SecProbe.io

September 30, 2011
 Via E-mail

José Antonio Álvarez Chief Financial Officer Banco Santander, S.A. Ciudad Grupo Santander 28660 Boadilla del Monte Madrid, Spain
Re: Banco Santander, S.A.
Form 20-F for Fiscal Year Ended December 31, 2010 Filed June 6, 2011 Form 6-K filed August 1, 2011
  File No. 001-12518

Dear Mr. Álvarez:
 We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with  information so we may better understand your
disclosure.
 Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response.  Where we have requested changes in  future filings, please include a draft of your
proposed disclosures that clearly identifies new or revised disclosu res.  If you do not believe our
comments apply to your facts and circumstances or  do not believe an amendment is appropriate,
please tell us why in your response.
 After reviewing any amendment to your filing and the information you provide in
response to these comments, including the draf t of your proposed disclosures, we may have
additional comments.               Form 20-F for Fiscal Year Ended December 31, 2010

 Risk Factors, page 13

 Some of our business is cyclical a nd our income may decrease…, page 13

 1. Please provide more descriptive di sclosure to be included in future filings that identifies
your products and services whose levels of income depend on the strength of the
economies in the regions where you operate.  Pl ease provide quantitat ive disclosure of
the impact to your prof it by geographical area.

José Antonio Álvarez Banco Santander, S.A. September 30, 2011 Page 2
 The possibility of the moderate eco nomic recovery returning…, page 14

 2. Please revise to quantify in this risk fact or the amount of your gross sovereign debt
exposure to Spain, Portugal, Greece, Italy and Ireland.

Changes in the regulatory framework in th e jurisdictions where we operate…, page 18

 3. Please revise your disclosure in this risk f actor to clarify how th e enhanced regulation
that you discuss presents material risks to you.  For example, please revise this risk factor
to explain the “more restrictive condi tions” imposed by the Bank of Spain’s
Circular 9/2010 and how the amended rules will impact your business specifically.
Furthermore, please ensure that your revised disclosure clarifies the impact that the
Dodd-Frank legislation will have on your United States operations (e.g., whether
Sovereign Bank will be negatively impacted by the Durbin Amendment’s cap on debit
card transaction fees).
Credit, market and liquidity risks may have an  adverse effect on our credit ratings…, page 20

 4. Please expand your disclosure in this risk f actor to quantify the lik ely effect a one and
two notch downgrade in credit rating w ould have on your borrowing costs and your
collateral obligations under derivative contracts.

Business Overview, page 34

 5. In future filings, please ensure that you disclose the reasons underlying significant
changes in profit and return on equity for your  business operating units.  For example, we
note your disclosure on page 36 that profits a ttributable to the Sant ander Branch Network
and to Banesto declined by 38% and 43.2%, respectively, in 2010 compared to 2009, but
that you did not disclose the reasons for these changes.  In your response, please provide
sample disclosure that is responsive to this  comment as it would have appeared in your
2010 Form 20-F.
 Exposure to sovereign counterpa rties by credit rating, page 58

 6. We note your disclosure of sovereign risk e xposure to the sovereign entities of Ireland,
Greece, Portugal and Spain here and on page 253, which includes exposure to Italy.  We
also note your disclosure of pr ivate and sovereign debt issued  by origin of the issuer in
Note 7, and your disclosure of gross credit ri sk exposure in Note 54.  Please revise your
disclosure in future filings e ither here or in Note 54 to expand your tabular disclosure to
address all of your exposure to each of these co untries, separately, in terms of private and
sovereign institutions, including Italy, and address the following:

 Disclose whether the loan exposures in your disclosure are inclusive of credit
derivatives purchased or if any credit de rivatives (including bot h credit derivatives

José Antonio Álvarez Banco Santander, S.A. September 30, 2011 Page 3
 purchased and sold) are reported in the de rivatives and repos (CRE) column.  Also,
please revise your table to provide disclosu re of the gross exposure and separately
disclose the notional and fair value of any credit protection purchased.

 Additionally, please indicate whether you have sold credit protection on any
sovereign exposures related to these entitie s, and if so, please disclose the notional
and fair value amount of credit  protection sold by country.

 Please clarify for us whether your derivativ es exposure (trading a nd hedging) to each
of these private and sovereign entities is in cluded in the tabular disclosure on a gross
or net basis.  If your exposure is presen ted on a net basis, please revise your
disclosure in future filings to pr esent both the gross and net exposure.

 If your disclosure presents your credit risk net of any collateral, please revise future
filings to disclose t hose amounts separately.

 Clarify whether your tabular disclosure in cludes all off-balance sheet exposure to
these private and sovereign entities, in cluding financial guarantees, and any other
contingent exposures.
 Movements in Allowances for Credit Losses, page 67

 7. We note your disclosure of the net charge-offs to average loans ratio.  It appears that you
disclosed the total ratio as the sum of the rati os for borrowers in Spain and outside Spain.
We believe that the “total” ratio should be  calculated as a percentage of the total
portfolio.  In this regard, it appears that this  ratio is 1.37% for 2010, 1.33% for 2009, and
so on.  Please revise your disclosure of thes e ratios in future f ilings accordingly, or
advise.
 Impaired Balance Ratios, page 73

 8. We note your disclosure on page 74 that  Spain and Portugal still required higher
provisions in 2010 because of th e increase in bad loans and th e review carri ed out by the
Bank of Spain to determine the provisions for credit risk after taking into account the
experience from recent years and the current economic situation.  However, we note your
provision for borrowers in Spain included in  the table on page 67 decreased in 2010 as
compared to 2009.  Please expand your disclosure  on page 74 in future filings to more
clearly address the underlying reasons for a declining provision and a declining
allowance for borrowers in Spain in light of  the tabular disclosure on page 67.  Please
include a discussion of how you considered tr ends in your portfolio such as increasing
charge-offs and impaired loans (per page 70)  in your disclosure.  Please also provide
expanded disclosure of the impact of the findings of the Bank of Spain on your estimate
of loan losses.

José Antonio Álvarez Banco Santander, S.A. September 30, 2011 Page 4
 Supervision and Regulation, page 81

 United States Supervisio n and Regulation, page 91

 9. We note your disclosure on page 18 regardi ng the Dodd-Frank Wall Street Reform and
Consumer Protection Act provisions, includi ng prohibitions on your engaging in certain
proprietary trading activitie s and restricting your owners hip of, investment in, or
sponsorship of hedge funds and private equi ty funds.  Please tell us whether you have
conducted an analysis of what you believe the potential effects of the Volcker Rule will
be on your operations and whether you believe it  could have a material effect.  Also, to
the extent reasonably known, in future filings  please quantify the amount of historical
proprietary revenues which you believe coul d be subject to re strictions once the
rulemaking is finalized.
 Item 5. Operating and Financial Review and Prospects, page 94

 Critical Accounting Policies, page 94

 Business Combinations and goodwill, page 100

10. Please revise your future filings to include di sclosure of the most significant assumptions
used to determine the fair value of your  cash generating units for the purposes of
evaluating whether goodwill is impaired.  Pleas e discuss the degree of uncertainty related
to these assumptions and any potential changes that may cause you to record impairment through the income statement in the future.  For those cash generating units where the fair
value of the cash generating unit is at or near your cost basi s, please disclose the amount
or percentage by which the fair value exceeds th e cost basis as of the date of the most
recent test.
 Income Tax, page 112

 11. We note the volatility in your effective in come tax rates here and in Note 27.
Specifically, the rate increased from 11.5% in 2009 to 24.3% in 2010, and it appears that
the majority of that volatility is  due to the effect of different tax rates.  Please revise your
disclosure in future filings to discuss the underlying causes for such volatility, and
disclose the tax rates in each material jurisdiction that is driving the changes.
 Results of Operations by Business Areas, page 113

 Continental Europe, page 113

 12. We refer to your disclosure on page 114 that the strong incr ease in impairment losses on
financial assets in 2010 resulted from th e Bank of Spain’s review pursuant to
Circular 4/2004.  Please provide proposed disclo sure to be included in future filings that

José Antonio Álvarez Banco Santander, S.A. September 30, 2011 Page 5
 describes the review and specifies how the pr ovisions for credit risk were impacted as a
result.
 F.  Tabular disclosure of c ontractual obligations, page 136

 13. We note that you have not included some of  your long-term obligations within the
contractual obligations table.  For example, it would appear that your insurance contract
liabilities of EUR 10.4 billion represent future cash obligations.  We also note that you do
not include derivatives in your disclosure.  We believe the inclusion of  these liabilities in
the contractual obligation table will provide investors more tr ansparent disclosure of your
long term liquidity requirements.  As such, pl ease revise your contractual obligation table
in future filings to include the expected settlement of your insura nce contracts and the
fixed interest rate payments on your interest rate swaps and other similar derivatives with
fixed payments.
 Credit Exposure in Spain, page 235

 b.  Analysis of the mortgage portfolio  of individual customers, page 236

 14. We note your disclosure of loans with and w ithout mortgage guarantees in Spain.  Please
revise your disclosure in future filings to clarify the nature of such mortgage guarantees,
including whether the guarantee is represente d by collateral or by insurance from a third
party insurer or government agency.
 15. You disclose LTV ratios for your mortgage lo ans in Spain on page 237.  Additionally, the
ratios disclosed on page 245 related to loans in the UK appear to relate only to loans
originated during 2010.  We also note that you r losses on foreclosed assets and assets
acquired in 2010 and 2009 were EUR 298 million and EUR 1.35 billion, which appear to
be significant as a percentage of foreclosed assets sold, as disclosed on page 75.  Please
address the following in your future filings:

 Please revise your disclosure to clarify if  these ratios reflect the LTV upon origination
or have been updated since or igination.  If they have not  been updated, please clearly
disclose that fact, and if they have been updated, please disclose the date as of which
appraisals were obtained to compute the LTV ratios.
 If you do not update appraisals, describe a ny adjustments you make to the appraised
values as a result of outdated appraisals.

 Please discuss how you consider the potential  for outdated appraisal values in your
determination of the allowance for loan losses and impairments on foreclosed
properties and assets acquire d related to both domestic and foreign properties.

José Antonio Álvarez Banco Santander, S.A. September 30, 2011 Page 6
 Statistical Tools for Measuring a nd Managing Market Risk, page 269

 1.1  VaR Model, page 270

 16. We note your disclosure regarding your VaR methodology, including your disclosure on
page 278 that in 2009 and 2010 there were no exceptions of VaR at 99% (days when the daily loss was higher than the VaR), and we  note footnote three on that page that
indicates the exceptions exclude intraday re sults and commissions.  Please expand your
disclosure in future filings to address the following:
 Given your 99% confidence interval, we not e your disclosure on page 270 indicates
that you would expect to exceed daily VaR 1% of the time, or approximately three
days per year.  Please tell us about any evaluation or an alysis performed to validate
the appropriateness of your model in light of the fact that it is not performing as
statistically predicted (i.e., there we re no exceptions of VaR in 2009 and 2010).

 We note your disclosure on page F-211 that  you use the following day prices for back
testing the accuracy of your VaR results fo r the previous day.  Please tell us why you
use the prices for the following day and not the prices actually in place on the day for
which you are performing back testing.

 Address any changes you made, or plan  to make, to your VaR methodology or
assumptions during the periods presented.

G.  Market Risk:  VaR Cons olidated Analysis, page 290

 17. We note your disclosure of trading and non-tr ading VaR, as well as a diversification
effect on consolidated VaR.  Please revise your disclosure in future filings to discuss the
rationale of the diversificati on effect, including how it is ca lculated.  Also, please expand
your disclosure to provide more clarity about how the results of the VaR estimates for the
individual risks disclosed on pa ge 291 relate to the total da ily VaR estimates disclosed on
page 290.  For example, the sum of the non-tradi ng and diversification effect line items in
each of your individual VaR estimat es for interest rate risk, ex change rate risk, and equity
price risk do not exactly equal the non-trading line in the c onsolidated VaR.  Finally, for
the purposes of informing a reader of the extensiveness of your VaR model, please
consider disclosing the number of fa ctors you utilize when calculating VaR.
 Index to Financial Statements, page 305

 Consolidated Income Statements, page F-3

 18. Please revise your disclosure in future filin gs to round your earnings per share to the
nearest cent, in order to not imply a greater degree of precision than exists.

José Antonio Álvarez Banco Santander, S.A. September 30, 2011 Page 7
 Consolidated Statements of Cash Flows, page F-8

 19. We note that you classify changes in availa ble-for-sale financial assets and financial
liabilities at amortized cost, which appears to include market able debt securities or bonds
and debentures, in operating ac tivities.  We also note your disclosure on page F-56 that
investing activities includes other investments not included in  cash and cash equivalents.
Please tell us how you conclude d that it was appropriate to  classify these items as
operating cash flows.  Discuss the nature of these items in additional detail and tell us how these instruments are used in your opera tions.  Refer to paragraphs 16-17 of IAS 7.
 Notes to the Consolidated Fi nancial Statements, page F-9

 1.  Introduction, basis of presentation of the consolidated financial statements…, page F-9

 h) Comparative information, page F-19

 20. We note your disclosures on page F-20, as well as on page 124, that describe certain
gains and losses recorded in your Income St at