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October 28, 2014

VIA EDGAR SUBMISSION

Ms. Suzanne Hayes

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, N.E.; mail stop 4561

Washington, D.C. 20549

U.S.A.

Re:

Banco Santander, S.A.

Form 20-F for the Fiscal Year Ended December 31, 2013

Filed April 29, 2014

Form 6-K Furnished May 1, 2014

File No. 001-12518

Dear Ms. Hayes:

On behalf of Banco Santander, S.A. (“Santander” or the “Bank”), I hereby submit Santander’s responses to the comments of the staff of the Office of Global Security Risk (the “Staff”) of the United States Securities and Exchange Commission (the “Commission”) set forth in your letter dated September 30, 2014 in connection with the above referenced Annual Report on Form 20-F (the “20-F”) and Form 6-K (the “6-K”) of Santander.

I set forth below our responses to each of the Staff’s comments, indicating each comment in boldface text with our response below. All references to page numbers in Santander’s responses are to pages in the filed version of the 20-F and 6-K. I have also underlined and italicized our proposed changes to our 20-F, 6-K and consolidated financial statements that will be included in future filings and I have struck through the text that will be deleted in future filings.

****************************

Item 5. Operating and Financial Review and Prospects, page 123

Critical Accounting Policies, page 123

1.

Your disclosure on page 107 indicates that changes in Spanish law may impact your ability to recover the full balance of mortgage loans where the debtor is experiencing financial difficulty.  Please revise your disclosure in future filings, either here or elsewhere as you deem appropriate, to explain how these changes impact your severity, exposure and probability of default assumptions. Additionally, discuss, and quantify where possible, the impact these changes have had on your provisions and allowance for loan losses.

Response

We inform the Staff that the change in Spanish law that took place in 2013 affects a very specific and limited portion of the portfolio (loans to families considered vulnerable in Spain, which represent just 0.6% of the total mortgage portfolio of the Group).

1

The possibility, mentioned on page 107, of a reduction in the outstanding debt would only affect these specific clients and only in the event that the value of the corresponding collateral recovered by the Group pursuant to foreclosure is not sufficient to cover the debt. In this sense, our experience is that once the foreclosure has taken place no additional cash flow is recovered; accordingly the amount of the loan outstanding following the foreclosure is fully covered with impairment losses. Hence, these changes have not had any impact on our provisions or allowance for loan losses. We will add disclosure in future filings along the lines of the foregoing.

Financial Condition, page 163

2.

We note your disclosure that the decrease in customer loans in 2013 “was mainly due to the domestic component as a result of the deleveraging process in Spain and the cancellation of the public sector financing pursuant to a government program to pay suppliers’ pending invoices.”  In future filings, please describe in greater detail the government program cited and its impact on your business.

Response

Below is a description of the Spanish government program:

In 2012 the Spanish Government adopted specific mechanisms to facilitate the payment and cancellation of the debts that the local public entities had accumulated with their suppliers as a result of the sharp drop in the tax revenues caused by the economic crisis. It also approved the funding mechanism for this program through, among others, obtaining lines of credit from the main Spanish financial institutions, including us, which led to an increase in 2012 in our customer loans. During 2013, the improvement in the economic conditions in Spain allowed these public entities to obtain the required liquidity in the secondary markets and they cancelled those credit lines obtained the year before, which contributed to the reduction in our customer loans in 2013.

As the program has been terminated and primarily affected 2012 we respectfully inform the Staff that we do not consider greater detail about the government program mentioned to be relevant in future filings as we do not expect it will impact future periods.

Quantitative and Qualitative Disclosures about Risk, page 235

Part 5 – Credit risk, page 243

5.3.2 Spain, page 245

3.

Given the continuing declines in the value of real estate in Spain, as well as the continuing impairment charges and losses caused by that decline in your loan loss and foreclosed property portfolio, please revise your tabular disclosure on page 246 in future filings to also reflect an updated loan-to-value measure.  We note that you previously agreed to provide this disclosure in your correspondence filed on March 12, 2012. Therefore, please revise future filings to provide this disclosure, or tell us why this disclosure is no longer relevant.

2

Response

We acknowledge the Staff’s comment and we will revise in our future filings our tabular disclosure on page 246 to reflect an updated loan-to-value measure with the following disclosure:

“ The following table sets forth the loan to value ratio of our home purchase loan portfolio with mortgage guarantee in Spain, as of December 31, 2014, taking into account guarantee values at the time of origination:

Millions of euros

31/12/14

LTV ranges (*)

Less than or equal to 40%

More than 40% and less than 60%

More than 60% and less than 80%

More than 80% and less than or equal to 100%

More than 100%

Total

1. Gross amount

x,xxx

x,xxx

x,xxx

x,xxx

x,xxx

x,xxx

   1.1 Of which: Non-performing

xx

xx

xx

xxx

xxx

x,xxx

(*) LTV (Loan to value ratio: calculated as the outstanding amount of the loan to the updated available appraisal value of the mortgaged asset”

Credit Risk Cycle, page 253

5.5.6 Recovery management, page 259

Forborne loan portfolio, page 260

4.

Please revise your disclosure in future filings to provide the following information regarding your forbearance program:

• Clarify whether you have any limits on the number of times a borrower may request a modification of the terms of their loan.  If not, please discuss how you consider multiple modifications in determining whether a loan has been renegotiated or refinanced.

• We note in your correspondence filed with the Commission on March 11, 2013 that subsequent modifications to loans that were modified are not common but your disclosure on page 262 indicates that subsequent modifications are something you will consider if the previous modification did not lead to improvement in the customer’s performance.  Therefore, in future filings, separately disclose the balance of loans that have received multiple modifications from those that have received only one modification.

3

• Similarly, your disclosure on page 262 indicates that in the event that more than one modification is necessary, “more stringent classification/return-to-performing criteria” is used.  Please revise future filings to disclose specifically the more stringent classification and return to performing criteria that are applied to these types of loans.

• As previously requested, and as represented in your correspondence filed with the Commission on March 11, 2013, revise future filings to discuss how you consider the level of loans needing more than one modification as well as the level of re-defaults of refinanced or renegotiated loans when determining the appropriate level of allowance for loan losses.  If you believe this disclosure is no longer meaningful, please tell us why.

Response

In response to the four bullet items above, we have prepared the following responses with the Staff’s comments in bold and underlined.

Clarify whether you have any limits on the number of times a borrower may request a modification of the terms of their loan. If not, please discuss how you consider multiple modifications in determining whether a loan has been renegotiated or refinanced.

We will include in future filings the following disclosure to clarify this information “Our corporate policy permits a maximum of one modification per year and three modifications every five years.”

We note in your correspondence filed with the Commission on March 11, 2013 that subsequent modifications to loans that were modified are not common but your disclosure on page 262 indicates that subsequent modifications are something you will consider if the previous modification did not lead to improvement in the customer’s performance. Therefore, in future filings, separately disclose the balance of loans that have received multiple modifications from those that have received only one modification.

We will revise the disclosure in future filings to disclose the balance of loans that have had multiple modifications as follows:

“As of December 31, 2014 €x,xxx million of the forborne loan portfolio have had multiple modifications, which represents xx% of the total forborne loan portfolio.”

Similarly, your disclosure on page 262 indicates that in the event that more than one modification is necessary, “more stringent classification/return-to-performing criteria” is used. Please revise future filings to disclose specifically the more stringent classification and return to performing criteria that are applied to these types of loans.

We acknowledge the Staff comment and in future filings we will disclose the following information: “Conversely, if following the arrangement of forbearance there is no improvement in the customer´s payment performance, the possibility of extending new forbearance measures will be considered, with application of more stringent classification/return-to-performing criteria. Our corporate policy prescribes an extended period - between 6 months and 36 months- of continuous payment before a forborne loan with subsequent modification can be reclassified to the performing portfolio (between 3 months and 12 months in those which just have had one modification) . The length is determined by the existence of collateral and the remaining term of the loan.”

4

As previously requested, and as represented in your correspondence filed with the Commission on March 11, 2013, revise future filings to discuss how you consider the level of loans needing more than one modification as well as the level of re-defaults of refinanced or renegotiated loans when determining the appropriate level of allowance for loan losses. If you believe this disclosure is no longer meaningful, please tell us why.

We acknowledge the Staff’s comment and in future filings we will include the following disclosure, which is substantially the same as the wording included in our correspondence filed on March 11, 2013:

“For the purpose of determining losses, the Group monitors its customers differentiating between:

·

Customers classified by the Group as “standardized”: grouping together loans having similar credit risk characteristics indicative of the customers’ ability to pay all principal and interest amounts in accordance with the contractual terms. This category includes exposures to individuals, individual entrepreneurs and retail banking enterprises not classified as individualized customers.

·

Customers classified by the Group as “individualized”: they are monitored individually for significant loans and for loans which, although not significant, are not susceptible to being classified in a group of loans with similar credit risk characteristics. This category includes wholesale banking enterprises, financial institutions and certain retail banking enterprises.

Our internal models, used to calculate our loan loss provisions, incorporate re-defaults of the forborne loans in the following manner:

·

Customers classified by the Group as “standardized”: our internal models consider forborne loans as a different pool, which has its own probability of default calculated based on past credit history, which consider, among others, successive restructuration.

·

Customers classified by the Group as “individualized”: internal ratings are the key input for determining the probability of default of these loans and it takes into consideration subsequent restructuring of a loan. In this sense, our corporate risk policy establishes that the “rating” for forborne customers must be updated at least every six months reflecting new financial conditions or modifications.”

5.

Your disclosure in your Form 6-K filed July 31, 2013 discussing your financial results for the six month period ended June 30, 2013 indicates that the change in the Bank of Spain’s criteria for refinanced loans caused an increase in non-performing loans during the period.  You further state that this was due to the requirement to classify some or all of these loans as doubtful.  However, your discussion regarding the forborne loan portfolio discusses only the standard, substandard and impaired classifications.  Please tell us and revise future filings to disclose, if appropriate, how these two disclosures relate to each other and clarify to us why there is no disclosure of the doubtful loan category within your 20-F.  Clarify when a refinanced or renegotiated loan would be considered doubtful, similar to the disclosure regarding your other classifications on page 263, and quantify the balance of loans included in this classification.  Please also tell us in more detail why reclassification of these loans did not have any additional impact on your provisions.  For example, you have disclosure in the Form 6-K filed July 31, 2013 that indicated that you had already set aside provisions for EUR 340 million for these loans, in line with your internal policy, but it is unclear why this change in reclassification would not affect your internal policy for calculating loss provisions.

5

Response

We respectfully inform the Staff that the meaning of the term “impaired” used on page 263 of our Form 20-F and the meaning of the term “doubtful” used in the Form 6-K filed on July 31, 2013 is the same and refers to the meaning of “non-performing”. In future filings we will use the term “non-performing” in order to avoid any misunderstanding. Taking that into consideration, the information required by the Staff (the criteria for classifying a refinanced loan as non-performing) is disclosed on page 263 of our Form 20-F together with the balance of refinanced or renegotiated loans that are considered non-performing.

In regards to the disclosure included in our Form 6-K filed on July 31, 2013, when we stated that the reclassification of these loans would not have any additional impact on our provisions, we meant that we did not expect that these loans would require significant allowance for loan losses in the future in addition to those already recorded based on our internal models as we were not expecting a worsening of their LGDs taking into account the trends of house prices published by analysts.

Finally, we inform the Staff that this reclassification did not affect our internal policy for calculating provisions because, as mentioned in our disclosure in our Form 6-K filed on July 31, 2013, our internal models had already identified the deterioration in the financial conditions of these loans (refinanced mortgaged loans to unemployed clients with a long capital moratorium period) which prompted the change in Bank of Spain´s criteria.

Part 7 – Liquidity and funding risk, page 294

7.2.2  Balance Sheet Analysis and Liquidity Risk Measurement, page 296

6.

Please revise your future filings to disclose the weighted average of your structural liquidity surplus, if it differs or fluctuates materially from the period end balance.  We note that you represented you would provide this disclosure in your correspondence filed with t