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FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of July, 2018

Commission File Number: 001-12518

Banco Santander, S.A.

(Exact name of registrant as specified in its charter)

Ciudad Grupo Santander

28660 Boadilla del Monte (Madrid) Spain

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes  ☐             No  ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes  ☐             No  ☒

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Banco Santander, S.A.

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Item 1

Santander attributable profit up 4% in the first half of 2018 to €3,752 million, after €300 million integration charge

Excluding the €300 million charge, underlying profit increased by 25% in constant euros, to €4,052 million

Madrid, 25 July 2018 - PRESS RELEASE

Banco Santander Group Executive Chairman, Ana Botín, said:

“During the second quarter we have delivered strong growth in underlying revenue and improving credit quality, despite strong currency headwinds.

“Our results show that the commercial and digital transformation is accelerating and continues to deliver improvements in customer engagement and earnings quality. In the last year, we have earned the loyalty of a further 3 million customers, while playing a leading role in the sector in the development and application of new technology – including the launch of the first blockchain-based international payments service for retail customers.

“Our balanced presence across both Europe and the Americas remains a key strength for the Group – helping us deliver the most predictable results amongst our peers, as well as growing earnings. During the quarter we have seen particularly strong growth in Brazil, Spain, Mexico and the US and this has more than offset a more challenging environment in other markets.

“I remain confident that we will achieve our goals, not just for 2018 but for our 3-year plan.”

Corporate Communications		1
Ciudad Grupo Santander, edificio Arrecife, planta 2
28660 Boadilla del Monte (Madrid). Tel. +34 91 2895211
[email protected]
www.santander.com - Twitter: @bancosantander

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Results Summary

Banco Santander, S.A. (“Santander”) increased attributable profit in the first half of 2018 to €3,752 million, 4% higher than the same period of last year after a €300 million net charge primarily related to integration costs for Banco Popular. At the time of the Popular acquisition, on June 7th 2017, the Group said it expected to register €300 million in integration costs per year until 2019.

On an underlying basis (i.e. excluding the integration charge), profit increased by 25% YoY in constant euros to €4,052 million. This was driven by an increase in customer revenues (+10% in constant euros). The number of loyal customers (people who see Santander as their main bank) increased by 17% to 19 million. Lending and customer funds increased by 2% and 6% respectively in constant euros.

In the second quarter alone, Santander’s attributable profit fell by 3% YoY as a result of the integration costs. Excluding non-recurrent items and currency movements, underlying profit in the second quarter was up 28% compared to the same period of last year, to €1,998 million.

In the first half of 2018, the number of customers using digital services increased by 23% YoY to 28.3 million, with the ongoing investment in technology driving an increase in digital service adoption. 47% of active customers are now using digital services at least once a month.

In April 2018, the bank launched Santander One Pay FX in Brazil, Poland, Spain and UK, the first international payments service to be launched across multiple markets using blockchain-based technology. One Pay FX makes it possible for customers to complete international transfers instantly in many cases or by the next day.

Ongoing investment in commercial transformation and digitalisation led to an increase in operating expenses of 3% (+12% in constant euros), however, the cost-to-income ratio, a key measure of efficiency, remained among the lowest of our peer group at 47.5% (compared to a peer average of over 65%).

Corporate Communications		2
Ciudad Grupo Santander, edificio Arrecife, planta 2
28660 Boadilla del Monte (Madrid). Tel. +34 91 2895211
[email protected]
www.santander.com - Twitter: @bancosantander

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Santander’s CET1 capital ratio stood at 10.80% at June 2018. Santander generated 18 basis points of capital organically in the second quarter, offset by the elimination of excess capital from minority interests in SCUSA as announced in the first quarter (-18 basis points), and a 12 basis point reduction related to the valuation of the held-for-sell portfolio in the quarter. In the second half of 2018 Santander expects to register a positive impact on capital from the sale of WiZink (+0.09 point). The Group remains on track to meet its capital target for the year of 11%.

Credit quality improved during the quarter with the Group non-performing loan (NPL) ratio now 3.92%, down 145 basis points since the integration of Popular in June 2017. Cost of credit fell to 0.99%, down 18 basis points since H1 2017, the lowest level in many years.

A balanced presence across both mature and emerging markets remains one of Banco Santander’s key strengths, with underlying attributable profit increasing in eight of the Group’s ten core markets. During the first half of 2018, the Americas contributed 51% of Group profit and Europe, 49%. Brazil was the largest contributor to Group earnings, with 26%, followed by Spain, 15%, and the UK, with 14% of total profit. The lending book also remains well diversified across business segments and geographies.

1. Excluding corporate centre, and Spain real estate activities. 2. Loans excluding repos.

Over the last 12 months underlying return on tangible equity (ROTE), a key measure of profitability, has increased by 42 basis points to 12.2%. ROTE was 11.8% - among the best of the bank’s peer group.

Tangible net asset value per share was four cents higher than H1 2017 at €4.10, increasing 6% excluding the FX impact.

Earnings per share (EPS) was €0.216, down €0.16, due to the impact of the Banco Popular integration costs. Underlying EPS increased by €0.235. The Group maintains its target of achieving double digit EPS growth in 2018.

At the AGM on 23 March 2018 the bank announced its intention to increase the dividend paid from 2018 profits by 4.5% to 23 cents per share, subject to approval by the Board and general shareholder meeting.    

Country Summary

Corporate Communications		3
Ciudad Grupo Santander, edificio Arrecife, planta 2
28660 Boadilla del Monte (Madrid). Tel. +34 91 2895211
[email protected]
www.santander.com - Twitter: @bancosantander

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In Brazil, attributable profit increased by 6% to €1,324 million (+28% in constant euros) due to strong growth in business volumes, with lending and customer funds increasing by double-digits year-on-year and faster than the market average. Improving customer experience and satisfaction continued to be the bank’s top strategic priority, with the launch of new value-added products and services. As a result, loyal customers grew by 24% and digital clients increased by 30%, bolstering net interest income and fee income by 17%. Strong business performance was reflected in improved profitability, with RoTE increasing to 20%, from 16.4% in June 2017.

In Spain, attributable profit was down 20%, to €500 million, due to the net charge of 280 million registered for restructuring costs related to the Popular integration. Excluding the net charge, underlying profit was up 24.9%, to €780 million. Lending increased 1% compared to Q1, with strong growth in consumer lending, SMEs and private banking. Excluding the Blackstone transaction, loans fell 3% year-on-year. Costs increased following the incorporation of Popular, however, this was offset by positive trends in commercial revenues, with credit card turnover and insurance growing double digit.    

In the UK, attributable profit fell by 16% to €692 million (-14% in constant euros) as a highly competitive environment placed pressure on revenues, and costs increased due to higher investments in strategic, digital transformation and regulatory projects. Loan loss provisions increased due to single name exposures which moved into non-performing in the second half of 2017. However, overall credit quality remained good, with the NPL ratio falling by 11 basis points to 1.12%. Compared to Q1, trends were favourable, with attributable profit increasing 16% (+15.5% in constant euros) in the second quarter compared to the first, thanks to growing fees and lower loan-loss provisions.

Santander Consumer Finance increased attributable profit by 5.5% in the first half, to €669 million (+7% in constant euros), with new lending increasing in most geographies. The Nordic countries were the key contributors to the unit’s results, with €161 million. Profit growth was noteworthy in France (+27%), Spain (+9%) and Poland (+5% in constant euros).

In Mexico, attributable profit increased by 2.5% to €359 million (+13% in constant euros) as the bank added a further 400,000 loyal customers since H1 2017. The bank’s commercial and digital transformation helped drive a 10% increase in loans and 9% increase in customer funds YoY, with strong growth in revenues (+7% YoY in constant euros) as a result. Credit quality remained strong with NPL ratio remaining stable at 2.58% and cost of credit falling by 23 basis points over the same period to 2.78%.

In the US, attributable profit increased by 37.5% YoY to €335 million (+54% in constant euros). Both Santander Bank (SB), the Group’s US retail and commercial business, and Santander Consumer USA (SCUSA) delivered increasing profitability as SB strengthened its net interest margin further while also improving efficiency, while SCUSA saw a reduction in costs and lower loan loss provisions. In June Santander Holdings USA (SHUSA) passed the Fed stress tests with the regulator not objecting to an increase in dividend payments.

In Chile, attributable profit increased by 4% to €308 million (+8% in constant euros) as a focus on customer satisfaction, loyalty and digital initiatives, helped drive good growth in loans (+8% YoY) and customer funds (+4% YoY). Credit quality improved further with the NPL ratio reducing by 14 basis points since June 2017 to 4.86% while cost of credit reduced by 19 basis points to 1.18% over the same period.    

Corporate Communications		4
Ciudad Grupo Santander, edificio Arrecife, planta 2
28660 Boadilla del Monte (Madrid). Tel. +34 91 2895211
[email protected]
www.santander.com - Twitter: @bancosantander

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In Portugal, attributable profit increased by 6% to €250 million with revenue growth outpacing growth in costs. The bank continues to focus on the integration of Popular, which is developing on schedule.

In Poland attributable profit increased by 9% to €156 million (+8% in constant euros) as customer revenues increased (+7% YoY in constant euros) and growth continued across all key products and segments. Customer funds increased by 11%.

In Argentina a weakened Peso led to a fall in attributable profit of 29% to €137 million. Excluding this currency impact, attributable profit increased by 8% as the underlying performance of the business remained solid, with increasing volumes driving good growth in revenue.

About Banco Santander    

Banco Santander is the largest bank in the Eurozone with a market capitalisation of €74,097 million at 30 June 2018. It has a strong and focused presence in 10 core markets across Europe and the Americas with more than 4 million shareholders and 200,000 employees serving 140 million customers.

Corporate Communications		5
Ciudad Grupo Santander, edificio Arrecife, planta 2
28660 Boadilla del Monte (Madrid). Tel. +34 91 2895211
[email protected]
www.santander.com - Twitter: @bancosantander

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Key Consolidated Data (from Financial Report)

Note. The financial information in this report was approved by the Board of Directors, following a favourable report from the Audit Committee.

In accordance with the Guidelines on Alternative Performance Measures published by the European Securities and Markets Authority on 5 October 2015 (Guidelines on Alternative Performance Measures, ESMA/2015/1415en), we are attaching herewith a glossary with the definitions and the conciliation with the items presented in the income statement of certain alternative performance measures used in this document. Please refer to ‘Alternative Performance Measures Glossary* on page 58.

Corporate Communications		6
Ciudad Grupo Santander, edificio Arrecife, planta 2
28660 Boadilla del Monte (Madrid). Tel. +34 91 2895211
[email protected]
www.santander.com - Twitter: @bancosantander

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Important Information

In addition to the financial information prepared under International Financial Reporting Standards (“IFRS”), this press release includes certain alternative performance measures (“APMs”) as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority on 5 October 2015 (ESMA/2015/1415es) as well as non-IFRS measures (“Non-IFRS Measures”). The APMs and Non-IFRS Measures are performance measures that have been calculated using the financial information from the Santander Group but that are not defined or detailed in the applicable financial information framework and therefore have neither been audited nor are capable of being completely audited. These APMs and Non-IFRS Measures are been used to allow for a better understanding of the financial performance of the Santander Group but should be considered only as additional information and in no case as a replacement of the financial information prepared under IFRS. Moreover, the way the Santander Group defines and calculates these APMs and Non-IFRS Measures may differ to the way these are calculated by other companies that use similar measures, and therefore they may not be comparable. For further details of the APMs and Non-IFRS Measures used, including its definition or a reconciliation between any applicable management indicators and the financial data presented in the consolidated financial statements prepared under IFRS, please see 2018 2Q Financial Report, published as Relevant Fact on 25 July 2018,    Section 26 of the Documento de Registro de Acciones for Banco Santander, S.A. (“Santander”) filed with the Spanish Securities Exchange Commission (the “CNMV”) on June 28, 2018 (the “Share Registration Document”) and Item 3A of the Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission of the United States of America (the “SEC”) on March 28, 2018 (the “Form 20-F”). These documents are available on Santander website (www.bancosantander.com).

The businesses included in each of our geographic segments and the accounting principles under which their results are presented here may differ from the included businesses and local applicable accounting principles of our public subsidiaries in such geographies. Accordingly, the results of operations and trends shown for our geographic segments may differ materially from those of such subsidiaries.

Santander cautions that this press release contains statements that constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “expect”, “project”, “anticipate”, “should”, “intend”, “probability”, “risk”, “VaR”, “RORAC”, “RoRWA”, “TNAV”, “target”, “goal”, “objective”, “estimate”, “future” and similar expressions. These forward-looking statements are found in various places throughout this press release and include, without limitation, statements concerning our future business development and economic performance and our shareholder remuneration policy. While these forward-looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to: (1) general market, macro-economic, industry, governmental and regulatory trends; (2) movements in local and international securities markets, currency exchange rates and interest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties. Numerous factors, including those reflected in the Form 20-F - under “Key Information-Risk Factors” - and in the Share Registration Document – under “Factores de Riesgo” - could affect the future results of Santander and could result in other results deviating materially from those anticipated in the forward-looking statements. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements.

Forward-looking statements speak only as of the date of this press release and are based on the knowledge, information available and views taken on such date; such knowledge, information and views may change at any time. Santander does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise

The information contained in this press release is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by Santander. Any person at any time acquiring securities must do so only on the basis of such person’s own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in the press release. No investment activity should be undertaken only on the basis of the information contained in this press release. In making this press release available, Santander gives no advice and makes no recommendation to buy, sell or otherwise deal in shares in Santander or in any other securities or investments whatsoever.

Neither this press release nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities. No offering of securities shall be made in the United States except pursuant to registration under the U.S. Securities Act of 1933, as amended, or an exemption therefrom. Nothing contained in this press release is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotion in the U.K. Financial Services and Markets Act 2000.

Statements as to historical performance or financial accretion are not intended to mean that future performance, share price or future earnings (including earnings per share) for any period will necessarily match or exceed those of any prior year. Nothing in this press release should be construed as a profit forecast.

Corporate Communications		7
Ciudad Grupo Santander, edificio Arrecife, planta 2
28660 Boadilla del Monte (Madrid). Tel. +34 91 2895211
[email protected]
www.santander.com - Twitter: @bancosantander

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Item 2

Financial Report 2018
JANUARY—JUNE

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January—June 2018 FINANCIAL REPORT 3 Key consolidated data 4 Santander aim 6 Group performance 9 General background 10 Income statement and balance sheet 17 Solvency ratios 18 Risk management 20 Business information 37 Corporate Governance 38 Sustainability 39 The Santander share 40 Financial information. Appendix 58 Alternative Performance Measures All customers. shareholders and the general public can use Santander’s official social network channels in all the countries in which the Bank operates,

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GRUPO SANTANDER. KEY CONSOLIDATED DATA

(1) In this document we present the figures related to “underlying” results, which exclude non-recurring items, as they are recorded in the separate line of “net capital gains and provisions”, above the line of “attributable profit to the Group”. Further details on that line are provided in pages 10 and 11 as well as in the Alternative Performance Measures section as follows below.

(2) 2018 data applying the IFRS 9 transitional arrangements.

(3) In June 2017, including the capital increase in July: fully-loaded CET1 of 10.72%, phased-in CET1 of 12.08% and tangible equity per share of EUR 4.18.

(4) June 2017 data adjusted for the capital increase in July, for like-on-like comparisons with 2018 and year end 2017 data.

Note. The financial information in this report was approved by the Board of Directors, following a favourable report from the Audit Committee.

Financial Report 2018         3

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SANTANDER AIM

“Helping people and businesses prosper” 81%* 77%* 19.1 (+17%**) 28.3 (+23%**) of employees engaged million loyal million digital perceive that employees customers customers their colleagues behave in a more Simple, Personal and Fair way ...ma ke n d ou a . . sa rc e d s . tis u t e e fi st a y ed o i v l o a t p n m People o d e Customers m m l r s e e o y r e d a m o l o 200,961 a g … r 140 M e n g million e . . . d r e a n s u l y t i l i t n i i g i b … n n t a t h t h h i o fi w Communities* e gh r o Shareholders c e p r o ri n g g m nve i v i l e mu st . d r b 2.1 ni me . . n a 4.1 ty. nt t a i million people su s million helped in 2017 44,862* 1,295* 10.80%*** +8% scholarships agreements with Fully loaded first dividend granted universities CET1 ratio per share in 2017 and academic institutions growth in 21 countries (*) 2017 data (**) Year-on-year % change (***) Calculated using the IFRS 9 transitional arrangements

4         Financial Report 2018

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SANTANDER AIM

People Progress was made in installing the Workday platform (One Team programme), which will enable us to have a talent pool at the global level, manage talent in a more Simple, Personal and Fair way and enhance the experience of our professionals. The first phase of the Strategic Workforce Planning was carried out in the UK, Mexico and the Corporate Centre. This project aims to identify the talent needed in the medium- and short-term, quantifying the skills required for the future. Action plans have been put into effect in these countries. Behaviours in the life cycle of employees continued to be incorporated. Of note was the consolidation of MyContribution, the performance management model where the achievement of results is balanced with how they are attained. Another example are succession plans, where behaviours are key. We are Santander week, a global initiative for transmitting Santander’s culture to its employees, as well as fostering pride in belonging to the Group, was held for the 11th time. . Customers Various strategies continued to be developed under the commercial transformation programme in order to improve customer loyalty and experience. The number of loyal customers rose by 2.8 million and digital ones by 5.3 million year-on-year. Of note among the commercial actions implemented in the second quarter were the launch of the 1|2|3 Profesional in Spain (the first joint offer from Santander and Popular), the launch of the first digital SME account for companies under the SAS regime (Company for Simplified Actions) in Mexico and the good results of Santander Life in Chile. As regards digitalisation, in Brazil we launched the new app for managing sales. In Spain, the first operations of we.trade, a blockchain-based platform that facilitates the internationalisation of companies, were made. In Argentina, the new online banking service continued to be well received. In mobile banking, Poland now offers five ways to pay: Apple Pay, Google Pay, Garmin Pay, BLIK and HCE. In the UK, we were the first bank to offer Garmin Pay and Fitbit Pay. Shareholders Santander’s investor relations was ranked top in Spain and second among European banks by the Extel survey, which includes responses from 11,000 investment professionals. For the third year running, the IR Magazine Awards recognised Santander as one of the best European companies and banks in investor relations in Europe. We were rated first in the categories of Best Use of Multimedia for IR, Best IR during a Corporate Transaction and Best Investor Relations Event, and third in Best in IR Financial Sector (banks and insurance) and in Best Investor Relations Officer in Europe (all sectors). A survey was conducted among investors, analysts and shareholders in Spain and the UK to assess the implanting of the corporate culture and our contribution to progress. Community Santander joined the responsible banking initiative promoted by the United Nations. Together with 25 other big banks from five continents, we will develop principles for adapting the financial sector to the UN’s Sustainable Development Goals and the Paris Climate Agreement. At an event presided by HM Queen Letizia, Ana Botín awarded the prizes on 7 May to the ten winning projects of the 10th Convening of Banco Santander’s Social projects, financed by the Euros from your Payroll fund. For the ninth year running, Banco Santander turned off the lights in the most emblematic buildings in its 10 core markets and in its branch network, as part of the WWF’s Earth Hour campaign. Some 20,800 kg of food was collected during the We are Santander Week and delivered to the Red Cross.

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GROUP PERFORMANCE

6         Financial Report 2018

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GROUP PERFORMANCE

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MAIN BUSINESS AREAS PERFORMANCE

(Greater detail on pages 20 to 36 and in the appendix)

(Changes in constant euros)

 

		• Continental Europe recorded an attributable profit of EUR 1,447 million in the first half, having included costs associated with integrations (mainly restructuring costs) net of tax impacts in Spain and Portugal in the last quarter.

Excluding these impacts, underlying attributable profit would have been EUR 1,707 million, an annual increase of 15%. Growth was largely due to the increase in commercial revenue and also benefited from Banco Popular’s integration and the greater stake in Santander Asset Management.

Underlying profit was 17% lower in the second quarter than in the first, due to the contribution to the Single Resolution Fund (SRF) and lower gains on financial transactions in Spain. Commercial revenue and costs were practically flat and provisions were lower.

 

•	United Kingdom: in a highly competitive environment with some remaining uncertainties surrounding Brexit, attributable profit was 14% lower year-on-year at EUR 692 million. This was due to pressure on spreads and investments in regulatory and strategic projects. Cost of credit was only 10 bps.

The second quarter attributable profit was 16% higher quarter-on-quarter. The pressure on mortgage spreads was offset by higher fee income, increased gains on financial transactions and lower costs and provisions.

 

 

•  Latin America: attributable profit of EUR 2,214 million, 26% higher year-on-year. Growth in volumes, spreads management and increased loyalty underpinned the good evolution, both in net interest income as well as fee income, in addition to an improved cost of credit.

Operating expenses grew mainly due to plans relating to the expansion, commercial transformation and increased digitalisation of our retail networks.

Profit was 7% higher in the second quarter than in the first, due to the good performance of net interest income and fee income, which rose for the fifth consecutive quarter, and stable provisions.

 

•	United States: first half profit of EUR 335 million, 54% more year-on-year, due to a fall in costs and, above all, reduced provisions, which comfortably offset the decline in gross income from lower personal loans, reduced spreads, higher funding costs and the drop in fee income from servicing.

Quarter-on-quarter, profit was up 64%, partially due to a seasonal effect at SC USA. Good performance of all P&L lines: gross income increased, and costs and provisions declined (all three for the second quarter running).

 

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GENERAL BACKGROUND

Grupo Santander developed its business in an economic environment characterised by the appearance of risks of a global nature that increased volatility in markets and led to some countries downgrading growth forecasts.

The move toward greater protectionism and the tightening of US monetary policy were the main factors behind the greater uncertainty. This triggered rises in risk premiums, both in the Mediterranean countries as well as in the Latin American ones where the bank operates, and a general depreciation of currencies against the dollar, which in Latin America’s case was significant.

Central banks in Mexico and Argentina raised their benchmark rates in order to counter eventual inflationary pressures from the currency depreciation.

(*) Year-on-year change Q1’18.

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GRUPO SANTANDER RESULTS

10         Financial Report 2018

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