europe banks

8/8/2019 Europe Banks

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June 23, 2010

Europe: Banks

Stress-test adds to transparency, for private and public sector banks

EU wide stress-test results to be disclosed by the end of July

The European Council has announced that the results of the stress-test

carried out by banking supervisors will be disclosed in the second half of

July. The test is a bottom-up exercise aimed at addressing the impact of

macro shocks on credit and market risk. It covers over 60% of EU banking

sector assets.

A credible stress-test could be a positive for the sector

Market concerns over European banks are twofold: (1) those relating to

select European sovereigns, with clear direct or indirect implications forbanks and (2) concerns over potential additional clean-up charges on

legacy loan books. A credible stress-test could cap concerns over

sovereign contingent liabilities from the banking sector, which we view

as important. In short, we see any additional transparency as a positive.

Scope for surprise limited for major banks under our coverage

We believe the results of the stress-tests for the banks under our coverage

should produce no major surprises; the institutions we cover have

recapitalized, and their risks are under constant scrutiny by the markets.

Credit buffers for the major banks are significant (BBVA and SAN have the

largest buffers), and in general, we view these banks as resilient. However,

private banks are only part of the market in Europe.

Public sector banks stress-test could add to transparency

For unlisted, public sector institutions, the regulators ability to credibly

size cumulative residual losses could go a long way towards restoring

confidence in (and among) the banks, in our view. In addition, it could act

as a catalyst for further change; Spain is a good example, with systemic

changes well under way in the Caja sector.

We update our estimates, maintain Buys on selected large caps

We update our estimates and price targets post the 1Q2010 results season

and the Goldman Sachs Financials Conference on June 9-10. We keep our

ratings unchanged and continue to favour large European banks with: (1)dominant foreign components in their business mix; (2) exposure to

growth markets; and (3) an element of protection from domestic

problems. Our Buys include Erste, Santander, Unicredit and HSBC, and we

maintain Sells on selected domestic Spanish, Italian and Greek banks.

RELATED RESEARCH:

Spain: Banks: Sector losses remain, distributionuneven; SAN relative winner, June 9, 2010

Europe: Banks: The Euro-zone challenge for

European banks: Greece and contagion, February 8,2010

Prices in this report are as of the market close ofJune 22, 2010.

COVERAGE VIEW: NEUTRAL

Jernej Omahen+44(20)7774-6324 [email protected] Goldman Sachs International

The Goldman Sachs Group, Inc. does and seeks to do business withcompanies covered in its research reports. As a result, investors shouldbe aware that the firm may have a conflict of interest that could affectthe objectivity of this report. Investors should consider this report asonly a single factor in making their investment decision. For Reg ACcertification, see the end of the text. Other important disclosures followthe Reg AC certification, or go to www.gs.com/research/hedge.html.Analysts employed by non-US affiliates are not registered/qualified asresearch analysts with FINRA in the U.S.

Jean-Francois Neuez+44(20)7552-9362 [email protected] Goldman Sachs International

Pawel Dziedzic+44(20)7774-1279 [email protected] Goldman Sachs InternationalHeiner Luz+44(20)7051-2264 [email protected] Goldman Sachs International

The Goldman Sachs Group, Inc. Global Investment Research


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June 23, 2010 Europe: Banks

Goldman Sachs Global Investment Research 2

Stress-test should add to transparency of European bank sector

Structure of the European banking markets is varied

In contrast to other global markets, many European markets have a substantial proportionof public sector institutions; in Spain, for example, Cajas represent around half of total

sector assets. In Germany too, the public sector accounts for more than a third of total

assets.

Banks under our coverage limited scope for surprise

We expect very limited surprises for the institutions we cover the largest listed, private

banks in Europe for the following reasons:

The private banks domiciled in the Eurozone have recapitalized to the tune of 106 bn

since the start of the crisis (see Exhibit 1).

This takes Tier 1 ratios to more than 10% and core Tier 1 ratios to around 8% for thelargest banks that we cover.

Credit buffers cash flows available to absorb stress levels from credit losses are

relatively large for the biggest banks. This is particularly true for institutions that

operate emerging market franchises (see Exhibit 2).

Finally, in most cases, extensive data is available to apply various levels of stress to the

different components of assets. See, for example, our report on the Spanish banks

stress-test (Spain: Banks: Sector losses remain, distribution uneven; SAN relative

winner, June 9, 2010).


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Exhibit 1: 106 bn of Tier 1 capital raised by Eurozone banks we cover, since start of crisisSummary of capital raised by European banks under GS coverage since 2008 (ex. repayments)

Source: Company data, Goldman Sachs Research estimates.

Sourceofcapital(bn) Formofcapitalraising(mn)

Private State Total Ords/MCN Other Total

Austria 2.3 2.5 4.7 1.7 3.0 4.7

Benelux 0.0 9.0 9.0 0.0 9.0 9.0

France 24.2 3.9 28.1 24.2 3.9 28.1

Germany 1.0 18.2 19.2 2.8 16.4 19.2

Greece/Cyprus 3.4 3.5 6.9 2.8 4.2 6.9

Italy 7.2 4.1 11.3 4.2 7.1 11.3

Ireland 1.8 8.7 10.4 10.4 0.0 10.4

Spain 15.9 0.0 15.9 11.3 4.7 15.9

Nordics 7.7 4.0 11.7 8.2 3.5 11.7

Switzerland 25.6 3.9 29.5 26.0 3.6 29.5

UK 73.1 79.8 152.9 147.6 5.3 152.9

Eurozone 56 50 106 57 48 106

NonEurozone 106 88 194 182 12 194

Total 162 138 300 239 61 300as% 54% 46% 100% 80% 20% 100%

Note: Capital raisings by banks within GS coverage universe; excludes capital raisings for the purpose of

acquisitions and preference share offerings to retail clients.

Countryofdomicile


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Exhibit 2: Top European banks can withstand severe credit quality deterioration, in our view mn, sorted by cumulative credit buffer for 2010-12E period


% of gross loans % of gross loans Credit buffer

GOP Credit Buffer NPL buffer Credit Buffer NPL buffer Credit costs

2009A 10-12E 2009A 10-12E 09A 10-12E 2009A 10-12E 2009A 10-12E 2007-09A 09-12E

Raiffeisen 2.1 6.2 0.9 2.1 7.1 2.6 8.8 4.2% 14.0% 5.2% 17.5% 5.7% 4.7% 14.0% 19.7%

BBVA 12.3 37.2 3.0 12.3 40.2 15.4 50.3 3.7% 12.1% 4 .6% 15.1% 3.4% 4.2% 12.1% 15.5%

Santander 23.0 73.9 6.7 23.0 80.7 28.7 100.8 3.3% 11.5% 4.1% 14.4% 3.1% 4.1% 11.5% 14.6%

NBG 2.4 7.7 0.0 2.4 7.7 3.0 9.6 3.3% 10.7% 4.1% 13.4% 2.7% 4.8% 10.7% 13.4%

Deutsche Bank 7.8 23.5 1.5 7.8 25.0 9.8 31.2 3.0% 9.6% 3.7% 12.0% 1.7% 1.1% 9.6% 11.2%

Erste Bank 3.3 11.5 0.0 3.3 11.5 4.1 14.4 2.6% 8.9% 3.2% 11.2% 2.8% 3.4% 8.9% 11.7%

Societe Generale 6.0 31.6 1.3 6.0 32.9 7.5 41.1 1.6% 8.5% 1.9% 10.7% 2.1% 2.2% 8.5% 10.6%

EFG Eurobank 1.6 4.8 0.0 1.6 4.8 2.0 6.0 2.7% 8.4% 3.4% 10.5% 4.3% 6.1% 8.4% 12.7%

BNP Paribas 17.2 53.4 5.7 17.2 59.1 21.5 73.9 2.4% 8.4% 3.0% 10.5% 3.0% 1.8% 8.4% 11.3%

Bank of Cyprus 0.6 2.1 0.0 0.6 2.1 0.8 2.6 2.3% 7.9% 2.9% 9.8% 1.5% 3.3% 7.9% 9.4%

Intesa SanPaolo 8.0 26.9 3.0 8.0 29.9 10.0 37.4 2.1% 7.7% 2.6% 9.6% 2.3% 2.0% 7.7% 9.9%

Banco Popular 2.8 6.6 0.9 2.8 7.4 3.5 9.3 2.8% 7.6% 3.5% 9.5% 3.8% 2.5% 7.6% 11.5%

KBC 4.2 12.4 0.0 4.2 12.4 5.3 15.5 2.5% 7.4% 3.2% 9 .3% 1.6% 2.1% 7.4% 9.1%

Unicredit 12.5 38.9 2.9 12.5 41.9 15.6 52.3 2.1% 7.0% 2.6% 8.8% 2.5% 2.6% 7.0% 9.5%

Natixis 0.1 6.8 0.8 0.1 7.6 0.2 9.5 0.1% 7.0% 0.1% 8 .8% 2.4% 1.0% 7.0% 9.4%

Hellenic Bank 0.1 0.3 0.0 0.1 0.3 0.1 0.4 2.0% 6.9% 2.5% 8.6% 2.3% 3.5% 6.9% 9.2%

Credit Agricole 6.9 27.8 3.6 6.9 31.4 8.7 39.2 1.5% 6.9% 1.9% 8.6% 1.7% 1.6% 6.9% 8.5%

Banesto 1.6 4.5 0.7 1.6 5.2 2.0 6.5 2.0% 6.7% 2.5% 8.4% 2.1% 2.3% 6.7% 8.8%

Banco Pastor 0.7 1.2 0.3 0.7 1.4 0.9 1.8 3.4% 6.7% 4.2% 8.4% 6.0% 3.5% 6.7% 12.7%

BP Milano 0.7 2.0 0.2 0.7 2.2 0.9 2.7 2.2% 6.5% 2.7% 8.1% 2.0% 2.2% 6.5% 8.4%

Alpha Bank 1.2 3.4 0.0 1.2 3.4 1.5 4.2 2.2% 6.3% 2.8% 7.9% 2.7% 3.8% 6.3% 9.1%

Greek Postal Savings Bank 0.1 0.5 0.0 0.1 0.5 0.1 0.6 1.3% 6.3% 1.6% 7.9% 1.3% 1.6% 6.3% 7.6%

Credem 0.3 1.0 0.1 0.3 1.1 0.3 1.3 1.4% 6.0% 1 .8% 7.5% 1.2% 1.4% 6.0% 7.3%

Banco Sabadell 1.3 3.3 0.4 1.3 3.7 1.7 4.7 2.0% 5.8% 2.5% 7.2% 2.7% 2.0% 5.8% 8.5%

BMPS 2.0 8.3 0.8 2.0 9.1 2.6 11.4 1.3% 5.7% 1.6% 7 .1% 2.5% 2.1% 5.7% 8.2%

Banco Popolare 1.4 5.0 0.6 1.4 5.5 1.7 6.9 1.4% 5.7% 1.7% 7.1% 4.0% 2.0% 5.7% 9.7%

Piraeus Bank 0.8 2.2 0.0 0.8 2.2 1.0 2.7 2.0% 5.7% 2.5% 7.1% 2.6% 3.7% 5.7% 8.2%

Marfin Popular Bank 0.5 1.4 0.0 0.5 1.4 0.6 1.8 1.8% 5.6% 2.3% 6.9% 1.8% 3.0% 5.6% 7.4%

UBI Banca 1.6 4.9 0.5 1.6 5.4 1.9 6.7 1.5% 5.4% 1.9% 6.7% 1.8% 1.7% 5.4% 7.1%

Credito Valtellinese 0.3 1.0 0.1 0.3 1.1 0.4 1.4 1.4% 5.3% 1.8% 6.6% 1.5% 1.8% 5.3% 6.8%

Bankinter 0.6 1.7 0.4 0.6 2.1 0.8 2.6 1.5% 5.1% 1.9% 6.4% 1.7% 1.8% 5.1% 6.8%

Agricultural Bank of Greece 0.4 1.2 0.0 0.4 1.2 0.5 1.4 1.7% 5.1% 2.2% 6.3% 5.0% 4.1% 5.1% 10.1%

Allied Irish Bank 2.1 4.9 0.0 2.1 4.9 2.6 6.1 1.6% 3.8% 2.0% 4.7% 5.6% 10.1% 3.8% 9.4%

Commerzbank 1.9 11.5 1.5 1.9 13.0 2.4 16.3 0.5% 3.6% 0.7% 4.5% 2.3% 2.3% 3.6% 5.9%

Deutsche Postbank 0.8 3.8 0.0 0.8 3.8 1.0 4.8 0.8% 3.4% 0.9% 4.3% 1.3% 1.6% 3.4% 4.7%

Bank of Ireland 0.9 3.9 0.0 0.9 3.9 1.2 4.9 0.8% 3.2% 1.0% 4.0% 2.7% 3.5% 3.2% 5.9%

Total 130 437 36 130 473 163 591 2.1% 7.8% 2.7% 9.8% 1.4% 2.7% 7.8% 9.2%

GOP+Gp

rov

+pastlosses

EUR bn

Generic

Provisions

GOP

+GP

rov


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Public sector banks stress-test could add to transparency

From an equity investors perspective, public sector institutions in Europe played a minor

role in the past, and thus were not the focus of attention. This has now changed, as many

investors see the public sector in some countries as posing a potential systemic risk and

hence contingent liability for the sovereign. In our view, a credible stress-test would add to

investor understanding and could act as a circuit breaker of negative sentiment.

We have analyzed and stress-tested the Spanish public sector banks in detail; our

conclusion was that the expected losses, even in an extreme case, were manageable for

the system as a whole (see: Spain: Banks: Sector losses remain, distribution uneven; SAN

relative winner, June 9, 2010).

Exhibit 3: Stress-test: Resident banks remain profitable but Cajas fall short of breaking even over 2010-12Calculations of residual loss, credit buffer and pro-forma impact on PBT and net income for Spanish credit institutions

Source: Goldman Sachs Research estimates.

BaseCaseScenario ExremeCaseScenario

Incrementallosses

Cumulativeloss

56.3

73.9

135.6

103.0

127.0

247.3

()Lossestakentodate 21.5 23.0 46.3 21.5 23.0 46.3

=Residualloss 34.8 50.9 89.4 81.5 104.0 201.0

Assuminglossesaretakenover3years

Residualloss 34.8 50.9 89.4 81.5 104.0 201.0

(+)reservebuffer(2) 5.6 7.3 15.5 5.6 7.3 15.5

(+)preprovisionprofits(3yr)(3) 57.3 41.4 105.3 53.6 38.7 98.6

(+)CreditBuffer 62.8 48.7 120.7 59.2 46.0 114.1

ProformaPBT 28.0 2.2 31.4 22.3 58.0 86.9

(+/)tax 8.4 0.7 9.4 6.7 17.4 26.1

ProformaNetIncome 19.6 1.6 22.0 15.6 40.6 60.9

As%oftotalcreditexposure(4)

Cumulativedefaults 14% 17% 15% 21% 23% 22%

Cumulativeexpected

loss 5.9% 7.0% 6.2% 10.8% 12.1% 11.3%

Lossestakentodate 2.2% 2.2% 2.1% 2.2% 2.2% 2.1%

Residualloss 3.6% 4.8% 4.1% 8.5% 9.9% 9.2%

Preprovisionprofits(3) 6.0% 3.9% 4.8% 5.6% 3.7% 4.5%

excludingforeignoperations

Creditbuffer 6.6% 4.6% 5.5% 6.2% 4.4% 5.2%

(1)Totalforallcreditinstitutions(banks,savingsbanks,creditcooperatives,specialisedcreditinstitutionsandtheInstitutodeCrditoOficial).

(2)Loanlossreserves(genericandspecific)overexpectedlossonoutstandingNPLs.

(3)Cumulativeestimatedpreprovisionprofitsfor201012E.

(4)Totalexposureincludesgrossloans,contingentliabilitiesandacquiredrealestateassets.

Excludesprofitsgeneratedbyforeignsubsidiaries(c.50bnforSANandBBVAonourestimatesfor201012E)

bn Residentbanks(exforeignunits)

Savings

banksTotal

(1)Residentbanks

(exforeignunits)

Savings

banksTotal

(1)


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Rating and estimate summary

We make a number of adjustments to our estimates and price targets post the 1Q2010

results season, as well as the Goldman Sachs Financials Conference on June 9 and 10. We

keep our ratings unchanged.

Exhibit 4: We adjust our estimates after the 1Q2010 results season and Goldman Sachs Financials Conference


Price Target Current GS EPS (old) GS EPS (new) GS EPS (change)Old New Change Rating 2010 2011 2012 2010 2011 2012 2010 2011 2012

Austria

Erste Bank 28.8 45.0 45.0 0% 56% Buy* 12 months 2.33 3.42 4.72 2.33 3.42 4.72 0% 0% 0%

Raiffeisen 35.2 41.0 41.0 0% 17% Neu tr al 12 mon th s 3.48 5.09 6.30 3.48 5.09 6.30 0% 0% 0%

France

BNP Paribas 50.3 65.0 68.0 5% 35% Neu tr al 12 mon th s 4.88 6.97 8.34 5.72 6.99 8.34 17% 0% 0%

Credit Agricole 10.0 13.8 12.1 -12% 21% Neu tr al 12 mon th s 1.13 1.84 2.20 1.23 1.97 2.33 8% 7% 6%

Natixis 3.9 3.1 3.40 10% -12% Neu tr al 12 mon th s 0.29 0.45 0.56 0.44 0.51 0.57 53% 12% 2%

Societe Generale 38.9 60.0 58.0 -3% 49% Buy 12 months 4.12 6.95 8.38 4.44 6.98 8.18 8% 0% -2%

Benelux

KBC 33.7 40.0 42.0 5% 25% Buy 12 months 3.27 4.17 4.55 3.78 3.90 4.58 15% -6% 1%

Germany

Commerzbank 6.2 7.0 7.10 1% 15% Neu tr al 12 mon th s -0.31 0.49 1.61 0.08 0.43 1.60 -125% -13% 0%

Deutsche Bank 50.3 65.0 65.0 0% 29% Neu tr al 12 mon th s 6.89 7.83 8.29 6.89 7.83 8.29 0% 0% 0%

Deutsche Postbank 25.6 27.4 22.4 -18% -12% Neu tr al 12 mon th s 2.11 2.34 2.05 2.05 2.71 -3% -12% --

Greece & Cyprus

Piraeus Bank 4.0 4.3 3.70 -14% -7% Sell 12 months 0.23 0.57 0.80 0.21 0.62 0.74 -11% 10% -7%

National Bank of Greece 10.2 10.1 9.30 -8% -9% Sell 12 months 1.28 1.66 1.88 0.97 1.67 1.88 -25% 1% 0%

Greek Postal Savings Bank 2.8 3.3 2.30 -30% -19% Sell 12 months 0.16 0.29 0.35 0.14 0.36 0.43 -9% 21% 22%

EFG Eurobank 4.4 5.1 4.50 -12% 3% Neu tr al 12 mon th s 0.37 0.58 0.95 0.03 0.26 0.91 -91% -54% -5%

Alpha Bank 4.8 4.9 4.30 -12% -10% Neu tr al 12 mon th s 0.40 0.63 0.93 0.21 0.41 0.90 -48% -35% -3%

Agricultural Bank of Greece 1.1 1.2 0.45 -61% -60% Sell 12 months 0.00 0.11 0.16 -0.16 0.08 0.10 nm -34% -39%

Bank of Cyprus 3.7 4.3 4.00 -7% 7% Neu tr al 12 mon th s 0.38 0.54 0.68 0.45 0.54 0.70 19% 1% 3%

Marfin Popular Bank 1.6 1.9 1.40 -26% -13% Neu tr al 12 mon th s 0.17 0.25 0.31 0.15 0.20 0.25 -13% -19% -17%

Hellenic Bank 1.0 1.3 0.95 -29% -4% Neu tr al 12 mon th s 0.10 0.16 0.13 0.15 0.15 23% -5% --

Ireland

Allied Irish Bank 1.1 2.0 1.55 -23% 40% Buy 12 months -4.37 -0.23 0.43 -3.88 -0.20 0.37 -11% -14% -14%

Bank of Ireland 0.9 1.4 1.25 -11% 47% Buy 12 months -1.06 -0.02 0.32 -0.49 -0.02 0.11 -54% -18% -66%

Italy

BMPS 1.0 1.1 1.10 0% 10% Neu tr al 12 mon th s 0.05 0.12 0.16 0.05 0.12 0.16 0% 0% 0%

Credito Valtellinese 3.9 5.2 4.80 -7% 22% Neu tr al 12 mon th s 0.24 0.44 0.60 0.24 0.44 0.60 0% 0% 0%

UBI Banca 7.7 11.0 9.60 -13% 25% Neu tr al 12 mon th s 0.48 0.94 1.22 0.48 0.91 1.17 0% -3% -4%

BP Milano 3.7 5.1 4.75 -7% 28% Neu tr al 12 mon th s 0.26 0.48 0.64 0.26 0.48 0.64 0% 0% 0%

Banco Popolare 4.8 5.0 4.95 -1% 4% Sell 12 months 0.31 0.59 0.73 0.31 0.59 0.73 0% 0% 0%

Credem 4.9 5.1 5.00 -2% 2% Sell 12 months 0.27 0.45 0.59 0.27 0.45 0.59 0% 0% 0%

Intesa SanPaolo 2.4 3.2 3.00 -5% 26% Neu tr al 12 mon th s 0.19 0.29 0.35 0.19 0.29 0.35 0% 0% 0%

Unicredit 2.0 3.0 2.85 -3% 46% Buy* 12 months 0.10 0.25 0.33 0.10 0.25 0.33 0% 0% 0%

Nordic

Danske Bank Dkr 131.5 164.0 165.0 1% 25% Neu tr al 12 mon th s Dkr 6.57 14.82 22.53 6.58 14.88 22.62 0% 0% 0%

DnB NOR Nkr 70.6 78.0 78.0 0% 10% Neu tr al 12 mon th s Nkr 6.88 7.84 8.72 6.88 7.84 8.72 0% 0% 0%

Swedbank Skr 76.9 69.0 69.0 0% -10% Sell 12 months Skr 3.99 6.65 8.40 3.99 6.65 8.40 0% 0% 0%

Nordea Skr 70.3 66.0 66.0 0% -6% Sell 12 months 0.62 0.71 0.79 0.62 0.71 0.79 0% 0% 0%

SEB Skr 45.2 39.0 39.0 0% -14% Sell* 12 months Skr 2.29 3.77 4.76 2.29 3.77 4.76 0% 0% 0%

Svenska Skr 203.1 213.0 213.0 0% 5% Neu tr al 12 mon th s Skr 18.10 20.55 23.19 18.10 20.55 23.19 0% 0% 0%

Spain

BBVA 9.4 12.50 12.90 3% 37% Neu tr al 12 mon th s 1.11 1.30 1.73 1.15 1.34 1.78 3% 3% 3%

Santander 9.4 11.9 11.9 0% 26% Buy 12 months 1.02 1.17 1.37 1.02 1.17 1.37 0% 0% 0%

Bankinter 5.4 5.0 4.95 0% -9% Sell 12 months 0.47 0.44 0.53 0.47 0.44 0.53 0% 0% 0%

Banco Popular 4.8 5.4 5.35 0% 11% Neu tr al 12 mon th s 0.48 0.56 0.74 0.48 0.56 0.74 0% 0% 0%

Banco Sabadell 3.8 3.3 3.30 0% -12% Sell* 12 months 0.27 0.29 0.43 0.27 0.29 0.43 0% 0% 0%

Banesto 7.0 8.2 8.20 0% 17% Neu tr al 12 mon th s 0.71 0.75 1.07 0.71 0.75 1.07 0% 0% 0%

Banco Pastor 3.9 4.1 4.10 0% 6% Sell 12 months 0.12 0.30 0.53 0.12 0.30 0.53 0% 0% 0%

Switzerland

Credit Suisse SFr 46.3 61.0 61.0 0% 32% Buy 12 months SFr 5.08 6.35 6.73 5.08 6.35 6.73 0% 0% 0%UBS SFr 16.0 19.4 19.4 0% 21% Neu tr al 12 mon th s SFr 1.50 2.07 2.25 1.50 2.07 2.25 0% 0% 0%

EFG International SFr 15.6 24.0 24.0 0% 54% Buy 12 months SFr 1.98 2.45 2.96 1.98 2.45 2.96 0% 0% 0%

Julius Baer SFr 34.6 47.0 47.0 0% 36% Buy 12 months SFr 2.86 3.52 4.17 2.86 3.52 4.17 0% 0% 0%

Sarasin SFr 42.9 45.0 51.0 13% 19% Neu tr al 12 mon th s SFr 2.73 3.66 4.35 2.79 3.97 4.88 2% 8% 12%

Vontobel SFr 30.1 39.0 39.0 0% 30% Neu tr al 12 mon th s SFr 3.36 3.82 4.34 3.38 3.84 4.36 1% 1% 1%

UK

Barclays /p 317 348 367 5% 16% Neu tr al 12 mon th s /p 24 38 46 32 42 49 31% 12% 7%

HSBC /p 659 860 860 0% 30% Buy 12 months $ 0.67 1.01 1.29 0.64 0.91 1.17 -4% -10% -9%

Lloyds TSB /p 57 83 84 1% 48% Buy* 12 months /p -1 8 11 -1 8 11.1 0% 7% 2%

Royal Bank of Scotland /p 47 38 42 11% -10% Neu tr al 12 mon th s /p -2 2 4 0 3 5 -117% 71% 22%

Standard Chartered /p 1,792 1800 1800 0% 0% Neu tr al 12 mon th s $ 1.92 2.29 2.61 1.93 2.27 2.63 0% -1% 1%

Upside /Downside

PT periodEPS

CurrencyShare Price


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Exhibit 5: Rationale for estimate and price target changes


Target Price and Estimate Changes

TP EPS 10E EPS 11E EPS 12E

Agricultural Bank of Greece -61% nm -34% -39% Adjusting for weaker outlook and operational trends seen in 1Q10

Allied Irish Bank -23% -11% -14% -14% Price target and estimate changes reflect recent s hare price performance ahead of pending recapitalization and issuance of shares to NPRFC.

Alpha Bank -12% -48% -35% -3% Adjusting for weaker outlook and operational trends seen in 1Q10

Banco Pastor 0% 0% 0% 0% no changes

Banco Popolare -1% 0% 0% 0%COE adjustment for Italian sovereign spreads

Banco Popular 0% 0% 0% 0% no changes

Banco Sabadell 0% 0% 0% 0% no changes

Banesto 0% 0% 0% 0% no changes

Bank of Cyprus -7% 19% 1% 3% Adjusting for weaker outlook and stronger than expected operational trends seen in 1Q10

Bank of Ireland -11% -54% -18% -66% Adjusting estimates and price target for shares being issued as a part of recapitalizing process and revised level and terms of preference shares.

Bankinter 0% 0% 0% 0% no changes

Barclays 5% 31% 12% 7% Adjusting estimates to reflect lower credit losses than previously expected

BBVA 3% 3% 3% 3% Adjusting for better performance in wholesale banking and LATAM divisions.

BMPS 0% 0% 0% 0% COE adjustment for Italian sovereign spreads

BNP Paribas 5% 17% 0% 0% Better provisions

BP Milano -7% 0% 0% 0% COE adjustment for Italian sovereign spreads

Commerzbank 1% -125% -13% 0% COE adjustment for sovereign spreads, better trading and credit cost in 1Q10, lower core revenue expansion in 2011E

Credem -2% 0% 0% 0% COE adjustment for Italian sovereign spreads

Credit Agricole -12% 8% 7% 6% Better provisions for EPS, refining capital structure adjustments for PT

Credit Suisse 0% 0% 0% 0% no changes

Credito Valtellinese -7% 0% 0% 0% COE adjustment for Italian sovereign spreads

Danske Bank 1% 0% 0% 0% Better than expected trends in fee & trading income as well as lower provisions in 2010-11

Deutsche Bank 0% 0% 0% 0% No changes

Deutsche Postbank -18% -3% -12% -- Recent results

DnB NOR 0% 0% 0% 0% no changes

EFG Eurobank -12% -91% -54% -5% Adjusting cost of equity for weaker outlook and estimates for stronger operational trends seen in 1Q10

EFG International 0% 0% 0% 0% no changes

Erste Bank 0% 0% 0% 0% no changes

Greek Postal Savings Bank -30% -9% 21% 22% Adjusting cost of equity for weaker outlook and estimates for stronger operational trends seen in 1Q10

Hellenic Bank -29% 23% -5% -- Adjusting cost of equity for weaker outlook and estimates for stronger operational trends seen in 1Q10

HSBC 0% -4% -10% -9% Reduced European loan growth, faster Asian loan growth, impact of EUR/GBP depreciation.

Intesa SanPaolo -5% 0% 0% 0% COE adjustment for Italian sovereign spreads

Julius Baer 0% 0% 0% 0% no changes

KBC 5% 15% -6% 1% recent results

Lloyds TSB 1% 0% 7% 2% small changes due to changes in pricing of funding and mortgages

Marfin Popular Bank -26% -13% -19% -17% Adjusting cost of equity for weaker outlook and estimates for stronger operational trends seen in 1Q10

National Bank of Greece -8% -25% 1% 0% Adjusting cost of equity for weaker outlook and estimates for stronger operational trends seen in 1Q10

Natixis 10% 53% 12% 2% High % upgrade due to low base - less losses & provisionsNordea 0% 0% 0% 0% no changes

Piraeus Bank -14% -11% 10% -7% Adjusting cost of equity for weaker outlook and estimates for stronger operational trends seen in 1Q10

Raiffeisen 0% 0% 0% 0% no changes

Royal Bank of Scotland 11% -117% 71% 22% Adjusting estimates to reflect lower credit losses and lower trading write downs than previously expected

Santander 0% 0% 0% 0% no changes

Sarasin 13% 2% 8% 12% Better inflows, better cost control

SEB 0% 0% 0% 0% no changes

Societe Generale -3% 8% 0% -2% downward revision for capital markets activity

SHB 0% 0% 0% 0% no changes

Standard Chartered 0% 0% -1% 1% Minor estimate changes reflecting Indian IDR issuance, currency movements as well as higher revenues/costs and lower provisions

Swedbank 0% 0% 0% 0% no changes

UBI Banca -13% 0% -3% -4% COE adjustment for Italian sovereign spreads and lower expectation on margin evolution

UBS 0% 0% 0% 0% no changes

Unicredit -3% 0% 0% 0% COE adjustment for Italian sovereign spreads

Vontobel 0% 1% 1% 1% Small house-keeping changes

CommentsCompany


8/14



Exhibit 6: Price target methodologies and risks

Source: Goldman Sachs Research.

Agricultural Bank of Greece ROTE/COE Better than expected macro environment in Greece; volumes trends and asset spreads; recapitalisation at favourable terms

All ied Ir ish Bank P/E Downside risk: r isks related to recapi ta lization process, lag in the economic recovery in Ireland and UK, further worsening of commercial real estate condi tions in the core markets

A lp ha Ban k R OTE/CO E Bet te r / wo rse tha n e xp ec te d macro e nv iron me nt in G re ece / SEE; vo lu me s t re nd s a nd a sset sp re ad s

Banco Pastor ROTE/COE Upside risks: prompt recovery of the Spanish economy, better than expected trends in asset quality, spreads and business volumes and M&A risk. Downside: asset quality

Banco Popolare ROTE/COE Better than expected macroeconomic and asset quality trend; better than expected execution of Italease turnaround and capital managementexecution on Italease acquisition

Banco Popular Espanol ROTE/COE Upside risks include prompt recovery of the Spanish economy, better than expected trends in asset quality, spreads and business volumes and M&A risk. Downside risks are opposite except M&A.

Banco Sabadell ROTE/COE Upside risks include prompt recovery of the Spanish economy, better than expected trends in asset quality, spreads and business volumes and M&A risk.

Banesto ROTE/COE Upside risks include prompt recovery of the Spanish economy, better than expected trends in asset qual ity, spreads and business volumes and M&A r isk. Downside risks are opposite except M&A.

Bank of Cyprus ROTE/COE Better / worse than expected macro environment in Greece / Cyprus / Russia; volumes trends and asset spreads

Ban k of I re la nd P/E D own si de ri sk : la g i n the econ omic recovery in I re la nd an d UK, fu rthe r wo rsen in g of comme rc ia l rea l es ta te con di ti on s in the core ma rkets

Bankinter ROTE/COE Upside r isks include prompt recovery of the Spanish economy, better than expected trends in asset qual ity, spreads and business volumes and M&A r isk.

Barc lays ROTE/ COE Higher/ lower impai rm ent charges in GRCB and higher/ lower revenues in BarCap

BBVA ROTE/COE Downside r isks: include prolonged recession in Spain, sharp slowdown in Mexico and Latam, worse than expected trends in asset qual ity and spreads in core markets.

BNP Paribas ROTE/COE Upside: continued stronger than expected recovery in capital markets, lower loan loss provisions; downside: in tegration risk at Fort is, h igher provisions

BMPS ROTE/COE Macro environment and asset quali ty trends; better / worse than expected trend in customer spreads; execution on noncore assets d isposals; evolution of European Sovereign spreads

BP Milano ROTE/COE Macro envi ronment and asset quali ty trends; better / worse than expected trend in customer spreads; evolution of European Sovereign spreads

Commerzbank ROTE/COE Macro environment and asset qual ity trends; better / worse than expected trend in customer spreads; evolution of European Sovereign spreads

C re de m R OTE/CO E Bet te r / wo rse tha n e xp ec ted ma croe co no mi c t re nd ; b et te r / wo rse tha n e xp ec te d t re nd in cu stomer sp re ad s a nd AM bu si ne ss

Credi t Agrico le ROTE/COE Sharper slowdown in capital markets; increased writedowns on structured credi t assets, sharp deter ioration in credit quali ty

C re di t Sui sse R OTE/CO E D own si de : reg ul atory r isk, ren ew ed we akne ss i n a sset val ue s a nd cap ital marke ts

Credito Valtell inese ROTE/COE Macro environment and asset quality trends; better / worse than expected trend in customer spreads; evolution of European Sovereign spreads

Danske bank ROE/COE Higher impai rments than expected, a slower economic recovery or a more severe downturn in the Danish corporate real estate market.

Deutsche Bank ROTE/COE Upside: sharper than expected recovery in capi ta l markets; downside: addit ional wri te downs requi ring more capi ta l

Deutsche Postbank ROTE/COE Higher/lower than expected further writedowns on the structured credit portfolio; better / worse than expected trend in asset spreads and asset quality.

D nB NO R R OE/C OE H ig he r/Lo we r- th an -e xp ec te d l oa n l osse s i n the Sh ip pi ng an d Bal ti c l oa n b oo k. Q ui cker /S lo we r e co no mi c re co ve ry in the No rw ay

EFG Eu ro ba nk R OTE/CO E Bet te r / wo rse tha n e xp ec te d macro en vi ro nmen t i n G re ece / SEE; vo lu me s t re nd s a nd asse t sprea ds

EFG I nternational P/E Downside: regulatory risk, renewed weak ness in ass et values

Erste Bank ROTE/ COE Worse t han expect ed m acro environment in t he CEE and SEE regions

Greek Postal Savings Bank ROTE/COE Better than expected macro environment in Greece; volumes trends and asset spreads; M&A speculation

H el le ni c Ban k R OTE/CO E Bet te r / wo rse tha n e xp ec te d macro en vi ro nmen t i n G re ece / Cyprus ; vo lu me s trend s an d a sset sprea ds

H SBC R OTE/CO E U S/gl ob al ma cro d ou bl e d ip . H ig her th an expe cted HFC c re di t card/mo rtga ge lo sses . Sha rp er th an expe cted NIM, co st pressu re s.

Intesa SanPaolo ROTE/COE Macro environment and asset quality trends; better / worse than expected trend in customer spreads and AM business; execution on non-core assets disposals; evolution of European Sovereign spreads

Julius Baer ROTE/ COE renewed weakness in as set values, les s net money flows than expec ted

KBC SOTP Uncertainty over the severity of t he CEE credit impairment cyc le, regulatory changes, potential for dilutive capital raises and uncertainty surrounding the groups CDO and ABS portfolios.L loyds ROTE/COE Worse than expected losses wi th in commercial real estate; increased regual tion, with regards to capital requirements and l iquidi ty, access to funding intervention

Marfin Popular Bank ROTE/COE Better / worse than expected macro environment in Greece / Cyprus / SEE volumes trends and asset spreads

National Bank of Greece ROTE/COE Better than expected trend in asset quality and margins; better than expected macro environment; spin-of of Turkish unit

Na ti xi s RO TE /CO E Vo lat il it y i n c api ta l m ar ke ts ; in cre as ed wr it edo wns on st ru ct ur ed cr ed it as se ts , c redi t qu al it y

Nordea ROE/COE A more benign macrodevelopment in the Nordics and Bal tics, a possib le accretive depletion of Nordea capital and potential further share accumulation by Sampo,currently hold ing 16% of Nordea.

P irae us Ba nk R OTE/CO E Bet te r tha n e xp ec te d macro e nv iron me nt in G re ece / SEE; vo lu me s t re nd s a nd asse t sprea ds

Rai ffeisen International ROTE/COE Better / worse than expected macro environment in the CEE and SEE regions

Royal Bank of Scotland ROTE/COE Significant deterioration in the UK economy and UK credit quality, lower/higher revenues in GBM or lower/higher losses in the non core division.

Santander ROTE/COE Downside risks: prolonged recession in Spain, sharp slowdown in Brazil and Latam, worse than expected trends in asset quality and spreads in core markets. Upside risks are the opposite.

Saras in R OTE/CO E U ps id e: be tter cos t man ag emen t, sh arpe r recovery i n a sset va lu es ; d ow ns id e: re gu la to ry r isk, cos t d evel op me nts

SEB ROE/COE (1) Better than expected macro development in the Bal tics including a Euro entry for Latvia and L ithuania; (2) strong revenues from capi ta l markets in Sweden and (3) reduced competi tion in Sweden

Societe Generale ROTE/COE Sharper slowdown in capi ta l markets, and worse than expected developments in credit qual ity

Standard Chartered SOTP Double dip for the US, for Asia, loss of macro.loan growth momentum for China, higher than expected NPLs, revenue pressures in 2H09E or FY10E as part of a long tailed recession scenario.

SHB ROE/CO E Higher/ lower impairm ents than expec ted or quicker/ slower economic recovery t han expect ed

Swedbank ROE/COE Better than expected macro development in the Bal tics, including a Euro entry for Latvia and L ithuania and reduced competit ion in Sweden

UBI Banca ROTE/COE Macro envi ronment and asset qual ity trends; better / worse than expected trend in customer spreads; evolution of European Sovereign spreads

UB S RO TE /CO E Up sid e: shar p t urn ro und in IB pr of it ab il it y ( e. g. on co st cu ts ); do wn si de : r egu la tor y r is k, out flo ws in WM

Unicredit ROTE/COE A sharp deter ioration in macroeconomic outlook and credi t spread; execution on cost saving plan; sharp deter ioration in European Sovereign spreads

V on tobel S OT P Up sid e: hi gh c ap it al m ar ke ts a ct iv it y, d own sid e: reg ula to ry r is k, hed gi ng r is k o n der iv at iv es port fol io

Company Methodology Risks to our target price


9/14



Appendix 1: Composition of public and private debt by geography

Exhibit 7: Composition of total public and private debt by geography

Source: ECB, Eurostat.

Debt / GDP - ranked by government debt Debt / GDP - ranked by total debt Debt composition

Gvt Corp Retail Total Total Gvt Corp Retail Total Gvt Corp Retail

1 Greece 115% 41% 41% 197% 1 Luxembourg 353% 14% 263% 76% 100% 4% 75% 22%

2 Italy 113% 70% 32% 216% 2 Cyprus 334% 55% 157% 121% 100% 17% 47% 36%

3 Belgium 94% 55% 30% 179% 3 Ireland 289% 66% 133% 90% 100% 23% 46% 31%

4 France 76% 50% 49% 176% 4 Denmark 255% 40% 79% 135% 100% 16% 31% 53%

5 Portugal 76% 84% 83% 244% 5 Portugal 244% 76% 84% 83% 100% 31% 35% 34%

6 Hungary 76% 35% 29% 140% 6 UK 238% 65% 99% 73% 100% 27% 42% 31%

7 Germany 72% 45% 58% 175% 7 Spain 231% 53% 94% 84% 100% 23% 41% 36%

8 Malta 67% 99% 60% 226% 8 Netherlands 227% 59% 95% 73% 100% 26% 42% 32%

9 Ireland 66% 133% 90% 289% 9 Malta 226% 67% 99% 60% 100% 30% 44% 26%

10 Austria 65% 69% 45% 180% 10 Italy 216% 113% 70% 32% 100% 53% 33% 15%

11 UK 65% 99% 73% 238% 11 Greece 197% 115% 41% 41% 100% 58% 21% 21%

12 Netherlands 59% 95% 73% 227% 12 Austria 180% 65% 69% 45% 100% 36% 38% 25%

13 Cyprus 55% 157% 121% 334% 13 Belgium 179% 94% 55% 30% 100% 52% 31% 17%

14 Spain 53% 94% 84% 231% 14 France 176% 76% 50% 49% 100% 44% 29% 28%

15 Poland 47% 17% 29% 93% 15 Germany 175% 72% 45% 58% 100% 41% 26% 33%

16 Finland 43% 33% 56% 132% 16 Sweden 159% 38% 51% 69% 100% 24% 32% 44%

17 Denmark 40% 79% 135% 255% 17 Latvia 153% 40% 62% 51% 100% 26% 41% 33%

18 Latvia 40% 62% 51% 153% 18 Hungary 140% 76% 35% 29% 100% 54% 25% 21%

19 Sweden 38% 51% 69% 159% 19 Finland 132% 43% 33% 56% 100% 33% 25% 43%

20 Slovenia 35% 66% 24% 126% 20 Slovenia 126% 35% 66% 24% 100% 28% 53% 19%

21 Slovakia 34% 25% 21% 80% 21 Estonia 115% 7% 53% 54% 100% 6% 47% 47%

22 Czech Republic 34% 24% 26% 84% 22 Lithuania 101% 30% 39% 32% 100% 30% 38% 32%

23 Lithuania 30% 39% 32% 101% 23 Poland 93% 47% 17% 29% 100% 51% 18% 31%

24 Romania 22% 19% 19% 59% 24 Bulgaria 90% 15% 47% 28% 100% 16% 52% 31%

25 Bulgaria 15% 47% 28% 90% 25 Czech Republic 84% 34% 24% 26% 100% 40% 29% 31%

26 Luxembourg 14% 263% 76% 353% 26 Slovakia 80% 34% 25% 21% 100% 43% 31% 26%

27 Estonia 7% 53% 54% 115% 27 Romania 59% 22% 19% 19% 100% 37% 31% 32%

Eurozone (11) 77% 64% 55% 196% Eurozone (11) 196% 77% 64% 55% 100% 39% 33% 28%

Western Europe 74% 69% 59% 203% Western Europe 203% 74% 69% 59% 100% 37% 34% 29%

CEE 41% 26% 27% 94% CEE 94% 41% 26% 27% 100% 43% 27% 29%

Total 72% 66% 57% 194% Total 194% 72% 66% 57% 100% 37% 34% 29%


10/14



Appendix 2: Capital raisings by Eurozone banks

Exhibit 8: Capital raisings (excluding repayments) European Banks

Source: Company data, Goldman Sachs Research.

Sourceofcapital(bn) Formofcapitalraising(mn)

CompanyAnnouncement

date Private State Total Ords/MCN Other Total

BankofIreland 26/04/10 1.8 1.7 3.4 3.4 3.4

ErsteBank 29/10/09 1.7 1.7 1.7 1.7

AlphaBank 16/10/09 1.0 1.0 1.0 1.0

SocGen 06/10/09 4.8 4.8 4.8 4.8

Unicredit 29/09/09 4.0 4.0 4.0 4.0

BNPParibas 29/09/09 4.3 4.3 4.3 4.3

CreditoValtellinese 20/09/09 0.2 0.2 0.2 0.2

Popular 09/09/09 1.2 1.2 1.2 1.2

BBVA 04/09/09 2.0 2.0 2.0 2.0

RIBH 15/07/09 1.3 1.3 1.3 1.3

Sabadell 26/06/09 0.5 0.5 0.5 0.5

Bankinter 14/05/09 0.4 0.4 0.4 0.4

KBC 14/05/09 3.5 3.5 3.5 3.5

GPSB 22/04/09 0.5 0.5 0.5 0.5

Banesto 2Q09 0.5 0.5 0.5 0.5

BancoPastor 2Q09 0 .3 0.3 0.3 0.3

Santander 2Q09 2.0 2.0 2.0 2.0

Popular 2Q09 0.4 0.4 0.4 0.4

BMPS* 27/03/09 1.9 1.9 1.9 1.9

BPMilano 24/03/09 0.2 0.2 0.2 0.2

BPMilano 24/03/09 0.5 0.5 0.5 0.5

BancoPopolare 10/03/09 1.5 1.5 1.5 1.5

BankofCyprus 25/02/09 0.6 0.6 0.6 0.6

AlliedIrish 11/02/09 3.5 3.5 3.5 3.5

BankofIreland 11/02/09 3.5 3.5 3.5 3.5

GPSB 28/01/09 0.2 0.2 0.2 0.2

PiraeusBank 23/01/09 0.4 0.4 0.4 0.4

NationalBankofGreece 22/01/09 1.3 0.4 1.6 1.3 0.4 1.6

KBC 22/01/09 2.0 2.0 2.0 2.0

Natixis 20/01/09 1.9 1.9 1.9 1.9

AlphaBank 12/01/09 0.9 0.9 0.9 0.9

ATEBank 12/01/09 0.7 0.7 0.7 0.7

EFGEurobank 12/01/09 1.0 1.0 1.0 1.0

Commerzbank 08/01/09 10.0 10.0 1.8 8.2 10.0

Sabadell 1Q09 0.5 0.5 0.5 0.5

Santander 10/11/08 7.2 7.2 7.2 7.2

Commerzbank 03/11/08 8.2 8.2 8.2 8.2

ErsteBank 30/10/08 0.5 1.2 1.8 1.8 1.8

DeutschePostbank 27/10/08 1.0 1.0 1.0 1.0

KBC 27/10/08 3.5 3.5 3.5 3.5

Natixis 20/10/08 2.0 2.0 2.0 2.0

Unicredit 05/10/08 3.0 3.0 3.0 3.0

BBVA 4Q08 1.0 1.0 1.0 1.0

Natixis 16/07/08 3.7 3.7 3.7 3.7

CreditAgricoleSA 13/05/08 5.9 5.9 5.9 5.9

SocGen 24/01/08 5.5 5.5 5.5 5.5

TotalEurozone 56 50 106 57 48 106

Total(%) 53% 47% 100% 54% 46% 100%

Note:CapitalraisingsbybankswithinGScoverageuniverse;excludescapitalraisingsforthepurposeofacquisitions


11/14



Appendix 3: Fundamental performance up in 1Q; coverage flat

Exhibit 9: Pro-forma for change in coverage ratios, PBT for 1Q10 alone would have been twice as high as FY2009 mn

Source: Company data, Goldman Sachs Research estimates. Note: we gross up BNPs NPLs by collateral values for comparability purposes.

Coverage Ratio Incre. Cov. Incre. Cov. PBT (mn) Pro-forma PBT change PBT (mn) Pro-forma PBT change

4Q08 4Q09 1Q10 2009 1Q2010 2009 Pro-forma* mn % 1Q10 Pro-forma* mn %

AustriaErste Bank 68% 58% 60% 37% 93% 1,261 397 -864 -68% 402 565 163 40%

Raiffeisen 111% 69% 68% 49% 58% 365 -1,473 -1,838 -503% 139 73 -66 -47%

Total 77% 62% 63% 43% 73% 1,626 -316 -1,943 -119% 541 664 123 23%

France

BNP Paribas 58% 53% 52% 48% 30% 8,833 6,123 -2,710 -31% 3,840 3,614 -226 -6%

Societe Generale 65% 57% 56% 34% 50% 131 -1,645 -1,776 -1356% 1,500 1,383 -117 -8%

Credit Agricole 65% 65% 68% 65% 199% 2,241 2,218 -23 -1% 850 1,406 556 65%

Natixis 146% 71% 70% 20% 50% -2,272 -5,109 -2,837 125% 555 513 -42 -8%

Total 64% 57% 57% 46% 62% 8,934 1,901 -7,032 -79% 6,745 6,940 195 3%

Germany

Commerzbank 48% 48% 49% 48% 488% -4,659 -4,641 18 0% 771 1,057 286 37%

Deutsche Bank 53% 46% 47% 40% 67% 5,202 4,755 -447 -9% 2,793 2,827 34 1%

Deutsche Postbank 137% 137% 132% 136% 81% 217 215 -2 -1% 131 75 -56 -43%

Total 54% 51% 52% 48% 154% 760 28 -732 -96% 3,695 4,035 340 9%

Greece & Cyprus

Piraeus Bank 52% 51% 50% 47% 47% 254 221 -34 -13% 9 1 -8 -88%

National Bank of Greece 61% 55% 53% 47% 40% 1,206 964 -241 -20% 148 34 -113 -77%

Greek Postal Savings Bank 216% 165% 168% 97% 233% 47 -4 -50 -108% -16 -13 3 -19%

EFG Eurobank 63% 45% 44% 20% 33% 340 -355 -695 -205% 77 33 -44 -57%

Alpha Bank 62% 55% 53% 38% 42% 459 224 -236 -51% 66 22 -43 -66%

Agricultural Bank of Greece 62% 71% 71% 98% 65% -470 -304 165 -35% -45 -54 -8 18%

Bank of Cyprus 86% 59% 58% 27% 46% 365 -45 -410 -112% 91 72 -19 -21%

Marfin Popular Bank 63% 51% 51% 31% 52% 205 16 -189 -92% 54 55 1 2%

Total 65% 55% 53% 35% 43% 2,406 480 -1,926 -80% 383 143 -240 -63%

Italy

BMPS 49% 45% 45% 33% 41% 1,451 759 -691 -48% 215 190 -25 -12%

Credito Valtellinese 56% 43% 40% 24% 9% 143 -70 -213 -149% 42 -9 -51 -121%

UBI Banca 48% 38% 37% 24% 5% 705 53 -652 -92% 137 71 -67 -49%

BP Milano 55% 35% 34% 13% -34% 217 -276 -493 -227% 86 48 -39 -45%

Banco Popolare 48% 31% 30% 17% -5% 487 -1,753 -2,241 -460% 206 94 -112 -54%

Credem 51% 44% 42% 33% 14% 163 113 -49 -30% 38 23 -16 -41%

Intesa SanPaolo 61% 49% 49% 26% 50% 4,328 171 -4,157 -96% 1,131 1,134 3 0%

Unicredit 59% 51% 51% 32% 49% 3,300 -975 -4,275 -130% 1,049 986 -64 -6%

Total 57% 47% 47% 27% 41% 10,794 -2,376 -13,170 -122% 2,906 2,582 -323 -11%

Nordic

Danske Bank 65% 42% 43% 33% 51% 1,039 -1,660 -2,699 -260% 160 251 91 57%

DnB NOR 62% 40% 37% 28% 17% 1,392 694 -698 -50% 433 332 -102 -23%

Swedbank 97% 65% 65% 59% 194% -872 -2,149 -1,277 146% 100 125 25 25%

Nordea 70% 58% 60% 50% 78% 3,074 2,592 -482 -16% 878 945 67 8%

SEB 92% 63% 68% 48% -38% 454 -356 -811 -178% 106 242 136 129%

Svenska Handelsbanken 57% 62% 73% 69% -49% 1,329 1,373 44 3% 372 451 79 21%

Total 71% 50% 51% 42% 61% 6,416 994 -5,423 -85% 2,049 2,220 171 8%

Spain

BBVA 91% 57% 59% 16% 136% 5,736 423 -5,312 -93% 1,862 2,074 211 11%

Santander 91% 75% 74% 54% 42% 11,795 8,036 -3,759 -32% 3,161 2,841 -321 -10%

Bankinter 120% 74% 73% 17% 39% 346 -155 -501 -145% 91 73 -18 -20%

Banco Popular 73% 50% 50% 22% 39% 1,073 -181 -1,254 -117% 290 275 -15 -5%

Sabadell 107% 69% 62% 6% -13% 571 -457 -1,028 -180% 123 -88 -212 -171%

Banesto 105% 63% 61% 10% 3% 780 -297 -1,078 -138% 295 219 -76 -26%

Banco Pastor 49% 52% 56% 58% 338% 131 173 43 33% 48 103 54 113%

Total 90% 66% 65% 34% 48% 20,431 7,584 -12,847 -63% 5,873 5,549 -324 -6%

Switzerland

Credit Suisse 61% 61% 56% 63% 315% 5,349 5,343 -6 0% 1,970 1,903 -67 -3%

UBS 36% 39% 34% 20% 70% -1,697 -1,560 136 -8% 1,861 1,660 -201 -11%Total 42% 44% 40% 31% 79% 3,652 3,782 129 4% 3,831 3,594 -237 -6%

Benelux

KBC 71% 75% 78% 79% 147% 2,292 2,541 248 11% 767 942 175 23%

Total ex UK & Ireland 64.0% 53.8% 53.8% 38% 54% 57,312 13,940 -43,372 -76% 26,790 26,783 -7 0%

Coverage ratioshave stopped

falling

1Q10 is already 2x

as much asFY2009 proforma


12/14



Reg AC

We, Jernej Omahen, Jean-Francois Neuez, Pawel Dziedzic and Heiner Luz, hereby certify that all of the views expressed in this report accuratelyreflect our personal views about the subject company or companies and its or their securities. We also certify that no part of our compensation was,is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

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Growth is a composite of next year's estimate over current year's estimate, e.g. EPS, EBITDA, Revenue. Return is a year one prospective aggregateof various return on capital measures, e.g. CROCI, ROACE, and ROE. Multiple is a composite of one-year forward valuation ratios, e.g. P/E, dividendyield, EV/FCF, EV/EBITDA, EV/DACF, Price/Book. Volatility is measured as trailing twelve-month volatility adjusted for dividends.

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Rating Distribution Investment Banking Relationships

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Global 30% 54% 16% 48% 46% 38%

As of April 1, 2010, Goldman Sachs Global Investment Research had investment ratings on 2,821 equity securities. Goldman Sachs assigns stocks asBuys and Sells on various regional Investment Lists; stocks not so assigned are deemed Neutral. Such assignments equate to Buy, Hold and Sell forthe purposes of the above disclosure required by NASD/NYSE rules. See 'Ratings, Coverage groups and views and related definitions' below.

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Regulatory disclosures

Disclosures required by United States laws and regulations

See company-specific regulatory disclosures above for any of the following disclosures required as to companies referred to in this report: manageror co-manager in a pending transaction; 1% or other ownership; compensation for certain services; types of client relationships; managed/co-managed public offerings in prior periods; directorships; for equity securities, market making and/or specialist role. Goldman Sachs usually makes amarket in fixed income securities of issuers discussed in this report and usually deals as a principal in these securities.

The following are additional required disclosures: Ownership and material conflicts of interest: Goldman Sachs policy prohibits its analysts,professionals reporting to analysts and members of their households from owning securities of any company in the analyst's area of coverage.Analyst compensation: Analysts are paid in part based on the profitability of Goldman Sachs, which includes investment banking revenues. Analyst


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as officer or director: Goldman Sachs policy prohibits its analysts, persons reporting to analysts or members of their households from serving as anofficer, director, advisory board member or employee of any company in the analyst's area of coverage. Non-U.S. Analysts: Non-U.S. analysts maynot be associated persons of Goldman Sachs & Co. and therefore may not be subject to NASD Rule 2711/NYSE Rules 472 restrictions oncommunications with subject company, public appearances and trading securities held by the analysts.

Distribution of ratings: See the distribution of ratings disclosure above. Price chart: See the price chart, with changes of ratings and price targets inprior periods, above, or, if electronic format or if with respect to multiple companies which are the subject of this report, on the Goldman Sachswebsite at http://www.gs.com/research/hedge.html.

Additional disclosures required under the laws and regulations of jurisdictions other than the United StatesThe following disclosures are those required by the jurisdiction indicated, except to the extent already made above pursuant to United States lawsand regulations. Australia: This research, and any access to it, is intended only for "wholesale clients" within the meaning of the AustralianCorporations Act. Canada: Goldman Sachs & Co. has approved of, and agreed to take responsibility for, this research in Canada if and to the extent itrelates to equity securities of Canadian issuers. Analysts may conduct site visits but are prohibited from accepting payment or reimbursement by thecompany of travel expenses for such visits. Hong Kong: Further information on the securities of covered companies referred to in this research maybe obtained on request from Goldman Sachs (Asia) L.L.C. India: Further information on the subject company or companies referred to in thisresearch may be obtained from Goldman Sachs (India) Securities Private Limited; Japan: See below. Korea: Further information on the subjectcompany or companies referred to in this research may be obtained from Goldman Sachs (Asia) L.L.C., Seoul Branch. Russia: Research reportsdistributed in the Russian Federation are not advertising as defined in the Russian legislation, but are information and analysis not having productpromotion as their main purpose and do not provide appraisal within the meaning of the Russian legislation on appraisal activity. Singapore: Furtherinformation on the covered companies referred to in this research may be obtained from Goldman Sachs (Singapore) Pte. (Company Number:198602165W). Taiwan: This material is for reference only and must not be reprinted without permission. Investors should carefully consider theirown investment risk. Investment results are the responsibility of the individual investor. United Kingdom: Persons who would be categorized asretail clients in the United Kingdom, as such term is defined in the rules of the Financial Services Authority, should read this research in conjunctionwith prior Goldman Sachs research on the covered companies referred to herein and should refer to the risk warnings that have been sent to them by

Goldman Sachs International. A copy of these risks warnings, and a glossary of certain financial terms used in this report, are available fromGoldman Sachs International on request.

European Union: Disclosure information in relation to Article 4 (1) (d) and Article 6 (2) of the European Commission Directive 2003/126/EC is availableat http://www.gs.com/client_services/global_investment_research/europeanpolicy.html which states the European Policy for Managing Conflicts ofInterest in Connection with Investment Research.

Japan: Goldman Sachs Japan Co., Ltd. is a Financial Instrument Dealer under the Financial Instrument and Exchange Law, registered with the KantoFinancial Bureau (Registration No. 69), and is a member of Japan Securities Dealers Association (JSDA) and Financial Futures Association of Japan(FFAJ). Sales and purchase of equities are subject to commission pre-determined with clients plus consumption tax. See company-specificdisclosures as to any applicable disclosures required by Japanese stock exchanges, the Japanese Securities Dealers Association or the JapaneseSecurities Finance Company.

Ratings, coverage groups and views and related definitions

Buy (B), Neutral (N), Sell (S) -Analysts recommend stocks as Buys or Sells for inclusion on various regional Investment Lists. Being assigned a Buyor Sell on an Investment List is determined by a stock's return potential relative to its coverage group as described below. Any stock not assigned asa Buy or a Sell on an Investment List is deemed Neutral. Each regional Investment Review Committee manages various regional Investment Lists to aglobal guideline of 25%-35% of stocks as Buy and 10%-15% of stocks as Sell; however, the distribution of Buys and Sells in any particular coveragegroup may vary as determined by the regional Investment Review Committee. Regional Conviction Buy and Sell lists represent investmentrecommendations focused on either the size of the potential return or the likelihood of the realization of the return.

Return potential represents the price differential between the current share price and the price target expected during the time horizon associatedwith the price target. Price targets are required for all covered stocks. The return potential, price target and associated time horizon are stated in eachreport adding or reiterating an Investment List membership.

Coverage groups and views: A list of all stocks in each coverage group is available by primary analyst, stock and coverage group athttp://www.gs.com/research/hedge.html. The analyst assigns one of the following coverage views which represents the analyst's investment outlookon the coverage group relative to the group's historical fundamentals and/or valuation. Attractive (A). The investment outlook over the following 12months is favorable relative to the coverage group's historical fundamentals and/or valuation. Neutral (N). The investment outlook over the following12 months is neutral relative to the coverage group's historical fundamentals and/or valuation. Cautious (C). The investment outlook over thefollowing 12 months is unfavorable relative to the coverage group's historical fundamentals and/or valuation.

Not Rated (NR). The investment rating and target price have been removed pursuant to Goldman Sachs policy when Goldman Sachs is acting in anadvisory capacity in a merger or strategic transaction involving this company and in certain other circumstances. Rating Suspended (RS). GoldmanSachs Research has suspended the investment rating and price target for this stock, because there is not a sufficient fundamental basis fordetermining an investment rating or target. The previous investment rating and price target, if any, are no longer in effect for this stock and should

not be relied upon.Coverage Suspended (CS).

Goldman Sachs has suspended coverage of this company.Not Covered (NC).

Goldman Sachs doesnot cover this company. Not Available or Not Applicable (NA). The information is not available for display or is not applicable. Not Meaningful(NM). The information is not meaningful and is therefore excluded.

Global product; distributing entities

The Global Investment Research Division of Goldman Sachs produces and distributes research products for clients of Goldman Sachs, and pursuantto certain contractual arrangements, on a global basis. Analysts based in Goldman Sachs offices around the world produce equity research onindustries and companies, and research on macroeconomics, currencies, commodities and portfolio strategy. This research is disseminated inAustralia by Goldman Sachs JBWere Pty Ltd (ABN 21 006 797 897) on behalf of Goldman Sachs; in Canada by Goldman Sachs & Co. regardingCanadian equities and by Goldman Sachs & Co. (all other research); in Hong Kong by Goldman Sachs (Asia) L.L.C.; in India by Goldman Sachs (India)Securities Private Ltd.; in Japan by Goldman Sachs Japan Co., Ltd.; in the Republic of Korea by Goldman Sachs (Asia) L.L.C., Seoul Branch; in NewZealand by Goldman Sachs JBWere (NZ) Limited on behalf of Goldman Sachs; in Russia by OOO Goldman Sachs; in Singapore by Goldman Sachs(Singapore) Pte. (Company Number: 198602165W); and in the United States of America by Goldman Sachs & Co. Goldman Sachs International hasapproved this research in connection with its distribution in the United Kingdom and European Union.


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European Union: Goldman Sachs International, authorized and regulated by the Financial Services Authority, has approved this research inconnection with its distribution in the European Union and United Kingdom; Goldman Sachs & Co. oHG, regulated by the Bundesanstalt frFinanzdienstleistungsaufsicht, may also distribute research in Germany.

General disclosures

This research is for our clients only. Other than disclosures relating to Goldman Sachs, this research is based on current public information that weconsider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. We seek to update our research asappropriate, but various regulations may prevent us from doing so. Other than certain industry reports published on a periodic basis, the largemajority of reports are published at irregular intervals as appropriate in the analyst's judgment.

Goldman Sachs conducts a global full-service, integrated investment banking, investment management, and brokerage business. We haveinvestment banking and other business relationships with a substantial percentage of the companies covered by our Global Investment ResearchDivision. Goldman Sachs & Co., the United States broker dealer, is a member of SIPC (http://www.sipc.org).

Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and ourproprietary trading desks that reflect opinions that are contrary to the opinions expressed in this research. Our asset management area, ourproprietary trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or viewsexpressed in this research.

We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in,act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.

This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would beillegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs ofindividual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, ifappropriate, seek professional advice, including tax advice. The price and value of investments referred to in this research and the income from themmay fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.

Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments.Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors.Investors should review current options disclosure documents which are available from Goldman Sachs sales representatives or athttp://www.theocc.com/publications/risks/riskchap1.jsp. Transactions cost may be significant in option strategies calling for multiple purchase andsales of options such as spreads. Supporting documentation will be supplied upon request.

All research reports are disseminated and available to all clients simultaneously through electronic publication to our internal client websites. Not allresearch content is redistributed to our clients or available to third-party aggregators, nor is Goldman Sachs responsible for the redistribution of ourresearch by third party aggregators. For all research available on a particular stock, please contact your sales representative or go tohttp://360.gs.com.

Disclosure information is also available at http://www.gs.com/research/hedge.html or from Research Compliance, 200 West Street, New York, NY10282.

Copyright 2010 The Goldman Sachs Group, Inc.

No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior

written consent of The Goldman Sachs Group, Inc.

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