May 2012

José Antonio ÁlvarezCFOGrupo Santander

Evolving Business Models and Capital Markets Contexts:

The Santander Model

2

Headcount 193,349

Branches (units) 14,756

Profit3 (EUR million) 5,351

Highlights

Customers (million)2 102,1

Total Assets (EUR trillion) 1.25

(1) Over operating areas attributable profit

Santander: key figures

USA

UK

Germany

Other Europe

Poland

Mexico

Brazil

OtherLatam

Chile

Spain

Attributable profit Q1'12(1)

Portugal

56% emergingmarkets

Focused on retail banking:We are the international Group with the

largest branch network

3

OPERATIONAL INTEGRATION

SUBSIDIARY MODEL with financialautonomy

Santander: our model

3

UK US Mexico Brazil ChilePortugal

…

Santander Group

STRONG LOCAL PRESENCE/ economies

of scale (“vertical strategy”)

1 2

3

4

LOCAL CRITICAL MASS is key to

achieve superior profitability…

… especially in the new

environment; ROE pressures, regulatory costs

We are focused on 10 key large markets

STRONG LOCAL PRESENCE: dominant local positions in large and attractive countries

1

710

2

3

4

85

1

6 9

Avoid subscalebusinesses

(1) Loans + deposits (balance sheet funds) + mutual funds(2) Santander Consumer not included (in Spain: 2.0 million customers and 73 branches; Portugal: 0.3 million customers and 7 branches)(3) Mortgages and retail savings (4) Present in 14 countries. Loyalty cards not included under customers(5) Excluding public-sector banks (6) Only data from Sovereign Bank. Customer-homes data (7) Attributable profit and branches. Data as of Dec'11 not including Kredyt Bank.

6.USA7.Germany8. Argentina9. Poland10.Portugal

5

UK US Mexico Brazil ChilePortugal…

Each subsidiary is responsible for its own capital and funding needs:

No cross border funding

Santander Group

Financial independent subsidiaries’ based model…2

6

USA0.3 Bn

México2 Bn

México2 Bn

Brasil7 Bn

Chile1 Bn

San13 Bn

BAN3 BnBAN3 Bn

UK13 Bn

SCF EU0.4 Bn

TOTAL40 Bn €

0.1 Bn

BZ WBK

0.1 Bn

M/L term issuance2 – 2011

(1) Including retail commercial paper (2) Excluding securitisations and structured funding.

Data in euros, 2011

Marketdiversification: aprox. 1/3 GBP

area; 1/3 EUR area; 1/3 USD area

… with diversified funding sources

• Business units mostly funded through LOCAL DEPOSITS…

• … additional funding raised in LOCAL WHOLESALE MARKETS (stand-alone basis)

� Own ratings and programs in each subsidiary

7

INCREASED INTEGRATION…

Spain Portugal UK US Brazil Mexico

GBMGBM

Asset ManagementAsset Management

CardsCards

SegurosInsurance

IT/OPs - Medios

Funciones soporteSupport Functions: Finance, Risks

Corporate Management

Technology and Operations

Strong operational integration…

Continue to exploit intra-group synergies:

Costs synergies: a) IT infrastructureb) Application development /

maintenancec) Operations (back-office)d) Centralised purchases

Revenue synergies:a) Shared commercial modelb) Product factories (e.g., cards)c) Distribution model of products

originated in global factories (insurance, AM, treasury)

Governance synergies:a) Shared risk management systemsb) Shared financial management systemsc) Shared accounting / MIS systemsd) Shared corporate governance systems

3

8

66,1

64,1

61,4

59,7

56,3

54,754,1

45,544,6

41,7

44,9

43,3

49,7

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Positive jaws are key to remain competitive; going forward, we expect our efficiency ratio to

continue to improve

This allows us to reach “best in class” status in terms of cost efficiency….

In percentage

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

Group efficiency ratio*

(*) Efficiency ratio with amortisations.

Abbey’s entry

B. Real’s entry

Sovereign, A&L and GE’s entry

9

Our model is producingtangible results…

10Healthy volume growth in emerging markets…… in spite of the deleveraging trend in Spain / Portugal

Spain-gross loans

Res of LatAmBrazil Poland

Emerging markets-gross loans

Loan / deposits ratio:

From 178% in 2008…

… to 111% in 2012

11

While our results have been under pressure in Spain and Portugal…

…. the rest of the Group has continued to perform well

Group PBT- Operating units

Spain +Portugal

Rest

7,483 8,512 10,250

12,866 12,262

4,222 4,413

4,548

2,357 1,292

2007 2008 2009 2010 2011

12

Final remarks

1. STRONG LOCAL PRESENCE (local economies of scale)

2. FINANCIAL AUTONOMY: local capital + local fundingsources (deposits / wholesale funding) + local supervision…

3. … WITH STRONG OPERATIONAL INTEGRATION (intra-group synergies)

• Resilient model during the financial crisis

• No «contagion» from the eurozone crisis.

• Volume growth reflects local demand / local market conditions

• Loans in e.g., LatAm or Poland, continue to grow, while Spain continues to deleverage

OUR MODEL

TANGIBLE RESULTS