&A. Before we begin, a quick note that all figures in the presentation continue to include Poland until the disposal is completed. Q3 was another record quarter, reflecting the strength of our strategy and the resilience of our business model in a more demanding environment. Our quarterly profit hit a new record at $3.5 billion, making 9 months 25 the best 9-month period ever, driven by strong revenue growth across the global businesses and our solid customer base, which increased by $7 million year-on-year to $178 million as we enhanced customer experience by leveraging our global platforms. We achieved this while we continued to invest for the future through one transformation, making excellent progress towards a simpler and more integrated model. This has enabled further efficiency gains and a 70 basis points increase to our ROTE to 16.1. Our balance sheet remains also solid, with a strong capital ratio which ended the quarter with an all-time high of 13.1% and a robust credit quality. All of this drove strong shareholder value creation with enough plus cash dividend per share growing 15% despite some currency headwinds. We are approaching the end of our 2023-2025 strategic plan well on track to meet our targets. Thanks to our profitability and our disciplined capital allocation which is further improving profitability. Remember that earlier this year, we raised our ROTE target to around 16.5% post-81, equivalent to above 17% pre-81 from our original investor-day target range of 15% to 17%. At the same time, we are already operating with a CET1 ratio above 13%, clearly exceeding our original post-FACEL III target of above 12%, with 88% of RWAs generating returns above our cost of equity. Finally, after our latest inorganic transactions, we decided to accelerate the execution of our 10 billion euro share buybacks and upgrade our target, so we announced that we expect to distribute at least 10 billion euros to our shareholders through share buybacks for 2025-2026, subject to regulatory approvals. Let's go now into our income statement. Our P&L remained very solid with profit growing double digits year on year, once again reflecting the strength and diversification of our model. We deliver strong top-line growth, with revenue up 4% in cost and euros, supported by NII, which increased 2%, but especially by a new record quartering fees, up 8%, supported by significant customer growth and the network benefits that we are capturing through our global businesses. At the same time, expenses grew below revenue, down 1% in euros, in line with our target, showing the positive effects from our transformation. This performance translated into solid growth in net operating income, again demonstrating the sustainability of our results. A prudent approach to risk is also evident in our robust credit quality trends, with a cost of risk that is consistently improving year on year. Overall, as we have shown over time, our results are sustainable and less volatile than peers, even in a more challenging environment. We are ahead of our plan executing our transformation, boosting our operational leverage and structurally improving both revenue and cost. Simplification, automation and active spread management have already delivered 259 basis points of efficiencies. Our global businesses added 101 basis points, and our in-house and global tech capabilities another 88 basis points, exceeding the level expected by the end of 2025. And there is still more to come. We see further upside as we stay focused on rolling out common platforms across retail and consumer, while also capturing additional efficiencies from wealth, CIB, and payments by leveraging our global network. And all this is something that is entirely under our control. All our global businesses delivered strong profit growth while we improved the group's profitability. Customer activity and diversification continue to drive revenue growth. In a less favorable interest rate environment, our CIB, wealth, and payments businesses, which are more fee-driven, are seeing increased revenue, with fees up 7%, 19%, and 16% respectively. At the same time, some of our franchises and emerging markets perform better with lower rates. Our consumer business is a great example, with NII up 6% year-on-year. In addition, Our customer focus on solid track record in active balance sheet management explained the resilient NII performance in retail, which, excluding Argentina, grew 1% year-on-year. At the same time, we're extracting the potential from our scale. Scale gives us efficiency and also the flexibility to allocate capital quickly, something very few others can replicate. Combined with our strict capital discipline and focus on profitability, this is driving higher ROTE, which most of our businesses already above the targets we set for 25. It is this unique combination of customer focus, scale, and diversification that enables us to deliver strong and recurring results, putting us in an excellent position to navigate the challenges ahead. In retail, We are transforming the way we operate to become a digital bank with branches, combining cutting-edge technology with expertise and proximity of our teams. We continue to digitalize and enhance customer journeys, driving double-digit growth in digital sales. A key milestone was the launch of the new app in Brazil. That introduces conversational capabilities that we are now preparing is rolled out across more countries. In cost, we are making the most of AI to speed up simplification and automation, which is reducing manual activities and allowing teams to focus more on customer interactions and value-added activities. As a result, dedication of teams to non-commercial activities has dropped by 17% during the last 12 months. We are progressing in the rollout of our global platform, Gravity. Our backend technology is fully implemented in Spain and Chile, and we expect to deploy it in Mexico in Q4. Retail profit grows high single-digit year-on-year, driven by sound revenue performances across most countries. Costs decline in VR terms, and credit quality remains solid. In a more demanding environment, NII grew year-on-year, excluding Argentina, reflecting our focus on profitability and the disciplined margin management. And fees rose 5%, supported by higher customer activity, our ongoing digitalization, and improved customer journeys. We will keep scaling our transformation to boost efficiency and contribute to groups' growth. By improving customer experience and simplifying operations, we expect to continue growing our customer base while reducing cost in euros. In consumer, we continue to advance in our priority to become the preferred choice for our partners and customers by delivering the best solutions and strengthening our cost-competitive advantage across our footprint. Deploying global platforms is key to scale our business and to reduce cost to serve. We recently announced the integration of Santander Consumer Finance and OpenBank in Europe, a natural step that simplifies our business, reduces costs and improves our product offering. We keep enhancing our value proposition and OpenBank is again a great example. In Germany, it now offers a new AI-powered investment broker. In the US and Mexico, OpenBank has attracted 6.2 billion euros in deposits as part of our broader deposit gathering strategy. We continue to expand and consolidate partnerships, offering global best-in-class solutions with top OEMs. Xenia continued to grow, reaching record volumes during Amazon Prime Days and introducing installment payments for Amazon customers in Spain. Profit grew 6% year-on-year in a challenging context of weaker car registrations in Europe driven by NII growth and solid cost-for-risk performance, especially in the U.S. We continue to prioritize profitability over volumes, lower funding costs and accelerating transformation while actively managing capital to maximize returns. We expect consumer to be one of the drivers of the group's profit, supported by NII growth as the business benefits from lower rates and progresses in our strategy to lower funding costs, solid fee income performance as insurance penetration improves, and further cost efficiencies as we accelerate our transformation. In CIB, we are building a world-class business to better serve our corporate and institutional clients across our footprint, while maintaining our low risk profile. Number one, we continue to deepen our client relationships and strengthen our position in our core markets, leveraging our centers of expertise and expanded coverage. This is translating into market share gains in the U.S. as we achieve greater relevance in the investment banking space. Number two, our enhanced capabilities are enabling us for significant opportunities across EIB, improving our cross-business value proposition and driving solid growth in our institutional franchise in global markets, where revenue rose 27% year-on-year. Even in a more challenging environment, CIB keeps on delivering solid results with profit up 10% year-on-year, supported by solid free growth across business lines and exceptional performance of global markets early in the year. All of this while we maintain one of the best efficiency ratios in the sector and a ROTE of around 20%, reflecting our strict focus on profitability and capital discipline. We will build on the capabilities developed in recent years to drive revenue growth in CIB across the group, driven by stronger connectivity across countries, products and businesses. In wealth, we are building the best wealth and insurance manager in Europe and the Americas. Number one, in private banking, we remain focused on expanding our fee businesses and consolidating our global position through value-added solutions. we continue developing our new global family office service, which, after just three months of activity, is proving advisory services to our first clients in Spain who represent a total wealth of more than 500 million. Number two, in asset management, we keep reinforcing distribution and investment capabilities in alternatives and streamlining our liquid product platform. Number three, in insurance, we are focused on in two new verticals, Life and Pensions, with new products for senior customers in Brazil and annuities from private banking and affiliate clients in Spain, and P&C, where we expanded our value offering to SMEs with new protection business products in collaboration with GetNet. Number four, collaboration with other businesses is a major growth driver for wealth. Collaboration revenues have been a strong growth lever, with PV and CIB working hand-in-hand from tailored capital market structures for ultra-high-network individuals to new joint opportunities. In summary, all of this is supporting strong growth and high profitability levels. Profit rose 21% off the back of strong commercial activity and over-digit fee growth across the three businesses. Efficiency improved 1.3 percentage points year-on-year, and Rote is close to 70% confirming wealth position at one of the most efficient and profitable businesses in the group. Finally, payments, where we hold a unique position on both sides of the value chain. In Merchant Aquarium, we're expanding our global platform with a single API to serve all our customers across our footprint. It is now live across our five countries in Latin America, reinforcing GetNet's positioning in the region. Pagonex Payments is leveraging the best proprietary technology to deliver account-to-account processing, FX, fraud detection, and other value-added services, volume processes, by our payments hub were more than five times higher than last year. In cards, where we are among the largest issuers globally with 107 million active cards, we continue to expand the business and deliver best-in-class products. As part of our Debit to Credit strategy to promote the benefits of using credit cards, this quarter we launched PaySmarter in five other countries. We also kept strengthening the integration between cards and merchant solutions, expanding our bundling proposition with GetNet in Brazil, which now joins Spain, Chile, Portugal, and Argentina. Payments delivered strong quarter, resulting in double-digit revenue increase year-on-year, both in CARTS and Pagonext, with controlled costs driving profit growth of more than 60% and improving Pagonext's EBDA margin to 32%, already above our 25-invest-a-day target, with GetNet being one of the best among peers. Our strong operational and financial performance is driving higher profitability and double-digit value creation for the 10th consecutive quarter. Post-81 ROPE reached 16.1% of nearly 1% point year-on-year, reflecting our disciplined capital allocation strategy. Earnings per share rose 16%, supported by solid profit generation and fewer shares following buybacks. As a result, TNAF plus cash dividend per share increased 15%. We maintain our upgraded target to distribute at least 10 billion euros to our own shareholders through share buybacks for 25 and 26, subject to regulatory approvals. Since 21, and including the program that is underway, we will have repurchased more than 50% of our outstanding shares, providing a return on investment of approximately 20% to our shareholders. I will leave you now with Jose, who will go into our financial performance in more detail.

Thank you, Hector, and good morning, everyone. I will go into more detail on the group's P&L and capital performance. Let me first remind you that, as we always do, we are presenting growth rates in both current and constant euros. The difference was around 5 percentage points as of September, mainly due to the depreciation of the Brazilian real and the Mexican peso towards the end of last year. As the CEO explained, we are yet again reporting record results this quarter for the sixth consecutive quarter. Revenue grew 4%, with a good cost performance in line with our objectives for 2025. Cost of risk improved in the quarter, supported by robust labour markets and our prudent risk management. There are several positives and negatives in the other results line, but the concepts that explain most of the significant drop in this line Year-on-year are the write-downs in PagoNext in the second quarter of last year and the temporary levy on revenue earned in Spain, which this year is being recorded under the tax line. For the last two years, we have reported a continuous upward trend in profit, which grew 3% this quarter in constant euros on the back of a resilient NII performance, cost under control and lower loan loss provisions. Total revenue increased 4% to 46 billion, on track to meet our 2025 target, even with less favorable interest rates than initially anticipated. This growth was underpinned by customer activity and more than 7 million new customers. All global businesses contributed to revenue growth. Payments accelerated with revenue up 19%, as both PagoNext and Cards delivered double-digit growth in NII and fees, driven by higher activity. Wealth also maintained the positive trends from the first half, with revenue rising 13%, supported by record assets under management and strong commercial momentum. CIB grew 6% year-on-year, driven especially by global markets and our growth initiatives in the U.S. Consumer also had a strong performance, supported by strong net interest income growth across most of our footprint. And finally, in retail, revenue rose even in a less favorable interest rate context, thanks to our active margin management and our increased focus on fees. The group's net interest income increased 3% year-on-year, excluding Argentina. Although the majority of Groups NII comes from retail and consumer, this quarter most of our businesses contributed to the overall growth year-on-year, which was supported by active asset and liability pricing management. This is most evident in consumer, both in Europe and the US, with improving loan yields and a funding structure with a larger share of customer deposits. Also in retail, especially in the UK, Chile and Mexico. Strong activity in cards, particularly in Brazil. Higher volumes and lower funding costs related to market activities and CIB. and our efforts to adapt the sensitivity of our balance sheets to protect NII on the new cycle of interest rates. A good example of this is retail, where net interest income increased across most countries in a less favorable context of interest rates. In the quarter, net interest income was impacted by the Argentine peso. Excluding Argentina, NII was flat and net interest margin declined only four basis points for similar reasons I just mentioned. This performance is in line with our guidance of NII going slightly up in 2025 in constant euros excluding Argentina and slightly down in current euros. We believe net interest income is approaching its trough as we move into a more balanced environment. with rates in Brazil expected to ease and lower rates in Europe likely to support consumer volumes and funding costs. Net fee income achieved yet another record period, as the number of active customers continue to increase and our transformation promotes connectivity across the group, deploys high-value added products and services, and delivers the best customer experience. Fees grew high single digits, above our target for the year and well above inflation and costs. This was supported by positive activity trends, customer growth and a product mix that is shifting towards more value-added products and services. This shift is evident across all global businesses. Retail fees rose 5%, increases across most of our footprint. CIB increased 7% up from record levels last year, boosted by an excellent first quarter and year-on-year growth across all business lines, particularly in global banking in the US. Wealth maintained strong momentum across business lines, backed by record assets under management. Double-digit growth in payments, both in pago next and cards, supported by higher activity levels. As discussed in previous quarters, this year consumer is affected by new insurance regulation in Germany. Nevertheless, we saw a recovery this quarter, supported by our strategic focus on insurance, with rising penetration expected to translate into higher fee generation as activity accelerates. As we advance our transformation, enhancing customer experience and connectivity, and continue to attract more customers, we expect a strong and sustainable fee performance. One transformation is key to understanding why we are improving profitability in most of our markets, leveraging the connectivity that our global businesses provide. The improvements are already very evident. Our costs dropped 1% year-on-year in current euros, which translates into better efficiency levels already amongst the best in the industry. In retail and consumer, which are leading our transformation, costs are evolving very positively, down 1% in real terms, even with pressure on salaries in some countries and the upfront cost of rolling our global platforms. In CIB Wealth and Payments, where we are investing, costs grew. However, they showed positive operating jaws with a double-digit fee increase, as I have just explained. This excellent performance resulted in a 5% rise in net operating income from already high levels last year, and our efficiency ratio improved to 41.3%, the best we have reported in more than 15 years. Going forward, we expect sustainable improvements in operational leverage as we further implement the structural changes to our model, especially in retail and consumer, which represent 70% of our cost base. The risk profile of our balance sheet remains low with robust credit quality across our footprint on the back of low unemployment and easing monetary policies in most countries. Loan loss provisions increased 5% year on year reflecting the decision to reduce NPLs and also some deterioration in Brazil in a context of higher interest rates. Credit quality continued to improve year on year, as reflected both in the NPL ratio and cost of risk. The NPL ratio was fairly stable at 2.92%. Remember that much of our NPL portfolio has collateral, guarantees and provisions that account for more than 80% of its total exposure. Cost of risk improved year-on-year and quarter-on-quarter to 1.13%, despite the management actions I just explained. In retail, cost of risk improved year-on-year across all our main countries and was steady in the quarter. In consumer, cost of risk also improved, both year-on-year and quarter-on-quarter, as the excellent trends in the US continued in the third quarter, even with the usual seasonality. US auto has demonstrated to be highly profitable and resilient business through multiple macroeconomic cycles. It continues to perform better than expected, even after some normalization of the delinquency rate, in line with our expectations, with over 90-day delinquency at historically low levels, backed by strong labor markets and resilient used car values. Finally, our lending exposure to private markets is less than 1% of groups' lending exposure. we anticipate a stable cost of risk going forward, supported by stable labour markets. Moving on to capital, as you know, we have been working on improving our capital productivity and accelerating our capital generation for some time. Our CET1 ratio increased again to 13.1% and is now above the top end of our 12 to 13% operating range. This quarter, we generated 56 basis points of capital from attributable profit, which enabled us to accumulate capital after allocating some capital to profitable organic risk-weighted asset growth, mostly offset by asset rotation initiatives, compensating capital distribution charges for shareholder remuneration and 81s, and absorbing other charges, including some regulatory headwinds, which, as we discussed last quarter, this year will be lower than initially expected, as some of them have been postponed to 2026, and some of the technical notes published by the EBA were more favorable than anticipated. We continue to deploy capital to the most profitable opportunities and leverage our global asset desks' mobilization capabilities to maximize capital productivity. Our disciplined capital allocation delivered a new book, RORWA, of 2.8% in the quarter, equivalent to a return on tangible equity of 22%, well above that of our back book. Hector, back to you.