Good evening, everyone, and thank you for joining Santander's 2025 Results Presentation. We are delighted to be joined by Executive Chair, Ana Botin; our CEO, Hector Grisi; and our CFO, Jose Garcia Cantera. We are going to have a short presentation with Ana leading the way. Ana, it's my pleasure to hand to you. Ana Botín-Sanz De Sautuola y O'Shea: Thank you, Raul, and good evening, everyone. Welcome to our '25 results presentation. So alongside our strong results today, we are announcing the acquisition of Webster Financial Corporation, an important strategic step for the group. So for that reason, today's presentation will follow a slightly different structure. First, Hector will kick off with an overview of our results. Then I will explain the transaction in detail, including the strategic and financial rationale and implications, and I will then wrap up with some closing remarks and our outlook for 2028. Hector, over to you.

Thanks, Ana, and welcome to our full year results presentation. This was another record year for Santander with a customer base growing by 8 million new customers to 100 million. Our quarterly profit hit a new record. And with EUR 14.1 billion in '25, we have reported our best ever annual results driven by solid underlying growth across all our businesses. We achieved this by focusing on one transformation. making excellent progress towards a common operating model and simplifying our products. This has enabled us to improve our efficiency to almost 41% and to increase our RoTE post AT1 to 16.3%. We have further strengthened our balance sheet, ending the year at all-time high CET1 ratio of 13.5%, reflecting our ability to generate capital organically. And finally, we once again delivered strong shareholder value creation with TNAV plus dividend per share growing by 14%. Our profits are up 12% year-over-year and ex Argentina up 15% year-on-year. We delivered strong growth in our top line with revenue up 4% in constant euros, supported by customer activity across all our businesses. Fee income is up 9% in constant euros, supported by significant growth in customers and the network benefits we're capturing through our global businesses. Expenses grew well below revenue, down 1% in absolute terms, showcasing the positive effects of our transformation, and we delivered record net operating income of almost EUR 37 billion. Our prudent approach to risk is also evident in our cost of risk, which ended the year at 1.15%, in line with our guidance for '25. The combination of our global businesses with geographical diversification continues to drive profitable and resilient growth. CIB, Wealth and Payments delivered strong revenue growth underpinned by solid fee increases driven by network effects and enhanced capabilities. At the same time, while higher…

We are now going to move to the Q&A session. We have the details of the phone line on our website if you'd like to join. [Operator Instructions] We have 5 questions lined up already from analysts. Can we go to the first question, please? I think it's from Alvaro Serrano.

A couple of questions, please. One on the cost synergies, the EUR 800 million. Obviously, it's a big number. I've seen the slide, and I listened to you, Ana, on talking through it, but maybe you can give a bit more color on the EUR 800 million because it's more than half of the cost base of Webster. I realize you're pointing out the combined, but they still look pretty substantial. Obviously, some of the U.S. was subscale in some businesses. So maybe you can walk us through there. And then the second one is more difficult is just to try to understand the rationale. When Poland was disposed, I remember the message was 20% hurdle rate. Look, 15% is still reasonable in today's world. But the concept of 20% was the group is making 15% or so, we've got to get compensated for execution risk and the U.S. is a market with mixed results over the last few years. So how would you explain to investors, which could be sort of questioning the geography, which was the U.S. investment was played down back then. Is 15% enough? Why do you think it's the right region? And how do you get paid for execution risk?

Yes. Thank you, Alvaro. So going to first to the question on synergies. First to highlight that we do expect actually quite significant revenue synergies, but that's not in the numbers. Webster has a very strong commercial operation with very strong bankers and very long-standing customers. They don't have a capital markets or CIB capacity. So actually, we're very excited about those opportunities. There could be funding synergies. It's going to allow us to grow faster in auto finance. That's not in the numbers. In terms of how we split the synergies, that is roughly the same number in terms of the combined cost base, I think, of what we said in TSB. We have done extensive due diligence. And the way we split this on the EUR 800 million is headquarters and overheads, EUR 480 million. Remember that we have very significant duplication in headquarters in Boston, Dallas, New York and Connecticut. We think that is a very significant opportunity there running retail networks. You don't need 2 structures to run retail networks. So that is something that is significant. Second, the technology integrations, we estimate somewhere around EUR 300 million of the total. That's a big number, EUR 280 million. We are very comfortable with that number. We are going to go on the commercial side, we're basically going to shut down our systems and go on to theirs. Simple, it's going to go into Fiserv. Our commercial bank is relatively small, but it's not that small. So that's all upside. On the front end for the consumers, we're going to use Openbank, which is up and running. It will delay slightly the Open bank launch national, but we're going to get a much better front end on the -- for the Webster customers. And the back end,…

Thank you, Ana. Could we go to the next question, please? It's from Sofie from Goldman Sachs.

This is Sofie from Goldman Sachs. Yes. So just going back to the previous question around the West Coast because it's not that long ago you exited your operations in the West Coast. Kind of what has changed now that you see that as a very attractive market given that a few years ago, you decided to run down your mortgage lending and kind of close your Santander branches in the region? And then my second question would be on the 140 basis points capital impact that you guide for. Can you just give us numbers that you kind of assume in terms of goodwill impact and other kind of adjustments to cap down that we should be aware of from this transaction? Ana Botín-Sanz De Sautuola y O'Shea: Okay. Apologies if I understood correctly, but I would say that, obviously, what Webster does is it converts Santander U.S. into the same kind of retail commercial bank that we run in every other country. We are not pretending to be a retail commercial bank across the United States. Our focus is the Northeast. It's a country or an economy the size of the U.K. There, we're going to be top 5 combined with the global scale of Santander, but the very strong community banking, commercial bank of Webster, what you're getting is a full-service retail commercial bank, which is something we could not do without Webster. That is why pre-Webster, we were very clear. And by the way, you have the numbers of what we've done in the last 3 years. We have turned Santander U.S. into a sustainable, profitable business, but it was more of a monoliner focused on consumer. What we did is expand the digital bank, greatly reduce the cost of funding. We got $8 billion in…

Could we move to the next question, please? I think it comes from Borja Ramirez at Citi.

The next question comes from Borja Ramirez from Citi.

I would like to ask -- so it seems the funding cost synergies from the deposit side of Webster. So I would like to ask, please, how should we look at the funding and the deposit funding allowing maybe better funding cost for the auto business point of view? And also, how should the transaction maybe -- how should we think about the improved [Technical Difficulty]

Sorry, Borja, I don't think we got the second part of your question. Yes. Do you mind repeating the second question, please?

Yes. Sorry. Sorry, my bad. I would like to ask, given the fact that the business is now more diversified and better funding now 100% loan-to-deposit ratio, could that allow for better growth going forward for the combined business? Ana Botín-Sanz De Sautuola y O'Shea: Yes, the answer is yes. As you said, loan-to-deposit goes to 100%. But very importantly, the cost -- average cost of deposits for the combined bank goes down by about 40 basis points, which is quite significant. One of the great businesses that Webster has is the HHA that is very sticky retail deposits. They're very good at that. And that is a very cheap cost of funding that they manage very well. That is one of the very attractive parts of the business. But obviously, they have a very strong retail presence also on commercial funding. So overall, that improves our loan to deposit and should allow us to grow faster on the consumer side. By the way, not just because of the funding, but also by the diversification. We now have a bank that looks like a traditional retail commercial bank, which we run in other markets. And in the U.S., this is the mix that you would see in any of the regional banks. So again, should allow us to grow faster overall as well as reducing the cost -- overall cost of funding.

Maybe we can go to the next question. That comes from Carlos at CaixaBank.

The next question comes from [ Carlos Peixoto ] from CaixaBank.

Just a quick question from my side actually on the deal integration. So actually 2 questions. But basically, in Slide 27, you make a bridge in CET1 evolution. I was wondering if you could describe as well is on the expected impact from the Polish sale and PSP so that we could have a bit of an additional color on the overall bridge until year-end 2026. And then on the second question, are you issuing new shares -- I'm sorry if I missed this, but are you issuing new shares for Webster or are those shares coming from the share buybacks being carried out? In case you issuing new shares, what was the rationale behind this option of issuing new shares while carrying out these buybacks? And why not carrying out the deal in cash and canceling the share buybacks that were previously announced? Ana Botín-Sanz De Sautuola y O'Shea: So Carlos, I hope I understood your question. So I think you're asking TSB and Poland, what this means in terms of impact by year-end. Ex M&A, as I said, mid-single-digit revenue growth, cost down and profit up during '26. with M&A, we expect double-digit revenue growth. We haven't said much in terms of cost, but because we need to -- again, we need to bring in a lot of cost and then include the synergies. So we'll give you that detail. But what's important is that for '27, which will be a clean year where you will get the full benefit of both TSB and Poland, what we are saying is double digit in constant euros, positive operational leverage and up -- profits up mid-teens in constant euros. So again, '27 would be a full year with both TSB and Poland. I think the more important strategic message is…

Next question comes from Britta at Autonomous.

The next question comes from Britta Schmidt from Autonomous Research.

I've got a few, please. Maybe firstly, with regards to the lending exposure, could you comment a little bit on the commercial real estate portfolio at Webster, which is relatively large, and I think where the NPL level is a little bit elevated versus peers. Maybe you can give us some comfort around that. The second one would be around the level of restructuring costs, which looks perhaps a little bit low. Maybe you can comment on what your due diligence has uncovered there? And then thirdly, just structurally, do you intend to merge Webster into the Santander business at some point in time? Are any of the synergies dependent on merging the business? And would this have any capital implications for Santander U.S.? So might there be perhaps some capital transferred into the business? And then lastly, just a clarification on what you just mentioned. The 2026 profit increase versus 2025 ex M&A. I'm reading the slide for that to be not in constant euros, but current euros. Maybe you can just confirm that. Ana Botín-Sanz De Sautuola y O'Shea: Yes. The EUR 14.1 billion is, right? So if you look at 2026, so we're talking about revenues and costs in constant, but we're talking about profits in euros, and they would compare with the EUR 14.1 billion we just reported in '25. So again, profits once you take out Poland and without putting TSB or Webster in the numbers, and you will have some months. We don't have exactly the number of months yet. We are assuming Q2 closing for TSB and second half for Webster. Profits will be up, okay? So -- and that is in euros, yes. In terms of capital implications, yes, that's all considered in the returns that we have provided, the -- as Jose explained, we have considered the group capital implications, and that's in 140 basis points. There's nothing more that we have seen, and we have been very -- we have been -- we've done quite a rigorous due diligence. In terms of the commercial book, again, we have people in the U.S. that understand this business. They've looked at the books. We think they're absolutely clean. They have a strong portfolio. They know the customers really well. They're quite diversified. So we're quite comfortable with that. Restructuring cost, the question was that it sounded -- it's EUR 1 billion, right?

[indiscernible] Ana Botín-Sanz De Sautuola y O'Shea: Sorry, 1x, so EUR 800 million EUR 800 million. And we will actually -- both the restructuring cost of TSB and Webster subject to auditors, but we believe we will offset most of those in '26 with the accounting gain from selling Poland, which is quite substantial. So again, that is considered in the numbers and the returns that we are providing both in TSB and now in Webster. Do you want to say? José Antonio García Cantera: No. And obviously, we haven't clarified this, but now that you mentioned it's important. The profit up in 2026 excludes the capital gain from Poland, obviously. Ana Botín-Sanz De Sautuola y O'Shea: With Santander, yes. So part of the uplift in RoTE to 18% before Webster was coming, and you have that in the slide, if you can put up the slide with the synergies. So first, as I said, Santander U.S. profit has gone up by 30% in 2 years. 3 years -- the last 3 years, you can see that the way we get from 10% accounting RoTE measured as U.S. banks to 18%. You can see here on the slide that we're just showing on the screen, there's a stand-alone improvement from merging already. And yes, they will all be merged into the bank. We have a process ongoing for that already. That is a big improvement on ourselves as we merge the banks. Then there's the cost synergies of Webster with the bank. So again, that is what takes us from 48% to 40%. On the right-hand side of the slide is for the whole of Santander U.S. that includes CIB. On the left, it's excluding CIB, so you can have clarity of what the retail commercial bank of Santander, including the auto business plus Webster and then the synergies on that slide. So we go from EUR 4.4 billion to 3.5 Again, some of it, as you can see on the left, Santander U.S. organic plan. You can see that, obviously, our cost base was still high pro forma and the combination is what takes you down then to the 3.5%. Is that helpful?

Britta, we will be around if you've got further details after the call as well, and we can follow up. Could we go to the next question, please? I think it's Ignacio Ulargui.

The next question comes from Ignacio Ulargui from BNP Paribas.

I have 2 questions. The first one is on capital generation. If I just look to the plan Slide 27 of the presentation. I mean, could you just explain a bit what is the reason behind the stronger buildup of capital that you have in '26 before completing the transaction, the 70 bps, I think it's a bit higher than what I would have in mind. Is there more SRP or it's just the fact that the profitability is improving? And the second question I have is on the revenue potential funding synergies of [indiscernible], just to be clear on that, there is no funding synergies incorporated into the 7%, 8% EPS accretion. Ana Botín-Sanz De Sautuola y O'Shea: So the answer is there's no funding synergies on the EPS accretion. That's upside. There's no revenue synergies. We are only giving you the synergies that we know we can count, we can measure and we can deliver for sure. But I am certain that there will be some funding synergies. I think this was asked before in the sense that we will be able to grow our auto consumer faster because we have a cheaper funding. So I think that is really interesting. And as you know, we are very competitive there. On the -- so there is upside, not just because of cross-selling of our CIB capital markets products to commercial customers, but also we'll be able to grow faster than we had in our own organic plan. That's not in the numbers. The cap gen that we are putting in for '26, it's exactly the same as what we did this year. So again, Jose or maybe Hector can comment on how we have done it. We are generating a lot of cash, and this is something we can do again. We've done it already. We know how to do it. We have very granular tools. But Jose, can you... José Antonio García Cantera: The cap gen is the same as in '25, as Ana just said. What are the assumptions in these numbers? Regulatory and supervisory headwinds of between 20 to 25 basis points, the same amount of asset rotation as in 2025, not more. Obviously, profitability, as we just discussed, is going to be higher. So we will be generating a bit more capital through profits. But all the other components, we expect them to be very, very similar to 2025. So that's how we come up with the 70 basis points, which again is the same number as in '25.

The next question comes from Hugo Cruz at KBW.

The next question comes from Hugo Cruz from KBW.

I have 3 questions. So first, I mean, I think some investors will be kind of right or wrong upset because they thought you're not going to do any big acquisitions. So I was wondering if you can give them any comfort that this is the last one? Or will you think about others once you digest this? Second question, is there any risk that this transaction is not approved by Santander or Webster's shareholders? And third, the timing of the synergies, I understand from the slide that the EUR 800 million will be captured by 2028. It seems pretty quick. But then perhaps it's because of the U.S., but also I was wondering, are there any more synergies to come after 2028? That's it. Ana Botín-Sanz De Sautuola y O'Shea: So the answer is very simple. No more bolt-on acquisitions. I'm not going to say never, but the next 3 years, clearly not. We don't -- but very importantly, it's not that I say we don't -- the important thing is that we are now at scale. We had an issue in the U.K. and the U.S. where it was taking us too long. As I've said many times, the U.S. was doing huge progress. You've seen it in the numbers. But our goal is to be the most profitable bank in each one of our geographies. This acquisition, again, is a bolt-on for the group. We were very transparent. It follows our capital hierarchy. This is really important. We've been very consistent. Share buybacks at today's price, return 9% to shareholders. This will return 15% to shareholders. It will add about EUR 2 billion down the road. I think those are rough numbers to get us to 18% between the synergies and the P&L of [indiscernible]. This gets…

Yes. I mean just to give you a very brief idea of what are we doing. So it's very important to understand that the business has grown significantly. '23, we made EUR 1 billion PAT, '24, EUR 1.5 billion, EUR 25 billion, EUR 1.7 billion in the results that you're seeing today. So it's very important to understand exactly what we're doing. Also, look at the spread of how the revenue basically. Revenue grew 9% in the U.S. year-on-year. Auto, the consumer business made, I mean, EUR 5.7 billion in revenue, okay? CIB, EUR 1.9 billion in revenue. That's basically 33% up year-on-year. Private Banking, around EUR 700 million and SB&A basically -- I mean, the retail bank basically retail and commercial is EUR 500 million. So what we're telling you is this is the last part of the puzzle that we needed to take this bank to the next level, right? So this is exactly what we needed in terms and it's going to help us not just in the synergies we're talking about, which are huge, but also what we're doing in terms of what the funding, which is not taken into account in these numbers [indiscernible] explained to you. And there is a lot of synergies in terms of cross-selling and things that we can do within the 2 business within CIB and the commercial business. Remember that Webster is 80% commercial, 20% retail. So it's actually exactly what we needed in order to combine our business and to take it to the next level. So it's going to help us quite a lot in that sense because -- it is exactly what we needed to take the business to be able to grow it to 18%. So the return is great, as you have seen, and…

Thank you, Ana. We've got 2 more questions left. The next one comes from Paco Riquel at Alantra.

The next question comes from Francisco Riquel from Alantra.

My first question is you have mentioned in the past that 10% market share was the target scale in any country where you operate. You will now get to 8% in the Northeastern region, much less nationwide. So do you think Webster will give you the scale and platform to be competitive with the large U.S. banks in the longer term? And my second question is, why do you think that the Webster acquisition is a better alternative than rolling out Openbank nationwide as you have been defending your digital strategy in the U.S. to date? Ana Botín-Sanz De Sautuola y O'Shea: So the answer is yes. I have said it. It's on the slide. We're at scale in all our core markets. When we think about the retail commercial business in the United States, we don't think about the whole country. We think about the Northeast, there we have a market share of 8%, which is very close to the 10%, and we are very confident we can get to that 10% with the new combination. So again, we are top 5 in footprint and 8% is a very attractive market share. Clearly enough, I want to repeat it again, we're at scale in all our core markets. We are not going to stop the open bank rollout national. That continues. Now what we are going to do is we will slow down the rollout of other products because we're going to focus on the integration. So we will delay by about a year. The national digital bank -- remember that, again, we were focusing on shareholder value creation in the short term. So the goal of Openbank National was to access cheaper funding than wholesale that we have achieved. That's what's behind part of the increase to EUR…

The next question comes from Andrea Filtri.

The next question comes from Andrea Filtri from Mediobanca.

I've got 2. Your business plan is in a few weeks, but this move feels like an introduction to it. You fixed U.K. and the U.S. now. Can we take this as a strategic move now that capital has also been addressed as a pivot towards growth over building up capital return, which you're confirming at 50% total payout between buyback and cash dividend. And the second is, if you could walk us through the buildup from the current 16 or thereabout percent RoTE to over 20% of 2028. I think the U.K. improvement, it's worth more than 1 percentage point for the group. The U.S. is contributing another one. Can you fill the gap of where you intend to complete the climb to over 20%? Ana Botín-Sanz De Sautuola y O'Shea: So thank you, Andrea, for that question. And the answer to the first is yes, absolutely. So we have built the capital. We had 2 pending core geographies where we're not at scale locally and the businesses were not at the level that we could get to that profitability in a reasonable time period. So yes, you can expect that you will compound -- we think of ourselves as a compounder, dividends, compounding tangible book and dividend growth through the cycle, and we think this is an incredibly important step. It's a turning point. We do -- obviously focusing on organic growth. As I've said, we are at scale in all our core markets. The 8% market share in our footprint is huge. What's really important, we are buying a really good bank. So yes, we are paying 2x tangible. But because we are the best owner, we can deliver for shareholders a 15% return on invested capital that's cash on cash, which I think is incredibly attractive…

Thank you, Ana. The last question -- we got one more question from Ignacio Cerezo at UBS.

The last question comes from Ignacio Cerezo from UBS.

Just clarifications really. The first one is if you can give us some detail on how you calculate the 15% return on capital invested. The second one, if you can confirm the distribution policy or the annual payout you're embedding in the 20% RoTE by '28. And the third one is if you foresee the possibility of having to raise the offer and how would you respond to that? Ana Botín-Sanz De Sautuola y O'Shea: So no, we do not consider raising the offer. We think this is a very balanced price for both sides. And again, the shareholders in Webster have upside through the share portion. The numbers for us work well, again, a combination of our global platforms and expertise, but very importantly, the synergies we've identified and the confidence we have that there will be revenue synergies. So do you want to -- this is a cash on cash, basically ROIC?

Yes. I'm going to ask Raul to give the details. But again, this is a 3-year return on the capital invested today. Ana Botín-Sanz De Sautuola y O'Shea: It's a cash on cash...

Exactly. Ana Botín-Sanz De Sautuola y O'Shea: Is that -- that's simple.

So Ignacio, we can take you through the details, if you like. But as you know, the transaction has 12.2 billion consideration, and that will give you a number that gets you to a capital employed if you take into account the capital impact, you take the 140 basis points to work out the capital impact plus the share issuance, that gives you the capital employed. And in terms of the returns, we've been quite clear. If you take consensus estimates, visible Alpha for 2028 for Webster, you will get the net profit number. You can add on to that the cost synergies, and that should get you relatively close. There is a point about the marks, but we can take you through the detailed part of the calculation, but that should get you pretty close to the circa 15% number. And obviously, feel free to give us a call. The Investor Relations team will be...

Which is the same way we calculated the TSB return on capital invested, and this is the usual way the industry calculates this number. So this is standard.

On the distribution question, Ignacio, we will give you more details at Investor Day. But safe to say, Ana has reiterated the 50% payout, and she has reiterated that we will apply capital hierarchy to CET1 above 13%. We expect to be above 13% in '27 and '28. We will apply capital hierarchy, but no more bolt-on acquisitions. Again, happy to take you through our existing guidance on that, and that should get you pretty close to some sense of what we assume in terms of a greater than 20% return on tangible equity. I think we've got no more questions left in the queue. I just wanted to thank you all for joining us at short notice this evening. We, in the Investor Relations team will be available all night to speak and answer your questions. You can get in touch through -- with us directly through our e-mail address, raul.sinha@gruposantander.com or through the usual phone lines that are on our website. And obviously, we look forward to seeing many of you at our Investor Day on the 25th of February. Thank you very much, and this concludes our call. Ana Botín-Sanz De Sautuola y O'Shea: Thank you very much.