Bankinter S A : 2024 Consolidated Statement of Non-Financial Information and Sustainability Information

About this update from Bankinter Sa

Consolidated Statement of Non- Financial Information and Sustainability Information 2024 General Information Introduction General bases for the preparation of the Consolidated Statement of Non-Financial Information and Sustainability Double materiality analysis Context analysis IRO identification and management process Double materiality assessment List of Material Disclosure Requirements Corporate governance The role of the governing, management and supervisory bodies Alignment of remuneration policy with ESG objectives Due diligence Risk management system and internal control related to the Sustainability information disclosure process (ICNFR) Strategy Business model The Group's Commitment to Sustainability (Sustainability Policy and Plan) Relationship with stakeholders Integration of impacts, risks and opportunities in the strategy and business model Policies, processes, actions, parameters and goals Environmental Information - ESRS E1 Identification and assessment of material environmental IROs Materiality analysis of climate change risks Management of IROs in financing IRO management in investment Integration of environmental factors into the Group's business model and strategy - Climate resilience Identification and measurement Corporate & SME Banking Mortgage portfolio Evaluation Portfolio alignment Sensitivity analysis Exposure method 4 2.2.3. Action 62 4 2.2.3.1. Inclusion of Climate Change Risk in the Credit Risk Admission Process 62 4 2.2.3.2. Business strategy - Transition plan 63 2.2.4. Monitoring 72 6 2.3. Information on Environmental Taxonomy 72 7 2.4. Governance of climate aspects management 78 7 2.5. Consumption and energy mix 79 8 2.6. Emissions 80 13 2.6.1. Emissions offsetting 82 17 2.7. Objectives 83 17 3. Social Data 85 21 3.1. Issues relating to employees - ESRS S1 85 23 3.1.1. Characteristics of employees 85 24 3.1.2. Integration of IROs relating to employees into the strategy 88 26 3.1.3. Dialogue and collaboration process with the staff 91 3.1.3.1. Channels for communication and employee incident management 94 26 3.1.4. Policies relating to employees 95 28 3.1.5. Objectives and goals 98 34 3.1.6. Working conditions: Key actions and parameters. 100 3.1.6.1. Fair wages 100 35 3.1.6.2. Social protection 100 36 3.1.6.3. Social dialogue and collective bargaining 101 3.1.6.4. Work-life balance 102 37 3.1.6.5. Health and safety 104 37 3.1.7. Equal treatment and opportunities: Key actions and parameters 106 40 3.1.7.1. Remuneration 106 45 3.1.7.2. Training and talent management 107 47 3.1.7.3. Attracting talent and promoting diversity 110 48 3.1.7.4. Measures against violence and harassment in the workplace 112 3.2. Issues concerning consumers and end users - ESRS S4 114 48 3.2.1. Dialogue with stakeholders 114 48 3.2.1.1. Communication channels and incident management 114 53 3.2.2. Incidents related to information for consumers or end users 119 59 3.2.2.1. Integration of information incidents into the strategy 119 60 3.2.2.2. Policies, processes and actions relating to customer relations. 121 60 3.2.2.3. Objectives and goals 127 61 3.2.3. Social inclusion of consumers 130 2 Bankinter Group · Consolidated Statement of Non-Financial Information and Sustainability Information 2024 3.2.3.1. Integration of IROs related to inclusion into the strategy 130 3.2.3.2. Policies, processes and actions 131 3.2.3.3. Objectives and goals 133 4. Governance Information - ESRS G1 134 4.1. Identification and evaluation of IROs related to governance 134 4.2. Business conduct 135 4.3. Codes of ethics and conduct 136 4.4. Fight against corruption and bribery 137 4.5. Reporting channels 140 4.6. Supplier relationship management 141 4.6.1. Payment practices 143 Annex I: Tables relating to Art. 8 of the European Taxonomy 145 Annex II: Information not required by CSRD under Law 11/2018 208 Annex III: Requirements of Law 11/2018 on non-financial 222 information and diversity Annex IV: List of data points included in cross-cutting standards 230 and in thematic standards derived from other EU legislation. Annex V: Independent assurance report 235 3 Bankinter Group · Consolidated Statement of Non-Financial Information and Sustainability Information 2024 1. General Information 1.1. Introduction 1.1.1. General bases for the preparation of the Consolidated Statement of Non-Financial Information and Sustainability This document contains information on the results and the trend of the non-financial indicators of Bankinter Group with respect to the impact of its activity on environmental, social and labour aspects, respect for human rights and matters related to the prevention of corruption and bribery, among others. This is in accordance with the provisions relating to non-financial information and diversity in Law 11/2018, of 28 December, modifying the Commercial Code, the consolidated text of the Spanish Companies Act approved by Royal Legislative Decree 1/2010, of 2 July, and Law 22/2015, of 20 July, on Account Auditing. Bankinter Group has prepared this report in voluntary compliance with Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/ EC and Directive 2013/34/EU with regard to the reporting of sustainability information by companies (hereinafter, the CSRD), following the non-transposition of the Directive in Spain. The Directive establishes the development of a sustainability reporting framework based on the European Sustainability Reporting Standards (ESRS). This Consolidated Statement of Non-Financial Information and Sustainability is included in the Consolidated Management Report, which accompanies the Consolidated Annual Accounts for the financial year 2024, as set out in Article 49.6 of the Commercial Code introduced by Law 11/2018. The report also includes a summary of the Group's business model, a description of the policies in relation to the above issues and measures adopted, the results of these policies, the main risks related to these issues linked to the Group's activities, the management of these risks and objectives and key non-financial performance indicators. Bankinter Group's 2024 information includes Bankinter and all its subsidiaries, as it did in 2023. The reporting scope of the information contained in this document is the same as that used for the purposes of the consolidated public financial information of the Bankinter Group, and no sensitive information has been omitted. The most significant events with an impact on the Group's consolidation scope (specific circumstances) that occurred during the current year are listed below: In February 2024, EVO Banco, S.A.U. carried out a capital increase for a nominal amount of 5 million euros and an issue premium of 75 million euros, which allowed it to increase its shareholder equity by 80 million. On 17 April 2024, the boards of directors of Bankinter, S.A. and its subsidiary in Ireland, Avantcard Designated Activity Company (Avantcard DAC), decided to reorganise the Group's business in that country by merging both companies and creating a branch to continue developing the business. Under the agreement, Bankinter will acquire from Bankinter Consumer Finance, E.F.C., S.A., all the shares that make up the share capital issued by Avantcard DAC. Following the acquisition, Bankinter and Avantcard DAC will be merged and a Bankinter branch will be established in Ireland to which all assets, liabilities, rights, obligations and other legal relationships acquired by Bankinter as a result of the merger will be assigned. This branch will constitute a permanent establishment in Ireland and will continue the activities currently carried out by Avantcard DAC in that jurisdiction. The merger process is expected to be completed in the first half of 2025. On 19 June 2024, the boards of directors of Bankinter, S.A., the parent company of Bankinter Group and EVO Banco, S.A.U., a subsidiary company wholly owned by Bankinter, S.A., have agreed to carry out a merger by absorption, thus integrating EVO Banco into the Bankinter, S.A. structure, improving the profitability and efficiency of the Group. The purpose of the merger is to take full advantage of the synergies between the two companies, boosting the Group's digital transformation. This merger will entail the integration of EVO Banco's customers, business and workforce into Bankinter's structure. The merger process is expected to be completed in the first half of 2025. In compliance with the provisions of Royal Decree-Law 5/2023, the documentation relating to the previous merger projects is published on the Group's corporate website. During the 2022 financial year, Bankinter and Liberty Seguros reached an agreement to jointly develop the insurance business through the company Bankinter Liberty Home and Auto, S.A. However, during the 2024 financial year the parties have withdrawn from this agreement. 4 Bankinter Group · Consolidated Statement of Non-Financial Information and Sustainability Information 2024 Regarding the information reported in relation to previous years, it should be noted that some indicators required by Law 11/2018 but not by the ESRS have been included in Annex I of this report. Likewise and following the recommendations of the CNMV (National Securities Market Commission), information for the year 2023 has been reported for comparative purposes in the indicators identified as material by the company in its materiality analysis. The Consolidated Statement of Non-Financial Information and Sustainability Information 2024 has been prepared in accordance with the contents of current commercial regulations, as well as the EU guidelines 2017/C215/01 for the reporting of non-financial information and, as indicated above, the ESRS approved in Commission Delegated Regulation 2023/2772. Additionally, the regulations relating to the Taxonomy Regulation (EU) 2020/852 (hereinafter, the Taxonomy Regulation), the Delegated Regulation (EU) 2021/2178 on disclosure and Delegated Acts have been taken into account for another year. The information included in this document meets the requirements of Law 11/2018 regarding non-financial information and diversity, and has been verified with a limited scope of review by PwC (PricewaterhouseCoopers Auditores, S.L.) in accordance with code 49 of the Code of Commerce. This report reproduces some information that is also contained in more detail in other documents, such as the Consolidated Legal Report, the Integrated Annual Report, the Corporate Governance Report or the Remuneration Report 2024. 5 Bankinter Group · Consolidated Statement of Non-Financial Information and Sustainability Information 2024 1.2. Double materiality analysis Bankinter Group has prepared this report and the information contained therein in accordance with the double materiality principles consistent with the Corporate Sustainability Reporting Directive (CSRD) and the Draft Law on Corporate Sustainability Information. This approach covers both the company's impacts on society and the environment (impact materiality) and the potential financial implications of sustainability (financial materiality). Prior analysis Bankinter Group periodically carries out materiality studies in order to improve the effectiveness of the channels of dialogue with social stakeholders and identify priority issues according to two parameters: the maturity of aspects related to financial activity according to sustainability analysts and the importance attributed to these aspects by the Bank's main stakeholders. The Sustainability Plan 2024-2026 was defined based on the results of the Double Materiality Analysis carried out in 2023, which identified the main sustainability challenges for the following years. First, a context analysis was carried out, considering internal and external sources. Surveys were then conducted with six key Bankinter Group stakeholders, including customers, employees, academic experts, media, NGOs and suppliers, totalling 2,732 completed surveys. At the same time, the preliminary identification of the company's Impacts, Risks and Opportunities (IROs) was carried out. This process included validation with teams from different departments at Bankinter Group to ensure alignment with each affected area. The focus was on ensuring coherence and identifying measures to manage them in the new sustainability strategy for the 2024-2026 period. Validated and grouped into corresponding topics and sub-topics, each IRO was then assessed once the final list was obtained, also taking into consideration the stakeholder group of sustainability analysts. The result of this analysis was the obtaining of a double materiality matrix, which served as a starting point for the design of the new Sustainability Plan for the 2024-2026 period for Bankinter Group. 2024 double materiality analysis Following the guidelines of the EFRAG IG1 Materiality Assessment guidance, Bankinter Group has carried out a new double materiality analysis in 2024, with the aim of identifying those material IROs on which to focus its sustainability reporting. The process followed to carry out this analysis was as follows: This analysis of double materiality, both at a methodological level and in the results and conclusions obtained, has been reviewed by both the Bank's Internal Control area and the Internal Audit area, concluding that the process has been adequate and aligned with industry practices. As indicated in the standard, the materiality analysis will be reviewed annually and, in the event of relevant changes, either in the business model or in the value chain, it will be updated accordingly. 6 Bankinter Group · Consolidated Statement of Non-Financial Information and Sustainability Information 2024 1.2.1. Context analysis The context analysis carried out in 2023 has been updated to incorporate the most recent developments in the field of sustainability, in political, economic, social, technological, environmental and legal matters (PESTEL), as well as specific elements of Bankinter Group. In addition, the Identified IROs from that analysis have been aligned with the topics, sub-topics and sub-sub-topics defined by the ESRS framework. The context analysis consists of an analysis of relevant internal and external information of Bankinter Group. Analysis of internal information It provides a global overview of the Group and its business model, while identifying impacts, risks and opportunities. Public documents and policies, business plan, strategy, financial statements, previous non-financial information statements, information provided to investors, results of surveys conducted in previous years, as well as risk management procedures and analysiss have been included. Analysis of external information It includes public documents on sector trends, regulatory developments, reports by analysts, supervisors, shareholders and regulators, and sustainability reports by peers. In addition, documents derived from questionnaires addressed to various stakeholders, including customers, staff, suppliers, shareholders, academic experts, the media and non- governmental organisations (NGOs), have also been analysed. Bankinter Group also considers society in general (in its geographical areas of activity) and nature (as a silent stakeholder) as part of its stakeholders. Bankinter Group has incorporated the perspectives and opinions of its various strategic stakeholders, incorporating the different areas that maintain direct contact with them into the process. By including the opinions of stakeholders, we seek to achieve a more complete and exhaustive analysis that integrates their perspectives in a coherent manner, enriching the review of the documentation for the Bank's contextual analysis. Furthermore, Bankinter Group has identified its value chain , not only its own operations, but also all the actors involved in its supply chain, products, services and customers. It has been divided into three large groups: Upstream : Set of activities carried out by companies that form part of the initial phases of the Bank, providing products or services for the development and marketing of the Bank's own products. Own operations : It covers all the activities that Bankinter Group carries out within its organisation to manage and carry out its functions. Downstream : It refers to the offer of products and services aimed at different types of customers and users. 1.2.2. IRO identification and management process In the analysis of identifying IROs, the EFRAG guidelines have been taken into account when assigning each IRO to a topic, sub-topic, or sub-sub-topic included in ESRS 1. In the case of the impacts , both positive and negative ones have been identified, analysing internal and external sources of information. In addition, they have been mapped with the previous materiality analysis carried out and have been linked to the value chain at a high level, according to the stage where they impact. Finally, they are classified according to their current or potential nature, whether they are positive or negative, the time horizon when they can occur, the analysis of internal or external context and the relevant documents where they are referenced have been identified. 7 Bankinter Group · Consolidated Statement of Non-Financial Information and Sustainability Information 2024 The process of identifying, assessing, prioritising and determining impacts has not focused on specific activities, business relationships, geographic areas or other factors that give rise to a higher risk of adverse events, due to the business model and geographies where the Bank operates. The identification of impacts has considered both those caused by Bankinter Group's own operations and those to which it has contributed as a result of its business relationships throughout the value chain. To identify risks , information on risk management, as well as other relevant external documentation, has been incorporated. In addition, the negative impacts of the previous section are analysed in order to determine potential risks that could arise and dependencies between risks and impacts are established. Furthermore, to identify opportunities , internal and external documentation is also taken into account, as well as positive impacts, in order to recognise potential opportunities that could be generated, again establishing dependencies between impacts and opportunities. The time horizons of the IROs that reflect the expected impacts on people and/or the environment, as well as the expected financial effects, have been generally established as follows: Up to 1 year for the short term. From 1 to 5 years for the medium term. More than 5 years for the long term. 1.2.3. Double materiality assessment The materiality assessment identifies impacts, risks and opportunities that are material and therefore must be reported. For these purposes, a sustainability issue is "material" when an associated IRO with that issue is assessed with a score that exceeds the established materiality threshold, as detailed below, either for impact materiality, financial materiality or both. Double materiality therefore has two dimensions: Impact materiality and financial materiality. Both dimensions are interrelated and the interdependencies between these two dimensions are considered, as can be observed with the risks and opportunities that depend on identified impacts. Impact materiality The objective criteria for assessing the materiality of current and potential impacts, whether positive or negative, are based on the severity of the impact (scale, scope, irremediable nature) and the probability of the event. Different assessments have been established for the scale, scope and irreversible nature with a scale between 1 and 4, which have allowed the classification of the various impacts identified. The probability scale has also been assessed on a scale of 1 and 4, taking into account the possible impact on human rights, with a greater weighting in the event that it does have an impact. Finally, the scale has been transformed to 1-5, taking into account a weight of 60% for severity and 40% for probability. Stakeholder opinions have been incorporated through the scores obtained in the 2023 questionnaires according to the topics applicable to each impact. To obtain the final result, the adjusted result prior to consideration of the stakeholders, with a weight of 80%, is added to the result of the participation of the stakeholders, weighted at 20%. 8 Bankinter Group · Consolidated Statement of Non-Financial Information and Sustainability Information 2024 Financial materiality Bankinter Group has developed specific methodologies to assess the financial materiality of sustainability risks and opportunities. In the case of climate and environmental risks, we have taken into account the risk assessment analysis developed according to the criteria of the European Central Bank, which analyses how the different prudential risks (credit, market, liquidity, operational and reputational) are affected by climate risk factors (transition and physical for various time horizons), as well as a first assessment analysis of environmental risks. On the other hand, the following have been applied to assess social and corporate governance risks: The SASB (Sustainability Accounting Standards Board) methodology, an internationally accepted standard, contemplates three different levels of materiality for the financial industry, which in Bankinter Group has been mapped with each sub- subtopic of the EFRAG. Bankinter Group's reputational risk matrix, so that the Bank has taken advantage of the internal analysis that is periodically carried out to assess these risks. Lastly, the assessment of opportunities takes into account the Bank's sustainable business plan, as well as the time horizon and calibration of internal stakeholders (considering both the likelihood and the potential magnitude of the financial impact of each opportunity). The final determination to establish an IRO (impact, risk and opportunity) as material is set by comparing the assessments obtained with the materiality thresholds that have been established for this purpose. Thus, all IROs that obtain an evaluation higher than 70% are considered material. The methodology and results of the double materiality analysis, the identification of the IROs that take into account the expectations of the main stakeholders and the list of IROs considered material after the analysis, have been supervised by the sustainability and appointments committee of the board of directors. This committee, as detailed below, is also responsible for approving the sustainability strategy, which takes into account these identified material IROs. Bankinter Group takes into account the materially relevant IROs in its risk analyses. In section 2.1.1 Analysis of the materiality of climate change risks, it is detailed that climate risk has been taken into account in the climate stress tests of 2022, in the internal capital adequacy assessment processes (ICAAP) where future internal capital needs are foreseen, and has been incorporated as a risk factor that can impact prudential risks. Additionally, with a view to 2025, as explained in Note 44 of the Annual Accounts, the formalisation of a post-model adjustment is expected, which will more directly reflect the impact of climate risks on credit risk coverage. Despite the scarcity of specific customer information and the current uncertainty regarding climate risk, based on the estimates and weightings used by the Group and active management to identify, assess and reduce such risk, a significant short-term impact on the Group's financial statements is not expected. Below is a table that presents the material impacts, risks and opportunities (IROs) identified in 2024 through the materiality analysis. It details the different IROs, including information on the ESRS standard to which they belong, the corresponding subtopic and sub-subtopic, the type of IRO (impact, risk or opportunity), its description, whether it is current or potential, its typology and, finally, the strategic line of the DNA Plan to which they are associated. The DNA Plan is Bankinter Group's strategic sustainability plan for the 2024-2026 period, designed to integrate sustainability into the Bank's strategy and operations. Further details on this plan are provided in section 1.4.2 The Group's Commitment to Sustainability. 9 Bankinter Group · Consolidated Statement of Non-Financial Information and Sustainability Information 2024 Topic Sub-topic Sub-sub-topic IRO type Description of the IRO Current/ Classification DNA Plan Potential strategic line E1 Climate Change Mitigation - Impact Promote the decarbonisation of customers through the incorporation of ESG criteria in the Current Positive Climate Business Plan change Contributing to the transition towards a low-carbon economic model, making various Sustainable E1 Climate change adaptation - Impact products with ESG criteria available to customers (e.g. Sustainable loans funds, green bonds, Current Positive Finance sustainability-linked financing, etc.) E1 Energy - Impact Contributing to decarbonisation through financing of renewable energy projects Current Positive Sustainable Finance E1 Climate Change Mitigation - Impact Increase in Scope 3 emissions attributed to the Bank due to a higher volume of assets under Current Negative Climate management resulting in a higher volume of emissions change E1 Energy - Impact Increased Scope 3 emissions from involvement in fossil fuel-related activities such as coal, Potential Negative Climate natural gas and oil change E1 Climate Change Mitigation - Impact Contribution to the generation of emissions due to the financing of corporates in sectors with Current Negative Climate a high impact related to the intensive use of fossil fuels change E1 Climate Change Mitigation - Risk Delay in the transition towards climate change mitigation due to the prolongation in the Medium term Climate implementation of effective actions by companies to reduce emissions until 2030 change E1 Climate Change Mitigation - Risk Credit risk arising from physical damage to assets or discontinuity of operations affecting Long term Climate customers operating in sectors or locations exposed to physical environmental risks change E1 Climate Change Mitigation - Risk Operational risk arising from damage to assets and/or interruption of operations caused by Long term Climate physical risks change Business risk generated by a possible negative effect on the Bank's results due to the Climate E1 Climate Change Mitigation - Risk cessation of activities exposed to the materialisation of credit, market, operational, Medium term change reputational or liquidity risks. E1 Climate Change Mitigation - Risk Credit risk arising from the reduction of customers' financial capacity due to extreme weather Long term Climate events, gradual climate change and environmental deterioration change E1 Climate change mitigation - Risk Inefficiencies in risk management as a result of the lack of integration or inadequate Medium term Climate Climate change adaptation integration of traditional risks (credit, operational, etc.) with ESG risks. change Economic losses due to physical damage to financed assets due to extreme weather events Climate E1 Climate Change adaptation - Risk caused by climate change (heat and cold waves, floods, droughts, heavy rainfall, temperature Medium term change variations and/or rising sea level) E1 Climate Change Mitigation - Opportunity Reputational improvement due to increased development of sustainable products and Potential Medium term Sustainable advances in climate risk management by supervisors. finance Growth in financing and consulting on renewable energy (solar, photovoltaic and solar E1 Energy - Opportunity thermal), green buildings (financing or refinancing of residential, commercial or public Potential Short term Sustainable housing) and green loans, which facilitate the energy transition by increasing this type of Finance services by customers. Climate Change adaptation Increase financing for green bonds and sustainability-linked bonds, serving as a lever to Sustainable E1 Climate change mitigation - Opportunity Potential Short term promote measures and actions that encourage mitigation and adaptation to climate change finance Energy 10 Bankinter Group · Consolidated Statement of Non-Financial Information and Sustainability Information 2024

View stock analysis, news, and events for Bankinter Sa