Boston, June 28, 2024–(BUSINESS WIRE)–The Board of Governors of the Federal Reserve System (the “Federal Reserve”) notified Santander Holdings USA (“SHUSA”) on June 26, 2024 of SHUSA’s updated Stress Capital Buffer (“SCB”) requirements, effective October 1, 2024. SHUSA’s updated SCB will be 3.5% of the company’s Common Equity Tier 1 Capital (CET1), resulting in an overall CET1 capital requirement of 8.0%.
SHUSA’s strong capital supports our planned capital activities and the updated SCB is aligned with our long-term capital efficiency objectives.
As a Category IV company under the Federal Reserve’s adjustment rules, SHUSA was subject to the Federal Reserve’s 2024 supervisory stress tests. As measured by the reduction from the minimum projected CET1 capital ratio and the beginning CET1 capital ratio to the minimum CET1 capital ratio, SHUSA remains in the top half of companies subject to the supervisory stress tests. As of March 31, 2024, SHUSA had $5.1 billion of CET1 capital in excess of the 8.0% capital requirement.
The increase in SHUSA’s 2024 SCB from the current 7.0% requirement is the result of an increase in the Federal Reserve’s projected decline in CET1 in an extremely adverse scenario, last updated in the 2022 cycle, and planned dividends.
SHUSA conducts its own stress testing using bank holding company stress scenarios developed internally as well as scenarios provided by the Federal Reserve. The 2024 stress test shows that SHUSA maintains a strong capital position under all forecast scenarios, including the exploratory stagflation scenario included this year. SHUSA’s internal stress scenarios include low interest rates, high unemployment and a major shock to used vehicle and commercial real estate prices.
Santander Holdings USA (SHUSA) is a wholly owned subsidiary of Madrid-based Banco Santander (NYSE: SAN) (Santander), recognized as one of the world’s most respected companies. Fortune Magazine SHUSA, the intermediate holding company for Santander’s U.S. operations, is the parent company of financial companies with more than 11,800 employees, 4.5 million customers and more than $165 billion in assets as of 2023, including Santander Banco, NA, Santander Consumer USA Holdings, Banco Santander International, Santander Securities LLC and Santander US Capital Markets LLC, as well as several other subsidiaries. Santander US is ranked as a top 10 auto loan lender and multifamily bank lender, and also has a growing wealth management business. For more information about Santander US, please visit www.santanderus.com.
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