Banco PopularFrancisco Sancha

CFO

UBS Financials ConferenceNYC, May 20th, 2014

Disclaimer

This presentation has been prepared by Banco Popular Español solely for purposes ofinformation. It may contain estimates and forecasts with respect to the future developmentof the business and to the financial results of the Banco Popular Group, which stem from theexpectations of the Banco Popular Group and which, by their very nature, are exposed tofactors, risks and circumstances that could affect the financial results in such a way that theymight not coincide with such estimates and forecasts. These factors include, but are notrestricted to, (i) changes in interest rates, exchange rates or any other financial variables,both on the domestic as well as on the international securities markets, (ii) the economic,political, social or regulatory situation, and (iii) competitive pressures. In the event that suchfactors or other similar factors were to cause the financial results to differ from the estimatesand forecasts contained in this presentation, or were to bring about changes in the strategyof the Banco Popular Group, Banco Popular does not undertake to publicly revise the contentof this presentation.

This presentation contains summarised information and may contain unaudited information.In no case shall its content constitute an offer, invitation or recommendation to subscribe oracquire any security whatsoever, nor is it intended to serve as a basis for any contract orcommitment whatsoever.

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Agenda

3

1. Capital position for the upcoming AQR / Stress Test

2. The road to recovery of profitability

3. Conclusions

Over the past few years, Spanish Banks have faced a severe regulatory environment

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2009 - 2012 2013 2014

AQR

Financial assistance program

Restructuring Public recapitalisations

SAREB

OW Stress Test

Banking Union

Royal Decree Law 2/2012 RE exposure

CRD IV/ CRRRoyal Decree

2/2011 recapitalisation

Stress test

Stress Test EBA

Popular has heavily reinforced its capital base and provisions since the beginning of the crisis

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6.5

7.2

8.6

9.410.0 10.1

11.2 11.2

2007 2008 2009 2010 2011 2012 2013 1Q14

(1) BIS 3 Phased in CET 1 including MCNs stress test eligible(2) Write-offs included

Banco Popular’s core capital evolution

2.03.0

4.0

7.0

9.0

19.0

21.3 21.7

2007 2008 2009 2010 2011 2012 2013 1Q14

Banco Popular’s cumulative provisions 2007-2013 (2)

(€, Bn)(%)

Cumulative provisions +€19 Bn

BIS 3 Fully loaded: 10.3%

(1)

During 2013, Banco Popular has done several measures to prepare itself for the upcoming AQR & Stress Test

(1) SMEs treatment, DTAs monetization & deleveraging6

2013 capital measures1

Additional measures 2

+ Pre-provision profit excess in 2013 over OW (net of taxes) > €399M

+ 2013 Capital gains (net of goodwill and taxes) > €533M

+ ABB in 2013 > €450M

+ New measures in RWAs, DTAs & others (1) > €1,049M

€2.4Bn additional

capital generated over OW’ s/test requirements

ECB reduction in almost 79% since 4Q12

Reduction of the sovereign portfolio

Frontloading doubtful loans in 4Q13

Heavy provisioning: €2.7 Bn in 2013

While new macro assumptions for the upcoming EBA Stress Test are harsh but realistic3

Total Base Total Adverse Delta

GDPEBA’14 4,9% -1,2% -6,1%OW -1,7% -6,5% -4,8%

Unemployment EBA’14 23,2% 27,1% +3,9%OW 23,4% 27,2% +3,8%

Housing pricesEBA’14 -8,2% -9,5% -1,3%OW -9,9% -26,4% -16,3%

GDP

Unemployment

Housing prices

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As a consequence, we have a sound capital position under all ratios

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10.67%Common Equity Tier 1

(phased in)

10.28%CET 1 Fully Loaded

(with MCNs Stress Test eligible)

Leverage Ratio 6.18%

11.18%Common Equity Tier 1

(phased in, with MCNs Stress

Test eligible)

…while maintaining the highest quality capital with very low leverage

RWAs/Total Assets (%)(1)(2)

CRD IV fully loaded leverage ratio (%)(1)

(1) Banks: Barclays, BBVA, BNP Paribas, BPI, Caixabank, CASA, Commerzbank, Danske, Deutsche Bank, DNB, ING, KBC, Lloyds, Nordea, RBS, SEB, Societe Generale, Swedbank(2) Basel 2.5 RWAs as reported by each bank 8

Average (ex Popular): 4.07%

Average (ex Popular): 32.8%

Agenda

9

1. Capital position for the upcoming AQR / Stress Test

2. The road to recovery of profitability

3. Conclusions

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Top priorities

Intensify our business model

Margins management

NPAs management

2014-15

The current environment presents challenges but also opportunities. In light of this, the bank’s main priorities are:

No need to change business model

Reinforce our leading SME franchise

Cost of deposits will drive NIM expansion

Asset yields stable

Steady improvement of customer spread

NPL already falling

Increasing the pace of RE sales

Incorporation of a RE specialized unit tounwind this exposure in an orderly way

1

2

3

Highly profitable business model through leadership in retail/SME banking, tested due to the crisis

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Pre-provision profit evolution

(€, Bn)

2.9% 2.6% 2.7% 2.6% 2.6% 2.9% 2.2% 1.7% 1.9% 1.9%

Capital gains evolution & main JV

0.30.5

0.6 0.60.5

1.3

2008 2009 2010 2011 2012 2013

2010 2012

2013

2011

Main JVs

% Pre-provision over net loans

Note: Banco Popular and Pastor aggregated data through 2010, Banco Popular and Pastor pro-forma data for 2011, and Banco Popular consolidated data for 2013

1.82.0

2.42.7

2.9

3.5

2.5

1.9 2.0 2.0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Leadership in cost management (efficiency ratio of ~44.4%)

Highest net interest margin over ATAs among peers: 1.46% vs. 1.22% average ex Popular

>€2.0 billion average yearly pre-provision profit (last 10 years) demonstrating capacity to generate a high and recurrent pre-

provision profit, reinforced by a strong track record of generating capital gains with reliable partners

1 Our Business Model

9.42%

21.10%

12.11%

18.15%18.75%18.09%

11.02%

16.35%

10.99%

7.19%

2010 2011 2012 2013 1Q14

2.6x

Proven profitable business model focused on SMEs

SME market share clearly above other segments…

16.0%

3.5%

6.2%

SMEs and Self-employed

Individuals

Branches

(1)

(1) Market share based on SME loan volume according to Oliver Wyman report (2012)

17%43%

82%

83%57%

18%

Customers ATAs Gross operatingprofit

SMEs and self employed Rest

…SMEs is the most profitable segment

Loans to SMEs & corporates market share evolution ICO official credit lines market share evolution

Source: ICO. Banks: BBVA, Sabadell , Caixabank & Santander . Corporate deals included proforma12

Bank 1

Bank 2Bank 3

Bank 4

+87%

6%

11%

2007 2013

(2)

(2) % over retail gross operating profit

1 Our Business Model

This unique SMEs specialized business model is based on expertise that cannot be improvised overnight

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SMEs & self employed

50.7%

Corporates14.8%

Other34.5%

5 pillars5 pillars

Branchnetwork

Product

Riskmanagement

Operationalmanagement

HH.RR.

Strategy based on profitable

growth

“Tailored” products

and prices

High quality, quick-response service. Lower expected loss than peers

Strong SME culture

Efficiency

Loans by segment Key management pillars of SME model

(% over total core lending book)

Focus onclients

1 Our Business Model

Data as of 31/03/2014

Maturities profile and repricing of time deposits

% over total maturities

31.4%

13.4%10.9%

29.2%

Cost of maturities ( % )

15.1%

Time deposits cost evolution

(Quarterly average %)

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(€, million)

Note: From January 1st 2014, due to the entry into force of IFRS 11, the equity method is applied to jointly controlled entities. For comparative purposes, this criterion has been applied to information concerning the financial year 2013.

The improvement in time deposits will drive NIM expansion in coming quarters

2 Margins management

Current yields in core segments still above back book. Current pricing environment in both deposits and assets will allow us to improve our customer spread considerably

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1Q14 Frontbook vs Backbook yields by segment

(%)

2 Margins management

3.583.08

4.98

3.74

4.77

5.98

Corporates Individuals SMEs & selfemployed

Back book Front book

1.37

2.74

3.74 3.88

2.25

1.87 1.92

2.62

1Q11 1Q12 1Q13 1Q14

Front book Back book

Frontbook vs Backbook customer spreads

Quarterly average (%)

We maintain not only the highest margins but also of a higher quality

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2 Margins management

Lower contribution from carry trade1Q14 Securities portfolio yield

Higher margins than peers1Q14 NIM Comparison

(%)

1.46%1.27% 1.22% 1.22% 1.20%

Bank 1 Average exPOP

Bank 2 Bank 3

(%)

2.12

3.41 3.48 3.50 3.61

Bank 1 Bank 3 Average exPOP

Bank 2

Banks: Sabadell, Bankinter and Caixabank. Source: 1Q14 results

High quality revenues1Q14 revenues composition

(%)

695 836455 540

1,425

2,276

-132

2008 2009 2010 2011 2012 2013 1Q14

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In 1Q14 we saw the first negative net entries of NPLs since the beginning of the crisis

(€ million)

Net entries evolution

(1)

(1) Adjusting the effect of Banco Pastor consolidation

Note: From January 1st 2014, due to the entry into force of IFRS 11, the equity method is applied to jointly controlled entities. For comparative purposes, this criterion has been applied to information concerning the financial year 2013.

3 NPAs management

17,315

3,743

Stock Mar 14

Non performing loans

Subjective doubtful loans

This positive trend coupled with the substantial provisioning effort made during the crisis and conservative NPL recognition should allow us to gradually normalize the cost of risk

Total provisions over risks(1)NPL and Doubtful 1Q14

100% still performing

(%)(€, millions)

13.2% 13.5%

1Q13 1Q14

(1) Credit, guarantees, write-offs and repossessed.

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33 bp

82%

18%

3 NPAs management

398

774

2012 2013 2014E

119

Jan-14 Feb-14 Mar-14

75

248

1Q13 1Q14

Real estate sales are in line with the 2014 target and above book value

+3.3x

Real Estate Assets Sales (€ million) Real Estate Assets Sales (€ million)

(€, millions) c. 2x

c. 2x

3 NPAs management

Sales split by regionSales Mix 1Q14

(%)By nationality By product

30%

6.3%1.3% 0.1%

1% 14%

0.2%

3%

1% 1%

1.3%

16%

5.3%

1% 2.3%

12%

6%

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We continue selling above book value, and the Spanish RE market is showing clear signs of stabilization

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3 NPAs management

Banco Popular’s discount in sales vs. coverage

Prices stabilizing: First quarter with positiveevolution in housing prices (+0.84% QoQ) after 6years of decrease.

Demand increasing on a national level:

number of transactions +14,42% QoQ

Transactions up in 14 of 17 regions

Foreign demand still robust: 12% of total salesto foreign buyers

37%41%

15%20%25%30%35%40%45%

1Q13 2Q13 3Q13 4Q13 1Q14

Discount over book value of sales (gross)

RE assets coverage of sales

Recent trends of Spanish RE market

Source: Colegio de Registradors de la Propiedad.

Agenda

21

1. Capital position for the upcoming AQR / Stress Test

2. The road to recovery of profitability

3. Conclusions

Conclusions

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3

2 We will remain focused on expanding our core SMEs business while reinforcing ourNIM across the coming quarters.

The macroeconomic environment is showing clear signs of improvement.Nonetheless, challenges remain as the economy is still deleveraging and a lowinterest rates environment remains in place

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The positive NPL trend is confirmed and hopefully maintained over the nextquarters, same as the improvement in REO sales.

4 Recovery of profitability centers on three key variables: Economic recovery, awinning business model and a successful management of margins and NPA’s.

5 After the measures implemented, Banco Popular is well prepared to face theupcoming supervisory assessments

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