2q10 results...1q09 2q09 3q09 4q09 1q10 2q10 394.6 418.6 402.3 385.2 374.1 net interest income...

1

22nd July 2010

2Q10 Results

Banco Sabadell

2

Disclaimer

Banco Sabadell cautions that this presentation may contain forward looking statements with respect to the business. financial condition. results of operations. strategy. plans and objectives of the Banco Sabadell Group. While these forward looking statements represent our judgement and future expectations concerning the development of our business. a certain 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. Macroeconomic. governmental. political and regulatory trends. (2) movements in local and international securities markets. currency exchange rate. and interest rates. (3) competitive pressures. (4) technical developments. (5) changes in the financial position or credit worthiness of our customers. obligors and counterparts. These risk factors could adversely affect our business and financial performance published in our past and future filings and reports. including those with the Spanish Securities and Exchange Commission (Comisión Nacional del Mercado de Valores).

Banco Sabadell is not nor can it be held responsible for the usage. valuations. opinions. expectations or decisions which might be adopted by third parties following the publication of this information.

Financial information by business areas is presented according to GAAP as well as internal Banco Sabadell group´s criteria as a result of which each division reflects the true nature of its business. These criteria do not follow any particular regulation and can include forecasts and subjective valuations which could represent substantial differences should another methodology be applied.

The distribution of this presentation in certain jurisdictions may be restricted by law. Recipients of this presentation should inform themselves about and observe such restrictions.

These slides do not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe to any securities nor shall they or any one of them form the basis of or be relied on in connection with any contract or commitment whatsoever.

3

Agenda

1. 2Q10 Results

2. Commercial activity and liquidity

3. Risk Management

4. Banco Guipuzcoano

4

� Results featured by an important realisation of capital gains (sale&leaseback and exchange offer) which have been applied to higher provisioning

� Higher net interest margin due to active price management

� Good cost management

� Improvement in coverage ratios in the credit and real estate assets portfolio

� Important growth in number of customers and deposits

� Generating commercial GAP

2Q10 in summary

5

1H10 Results

Euros in million

Jun-09 Jun-10 10/09 (%)

Net Interest Income 813.1 765.2 -5.9%

Equity Method & Dividends 42.2 47.8 13.3%Commissions 267.1 253.3 -5.2%Trading Income & Forex 185.7 175.7 -5.4%Other Operating Results 3.7 5.4 43.1%Gross Operating Income 1,311.9 1,247.4 -4.9%

Personnel Costs -370.5 -326.0 -12.0%Administrative Costs -152.6 -163.4 7.1%Depreciations -69.0 -78.7 13.9%Pre-provisions Income 719.7 679.3 -5.6%

Total Provisions & Impairments -358.9 -693.8 93.3%Gains on sale of assets 28.9 292.1 -Profit before taxes 389.7 277.7 -28.7%Taxes and others -57.6 -44.0 -23.6%Attributable Net Profit 332.0 233.6 -29.6%

6

Strong capital position

6.63

1.160.9

2.271.78

7.70

Jun-09 Jun-10

BIS ratio (%)

Lower Tier I

Core Capital

Tier II

10.05 10.38

7Jun-09 Jun-10

- 5.9 %813.1 765.2

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

394.6 418.6 402.3 385.2 374.1

Net interest income supported by active price management …

391.1

Euros in million

Jun-10

NII 765.2

Dividends 10.5

Equity Method 37.3

Commissions 253.3

Trading income 152.1

Forex 23.6

Other op. results 5.4

Gross Op. Income 1,247.4

Personnel exp. -326.0

Administration exp. -163.4

Deprec. & amort. -78.7

Pre-provis.Op.Income 679.3

Prov. for NPLs and others -693.8

Gains on sale of assets 292.1

Taxes and minority int. -44.0

Disc. transactions 0.0

Attr. Net Profit 233.6

8

2.17%2.31%2.52%2.72%

2.81%2.84%2.80% 2.81% 2.73% 2.05%

3.53%

4.21%

4.93%

6.29%6.06%5.93%

6.28%

5.56%

3.79%3.49%

1.44%1.36%1.48%1.70%

3.48%3.22%

2.21%

3.13%3.47%

2.83%

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

1.81%1.78%1.86%

1.80% 1.83% 1.79%1.85%1.98% 2.06%

1.95%

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

… with limited impact on customer spread

Net interest margin

Customer loan yield

Cost of customer funds

Customer spread

9

29.8

60.6

28.634.1 31.2 30.731.2

52.8 51.952.1 51.854.2

44.4 41.638.1

45.3 43.842.3

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

63.9

113.4

85.4

61.9

106.0

89.7

Jun-09 Jun-10

267.1 -5.2%253.3

134.9 132.2 118.7 125.3 129.3

Commissions reflect the current environment

124.0

Asset Mgmt1

Services

Lending

1 Including mutual funds commissions and pension funds and non-life insurance brokerage

Asset Mgmt1

Services

Lending

Euros in million

Jun-10

NII 765.2

Dividends 10.5

Equity Method 37.3

Commissions 253.3


Forex 23.6












10

158.1 157.2 159.6 153.7 159.9 162.2

31.6 23.6 10.6 20.9 1.0 2.9

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

322.1315.4

55.23.9

Jun-09 Jun-10

370.5326.0

+ 2.1%

Recurrent Non-recurrent

- 12.0%

189.7 180.8

- 0.5%Like-for-like

170.2 174.6 160.9

Personnel expenses reflect excellent cost control…Personnel expenses

165.0

Euros in million

Jun-10

NII 765.2

Dividends 10.5

Equity Method 37.3

Commissions 253.3


Forex 23.6












11

… and administrative costs increasing only due to the sale&leaseback transaction

78.9 76.0 82.4

5.1

88.080.873.7

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

152.6 158.3

5.1

Jun-09 Jun-10

152.6 163.4

+ 7.1%

0.0%Like-for-like

Sale and leaseback

12 months impact:

€ 30m

Administrative costs

Euros in million

Jun-10

NII 765.2

Dividends 10.5

Equity Method 37.3

Commissions 253.3


Forex 23.6












12

The transformation plan is nearly completed ...

FTEs* administrative by branch 2.25

2.00 1.95

1.67

1.37 1.32 1.25

2004 2006 2007 2008 2009 1H10 2010P

Accumulated reduction: -717 FTE

The operating efficiency process keeps the trend in reducing back office time at the branch level

*FTE= Full Time Equivalents

Cost reduction measures

� New Administrative Center for Banco

Urquijo has enabled us to centralize

the branches back office workload

� Creation process of an outsourcing

center, that additionally to cost

optimization, enables us to free-up

capacity and take on new network

administrative tasks

� Strengthening the self-service

channels and focusing on telebanking

13

45.5%43.1% 41.9% 43.1% 42.1% 42.3%

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

1,229 1,2301,223

1,214

1,206 1,208

9,6689,615

9,559

9,466 9,484

9,395

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

… which has a continued positive impact in the company’s structure

Cost / income ratioNumber of employees and branches*

* Excluding Sabadell United

14

Total provisions and impairments

Capital gains offset with higher provisions

Capital gains of S&LB (€250m*) and debt exchange (€89m) applied to real estate assets, specific provisions and BCP

Euros in million. * €265m before transaction costs

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

Specific 105.9 148.4 168.5 141.0 228.0 212.2 of which:

NPLs entry 11.0 16.2 14.5 4.1 50.5 26.0 Calendar effect 80.8 121.7 155.2 174.8 164.6 175.6Extraordinary charge 0.0 0.0 0.0 0.0 0.0 90.0Substandard 41.9 87.5 258.7 3.4 -54.2 -31.2Metrovacesa 0.0 46.7 43.4 94.3 0.0 0.0Real estate assets 0.3 57.0 67.1 57.2 46.0 209.8BCP 0.0 0.0 0.0 210.0 0.0 38.5Goodwill and others 1.0 -0.3 9.1 53.5 8.9 5.3

Subtotal 149.1 339.2 546.8 559.4 228.6 524.6

Generic 0.0 -129.4 -315.5 -311.8 -61.2 1.7

Total prov. and impair. 149.1 209.8 231.3 247.6 167.4 526 .3

15

Agenda

1. 2Q10 Results


3. Risk Management


16

Commercial activity is being developed at a steady pace …

A strong commercial activity in a difficult environ ment allows us to increase market share

* Excluding repos and including preference shares placed in the retail network and convertible bond issue. Euros in million

On-balance sheet customer funds* 37,834 41,212 +8.9%

Jun-09 Jun-10 %

Fix-term deposits 22,615 24,191 +7.0%

Loans to customers 64,229 65,356 +1.8%+6.4%Loans to customers excluding real estate

Off-balance sheet fundsMutual funds 8,418 8,532 +1.4%Pension funds 2,297 2,777 +20.9%Third party insurance products 5,163 5,434 +5.3%

16,694 17,908 +7.3%

17

Emisiones en mercados de capitales (no incluye las titul izaciones)

… due to the good results of our campaigns to attract clients …

25,814 new accounts

46,130 new accounts

Significant success in gaining new customers:

Two major campaigns to attract clients:

Jun-09 Jun-10 % Var.

Individuals 68,318 96,828 +42%

Companies 13,855 22,661 +64%

18

Credit lines (number of new contracts)

Loans (number of new contracts)Mortgages (number of new contracts)

… emphasizing the transactions on the asset side …

,.000

2,000

3,000

4,000

5,000

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

2,000

4,000

6,000

8,000

10,000

2,000

4,000

6,000

8,000

10,000

CrediGlobal (number of new contracts)

500

1,000

1,500

2,000

2,500

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

19


… and with an important success in deposits …

€ 1,264.3 millions

Important efforts in cross selling through new depo sits campaigns (30% of the new deposits have also salary

account)

Cross selling4.3 products per client

2Q10 deposit attraction/taking

€ 1,005.0 millions

Flexible Deposit

Platinum Deposit

€ 607.1 millions18 months Deposit

Mass market

Personal Banking 7.4 products per client

20

FINANCIACIÓN


… that generates an important commercial GAP …

-1,000

0

1,000

2,000

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

Positive commercial GAP

10,000

15,000

20,000

25,000

30,000

Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10

0

2,500

5,000

7,500

10,000

Funds evolution

Wholesale funding

Sight deposits

Fix-term deposits

Euros in million

Mutual funds (right axis)

21

1,00

530

1,20

950 0

1,63

01,

289

900

280

200

801,

500

500

01,

000

0 020

00

1,50

00 0

1,75

01,

137

0 5015

0030

020

00 0 13

170

0

500

1,000

1,500

2,000

3Q10

1Q11

3Q11

1Q12

3Q12

1Q13

3Q13

1Q14

3Q14

1Q15

3Q15

1Q16

3Q16

1Q17

3Q17

1Q18

3Q18

FINANCIACIÓN


… and provide us with a comfortable liquidity position for the coming quarters

Wholesale funding maturity calendar€ m

Covered bonds € 1,000m

Subordinated debt € 500m

Total capital market issues € 1,500m

1H10 issues: Wholesale funding breakdown:

Securitization 9.42%

Preference shares 0.75%

ECP 13.62%

Subordinated debt 5.67%

Senior debt 19.12%

Covered bonds 51.41%

22

Service quality

7.937.917.907.838.037.827.44

6.797.20 7.37 7.19 7.03

6.59 6.52

2005 2006 2007 2008 2009 1Q10 2Q10

Banco Sabadell group Market

Ranking in retail banking network independent quality surveys 2

Ranking in service quality 1

0 2 4 6 8 10 12 14 16

San Consumer F.BanestoBarclays

Deutsche BankBankinter

GuipuzcoanoSantander

PastorValencia

AndalucíaBBVA

PopularSabadell 2008 2007

The only Spanish financial institution with a global ISO

9001 quality certificate

Renewal of the Global Award of

European Excellence

Source: 1 Bank of Spain, dec-08 Bulletin 2 STIGA, “RCB Objective Quality in Retail Banking Networks” 2Q10

23

Agenda

1. 2Q10 Results


3. Risk Management


24

NPL ratio remains under control …

Source: Bank of Spain

02468

10

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 mar-10

jun-10

*Banco Sabadell estimates

*

Continued important NPL gap vs the system, with a co verage ratio of 64% (122% including mortgage guarantees)

System NPLs Ratio BS NPLs ratio

Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10

NPL ratio BS 2.35% 2.82% 3.19% 3.47% 3.73% 4.09% 4.38%

NPL ratio system 3.37% 4.27% 4.60% 4.86% 5.08% 5.33% 5.62%

GAP (bp) 102 145 141 139 135 124 124

25

670.9671.8788.3748.5

625.4

806.7709.0

647.7

591.6578.9532.9

223.1

489.4

35.1

480.1531.9

3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

Evolution of entries and recoveries

Entries

Recoveries

… with entries and recoveries on a converging path …

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

Entries 806.7 788.3 709.0 671.8 670.9 647.7

Other provisioned loans entries 0.0 35.4 41.0 63.9 349.7 256.4

Recoveries -480.1 -532.9 -531.9 -489.4 -578.9 -591.6

Write-offs -1.7 -25.4 -9.2 -31.2 -183.3 -93.1

Quarterly change on NPLs 324.8 265.4 208.9 215.1 258.4 219.4Euros in million

26

Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10

Companies 1.60% 1.81% 1.95% 1.92% 2.05% 2.38%

SME 1.97% 2.54% 2.73% 2.89% 2.86% 3.32%

Small retailers and self-employed 2.42% 2.93% 3.59% 3.93% 3.96% 4.14%

Real estate development 7.34% 7.73% 8.05% 9.33% 12.60% 14.24%

Real estate management companies 3.37% 4.01% 4.63% 5.70% 6.95% 7.42%

Construction 3.84% 4.23% 4.71% 4.53% 4.88% 5.13%

Mortgages to individuals 1.48% 1.69% 1.99% 1.95% 2.11% 2.13%

Individual others 4.24% 4.91% 5.53% 5.43% 5.46% 5.43%

Total 2.82% 3.19% 3.47% 3.73% 4.09% 4.38%

… with no changes in the trend by segment

27

931 1,025 1,1121,025

Dic-08 Jun-09 01/12/yy 01/6/yy

-68

Results show the active management in Solvia …

Accumulated portfolio evolution

Acquisition

Repossession

Sales

Provisions

872 1,216 1,313 1, 468 1,498

-59 -59-129

-193

-43

250

460617

Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun -10

714

-244

-84

1,112

Significant real estate provisioning effort has con tinued.Real estate assets coverage ratio stands now at 22%

1,566

-288

1,112

-95

837

1,687

-475

-162

1,212

1,112

Euros in million

28

% Real estate assets over loans

10%

12%

14%

16%

22%

0%

5%

10%

15%

20%

25%

SavingBanks

System BS Banks BS

4Q09 Jun-10

% Coverage

Saving Banks System BanksBS

2,74%

4,75%

3,79%

2,84%

0,00%

0,50%

1,00%

1,50%

2,00%

2,50%

3,00%

3,50%

4,00%

4,50%

5,00%

1T07 2T07 3T07 4T07 1T08 2T08 3T08 4T08 1T09 2T09 3T09 4T09 1T10

Source: Bank of Spain and annual reports

… with a better scaled portfolio than the sector average

29

Agenda

1. 2Q10 Results


3. Risk Management


30

Key considerations

Transaction

� Exchange offer (“OPA”) for 100% Banco Guipuzcoano’s shares, subject to an acceptance level of at least 75%

� Irrevocable commitments by 45.61% of BG’s shareholders

� September: Extraordinary Shareholders Meeting

� Closing of the transaction: mid November

� -5% year 1, +6% year 2, +11% year 3

Economic terms

� 5 new ordinary shares + 5 mandatory convertible bonds (term 3 years; coupon 7.75%) for every 8 BG ordinary shares

� Equivalent effective price of €5.00 for every BG ordinary share and €5,47 for each BG preference share without voting rights

� Payment through BS ordinary shares and mandatory convertible bonds for an equivalent effective value of €749 million

EPS impact

Capital and Goodwill

� +15 bps in Core Tier 1

� Goodwill: €50 million

Note: Transaction is subject to the acceptance of the exchange offer

Synergies� Synergies of €60m (€53m in costs and €7m in revenues)� Achievement of 100% of the synergies in 2012

31Euros in million

A capital efficient transaction

401

50

348

602

Sharesoffered

Mandatoryconvertible

bonds offered

Goodwill Capital needfor RWA

Capital generation: 15 bps

Capital rising

Potential margin for assets revaluation due to accounting consolidation

Capital use

638

61

749

50

Acquisitionprice

BG bookvalue 1Q10

Fair valueadjustments

Goodwill

Only €50 million of goodwill

Capital generation / use


32

Strategic rationale

� Reinforces Banco Sabadell’s position as the fourth largest banking group in Spain and consolidates the domestic growth strategy

� Rebalances the geographic contribution of BS business, contributing with a more diversified network that reinforces Banco Sabadell’s presence in the Basque Country, whose GDP is the 5th in Spain (6.2%) and qualified with a rating of Aaa by Moody’s, AA+ by S&Ps and AAA by Fitch.

� Reinforcing the BS retail customer franchise

� It will allow the group to turn into the 6th (before 13th) financial entity (in number of branches) in the Basque Country (123 branches). Additionally, it will allow the group rising to the 6th position in Navarra and 7th in Madrid

� Banco Sabadell’s track record in integrations will improve the efficiency with €60 million of synergies, and at the same time, it will preserve the differentiated brand and Banco Guipuzcoano values


33

% : Market share

Customer deposits 1 (€bn)

167,0140,6

92,9 83,4 72,6 59,6 56,7 44,6 39,15,4

Caj

aM

adrid

SIP

La C

aixa

BB

VA

Esp

aña

CA

M S

IP

Red

San

tand

er

Pop

ular

Ban

esto

BS

+ B

G

BS

BG

Net loans to customers (€bn)

223,7 204,4176,7

115,6 95,0 94,5 75,6 70,4 63,2

7,2

Caj

aM

adrid

SIP

BB

VA

Esp

aña

La C

aixa

Red

San

tand

er

Pop

ular

CA

M S

IP

Ban

esto

BS

+ B

G

BS

BG

Domestic Branches

5.315 4.543

3.055 2.934 2.384 2.168 1.773 1.445 1.190

255

La C

aixa

Caj

aM

adrid

SIP

BB

VA

Esp

aña

Red

San

tand

er

CA

M S

IP

Pop

ular

Ban

esto

BS

+ B

G

BS

BG

Mutual funds and Pension funds (€bn)

40,2

27,9 27,4

14,5 13,0 12,2 11,9

1,1

BB

VA

San

tand

er

La C

aixa

Caj

aM

adrid

SIP

BS

+ B

G

Pop

ular BS

BG

10,7%13,6% 12,4% 7,0% 5,7% 4,6% 3,8% 0,4%

12,1% 6,9%10,4% 6,7% 4,9% 3,3% 2,7% 0,6%

14,1% 7,0%11,9% 7,8% 5,0% 3,3% 0,5%

16,2% 11,2% 11,1% 5,8% 5,2% 4,9% 4,8% 0,4%

6,1% 4,8%

4,0%

4,3% 3,8%

4,2%

5,8%

Reinforces Banco Sabadell’s position in Spain

Source: AEB, CECA and company data as of FY09Note: Santander does not include neither Banesto nor Santander Consumer Finance; BBVA España includes Spain and Portugal 1 Including REPOsNote: Transaction is subject to the acceptance of the exchange offer

34

Increasing market share in the Basque Country

2

2 199

5

3

2

126

52

1 27

1

252

12

4

395

110

39

19117

316

155

56

28

149

24

5

11

245

26

Banco Sabadell’s branchesBanco Guipuzcoano’s branches

Sabadell 1,1821

Guipuzcoano 2552

1 As of March 2010, 2 As of December 2009

2.0%

Branches market share in the Basque Country

8.6%

Without BG

With BG


35

Improving the positioning of BS in the Basque Country, Navarra and Madrid

243

225

187

140

133

102

99

98

67

63

24

123

Basque Country branches ranking

6th

13th

…

BS+B

G

Source: Company information, AEB, CECA (Data as of 2008). Banco Guipuzcoano as of December 2009 and BS as of March 2010

100

67

56

47

43

16

12

11

11

9

23BS+BG 6th

8th

775

575

510

305

301

159

158

155

207

198

1.066

BS+BG 7th

10th

Navarra branches ranking Madrid branches ranking


36

The importance of the economy in the Basque Country

9,8% 9,4%

11,8%10,7%

2007 2009

Basque Country Spain

Construction weight in the economy 3

Unemployment rate (1Q10)

10,9%

20,1%

Basque Country Spain

� Weight of the economy: 6.2% of GDP1

� Qualified with rating Aaa by Moody’s, AA+ by S&Ps and AAA by Fitch

� Spanish region with the lowest debt/GDP ratio (3.8%)1

� In the last six years, the economy in the Basque Country has shown a more favourable trend than in Spain as a whole

� The economic contraction in the Basque Country began later and is expected to have ended before than in Spain

� The GDP per inhabitant2 is above the country and EU average

1 Data as of 2009, 2 Nominal GDP per inhabitant, 3 Gross Value Added weight of the economy

Economic situation


37

Integration process

�Use of Banco Sabadell’s existing IT platform and operations

�Migration of IT platform to coincide with branch network consolidation

Key aspects

Calendar – main events 2010

End of exchange offer

EGM of Banco

Sabadell

New commercial structure

Integration IT/operations

Branch network integration

Board of Directors approval


June 25th September 18th February 2011November 14th

38

Key data Branch network

� Ranked as Spain’s 41st financial entity based on total assets

� 1.266 employees� €10.345m of total assets� €7.159m of net credit (58,9% SMEs,

32,4% individuals y 8,7% large corporates and other)

� €5.427m of client deposits (incl. repos of €241m)

� Net profit of €28m� Shareholder funds €639m� Tier 1: 9,1%� BIS: 12,6%� NPLs: €307m � NPL ratio: 3,9%� NPL coverage ratio: 91,5% 255

45% in Guipúzcoa and Navarra

Note: Data as of 2009. Euros in million

22 1 99

53

2

126

52

1 27

1

252

12

4Number of Banco Guipuzcoano branches


Annex I. Banco Guipuzcoano in summary

39

Annex II. Banco GuipuzcoanoCustomer loans and deposits

Customer loans Customer deposits


€ m 2007 2008 2009 09/08%

Public administrations 268.8 232.6 175.0 (24.8)%

Resident sector 4,920.4 5,172.8 5,166.2 (0.1)%

Sight deposits 1,763.6 1,659.8 1,697.2 2.3%

Current accounts 1,488.8 1,412.4 1,401.2 (0.8)%

Savings accounts 274.8 247.4 296.0 19.6%

Fixed-term deposits 2,258.6 2,800.3 3,157.8 12.8%

Fixed-term deposits 1,444.8 1,954.7 2,331.8 19.3%

Other¹ 813.8 845.6 826.0 (2.3)%

REPOs 896.5 643.0 241.2 (62.5)%

Valuation adjustments 1.7 69.7 70.0 0.4%

Non-resident sector 79.3 85.5 86.2 0.8%

Total customer deposits 5,268.5 5,490.9 5,427.4 (1,2)%

€ m 2007 2008 2009

Public Administrations 34.8 60.3 57.4

Resident sector 7,771.2 7,843.6 7,230.1

Individuals 2,699.0 2,882.3 2,776.4

SMEs 4,965.2 4,858.1 4,385.3

Other 107.0 103.2 68.4

Non-resident sector 163.9 159.9 152.4

Total gross loans 7,969.9 8,063.8 7,439.9

Valuation adjustments 179.5 222.3 281.4

Specific coverage 56.2 105.0 195.7

Generic coverage 123.3 117.3 85.7

Total net loans 7,790.4 7,841.5 7,158.5

40

179,2222,2

281,4

94

222,6307

2,8%1,2%

2007 2008 2009

Provisions NPLs

190% 100% 92%

%3.9%

Risk management

Coverage ratio NPL ratio

Solvency

Funding mix Wholesale funding calendar

5,62% 6,93% 7,37% 7,85%

4,78%4,05% 3,75%

3,48%11,09% 11,35% 11,79% 12,56%

1,23%0,67%0,64%

0,69%

2006 2007 2008 2009

Core Tier 1 Lower Tier 1 Tier 2

Covered bonds10,6%

Tradable securities

17,4%

Subordinated debt3,6%

Customer deposits53.3%

Interbank14,2%

Other1,0%

0

725

430

0 50

125

25

2010 2011 2012 2013 2014 2016 2022


Annex III. Banco GuipuzcoanoRisk management

41Data as of 2009 Note: The contribution analysis does not take into account the potential synergies obtained through the transactionNote: Transaction is subject to the acceptance of the exchange offer

10.7%

88.6%

90.7%

89.3%

92.2%

94.9%

9.3%

7.8%

5.1%

11.4%

Guipuzcoano Sabadell

Contribution analysis

12.2%

10.9%

11.1%

89.8%

87.8%

89.1%

88.9%

10.2%

Annex IV. Banco GuipuzcoanoBG represents c.10-12% of the combined entity

11.8%17.6%

10.7%

9.8%13.6%15.9%

88.2%82.4%

89.3%

90.2%86.4%84.1%

€m Guipuzcoano Sabadell Combined entity

P&LNet interest income 205 1,601 1,805Gross operating income 256 2,505 2,761Personnel and general expenses -142 -1,180 -1,321Net income before provisions 113 1,325 1,438Attributable net profit 28 522 551

Balance sheetNet loans to customers 7,158 63,233 70,391Customer deposits 5,427 39,131 44,558Shareholders' equity 639 5,226 5,866Total assets 10,345 82,823 93,168

OtherEmployees 1,266 9,466 10,732Branches 255 1,190 1,445

AverageMedianCapitalisation 773 4,892 5,665Ave. Capitalisation (last 5 years) 1,377 7,303 8,679

421 As of March 2010, 2 As of December 2009

GDP geographic distribution Branches geographic distribution

13.6%

3.1%

2.2%

2.5%

3.9%

1.3%

3.3%

5.9% 18.6%

9.7%1.7%

5.2%

18.0%

2.6%

1.7%6.2%

0.7%

# BS branches 1,1821

# Proforma branches 1,4372

2.8%

29.2%

1.8%

1.6%8.6% 0.7%0.4%10.5%

2.1%

14.4%

4.1%

0.4%

9.0%1.7%

9.5%

2.1%

1.2%

This transaction allows us to have a higher market share in the fifth most important Spanish region

%

%

33.3%

2.4%

12.6% 0.4% 2.0% 1.0%

4.7%

13.1%

0.4%

2.0%

0.3% 1.4% 9.3% 3.3%

1.6%9.9%

2.2%

Annex V. Banco GuipuzcoanoIncreasing market share in the Basque Country


43

The value of trust

2q10 results...1q09 2q09 3q09 4q09 1q10 2q10 394.6 418.6 402.3 385.2 374.1 net interest income...

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