santander bank activity and results 2011

1 1

31 January 2012

2 2

Important information

Banco Santander, S.A. ("Santander") cautions that this presentation contains forward-looking statements. These forward-looking statements are found in various places throughout this presentation and include, without limitation, statements concerning our future business development and economic performance. 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, 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. The risk factors that we have indicated in our past and future filings and reports, including those with the Securities and Exchange Commission of the United States of America (the ―SEC‖) could adversely affect our business and financial performance. 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 on which they are made and are based on the knowledge, information available and views taken on the date on which they are made; 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 presentation 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 presentation. In making this presentation 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 presentation 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 presentation 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.

Note: 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 presentation should be construed as a profit forecast.

3 3

Agenda

■ Group performance 2011

— Highlights

— Results

■ Business areas performance 2011

■ Conclusions

■ Appendix

4 4 2011 Highlights

In a year of mounting complexity, priority was given to balance sheet strengthening, backed by high profit generation

Note: Provisions and extraordinary capital gains are net of tax

Solid generation of recurring results

Pre-provision profit: € 24,373 mill.

Profit before extraord.: € 7,021 mill.

1

Balance sheet strengthening

Real estate coverage: 50%

Core capital (BIS II): 10.02%

3

Extraord. provisions (-3,183 mill.) doubled capital gains (1,513 mill.)

Attributable profit: € 5,351 mill.

2

Shareholder return above market

Total shareholders return (TSR):

SAN > Euro Stoxx Banks

4

5 5

Revenues and expenses

In 2011 Santander maintained an excellent track record in pre-provision profit, fuelled by solid revenues ...

EUR Billion

33.5

15.0

39.4

16.4

42.1

18.2

44.3

19.9

2009 2010 2011

Gross income Expenses

Pre-provision profit

2008 2009 2010 2011

18.5

23.0 23.9 24.4

EUR Billion

2008

1 Solid generation of recurring results

... placing us among the small group of banks generating pre-provision profit of around EUR 25 bn.

Net operating income

6 6 Solid generation of recurring results

EUR 7,021 million of recurring profit, absorbed the market's impact on trading gains and the larger provisions made in the year

Group's quarterly

RECURRING attributable profit

EUR Million

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

2,215 2,230

1,635

2,101 2,108

1,393

1,803 1,717

Group's RECURRING

attributable profit

EUR Million

2010 2011

8,181

7,021 -14%

1

7 7

Sale of Insurance

Holding Latam

SCF USA transaction

Capital gains and extraordinary provisions 2

Impact on 2011 results net of tax

Furthermore, strong effort in extraordinary provisions, well above the capital gains obtained

(*) Not including capital gains from agreement to sell the bank in Colombia, which are to be registered in 2012

872 -620

641 -893

-1,670

1,513

-3,183

Amortisation of intangibles,

pensions and other

Not required

Portfolio writedowns

Spain real estate 1,812

Portugal goodwill 600

Funds established before tax

Extraordinary* capital gains

Extraordinary provisions

EUR million

8 8

7,021

8,534

5,351

+1,513

-3,183

After the effort made in provisions, accounting profit was EUR 5,351 million

2

Capital gains* RECURRING attributable profit

TOTAL Provisions Attributable profit

Capital gains and extraordinary provisions

(*) Not including capital gains from agreement to sell the bank in Colombia, which are to be registered in 2012

EUR million

9 9

2008 2009 2010 2011

10%

31% 31%

50%

Foreclosed real estate Dec. 2011

3

Balance Coverage

8,552

4,278

Coverage ratio: 50%

Coverage ratio evolution

Balance sheet strengthening: Real estate coverage

The provisions established at the end of the year put foreclosed real estate coverage in Spain at 50%

EUR million

10 10

7.53%

9.01%

+0.12% +0.34%

+0.29% +0.25%

+0.20% +0.28%

Balance sheet strengthening: Capital ratio

September 2011 adjusted to EBA criteria

(*)

4th scrip dividend

Exchange preferred

shares

Q4 generation

Current with EBA criteria

(*)

The Group shows its financial strength and flexibility, by anticipating compliance with EBA requirements, which are to be met by June 2012

Core capital evolution (EBA criteria)

(*) Including Valores Santander (compulsorily convertible bonds)

Brazil (4.41%)

3

Disposals Provisions and other

11 11

Core capital evolution

Note: Dec'06 and Dec’07 according to BIS I

The effort made in the quarter resulted in a greater acceleration of Core capital under Basel II criteria

Balance sheet strengthening: Capital 3

Dec'06 Dec'07 Dec'08 Dec'09 Dec'10 Dec'11

5.91% 6.25%

7.58%

8.61% 8.80%

10.02%

12 12

Balance sheet strengthening: Liquidity

Good liquidity position after a stressed year

High structural liquidity surplus (> EUR 120 bn.)

2011 Key aspects

3

Note: Liquidity balance sheet in terms of management (trading derivatives, interbank balances and fixed assets are netted) (*) Including retail commercial paper (**) Including FHLB lines in the US to Sovereign

Liquidity balance sheet Grupo Santander (Dec'11, provisional) Liquidity ratios at comfortable levels:

Approx. EUR 100 bn.

Loans/ Deposits* 117%

Reduced recourse to short

term wholesale funding

High discounting capacity at Central Banks

High issuance capacity in stressful situations

– Moreover, EUR 25 bn. in securitisations placed in

the market

Dep.* + M/LT Funding / Loans > 114%

Assets Liabilities

139

11

750

24

174

40

639

Loans

Deposits*

Funding M/L term**

Financial Assets

Equity / other (net of Fixed Assets)

Funding ST

Securitisation bonds in market

M/LT issues EUR 40 bn.

Maturities EUR 32 bn.

< 2% balance sheet

13 13

Parent bank, Banesto and Portugal

Reduction of commercial gap and lower demand from SCF

… within a different strategy by unit

No need for recourse to wholesale markets in 2012

In 2012 few maturities and favourable commercial dynamics …

3

EUR Billion

2011

40

2012 2013 2014

32 30 24

Group issues* Group maturities

SCF, UK and SOV

SCF: moving towards self-financing

UK: self-financing of commercial activity and good access to markets

SOV.: surplus liquidity

Emerging markets

LatAm: greater focus on deposit

capturing and access to

developing wholesale markets

BZ WBK: surplus liquidity

(*) Excluding securitisations

Balance sheet strengthening: Liquidity

14 14

3.55 3.61 3.78 3.86 3.89

Dec'10 Mar'11 Jun'11 Sep'11 Dec'11

The Group's NPLs continue slightly sliding upwards, because of Spain. SCF, Sovereign and Latam ex-Brazil improved all quarters

%

United Kingdom and USA

%

1.76 1.75 1.82 1.88 1.86

D'10 M'11 J'11 S'11 D'11

UK Sovereign

4.61

4.15 3.76

3.22 2.85

D'10 M'11 J'11 S'11 D'11

Latin America

%

4.91 4.85 5.05 5.05 5.38

D'10 M'11 J'11 S'11 D'11

Brazil

3.07 2.94 2.87 2.84 2.82

D'10 M'11 J'11** S'11** D'11**

Continental Europe

%

4.24 4.57 4.81

5.15 5.49

D'10 M'11 J'11 S'11 D'11

Spain SCF

4.95

4.63 4.42

4.29

3.77

D'10 M'11 J'11 S'11 D'11*

3

(*) In December SC USA began to consolidate by the equity accounted method

(**) On a like-for-like basis, deducting the acquired GE portfolio in Mexico. Including it, 3.08% in June 2011; 2.91% in September 2011 and 2.89% in December 2011

Balance sheet strengthening: Credit quality

Group's Total

Latam Ex-Brazil

15 15

0.66 1.03

1.41 1.41 1.44 1.42

1.10

1.88

2.38 2.11 2.07 2.05

Dec'07 Dec'08 Dec'09 Dec'10 Jun'11 Sep'11

Latest available data for the sector obtained from Central Banks and Council Mortgage Lenders (UK)

0.64 1.95

3.41 4.24

5.15 5.49

0.92

3.37

5.08 5.81

7.16 7.51

Dec'07 Dec'08 Dec'09 Dec'10 Sep'11 Dec'11

1.6 2.1

2.7 2.6 2.6 2.5

2.3

3.2

4.6

3.6 3.3 3.3

Dec'07 Dec'08 Dec'09 Dec'10 Jun'11 Sep'11

2.9

3.4

5.9

3.9 4.3 4.5

3.2

3.2

4.3

3.2 3.5

3.6

3.5 3.8

5.4

4.0

4.5 4.8

Dec'07 Dec'08 Dec'09 Dec'10 Sep'11 Dec'11

Santander

Private Banks

Financial System

Our ratios still compare very well in the main markets where we operate

(Nov)

3

Spain United Kingdom

Brazil Latin America ex Brazil

Balance sheet strengthening: Credit quality

%

% %

%

16 16

Percentage points

(1) Drawn up based on Bloomberg data as of 31-12-2011

TSR: cumulative difference1 with Euro Stoxx Banks Index

Total return above market in short, medium and long term

4 Total shareholder return (TSR)

1 year 3 years 5 years 10 years

+13 p.p.

+29 p.p. +32 p.p.

+54 p.p.

17 17

Agenda


— Highlights

— Results


■ Conclusions

■ Appendix

18 18 Grupo Santander Results

Solid results in the upper part of the P&L not feeding through to profit because of larger provisions

Net interest income + fees 41,293 +2,334 +6.0 +4.7

Trading gains and other1 2,969 -121 -3.9 -4.9

Gross income 44,262 +2,213 +5.3 +4.0

Operating expenses -19,889 -1,694 +9.3 +6.8

Net operating income 24,373 +519 +2.2 +1.8

Loan-loss provisions -10,562 -304 +3.0 +2.8

Net operating income after provisions 13,811 +215 +1.6 +1.1

Other results and provions2 -2,994 -1,451 +94.0 +92.9

Profit before tax 10,817 -1,235 -10.2 -10.6

Tax and minority interest -3,796 +75 -1.9 -2.0

Profit before extraordinary results 7,021 -1,160 -14.2 -14.7

Net capital gains and extr. provisions -1,670 -1,670 -- --

Attributable profit 5,351 -2,830 -34.6 -35.1

1

2

3

Var. / 2010 % excl. FX EUR Mill. 2011 Amount % and perimeter

(1) Including dividends, equity accounted income and other operating expenses

(2) Including provision for PPI in Q2’11 in the UK (EUR 842 mill. before tax)

19 19 Revenues

Solid basic revenues as the driver of profits

Group's Gross income

1

(1) Basic revenues: Net interest income + fees + insurance activity (2) Trading gains + dividends + equity accounted income + other operating expenses

Basic revenues1

2011/2010:

+EUR 2,349 mill.; +6%

SCF (organic and

inorganic growth)

BZ WBK entry

Latam's dynamism +2,160

Mature markets

+672

+619

-1,102

2011/2010

2008 2009 2010 2011

30,249 35,718 39,336 41,685

3,240

3,663 2,713

2,577

33,489

39,381 42,049 44,262

Other revenues2

+32%

Basic revenues1

EUR Million

20 20 Expenses

Different management by units and businesses

Group's expenses

EUR Million

2

Expenses

2011/2010:

+ EUR 1,694 mill.; +9%

Develop franchises and businesses in mature ones (Germany, UK, USA, GBM)

Investments to capture growth in emerging markets

Latam: +938

BZ WBK: +324

+493

2011/2010

Reduction in retail units in Spain and Portugal

-61

2008 2009 2010 2011

14,949 16,421

18,196 19,889

+33%

21 21

Loan-loss provisions

Provisions still high at the current moment of the cycle …

3

Net loan-loss provisions1

EUR Million

(1) Including country-risk

… with performance impacted by the lower use of generic ones

Specific provisions

EUR Million

Use of generic provisions

EUR Million

2008 2009 2010 2011

7,659

11,760 12,342 11,137

2008 2009 2010 2011

6,601

9,484 10,258 10,562

+60%

2008 2009 2010 2011

-1,159

-2,159 -2,086

-569

22 22

GrupoSantander

Peersaverage

Europeanpeers avg.

3.6% 2.9%

2.4%

+5.3%

-0.1% -0.2%

Grupo Santander

Peers average

European peers avg.

Comparison vs. competitors*

Better performance in revenues and efficiency, and not yet taking

advantage of the normalisation of provisions as done by our peers

Var. 2011/2010

% / ATAs 2011

(*) According to the latest available information from each entity. “Peer Group” are large banks that because of their size, characteristics and /or degree of direct competition are the reference ones to surpass: Banco Itaú, BBVA, BNP Paribas, Credit Suisse, HSBC, ING Group, Intesa Sanpaolo, JP Morgan, Mitsubishi, Nordea, Royal Bank of Canada, Societe Generale, Standard Chartered, UBS, Unicredito and Wells Fargo.

C16

C15

C14

C13

C12

C11

C10

Peers avg.

C9

C8

C7

C6

C5

C4

C3

C2

C1

Grupo SAN

77.6

77.6

64.7 64.0

61.0 61.0 60.0

59.7 59.4 59.2

56.8 54.9 54.1

53.2 52.2

48.5

46.7

44.9

Data 2011 in %

C16

C15

C14

C13

C12

C11

C10

C9

Peers avg.

C8

C7

C6

C5

C4

C3

C2

Grupo SAN

C1

-0.05

0.03 0.19 0.22 0.27 0.30 0.33

0.74 0.79 0.97 1.00 1.01 1.02 1.10 1.12 1.13

1.41 4.66 -0.08

0.00

-0.31

0.00

-0.31

-0.14

-1.25

0.33

-0.94

-0.24

-0.04

-0.12

-0.09

-0.06

-0.07

-0.29

0.08

-0.09

Y-o-Y var. Data 2011 in %

Efficiency Revenues Net provisions/loans

Gross income

Gross income / Assets

23 23


— Highlights

— Results


■ Conclusions

■ Appendix

Agenda

24 24

2010 2011

404 526

3%

28%

10%

7% 6% 6%

12%

9%

4%

2% 13%

Sovereign

UK

Portugal

Global Europe

SCF Poland

(BZ WBK)

Brazil

(1) Over operating areas 2011 attributable profit

Continental Europe

2010 2011

3,355 2,849

EUR Million

-15%

Constant EUR Million

LatAm Ex-Brazil

Constant US$ million

2011 Attributable profit1

UK and Sovereign

Mexico

Brazil

Profit distribution by geographic area

Results are underpinned by the Group’s diversification and by managing the different growth stages in each market

2010 2011

1,941

1,145

-41%

UK Sovereign

+30%

2010 2011

2,578 2,856

+11%

2010 2011

3,915 3,629

Other

Latam

Chile

SAN network + Banesto


-7%

25 25

Continental Europe 2011

Networks and wholesale business impacted by macroeconomic environment and market's evolution. SCF growing strongly and Poland's incorporation

Attributable profit: EUR 2,849 mill.

Var. 2011 / 2010 (%)

Basic revenues

Gross income

Expenses


Net op. income afterprovisions

Attributable profit

+8%

+4%

+12%

-2%

-6%

-15%

Unit's profit

Var. / 2010 EUR Million

-22%

-69%

-62%

+52%

-48%

SAN network

Banesto

Portugal

Poland (BZ WBK)*

SCF

Other (GBM, Asset Mgmt., ...)

660

130

174

232

1,228

424

Basic revenues

EUR Million

2010 2011

13,713

14,867

+8%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

3,568 3,432 3,406 3,306 3,554

3,884 3,773 3,656

+11%

+22%

(*) Corresponds to the Group's attributable profit (9 months). Proforma growth in local criteria year 2011/2010

26 26 Santander Branch Network 2011

Activity

Net interest income return

Basic revenues

Net operating income / provisions

EUR Million

EUR Million

Loans Deposits*

Var. in EUR billion

Loans / deposits ratio*


Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

691 576

497 462 588 639 588 538

2010 2011

4,220 4,334

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

1,184 1,060 1,002 974

1,072 1,136 1,094 1,031

2010 2011

1,136 916

2,227 2,353

+6%

-19%

+16%

+6%

(*) Including retail commercial paper

1.43% 1.15%

1.36%

2.92% 3.26%

3.65%

Q4'10 Q2'11 Q4'11

Return / Cost

Return

Cost

Net interest inc. / ATAs

2010 2011

2.70%

2.95%

+3%

Improved net operating income fuelled by higher revenues (impacted in last quarters by deposit competition). Larger provisions due to end of generic ones

Prov.

Net op. income after LLPs

Net op. income

-3.9 -8.7

+13.2

-1.8

2010 2011 2010 2011

159

130 122

2009 2010 2011

27 27

2010 2011

666 451

1,376 1,112

2010 2011

2,187 2,017

Banesto 2011

Banesto's trends are similar to those of the Santander Branch Network. Profit impacted by provisions to increase coverage of foreclosed real estate

Activity

Net interest income return

Basic revenues


1.94% 1.66% 1.70%

2.92% 3.21%

3.61%

Q4'10 Q2'11 Q4'11

EUR Million

EUR Million

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

384 362 317 312

273 324

280 235

-8%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

601 570 535 481 489 525 516 486

-24%

+1%

-19%

-32%


(*) Excluding Repo's. Including retail commercial paper (**) Retail Banking

Return / Cost Net interest inc. / ATAs**

Loans Deposits*

Var. in EUR billion

Loans / deposits ratio*

Prov.


Return

Cost

+0.2

-6.8

+7.1

-6.2

2010 2011 2010 2011

136 127 134

2009 2010 2011

2010 2011

2.22%

2.44%

Net op. income

28 28

Spain1. Customer lending and NPLs

Gross loans

Dec'09 Dec'10 Dec'11

31 27 23

108 105 105

31 30 26

64 61

59

10 12

12

245 236

225

TOTAL

-12% -14%

NPL ratio

3.4 4.2

5.5

2.5

2.2 2.7 2.4

3.1 3.5

11.1

17.0

28.6

Dec'09 Dec'10 Dec'11

%

Of note in lending was the drop in loans with real estate purposes (-14%) and the maintaining of balances with other companies

EUR Billion

Companies w/o construc. and real estate

Real estate purpose

Household mortgages

Public sector

Other loans to individuals

With real estate

purpose

Total portfolio

Spain

Other portfolio

Household

mortgages

(1) Including Santander Branch Network, Banesto, GBM Spain, Santander Consumer Finance Spain and Banif

29 29

LOANS. Real estate purpose

EUR million

Dec'08 Dec'09 Dec'10 Dec'11

37,688 31,127

27,334 23,442

- €14,246 mill.; -38%

Loans with real estate purpose. Evolution and coverage

-14%

EUR million

Q1 Q2 Q3 Q4

-1,229

-758 -978

-849

2011 quarterly evolution

NPLs and substandard

Active management focusing on balances reduction and coverage increase

Amount Coverage

6,722

2,211

2010 2011

29%

33%

Coverage NPLs Dec'11

2010 2011

12% 16%

Coverage Substandard Dec'11

(*) 100% are up to date with payments

EUR million

Amount* Coverage

3,916

613

EUR million

30 30 Real estate coverage. Evolution and coverage

Foreclosed REAL ESTATE (gross amount)

Quarterly evolution in 2011

Foreclosed real estate. Coverage

2008 2009 2010 2011

10%

31% 31%

50%

Coverage evolution

Good quarterly performance and big effort in coverage, anticipating future regulatory requirements

EUR million EUR million

Dec'08 Dec'09 Dec'10 Dec'11

4,765 6,521 7,509 8,552

Balance Coverage

8,552

4,278

Coverage: 50%

Q1 Q2 Q3 Q4

+373 +453

+225

-7

EUR million

31 31

-2.0

-3.4

2011 Plan

Achieved in the year

Dec'10 Dec'11

49 45

-6%

+8%

Deposits Loans

Portugal 2011

Managing a “bail-out” scenario and deleveraging

Deleveraging process

continues

Balance sheet

reduction

Reduction of

commercial GAP

Total Assets (€ Bn.)

Activity

% var. Dec’11/Dec’10

-10%

Basic revenues


EUR Million

EUR Million


Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

192 188

138 132 151

112 93 88

2010 2011

1,118 959

-14%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

293 289 273 262 273 242 225 219

2010 2011

540

237

650

443

-32% -33%

-16%

-56%

EUR billion Prov.


Net op. income

32 32 Portugal. Troika inspection results

Without provisions deficit (-EUR 838 mill. in the sector) …

Outstanding results of Santander Totta after the "Special Program Inspection" carried out by the Troika

… and improved Tier I, after RWA's review

Deficit in million

San. Totta

C1

C2

C3

C4

C5

C6

0

-125

0

-381

-153

-90

-43

Tier I Improvement / Loss

San. Totta

C1

C2

C3

C4

C5

C6

+0.1%

-0.3%

-0.2%

-0.8%

+0.1%

+0.0%

+0.0%

Note: Competitors: BES, BPI, Millenium, Caixa Geral de Depositos, B. Funchal and Caixa Economica Montepio Geral

33 33

Santander Consumer Finance 2011

Sharp profit increase, fuelled by the main units and excellent credit management

2.75%

1.98%

4.99% 5.05%

2010 2011

2.24 3.07

Loans* Deposits

+16%

+28%

Var. Dec’11 / Dec’10

Total portfolio = EUR 63 billion

EUR billion

Germany

Italy

Spain

Nordic countries

Other Eurozone

UK

Poland

30

8

7

7

4

4

3

+39%


-4%

-11%

+10%

+1%

+9%

-10%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

786 825 890 860 920 917 900 866

2010 2011

4,618

5,290

+15%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

1,068 1,114 1,218 1,217

1,324 1,322 1,320 1,325

2010 2011

1,344 1,972

3,361 3,604

+47%

+9%

+7%

+1%

Note: In December SC USA began to consolidate by the equity accounted method (*) Before impact from consolidated by the equity accounted method from SC USA. Considering impact: -7%

Activity Basic revenues


EUR Million

EUR Million


Prov.


Net op. income

Net int. inc. /provisions (o/ATAs) Volumes

Provisions

Net interest income

34 34 Poland (BZ WBK) 2011 Data in local criteria. Constant EUR million

(*) 2010 proforma information.

Loans and deposits growth since its incorporation to the Group

Results* show sharp growth over 2010

Mar'11 Dec'11

2,578 2,820

5,148 6,025

7,726 8,845

Total

Loans

+14%

+17%

+9%

Mar'11 Dec'11

5,711 6,082

3,516 4,423

9,227 10,505 Total

Deposits

+14%

+26%

+6%

Basic revenues

Provisions

2010 2011

770 834

+8%

Expenses

2010 2011

429 468

+9%

2010 2011

102 89

-13%

2010 2011

237

288 +22%

Attributable profit

Companies

Individuals

Companies

Individuals

36 36

United Kingdom 2011

Results affected by sluggish activity, regulatory impacts and PPI1 provision

(1) After provision of sterling 538 million (net of tax) in Q2’11 for possible claims related to payment protection insurance (PPI).

(2) Loans to SMEs: +25% (3) Excluding GBM and other deposits amounts of £13 bn. as of December 2011

Attributable profit1: £ 993 mill. (EUR 1,145 million)

Var. 2011 / 2010 in £ (%)

Activity

Dec'10 Dec'11

166 166

Dec'10 Dec'11

153 149

£ Bill. Local criteria

+0% -3%

Core Non core

2010 2011

2,404 2,202

3,201

2,710


£ Mill.


Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

830 825 805 741 729 728 666 586

-21%

-15%

-8%

Gross income

Expenses



Attributable profit

-9%

+1%

-15%

-8%

-41%

Prov.


Net op. income

Mortgages Companies' loans Deposits3

Dec'10 Dec'11

27 31 +16%2

38 38

Brazil 2011

Continue growth of basic revenues underpinned by larger volumes. Profit impacted from lower trading gains, larger provisions and minority interests

Attributable profit: US$ 3,629 mill. (EUR 2,610 million)

Var. 2011 / 2010 in constant US$ (%)

(1) Local currency (2) Including "letras financeiras"

Activity1

Net int. inc. /provisions (o/ATAs)

Loans Deposits

+20%

+12%


Volumes

Provisions

Net interest income

Basic revenues





Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

3,058 3,031 3,148 3,295 3,375 3,522 3,497 3,458

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

4,586 4,662 4,733 4,912 5,177 5,296 5,362

5,655

+5%

+15%

2010 2011

18,893

21,490

2010 2011

7,372 7,585

12,533 13,852

+11%

+3%

+14%

Basic revenues

Gross income

Expenses



Attributable profit

+14%

+11%

+12%

+11%

+3%

-7%

Prov.


Net op. income

2.67% 2.79%

7.53% 7.47%

2010 2011

4.68 4.86

2

40 40

Latin America Ex-Brazil 2011

Profit increase spurred by retail banking: faster growing basic revenues and lower cost of credit. Negative impact from trading gains in Q4'11

+46%

Var. o/ 2010

-9%

+8%

+46%

-6%

-70%

-17%

Attributable profit by country

Mexico

Chile

Argentina

Colombia

P. Rico

Uruguay

Other

1,301

849

399

81

47

28

151

Attributable profit: US$ 2,856 mill. (EUR 2,054 million)

Activity1

Loans Deposits

+16% +13%

Var. Dec’11 / Dec'10

2010 2011

8,056 8,701

+8%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

1,938 2,030 2,013 2,075 2,058 2,152 2,213 2,278

+10%

Basic revenues

(1) Constant currency (2) Excluding New York branch (3) Excluding minority interests: Mexico +22%; Total area: +4%

Basic revenues

Gross income

Expenses



Attributable profit

+8%

+6%

+14%

0%

+0%

+11%

Net int. inc. /provisions (o/ATAs) Volumes2

Provisions

Net interest income


Constant US$ million Var. 2011 / 2010 in constant US$ (%)

3

0.91% 0.80%

3.90% 3.76%

2010 2011

2.96 2.99

3

41 41

2010 2011

2,985 3,241

Mexico 2011

Profit fuelled by strong basic revenues and lower provisions needs. Moreover, positive impact from minority interests

(1) Local currency (2) Excluding perimeter: +22%

Attributable profit: US$ 1,301 mill. (EUR 936 million)

Activity1

Loans Deposits

+31%

+11%


2

Basic revenues



Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

515 491 501 422

509 523 464 433

+9%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

744 757 743 741 768 780 847 846

+3%

+14%

2010 2011

1,299 1,459

1,930 1,928

0%

+12%

Basic revenues

Gross income

Expenses



Attributable profit

+9%

+4%

+12%

0%

+12%

+46%

Prov.


Net op. income


Provisions

Net interest income




1.16% 0.77%

3.98% 3.81%

2010 2011

3.04 2.82

42 42

Chile 2011

Activity continued to grow strongly, focused on deposits. In Q4’11 recovered revenues in UF portfolio and normalisation in provisions

(1) Local currency

Attributable profit: US$ 849 mill. (EUR 611 million)

Activity1

Loans Deposits

+7%

+20%


0.94% 0.98%

4.35% 3.99%

2010 2011

3.01 3.41

2010 2011

2,725 2,798

Basic revenues



Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

463 456 456 431 442 487 385

444

+3%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

646 706 686 687 666

730 675

726

+3%

+6%

2010 2011

1,356 1,229

1,806 1,757

-3%

-9%

Basic revenues

Gross income

Expenses



Attributable profit

+3%

+2%

+10%

-3%

-9%

-9%

Prov.


Net op. income


Provisions

Net interest income




44 44 Sovereign 2011

Larger revenues, increased commercial activity and sharp improvement in credit quality. In 2012 conversion to National Bank Association

Attributable profit: US$ 732 mill. (EUR 526 million)

Activity and return1

Var. 2011 / 2010 in US$ (%)

(1) Local currency

Gross income

Expenses



Attributable profit

+9%

+10%

+9%

+34%

+30%

-12%

-1%

+5%

-8% -4%

+13%

Dec’09 Dec’10 Dec’11 Dec’09 Dec’10 Dec’11

0.97% 0.71%

3.30% 3.21%

2010 2011

Provisions

2010 2011

872 1,165

1,547 1,685


US$ Mill.

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

385 382 401 378 422 418 432 413

+9%

+9%

+34%


Prov.


Net op. income

Y-o-Y change. US$

Loans Deposits Net interest income /

provisions (% / ATAs)

Net interest income

2.50 2.33

Note: Loans data (excl. securitisations) and deposits under US GAAP

46 46

Corporate Activities

Larger trading gains (fx hedging) offset the negative impact from funding costs and lower tax returns

Attributable profit

(Change 2011 vs. 2010)

Main effects:

Net interest income -344

Trading gains +746

Other results and taxes -274

Impact on profit: +128

Net capital gains and extraord. provisions -1,670

Total impact on profit: -1,542

EUR Million

47 47


— Highlights

— Results


■ Conclusions

■ Appendix

Agenda

48 48

2012 Outlook

Santander is facing the year from a solid starting point

High capacity to generate

results

EUR 24 bn. Pre-provision

profit

Quality balance sheet

50% coverage of

foreclosed real estate in Spain

High capital levels

9% Core capital

EBA

49 49 Santander 2012 outlook

In 2012 Santander will maintain a differentiated management by areas

Markets being adjusted

Spain and Portugal:

Deleveraging process continues

Managing liabilities spreads

Balance sheet strengthening

Growing markets

Latin America: focus on revenues, maintaining investment effort, taking advantage of good macroeconomic trends

Poland: full integration and delivery of announced targets

Developing markets / business

UK: continue to develop franchise (mainly companies)

USA: the new platform and the change from charter will enable a wider range of products and customer profiles

SCF: consolidate reached position and maintain profitability above competitors

50 50


— Highlights

— Results


■ Conclusions

■ Appendix

Agenda

51 51

Group's balance sheet

52 52

Assets Liabilities

750

99

96

214

58

639

76 37

112 120

160 143

1,252 1,252

Main trends of the Group’s balance sheet

Retail balance sheet, appropriate for the business nature of low risk, liquid and well capitalised

(*) Other assets: Goodwill EUR 25 bn., tangible and intangible assets 17 bn., other capital instruments at fair value 1 bn., accruals and other accounts 53 bn.

(**) Including retail commercial paper

Balance sheet at December 2011

EUR billion

1

6

5

4

3

2

Lending: 60% of balance sheet

Derivatives (with counterpart on the liabilities side): 9% of balance sheet

Cash, Central Banks and credit institutions: 13%

Other (goodwill, fixed assets, accruals): 8%

Available for sale portfolio (AFS): 6%

Trading portfolio: 4%

1

3

2

4

5

6

Loans to

customers

Derivatives

Cash and credit institutions

Other*

AFS Portfolio

Trading portfolio

Customer Deposits**

Issues and subordinated

liabilities

Shareholders’ equity & fixed liabilities

Credit institutions

Other

Derivatives

53 53

Secondary segments results

54 54 Retail Banking

Single-digit growth in net operating income after provisions due to recovered basic revenues and flat provisions

Attributable profit: EUR 6,893 million

Activity

EUR Billion

Basic revenues

Gross income

Expenses



Attributable profit

+7%

+6%

+10%

+3%

+3%

-9%

Deposits2 Loans

+2% +5%

(1) Net interest income + fees + insurance activity (2) Including retail commercial paper

2010 2011

36,549 39,206

Basic revenues1


EUR Million

EUR Million


Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

5,448 5,640 5,621 5,380 5,685 5,980 5,675 5,476

+7%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

8,837 9,239 9,357 9,115 9,556 9,857 9,870 9,923

+2%

+9%

2010 2011

11,944 12,358

22,088 22,817

+3%

+3%

Var. 2011 / 2010 in euros

Prov.


Net op. income

Dec'10 Dec'11

650 666

Dec'10 Dec'11

513 538

55 55

Global Wholesale Banking (GBM)

Customer revenues resilient to the environment. Impact from markets on revenues and from investments on costs

Gross income

EUR Million

2010 2011

4,414 4,056

5,150 4,675

-9% -17%

Gross income


EUR Million

2,309 2,351

1,387 1,293

78 56

640 356

736

619

2010 2011

-9%

-29%

+2%

Customer revenues

-44%

-16%

TOTAL

Trading

-7%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

1,082 1,199 1,042 1,090 1,127 1,053 976 900

282 104 188 162 210

148 122

140

1,364 1,303 1,230 1,252 1,337 1,201 1,098

1,040

Total

Trading

Customers

Total

Trading

Customers

(1) Including Global Transaction Banking and Credit

EUR Million


Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

1,023 922 848 865 943

782 680 627

-28%

2010 2011

3,656 2,891

3,658

3,032

-17%

-21%

-8%

5,150

4,675

Prov.


Net op. income

Investment banking

Corporate banking1

Hedging of interest /

exchange rates

Equities

56 56

Asset Management and Insurance

High contribution to the Group via revenues and profits: 9% of the operating areas total revenues (+9% / 2010)

Group total revenues

EUR Million

2010 2011

739 754

EUR Million

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

169 196 187 186 202 216

190 147

-21%

+2%

Net operating income 2010 2011

3,966 4,334

Insurance Asset Management

2010 2011

1,278 1,251

2010 2011

2,688 3,083

+15%

+9%

-2%

2010 2011

1,081 1,088

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

243 276 272 291 288 302 275 222

(*) Impact from sale of Latam insurance companies (-€ 64 mill.)

Gross income

EUR Million +1%

-23%

(*) Impact from sale of Latam insurance companies (-€ 53 mill.)

*

*

57 57

Summary Group coverage ratios

58 58

%

%

46 45 41 40 38

D'10 M'11 J'11 S'11 D'11

UK Sovereign

75 82 85

93 96

D'10 M'11 J'11 S'11 D'11

%

101 104 102 100 95

D'10 M'11 J'11 S'11 D'11

110 114 114 111 104

D'10 M'11 J'11** S'11** D'11**

%

58 53 49 46 45

D'10 M'11 J'11 S'11 D'11

SCF

128 122 128 132

113

D'10 M'11 J'11 S'11 D'11*

Summary Group coverage ratios

73 71 69 66 61

Dec'10 Mar'11 Jun'11 Sep'11 Dec'11

United Kingdom and USA Latin America

Continental Europe Group's Total

Brazil

Spain

Latam Ex-Brazil

(*) In December, SC USA began to consolidate by the equity accounted method

(**) On a like-for-like basis, deducting the acquired GE portfolio in Mexico. Including it: 110% in June 2011 and 108% in September and 102% in December 2011.

59 59

Main units spreads and NPL ratios

60 60 Continental Europe. Main units spreads (%)

2.10 1.94 1.83 1.83 1.90 1.97 2.03 2.01

0.50 0.10 0.04 0.06 0.05

0.56 0.65 0.53

2.60 2.04 1.87 1.89 1.95

2.53 2.68 2.54

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

Loans Deposits Total

2.02

2.00 1.92 1.99 2.03

2.08 2.12 2.16

0.18 -0.35 -0.51 -0.52 -0.36

0.12 0.42 0.36

2.20

1.65 1.41 1.47 1.67

2.20 2.54 2.52

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4


1.76 1.82 1.82 1.88 1.96

2.06 2.15 2.23

0.09 0.10 0.21 0.23 0.12 -0.31 -0.47 -0.78

1.85 1.92 2.03 2.11 2.08

1.75 1.68 1.45

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4


5.90 6.19 6.72 6.94 6.69 5.99 5.98 6.06

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4

Loans

SAN Branch Network Banesto Retail Banking

Santander Consumer Lending Portugal Retail Banking

61 61 Continental Europe. NPLs and coverage ratios

(1) Santander Branch Network's NPL ratio was 8.47% and coverage ratio 40% as of Dec'11

(2) In December, SC USA began to consolidate by the equity accounted method

Banco Santander1

3.61% 3.65% 3.79% 4.24% 4.68% 5.08% 5.63% 5.99%

66% 61% 61% 54% 49% 44% 39% 39%

Mar'10 Jun Sep Dec Mar'11 Jun Sep Dec

NPLs Coverage

Banesto

Santander Consumer2

Portugal

2.32% 2.40% 2.43% 2.90% 3.03% 3.25% 3.78% 4.06%

64% 65% 69% 60% 62% 62%

53% 55%


NPLs Coverage

5.12% 5.23% 5.13% 4.95% 4.63% 4.42% 4.29% 3.77%

108% 111% 122% 128% 122% 128% 132%

113%


NPLs Coverage

3.13% 3.49% 3.83% 4.11% 4.31% 4.54% 4.69% 5.01%

61% 58% 60% 54% 52% 52% 53% 53%


NPLs Coverage

62 62

LOANS with real estate purpose

Foreclosed REAL ESTATE (gross amount)

EUR Million

Dec’11 Dec’10 Var.

Finished buildings 11,805 12,709 -904

Buildings under constr. 1,985 2,548 -563

Developed land 3,118 3,678 -560

Building land 1,553 2,023 -470

Other land 244 252 -8

Non mortgage guarantee 4,737 6,124 -1,387

Total 23,442 27,334 -3,892

EUR Million

Gross amount

Coverage Net amount

Loans with real estate purpose and foreclosed real estate in Spain

Finished buildings 3,753 25% 2,826

Buildings under constr. 521 25% 391

Developed land 2,661 39% 1,615

Building land 1,339 40% 798

Other land 279 42% 162

Sub Total 8,552 32% 5,792

Fund pending

distribution 18%

Total 8,552 50% 4,275

63 63 United Kingdom. Spreads and NPL ratios

(%)

2.05 2.13 2.20 2.28 2.34 2.35 2.42 2.49

-0.06 -0.14 -0.17 -0.25 -0.30 -0.38 -0.46 -0.50

1.99 1.99 2.03 2.03 2.04 1.97 1.96 1.99

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4


1.88% 1.85% 1.77% 1.76% 1.75% 1.82% 1.88% 1.86%

46% 46% 48% 46% 45% 41% 40% 38%


NPLs Coverage

Spreads Retail Banking NPL and coverage

64 64 Spreads main countries Latin America (%)

15.26 15.29 14.73 14.29 14.72 15.05 14.23 14.44

0.87 0.94 1.08 1.13 1.12 1.12 1.18 1.00

16.13 16.23 15.81 15.42 15.84 16.17 15.41 15.44

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4


10.03 9.50 9.20 8.93 8.58 8.40 8.27 8.36

2.05 1.92 2.03 2.05 2.09 2.04 1.99 1.96

12.08 11.42 11.23 10.98 10.67 10.44 10.26 10.32

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4


5.24 5.03 4.76 4.52 4.38 4.14 4.18 4.35

2.25 2.30 2.27 2.17 3.09 2.90 2.65 2.52

7.49 7.33 7.03 6.69 7.47 7.04 6.83 6.87

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4


Retail Banking Brazil Retail Banking Mexico

Retail Banking Chile

65 65 Latin America. NPLs and coverage ratios

(1) On a like-for-like basis, deducting the GE acquired portfolio. Including it, NPL ratio: June 2.45%; September: 1.78%; December: 1.82% and

coverage ratio: June: 165%, September: 176%, December: 176%

Brazil

5.04% 5.01% 4.97% 4.91% 4.85% 5.05% 5.05% 5.38%

100% 98% 98% 101% 104% 102% 100% 95%


NPLs Coverage

Mexico1

Chile

1.86% 1.77% 2.20%

1.84% 1.58% 1.63% 1.45% 1.48%

268% 257%

199% 215% 234% 222% 217% 218%


NPLs Coverage

3.36% 3.31% 3.58% 3.74% 3.80% 3.65% 3.63% 3.85%

99% 97% 94% 89% 89% 89% 88% 73%


NPLs Coverage

66 66 Sovereign. Spreads and NPL and coverage ratios

(%)

1.94 1.96 2.04 2.08 2.16 2.24 2.22 2.29

0.94 0.99 0.62 0.53

0.78 0.66 0.40 0.46

2.88 2.95 2.66 2.61

2.94 2.90 2.62 2.75

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3 Q4


5.14% 5.11% 4.80% 4.61% 4.15% 3.76% 3.22% 2.85%

64% 67% 72% 75% 82% 85%

93% 96%


NPLs Coverage

Spreads Retail Banking NPLs and coverage