Credit Risk Management at Banco Santander
Credit Risk Management at Banco Santander

Author(s): Inés Rodríguez
Subject(s): Economy, Business Economy / Management, Micro-Economics, Financial Markets
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: credit risk management; Banco Santander; non-performing loans; financial stability and regulatory compliance
Summary/Abstract: This paper analyses Banco Santander’s credit risk management practices, focusing on how the bank identifies, measures, monitors, and mitigates potential losses from borrower defaults. Effective credit risk management is crucial for financial stability, profitability, and regulatory compliance, as it directly impacts portfolio quality and capital requirements. The study reviews Santander’s internal policies, organizational structure, technological tools, and monitoring systems, as well as key financial indicators such as non-performing loans, provisions, and coverage ratios. It also compares Santander’s performance with other major international banks to contextualize its practices. The topic is highly relevant given ongoing regulatory changes, economic fluctuations, and emerging risks such as climate, cyber, and technological threats. The methodology combines a descriptive and analytical approach, including the examination of official reports, financial statements, and specialized literature. Qualitative analysis of risk policies, governance, and risk culture is integrated with quantitative evaluation of portfolio quality and benchmarking against peers. Findings indicate that Santander maintains a strong and proactive credit risk management framework. Through advanced internal rating systems, continuous monitoring, portfolio diversification, and regulatory compliance, the bank demonstrates resilience to defaults and adverse conditions, ensuring sustainable profitability and reinforcing investor and customer confidence.

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