Financial Inclusion

We are convinced that in order to drive social development we must focus on guaranteeing accessibility to financial products and services in a responsible and sustainable manner. This is why we have been working on designing services that are available to all; services that meet the needs of the most vulnerable segments of the population and of each and every person who uses them. We want people to have the opportunity to plan and take informed decisions based on a quality financial education.

Microloans

Our Financial Inclusion division, Tuiio, Finanzas de tú a tú, offers microloans to a population with limited or no access to financial services and entrepreneurs in order to guarantee the success of their businesses and drive the domestic economy. Through this program, we have successfully supported local businesses and promoted financial inclusion.

Tuiio transforms people’s lives through financial products and services aimed at low-income sectors in Mexico. The majority of its customers are women entrepreneurs who are not part of the formal economy and who are generally excluded from formal financial institutions.

Tuiio offers direct support to our customers when they acquire a product because we know that proper engagement leads to transparency. Tuiio has 83 branches and one kiosk. During 2021, the kiosk in San Mateo Atenco, located in the State of Mexico, was closed to help streamline operations; however, the team from the kiosk was moved to our offices in Toluca to continue offering support and provide follow-up services for all its customers.

In addition to measuring Tuiio’s social impact, we have set short-, mid- and long-term indicators based on the generation of responsible and shared value.

Products

Tuiio Training for Employees

Our employees play a fundamental role in helping the Bank offer the best possible tailor-made services to our customers. We have achieved this through training sessions that cover areas such as customer service, financial issues and workplace and personal skills development.

Tuiio Móvil App

Tuiio promotes mobile banking among its customers in order to offer security and reduce the amount of time they have to spend at Santander offices. The app is available to all our customers and offers them the opportunity to make loan payments and check balances, among other operations.

In 2021, Tuiio joined the Financial Education strategy, focusing on three core areas to engage with its customers more efficiently and reach out to those people who are not yet customers:

• 1.Participation in forums and events.
• 2.Tuiio Financial Education website.
• 3.Financial Education - Fideicomiso Por los Niños de México (FPNM).

Government Loans – Tuiio

In conjunction with Tuiio, we continue promoting financial inclusion through a loan program announced by the Mexican President that is available to a million small businesses. Beneficiaries can make loan payments via the Tuiio Móvil app. We also offer them access to Financial Education content, the Anúncialo Tuiio online directory, and exclusive promotions and discounts. In 2021, we benefitted 3,314 people.

Financial Education

We are firmly committed to improving the financial culture of Mexican families, and we fully understand that the best way to do so is by promoting specialist financial education, providing them with information about how to use financial products and services properly, and offering them the tools and knowledge they need to make the right decisions to guarantee their financial well-being.

We have focused our financial education efforts on audiovisual resources and social media, convinced, on one hand, that this is an effective learning method, and, on the other hand, taking into consideration the fact that distance learning has become an essential tool during the COVID-19 pandemic.

The major actions undertaken in the area of financial education in 2021* include:

Financial Education Website

During 2021, we continued renewing the Bank’s Financial Education website. The website now includes a more consolidated and comprehensive range of content that is available to different sectors of the population. The site now includes a course covering the basic concepts of personal finances, as part of the institutional ABC of Your Finances program, created by the Bank in conjunction with ABM and MIDE and which has been approved by the National Commission for the Protection and Defense of Users of Financial Services (CONDUSEF). Furthermore, the site includes content from our financial inclusion program, Tuiio, focusing on the unbanked, new ventures, and materials for children, including games or audio stories and other content to help college students embark on their financial lives. Finally, we offer innovative and interactive materials, such as calculators and simulators, as well as content to help raise awareness and promote the adoption of the Digital Collection (CoDi) payment system. During 2021, the Bank’s financial education website had 25,016 unique visitors.

National Financial Education Week – SNEF

Every year, the federal government, through the National Commission for the Protection and Defense of Users of Financial Services (CONDUSEF), organizes National Financial Education Week (SNEF). The event brings together public, private, social and educational institutions from around the country through free conferences, games and activities, providing the general public with information on how to better manage their personal finances, including the responsible use of financial services and products.

For the second year, the SNEF was held virtually. From October 4 to 15, we participated through a range of audiovisual content on the SNEF website, a virtual stand in the central area of the online event, and a series of 20 virtual conferences with financial education experts held via Work Café Santander. In total, we offered training to 10,467 people through a number of different activities.

Tuiio Financial Education Website

Tuiio has its own financial education website that is free of charge and offers a wide range of materials designed to meet the needs of customers and people in Mexico from low-income backgrounds. It has also developed, among other content, a section for children, a section that offers tips on how to tackle the financial crisis stemming from the pandemic, and even a section containing health tips. The site offers calculators, financial education games, podcasts and videos, etc. In 2021, users were offered access to two new courses: How to Fix my Finances and Loans in the Digital Age. The website recorded 356,874 visits during the year.

Academia MX Financial Education – Employees

In 2021, we redoubled our efforts to offer our employees financial education training through online courses made available via an internal platform. These sessions dealt with basic concepts of personal finances, investments and the use of loans and insurance. During 2021, 2,574 employees took part in these training sessions for the first time.

Financial Education – SME’s

We continue offering webinars covering relevant issues for SME’s through our partnership with Work Café Santander, the Wadhwani Foundation and Universidad Anáhuac. During 2021, we benefitted 564 users through a number of online events dealing with issues that include SME digital transformation plans, the outlook for SME’s in Mexico, remote team management and obstacles, and adapting businesses during periods of crisis, among others.

Bank Financial Education - Work Café Sessions

Our non-financial content migrated to webinars dealing with issues such as financial education and resilience. We have been working with Work Café Santander to broadcast monthly sessions. During 2021, we benefited 1,106 users.

Bank Financial Education – Customer Sessions

In 2021, we offered our customers a series of webinars about financial education and resilience. These sessions were aired every month, benefitting 498 users.

Bank Financial Education – Payroll Sessions

During 2021, we rolled out a series of innovative initiatives to offer online financial education sessions to a number of different segments of the population. Through Work Café Santander, we held a series of financial education talks open to the general public; in conjunction with our payroll area, we offer monthly financial education courses for Santander customers; and, with the support of our credit card area, we offered training regarding how to use this financial tool properly, available to both Bank’s customers and Santander employees from around the country. We benefitted 1,455 users.

Bank Financial Education – Credit Card Use Sessions

During 2021, we rolled out a series of innovative initiatives to offer online financial education sessions to a number of different segments of the population. Through Work Café Santander, we held a series of financial education talks open to the general public; in conjunction with our payroll area, we offer monthly financial education courses for Santander customers; and, with the support of our credit card area, we offered training regarding how to use this financial tool properly, available to both Bank’s customers and Santander employees from around the country. We benefitted 1,455 users.

Financial Education – FPNM

Through Tuiio, we designed an annual Financial Education program aimed at beneficiaries of the Fideicomiso Por los Niños de México, Todos en Santander (FPNM). Four sessions were held, during which institutions were offered information about how to replicate materials and Financial Education tutoring was offered. A total of 21 CSO’s were involved, directly benefitting 23,021 adults, young people and children.

SME Programs

SME’s play a key role in the Mexican economy, mainly in terms of the large number of jobs they create. This is why we are committed to driving the progress of local companies and people involved in SME’s.

We offer a series of services aimed at Small and Medium-sized Enterprises that are just starting out in order to help them tackle major obstacles to their development and solvency, thereby guaranteeing their sustainable growth. This is how we help promote job creation and economic development in the country.

We focus on five core areas: Talent and Training, Employment, Internationalization, Connectivity and Financing.

We also focus on forging business alliances and relationships through international business support and outreach programs to offer Small and Medium-sized Enterprises the opportunity to export and import their products through the following programs:

SME Advance

In 2021, as a result of the COVID-19 pandemic, we continued offering our non-financial options online through webinars that focused on the most relevant issues SME’s faced together with Work Café Santander, the Wadhwani Foundation and Universidad Anáhuac. This year, only two events were held face to face:

• • National CANACINTRA Convention at Expo Tamaulipas in October 2021.
• • Agricultural Credit Fair held in Boca del Río, Veracruz, in November 2021.

We have had a positive impact on more than 7,600 users through 48 online events covering topics such as the outlook for SME’s in Mexico, remote working, and business roundtables for Mexican SME’s, among others.

Furthermore, in January 2021 we organized the first Santander SME Summit, a three-day online event that included workshops, moderator-led panels, talks with experts and a gateway for questions and answers from participants. We focused on issues such as finance and investments, e-commerce, resilience and the digital transformation of companies. A total of 3,387 people took part in the event, which was hosted and moderated by Max Espejel, a world-renowned presenter.

SME Digital Events

Throughout 2021, we continued support for SME’s throughout the COVID-19 pandemic by offering them a series of online talks, webinars and free courses, including:

SME Outlook: During this session, we offered an overview of the economic outlook based on major events, analyzing the present and trying to define the future based on these indicators.

Remote Working and New Ways of Working: This panel session focused on offering SME’s tools to improve how they manage their human capital in terms of remote working, legal reforms, hybrid working models in the new normal, and the challenges, pros and cons of these tools.

Managing Employee Mental Health and Talent: This panel session offered SME’s tools to help manage human capital, focusing specifically on employee mental health and how to measure their performance through this model.

SME Digital Transformation: During this panel session, we shared tools to help SME’s adapt to the new normal within the digital environment. We focused on a number of issues, including how to create a social media communication plan and how to find experts in this area, among others.

South-Eastern Business Roundtable: This informative session focused on attracting customers and consolidating the loyalty of existing customers. We offered useful information for customers and prospective customers, including economic and climatological outlooks for the south-eastern region, in addition to providing information about available financial options and services.

Santander SME Online Loan

Our SME and young entrepreneur customers now have the opportunity to request loans online. This has enabled us to streamline processes and accelerate customer response times from 48 hours to just 60 minutes after approval. We have also streamlined our application reception process, which means that we can quickly and easily decide whether an applicant meets the requirements.

We have two types of online loan:

• • Crédito Simple for working capital, with terms of between 12 and 36 months.
• • Crédito Ágil for working capital, with a 12-month term.

G Store

In conjunction with GetNet, Santander launched G Store, a platform that offers entrepreneurs or SME’s an online store created by a team of professionals that includes a catalog, sales processes, Santander GetNet payment options, and a functioning delivery model. This has helped G Store position itself as the most competitive model in the market as it offers next-day deposits, while other options on the market take three days to process deposits.

Industry Debtor Support Program (PGAD)

We rolled out this program to help our customers during the COVID-19 pandemic. In 2021, we improved the decision- making models for our customer accreditation process and for ensuring the proper management of any impact stemming from the pandemic. We also migrated our portfolio operations from LIBOR to SOFR as of 2022. We also streamlined our loan acquisition processes, and, by the end of the year, we rolled out a dual rate, offering customers the option to choose a fixed or variable rate depending on market forecasts.

Joint-Stock Companies (SAS)

We continue promoting the SME Online Onboarding process alongside the Ministry of the Economy, allowing us to recognize companies that have been registered as Joint-Stock Companies (SAS) in our information systems.

At 2021 year-end, we opened more than 5,000 new accounts for SAS through SME Online Onboarding, offering them a tailor-made and differentiated service.

Sustainable Finances

In keeping with our goals to tackle climate change, we enthusiastically support sustainable financing that encompasses Environmental, Social and Governance criteria (ESG). This is how we help guarantee social development and safeguard the environment, in addition to promoting the transition to a carbon- free economy through the financing of projects that develop renewable sources and help combat the climate crisis.

This is why we continuously focus our efforts on ESG operations, providing not only financing and funds for transactions but also guidance for our customers in this area.

Bonds and loans with ESG criteria

Sustainable bonds are debt instruments that are used to finance projects to guarantee social and environmental well- being. They must be aligned with the Green Bond Principles and Social Bond Principles of the International Capital Market Association (ICMA).

Through Santander Corporate and Investment Banking (SCIB) Mexico, the entity tasked with managing the financing of sustainable bonds, we created a specialized team in this area - ESG Solutions Mexico – the goal of which is to promote sustainability by financing green projects and providing guidance and support to our customers.

During 2021, the team participated in the first Sustainability- Linked Bond (SLB) transaction on the local debt market. Through ESG Solutions Mexico, we achieved numerous successes in issuing a range of different bonds:

ARCA CONTINENTAL Green Bond: Arca Continental, a Coca- Cola bottler, through its AC Bebidas subsidiary, issued its first green bond on the Mexican market for MXN $4.6 billion. This was the first green bond issued on the local market by a company in this sector. Santander Mexico was the only ESG consultant to offer positive results.

Coca-Cola FEMSA Sustainability-Linked Bond (KOF): This was the first Sustainability-Linked Bond issued on the Mexican market by KOF, the brand’s largest global bottler. Santander ESG Solutions jointly led the ESG consultancy process for the transaction. The bond’s rate is linked to the successful reduction and efficient use of water in its operations (from 1.36 liters by 2024 to 1.26 liters by 2026).

GAP 21V Green Bond: The purpose of issuing this bond, jointly with Grupo Aeroportuario del Pacífico (GAP), is to generate a positive impact on the environment by financing projects such as: ecological buildings, renewable energies, energy efficiency, sustainable management of water, among others.

Sustainability-Linked Syndicated Loan (Coppel): The team at ESG Solutions Mexico jointly led the ESG consultancy process for this transaction, aligning the company’s sustainability strategy with the LMA Principles (Loan Market Association). This joint effort led to the issuance of a sustainability-linked loan totaling MXN $40 billion. The loan rate is tied to the participation of women in leadership positions and the total installed capacity of solar energy within the company. This was a joint effort between SCIB and BEI, using the Green Book for appraisal.

Sustainability-Linked Bond FUNO 21X: The resources of this bond are directed to the financing of projects related to energy efficiency, clean energy, sustainable infrastructure, health and well-being, among other things.

Bimbo RCF Loan: This is a revolving loan totaling USD $1.75 billion, in which Santander was responsible for USD $212.5 million. This financing focused on extending the terms of a previous syndicated loan. The resources are being used to refinance liabilities, acquisitions, CAPEX and for general corporate use. This financing is tied to sustainability and the measurement of certain KPI’s throughout the year. If the company meets these KPI’s, it will see benefits in terms of the applicable margin and commissions for undrawn balances.

AMX Syndicated Loan: This focused on the refinancing of a 5-year syndicated loan for a total of USD $1.5 billion (the equivalent in USD of the original amount in EUR), in which we were assigned the role of Mandated Lead Arranger. The contract encompasses three KPI’s:

• • KPI 1: Reduction in absolute CO₂ emissions.
• • KPI 2: Increase in the number of ISO 4500-certified subsidiaries.
• • KPI 3: Increase in the number of women on the Board of Directors + independent annual review.

FEFA 21G Social Bond: We continue working together with Fideicomisos Instituidos en Relacion con la Agricultura (FIRA) to promote the socioeconomic empowerment of women in the agricultural sector

Affiliation into the Green Finance Advisory Board (CCFV)

In October 2021, Santander Mexico joined the CCFV. As a result, we will be able to become more involved in round tables, taxonomy development and discussion forums, among other activities, for the local market. This will allow us to proactively contribute to and remain at the cutting-edge of sustainability within the local market.

Sustainable Santander Mexico 2021

In November 2021, we held a forum organized by Santander Mexico SCIB that brought together ESG leaders from around the world, alongside companies, corporations and investors interested in these areas. The President of Banco Santander, Ana Botín, presided over proceedings and talked about how Santander is a global leader in the financing of renewable energies and is driving the transition to a green and carbon- free economy.

Santander Asset Management (SAM)

SAM is Banco Santander’s Investment Fund Manager, and it promotes a sustainable approach. In July 2020, it signed the United Nations Principles for Responsible Investment to reaffirm our commitment to responsible investments and our wholehearted support for creating a more sustainable financial system. Our strategy reflects our dual commitment: contributing to the United Nations Sustainable Development Goals and aligning ourselves with the goals of the Paris Agreement to combat climate change.

SAM has the methodology and tools required to analyze and calculate an ESG score for all the assets we invest in, in addition to offering a broader overview of the risks and opportunities they represent. This allows us to identify issuers who are well prepared and have a greater potential to benefit society and the environment.

It also includes a process of engagement to create a business model for the companies, their risks and opportunities, in addition to improving company reporting on ESG issues and driving improvements in companies’ management and strategies for ESG risks.

SAM reached a milestone in 2020 by launching SAM ESG, the first Equity Fund based on sustainability criteria in Mexico. It then went on to launch a second Equity Fund based on ESG criteria in 2021: the Global ESG Equity Fund (SAM-RVG).

SAM has also recently joined the Net-Zero Asset Managers global program as part of its commitments, helping it to achieve net-zero greenhouse gas emissions by 2050 or earlier and making it the first Spanish fund to join the 73 signatories of this program. This decision highlights Banco Santander’s firm commitment to spearheading sustainability initiatives as part of its commitment to achieving zero emissions stemming from any financing, consultancy or investment service by 2050.

Other Green Financing

We continue offering incentives for electric vehicle loans by launching business and financial plans that offer our customers an attractive option, in addition to future projects to benefit both the environment and society.

Green Car Plan

Our Súper Auto business grew by 85% in the number of loans and by 99% in the amount of the loans. We continue striving to finance electric cars in conjunction with major industry players given that the economic effects of the COVID-19 pandemic have led to serious challenges that must be overcome.