(incorporated with limited liability under the laws of ... · pdf file24,000,000 series 5...

LISTING PROSPECTUS

$600,000,000

24,000,000 Series 5 Preferred Securities

Santander Finance Preferred, S.A. Unipersonal (incorporated with limited liability under the laws of Spain)

6.50% Non-Cumulative Guaranteed Series 5 Preferred Securities (par value $25.00 per security)

fully and unconditionally guaranteed as described herein by Banco Santander Central Hispano, S.A. (incorporated with limited liability under the laws of Spain)

Santander Finance Preferred, S.A Unipersonal (the "Issuer") has issued 24,000,000 6.50% Non Cumulative Guaranteed Series 5 Preferred Securities (the "Series 5 Preferred Securities"). Non cumulative preferential cash distributions on these securities accrues from the date of original issuance and be payable, in United States dollars, quarterly in arrears on January 31, April 30, July 31 and October 31 of each year, commencing April 30, 2007. See "Description of the Series 5 Preferred Securities—Distributions".

The Series 5 Preferred Securities may be redeemed by the Issuer, subject to obtaining the prior consent of the Bank of Spain, in whole but not in part, on or after January 31, 2017. They are redeemable at $25.00 per Series 5 Preferred Security plus the accrued and unpaid distribution for the then-current distribution period to the date fixed for redemption. See "Description of the Series 5 Preferred Securities—Optional Redemption".

The liquidation preference of each Series 5 Preferred Security is $25.00 plus the accrued and unpaid distribution for the then-current distribution period, subject to limitations in the event of liquidation of Banco Santander Central Hispano, S.A. (the "Guarantor"). See "Description of the Series 5 Preferred Securities—Rights upon Liquidation".

Payment of cash distributions and payments upon liquidation or redemption with respect to the Series 5 Preferred Securities are unconditionally guaranteed by the Guarantor to the extent described under "Description of the Guarantee".

We have agreed to file an exchange offer registration statement pursuant to a registration rights agreement. See "Exchange Offer and Registration Rights" and "Taxation—Spanish Tax Considerations."

Investing in the Series 5 Preferred Securities involves risks, see "Risk Factors" beginning on page 15.

Under Spanish law, the Issuer and the Guarantor are required to provide to the Spanish tax authorities certain information relating to owners of beneficial interests in the Series 5 Preferred Securities and, under certain circumstances, are required to withhold taxes from distributions on and in relation to exchanges of the Series 5 Preferred Securities. See "Spanish Withholding Tax Requirements."

Neither the Series 5 Preferred Securities nor the Guarantee has been registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and the Series 5 Preferred Securities are being offered only to "qualified institutional buyers" (as defined in Rule 144A under the Securities Act ("Rule 144A")) under Rule 144A. For a description of certain restrictions on transfer of the Series 5 Preferred Securities, see "Transfer Restrictions."

This Listing Prospectus, which includes Annex A, Annex B and Exhibits I, II and III (the "Listing Prospectus") constitutes listing particulars for the purposes of Chapter 4 of the Listing Rules (the "Listing Rules") of the United Kingdom Financial Services Authority (the "FSA") and has been approved by the FSA, pursuant to Part VI of the Financial Services and Markets Act 2000 (the "FSMA"), in its capacity as competent authority in the United Kingdom, for the purpose of giving information with regard to Santander Finance Preferred, S.A. Unipersonal and Banco Santander Central Hispano, S.A. and the Series 5 Preferred Securities.

Application has been made to the FSA in its capacity as competent authority under the FSMA (the "UK Listing Authority") for the Series 5 Preferred Securities to be admitted to the official list of the UK Listing Authority (the "Official List") and to the London Stock Exchange plc (the "London Stock Exchange") for such Series 5 Preferred Securities to be admitted to trading on the Professional Securities Market of the London Stock Exchange. References in this Listing Prospectus to Series 5 Preferred Securities being "listed" (and all related references) shall mean that such Series 5 Preferred Securities have been admitted to the Official List and have been admitted to trading on the Professional Securities Market of the London Stock Exchange.

The date of this Listing Prospectus is April 12, 2007

RESPONSIBILITY STATEMENT

Each of the Issuer and Banco Santander accept responsibility for the information contained in this Listing Prospectus. Each of the Issuer and Banco Santander confirm that, having taken all reasonable care to ensure that such is the case, the information contained in this Listing Prospectus is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents shall be deemed to be incorporated in, and to form part of, the Listing Prospectus:

1. the Guarantor's 2005 Annual Report for the year ended 31 December 2005 (the "2005 Annual Report"), which includes the consolidated and non-consolidated financial statements, the management report, the balance sheet and income statement of the Guarantor and the auditor's report thereon; and the Guarantor's 2004 Annual Report for the year ended 31 December, 2004 (the "2004 Annual Report"), which includes the consolidated and non-consolidated financial statements, the management report, the balance sheet and income statement of the Guarantor and the auditor's report thereon;

2. the interim consolidated unaudited financial statements of the Group for the twelve months ended 31 December, 2006 (the "December 2006 Interim Report"); and

3. the Issuer's abridged Financial Statements and Auditor's Report for the period from 27 February, 2004 to 31 December, 2004 (the "Issuer's 2004 Financial Statements"), and the Financial Statements, Management Report and Auditor's Report of the Issuer for the year ended December 31, 2005 (the "Issuer's 2005 Financial Statements");

provided that any statement contained herein or in a document all or the relevant portion of which is incorporated by reference herein shall be deemed to be modified or superseded for the purpose of this Listing Prospectus to the extent that a statement contained in any subsequent document all or the relative portion of which is also incorporated by reference herein by way of a supplement prepared in accordance with Chapter 4 of the Listing Rules modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified or superseded shall not, except as so modified or superseded, constitute part of this Listing Prospectus.

Any information incorporated by reference in the documents listed at (1) to (3) above do not form part of this Listing Prospectus.

From the date hereof and throughout the period that the Series 5 Preferred Securities remain listed on the Professional Securities Market of the London Stock Exchange, the Issuer and the Guarantor will, at the specified offices of the Registrar, Transfer Agent and Paying Agent (as defined below) provide, free of charge, upon oral or written request, a copy of this Listing Prospectus (and any documents incorporated by reference in this Listing Prospectus). Written or oral requests for such documents should be directed to the specified office of the Issuer or to the Registrar, Transfer Agent and Paying Agent (as defined below).

REVIEW BY THE SECURITIES AND EXCHANGE COMMISSION

We have agreed to file an exchange offer registration statement with the United States' Securities and Exchange Commission ("SEC") pursuant to a Registration Rights Agreement. See "Exchange Offer and Registration Rights." In addition, our Annual Report on Form 20-F for the year ended December 31, 2005 is currently under review by the SEC. In the course of the review by the SEC of the registration statement or our Annual Report on Form 20-F, we may be required to make changes to our historical financial statements and other information. Accordingly, comments by the SEC on the registration statement may require modification or reformulation of our financial statements and other information we present in this Listing Prospectus or incorporate by reference.

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TABLE OF CONTENTS Page

TABLE OF CONTENTS ....................................................................................................................................... 3 NOTICE TO INVESTORS .................................................................................................................................... 4 SPANISH WITHHOLDING TAX REQUIREMENTS ......................................................................................... 5 PRESENTATION OF INFORMATION................................................................................................................ 5 WHERE YOU CAN FIND MORE INFORMATION ........................................................................................... 6 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS.................................. 6 ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES .................................................................................. 8 SUMMARY ........................................................................................................................................................... 9 RISK FACTORS .................................................................................................................................................. 15 THE ISSUER........................................................................................................................................................ 23 BANCO SANTANDER CENTRAL HISPANO, S.A. AS GUARANTOR......................................................... 27 LITIGATION AND GENERAL INFORMATION ............................................................................................. 48 RECENT DEVELOPMENTS.............................................................................................................................. 54 USE OF PROCEEDS ........................................................................................................................................... 58 SELECTED CONSOLIDATED FINANCIAL INFORMATION ....................................................................... 59 DESCRIPTION OF THE SERIES 5 PREFERRED SECURITIES ..................................................................... 66 DESCRIPTION OF THE GUARANTEE ............................................................................................................ 73 EXCHANGE OFFER AND REGISTRATION RIGHTS .................................................................................... 77 TAXATION ......................................................................................................................................................... 81 PLAN OF DISTRIBUTION................................................................................................................................. 90 TRANSFER RESTRICTIONS............................................................................................................................. 91 ANNEX A .............................................................................................................................................................. 1 ANNEX B .............................................................................................................................................................. 1

In this Listing Prospectus, the words "Santander," "Banco Santander," "Guarantor," "Bank," "we," "our," "ours" and "us" refer to Banco Santander Central Hispano, S.A. The words "Group" and "Santander Group" refer to Banco Santander Central Hispano, S.A. and its other banking and financial subsidiaries. The word "Issuer" refers to Santander Finance Preferred, S.A. Unipersonal.

Unless otherwise indicated, "securityholder" refers to the registered holder of any Series 5 Preferred Security. "Beneficial Owner" refers to an owner of a beneficial interest in any Series 5 Preferred Security.

Unless otherwise indicated, all references in this Listing Prospectus to "initial purchaser" refer to Lehman Brothers Inc.

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NOTICE TO INVESTORS

This Listing Prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any Series 5 Preferred Securities by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation. Neither the delivery of this Listing Prospectus nor any sale made under it implies that there has been no change in our affairs or that the information in this Listing Prospectus is correct as of any date after the date of this Listing Prospectus.

You must (1) comply with all applicable laws and regulations in force in any jurisdiction in connection with the possession or distribution of this Listing Prospectus and the purchase, offer or sale of the Series 5 Preferred Securities and (2) obtain any consent, approval or permission required to be obtained by you for the purchase, offer or sale by you of the Series 5 Preferred Securities under the laws and regulations applicable to you in force in any jurisdiction to which you are subject or in which you make such purchases, offers or sales. Neither the Issuer, the Guarantor nor the initial purchaser shall have any responsibility therefor. See "Transfer Restrictions" for information concerning some of the transfer restrictions applicable to the Series 5 Preferred Securities.

You acknowledge that:

• you have not relied on the initial purchaser or any person affiliated with the initial purchaser in connection with your investigation of the accuracy of information contained in this Listing Prospectus or your investment decision; and

• no person has been authorized to give any information or to make any representation concerning us or the Series 5 Preferred Securities, other than as contained in this Listing Prospectus and, if given or made, any such other information or representation should not be relied upon as having been authorized by us or the initial purchaser.

In making an investment decision, you must rely on your own examination of our company and the terms of the offering, including the merits and risks involved. The Series 5 Preferred Securities have not been recommended by any U.S. federal or state securities commission or regulatory authority of the United States. Furthermore, these authorities have not confirmed the accuracy or determined the adequacy of this document. Any representation to the contrary is a criminal offense. The Series 5 Preferred Securities may not be transferred or resold, except as permitted under the registration rights agreement entered into by us and the initial purchaser, the Securities Act and applicable U.S. state securities laws pursuant to registration or exemption therefrom.

The initial purchaser will provide you with a copy of this Listing Prospectus and any related amendments or supplements. By purchasing the Series 5 Preferred Securities, you will be deemed to have acknowledged that you have reviewed this Listing Prospectus and the documents incorporated by reference herein and have had an opportunity to request, and have received, all additional information that you need from us. You further acknowledge that the initial purchaser is not responsible for, and is not making any representation to you concerning, our future performance or the accuracy or completeness of this Listing Prospectus.

Neither the Series 5 Preferred Securities nor the Guarantee have been registered under the Securities Act or the securities laws of any state of the United States, and may not be offered or sold within the United States (except to "qualified institutional buyers" (as defined in Rule 144A under the Securities Act) under Rule 144A), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Issuer and the Guarantor have not registered the Series 5 Preferred Securities or the Guarantee under the Securities Act. The Issuer and the initial purchaser have entered into a registration rights agreement with respect to the Series 5 Preferred Securities. See "Exchange Offer and Registration Rights" for more information.

You should consult with your own advisors as to legal, tax, business, financial and related aspects of an investment in the Series 5 Preferred Securities. You must comply with all laws applicable in any place in which you buy, offer or sell the Series 5 Preferred Securities or possess or distribute this Listing Prospectus and you must obtain all applicable consents and approvals, and none of the Issuer, the Guarantor or the initial purchaser shall have any responsibility for any of the foregoing legal requirements.

You may not use any information herein for any purpose other than considering an investment in the Series 5 Preferred Securities.

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SPANISH WITHHOLDING TAX REQUIREMENTS

Under Spanish law, distributions in respect of the Series 5 Preferred Securities as well as imputed income deriving from the exchange of the Series 5 Preferred Securities in relation to an exchange offer will be subject to withholding tax in Spain, currently at the rate of 18%, in the case of (a) individual holders (as defined herein) who are resident for tax purposes in Spain; and (b) holders who receive payments through a Tax Haven (as defined in Royal Decree 1080/1991, of 5th July, as amended). Each of the Issuer and the Guarantor is required pursuant to Spanish law to submit to the Spanish tax authorities certain details relating to Beneficial Owners who receive distributions on the Series 5 Preferred Securities or obtain imputed income deriving from the exchanges of the Series 5 Preferred Securities in relation to an exchange offer. Beneficial Owners in respect of whom such information is not provided to the Issuer or the Guarantor in accordance with procedures described herein will receive payments net of Spanish withholding tax, currently at the rate of 18%. Neither the Issuer nor the Guarantor will pay additional amounts in respect of any such withholding tax in any of the above cases. See "Taxation—Spanish Tax Considerations—Evidencing of Beneficial Owner Residency in Connection with Distributions and Income Obtained from the Exchange of Series 5 Preferred Securities for Exchange Series 5 Preferred Securities".

The Issuer and the Guarantor have arranged certain procedures with Acupay System LLC ("Acupay") and DTC that will facilitate the collection of the required Beneficial Owner information. The procedures arranged by Acupay and DTC are intended to facilitate the collection of information regarding the identity and residence of Beneficial Owners who (i) are exempt from Spanish withholding tax requirements and therefore entitled to receive payments in respect of the Series 5 Preferred Securities free and clear of Spanish withholding taxes and (ii) (a) are direct participants in DTC, (b) hold their interests through securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a direct or indirect custodial relationship with a direct participant in DTC (each such entity an "indirect DTC participant") or (c) hold their interests through direct DTC participants. These procedures are set forth in Annexes A and B to this Listing Prospectus.

Such procedures may be amended to comply with Spanish laws and regulations or any judicial or administrative interpretation thereof. The description of these procedures contained in this Listing Prospectus is a summary only. Beneficial Owners must seek their own tax advice to ensure that they comply with all procedures with respect to providing Beneficial Owner information. None of the Issuer, the Guarantor, the initial purchaser, Acupay or DTC assume any responsibility therefor.

DTC is under no obligation to continue to perform the tax certification procedures and such procedures may be modified or discontinued at any time. In addition, DTC may discontinue providing its services as securities depositary with respect to the Series 5 Preferred Securities at any time by giving reasonable notice to us.

If DTC or the direct or indirect participants in DTC are unable to facilitate the collection of such information, the Issuer may attempt to remove the Series 5 Preferred Securities from the DTC clearing system and this may affect the liquidity of the Series 5 Preferred Securities. Provision has been made for the Series 5 Preferred Securities to be represented by certificated Series 5 Preferred Securities in the event that the Series 5 Preferred Securities cease to be held through DTC. See "Description of the Series 5 Preferred Securities—Form, Denomination, Transfer and Registration".

The Issuer and the Guarantor, as applicable, may, in the future, withhold amounts from payments for the benefit of Beneficial Owners who are subject to Corporate Income Tax in Spain if the Spanish tax authorities determine that the Series 5 Preferred Securities do not comply with exemption requirements specified in the Reply to a Consultation of the Directorate General for Taxation (Dirección General de Tributos) dated July 27, 2004 or otherwise require such withholding to be made. If this were to occur, neither the Issuer nor the Guarantor will pay additional amounts in respect of such withholding. See "Taxation—Spanish Tax Considerations—Legal entities with tax residency in Spain—Corporate Income Tax (Impuesto sobre Sociedades)".

PRESENTATION OF INFORMATION

We publish our consolidated financial statements in Euros and to the extent that any amounts reflected in such financial statements are stated in United States dollars or any other currency, such amounts have been translated from Euros at an assumed rate and solely for convenience and should not be construed as

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representations that such United States dollars or other currency actually represent such dollar or other currency amounts or could be converted into such dollars or other currency at the rate indicated.

WHERE YOU CAN FIND MORE INFORMATION

Banco Santander file annual and periodic reports and other information with the SEC.

You may read and copy any document Banco Santander file at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at l-800-SEC-0330 for further information on the operation of the public reference rooms. Our SEC filings are also available to the public over the Internet on the SEC's Electronic Delivery Gathering, Analysis and Retrieval (EDGAR) System which can be found at the SEC's website at http://www.sec.gov.

See page 2 for a list of documents incorporated by reference into this Listing Prospectus.

With the exception of the documents specifically incorporated by reference in this Listing Prospectus as set forth above, material contained on or accessible through our website is not incorporated into this Listing Prospectus. You may also request a copy of our filings at no cost, by writing or calling us at the following addresses:

Banco Santander Central Hispano, S.A. New York Branch 45 East 53rd Street

New York, New York 10022 (212) 350-3500

or

Banco Santander Central Hispano, S.A. Ciudad Grupo Santander

Avenida de Cantabria 28660 Boadilla del Monte

Madrid, Spain Attn: Shareholders' Office

(011) 34-91-259-6520

You should also know that we have agreed that, if at any time we are not subject to the informational requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") at any time while the Series 5 Preferred Securities constitute "restricted securities" within the meaning of the Securities Act, we will furnish to holders and beneficial owners of the Series 5 Preferred Securities and to prospective purchasers designated by such holders the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Listing Prospectus and the information incorporated by reference herein contains statements that constitute "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding:

• exposure to various types of market risks;

• management strategy;

• capital expenditures;

• earnings and other targets; and

• asset portfolios.

Forward-looking statements may be identified by words such as "expect," "project," "anticipate," "should," "intend," "probability," "risk," "VaR," "DCaR," "ACaR," "target," "goal," "objective," "estimate," "future" and similar expressions. The Issuer and the Guarantor include forward-looking statements in this Listing Prospectus and the information incorporated by reference herein. Forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements.

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http://www.sec.gov/

You should understand that adverse changes in the following important factors, in addition to those discussed in the "Risk Factors" section of this Listing Prospectus, could affect the Bank's future results and could cause those results or other outcomes to differ materially from those anticipated in any forward-looking statement:

Economic and Industry Conditions

• exposure to various types of market risks, principally including interest rate risk, foreign exchange rate risk and equity price risk;

• general economic or industry conditions in Spain, the United Kingdom, other European countries, Latin America, the United States and the other areas in which the Bank has significant business activities or investments;

• the effects of a decline in real estate prices, particularly in Spain and the UK;

• monetary and interest rate policies of the European Central Bank and various central banks;

• inflation or deflation;

• the effects of non-linear market behavior that cannot be captured by linear statistical models, such as the VaR/DCaR/ACaR model the Bank uses;

• changes in competition and pricing environments;

• the inability to hedge some risks economically;

• the adequacy of loss reserves;

• acquisitions or restructurings;

• changes in demographics, consumer spending or saving habits; and

• changes in competition and pricing environments as a result of the progressive adoption of the internet for conducting financial services and/or other factors.

Political and Governmental Factors

• political stability in Spain, the United Kingdom, the United States, other European countries and Latin America; and

• changes in Spanish, UK, US, EU or other laws, regulations or taxes.

Transaction and Commercial Factors

• the Bank's ability to integrate successfully its acquisitions, including Abbey National Plc ("Abbey"), and the challenges inherent in diverting management's focus and resources from other strategic opportunities and from operational matters while the Bank integrates these acquisitions; and

• the outcome of the Bank's negotiations with business partners and governments.

Operating Factors

• technical difficulties and the development and use of new technologies by the Bank and its competitors;

• the impact of changes in the composition of the Bank's balance sheet on future net interest income; and

• potential losses associated with an increase in the level of substandard loans or non-performance by counterparties to other types of financial instruments.

The forward-looking statements contained in this Listing Prospectus and the information incorporated by reference herein speak only as of the date of this Listing Prospectus and the reports incorporated by reference herein, respectively. Neither the Issuer nor the Guarantor undertake to update any forward-looking statement to reflect events or circumstances after such dates or to reflect the occurrence of unanticipated events.

Neither the Issuer nor the Guarantor undertake any obligation to release publicly the results of any future revisions the Issuer or the Guarantor may make to forward-looking statements to reflect events or circumstances after the date of this Listing Prospectus or to reflect the occurrence of unanticipated events.

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ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES

The Issuer and the Guarantor are limited liability companies (sociedades anónimas) organized under the laws of the Kingdom of Spain. All of the Issuer's directors and substantially all of the executive officers and directors of the Bank, and certain of the experts named in this Listing Prospectus, are not residents of the United States and all or a substantial portion of the assets of the Guarantor and the Issuer's and their respective directors and officers are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons with respect to matters arising under the Securities Act or to enforce against them judgments of courts of the United States predicated upon civil liability under the Securities Act. There is doubt as to the enforceability in Spain in original actions or in actions for enforcement of judgments of United States courts, of liabilities predicated solely upon the securities laws of the United States. The Guarantor has expressly submitted to the non-exclusive jurisdiction of New York State and United States federal courts sitting in New York City for the purpose of any suit, action or proceeding arising out of the Guarantee and has appointed Banco Santander Central Hispano, S.A., New York Branch, as its agent in New York City to accept service of process in any such action.

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SUMMARY

This Summary must be read as an introduction to this Listing Prospectus. Any decision to invest in the Series 5 Preferred Securities should be based on a consideration of this Listing Prospectus as a whole, including the documents incorporated by reference, by any investor. No civil liability attaches to the Issuer in respect of this Summary, including any translation thereof, unless it is misleading, inaccurate or inconsistent when read together with the other parts of this Listing Prospectus. Where a claim relating to information contained in this Listing Prospectus is brought before a Court in an European Economic Area member state (each, an "EEA State"), the plaintiff may, under the national legislation of the EEA State where the claim is brought, be required to bear the costs of translating the Listing Prospectus before the legal proceedings are initiated.

The cross references in this Summary to sections in the Listing Prospectus are included for informational purposes only and do not form part of this Summary for purposes of the Listing Rules.

Issuer .............................................................Santander Finance Preferred, S.A. Unipersonal is a wholly owned subsidiary of the Guarantor registered as a company with limited liability under the laws of Spain, being its exclusive activity to issue preferred securities in various markets and deposit the net proceeds with the Bank. The Issuer's share capital is €150,500. The Issuer has no material assets other than inter-company debt with affiliates and has no subsidiary companies. There are four directors on the Board of Directors of the Issuer, please see "The Issuer" below for more information.

Guarantor.......................................................Banco Santander Central Hispano, S.A. is incorporated under the laws of Spain and its activities are subject to special Spanish legislation governing credit institutions and the supervision, control and regulation of the Bank of Spain. The Guarantor, together with its subsidiaries, operate principally in Spain, the United Kingdom, other European countries and Latin America offering a wide range of financial products. At December 31, 2005 the Santander Group had €809,107 million total assets and net profit stood at €6,220 million. As of December 31, 2005 Banco Santander's paid-up share capital was EUR3,127,148,289.50, such share capital has not changed from that date. There are nineteen directors on the Board of Directors of the Guarantor, please see "Administrative, Management and Supervisory Bodies" below for more information.

Arranger.........................................................Lehman Brothers Inc. 745 Seventh Avenue New York, New York 10091

USA

Registrar, Transfer Agent and Paying Agent.The Bank of New York

101 Barclay Street New York, New York 10286 USA

Auditors .........................................................Deloitte, S.L. Plaza Pablo Ruiz Picasso, 1

Madrid Spain

Securities Offered ..........................................$600,000,000 6.50% Non-Cumulative Guaranteed Series 5 Preferred Securities (par value U.S.$25.00 per security)

Issue Price......................................................U.S.$25.00 per security

Distributions Payable on the Securities .........Fixed rate of 6.50% per annum.

Day Count Fraction .......................................30/360

Distributions ..................................................Non-cumulative cash Distributions on the Series 5 Preferred Securities accrue from January 31, 2007 and are payable quarterly in arrears on January 31, April 30, July 31 and October 31 in each year, commencing on April 30, 2007.

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Distributions on the Series 5 Preferred Securities are limited by the amount of the Distributable Profits of the Bank for the previous year and to any limitations that may be imposed by Spanish banking regulations on capital adequacy for credit institutions, as determined in accordance with guidelines and requirements of the Bank of Spain and other Spanish law as in effect from time to time. For more information see "Description of the Series 5 Preferred Securities - Distributions" below.

Except as provided in the section referred to in the above paragraph, the holders of the Series 5 Preferred Securities are not entitled to share in the profits of the Issuer.

Issue Date ......................................................January 31, 2007

Yield ..............................................................6.50 per cent.

Offering .........................................................The Series 5 Preferred Securities have been offered and sold only to "qualified institutional buyers" (as defined in Rule 144A under the Securities Act), and are subject to certain restrictions on transfer. See "Transfer Restrictions".

Optional Redemption.....................................The Series 5 Preferred Securities are redeemable, at the option of the Issuer, subject to the prior consent of the Bank of Spain, in whole but not in part, on or after January 31, 2017 at the redemption price of U.S.$25.00 per Series 5 Preferred Security, plus the accrued and unpaid Distribution for the then-current Distribution Period to the date fixed for redemption. For more information see "Description of the Series 5 Preferred Securities – Optional Redemption" below.

Ranking of the Securities...............................The Series 5 Preferred Securities will rank (a) junior to all liabilities of the Issuer including subordinated liabilities; (b) pari passu with each other and with any other series of Preferred Securities of the Issuer; and (c) senior to the Issuer's ordinary shares.

Form of the Securities....................................The Series 5 Preferred Securities have been issued in registered form represented by two Global Preferred Security Certificates, deposited with, or on behalf of, DTC and registered in the name of DTC or its nominee. No direct participant, indirect participant or other person is entitled to have Series 5 Preferred Securities registered in its name, receive or be entitled to receive physical delivery of Series 5 Preferred Securities in definitive form or be considered the owner or holder of the Series 5 Preferred Securities. See "Description of the Series 5 Preferred Securities – Form of Series 5 Preferred Securities; Book-entry System"

Status of the Guarantee..................................Banco Santander, as Guarantor, has unconditionally and irrevocably guaranteed the payment of Distributions, the Liquidation Distribution and the redemption price with respect to the Series 5 Preferred Securities, subject, in the case of Distributions, to the limitations on distributions referred to above. For more information see "Description of the Guarantee".

The obligations of the Guarantor under the Guarantee constitute an unsecured obligation of the Guarantor and will rank junior to all liabilities of the Guarantor, including subordinated liabilities (other than any guarantee or contractual right expressly ranking equally with or subordinated to the Guarantee); will rank pari passu with the most senior Preferred Securities issued by the Guarantor and any obligations of the Guarantor under any guarantee issued by it relating to any Preferred Securities issued by any Subsidiary; and will rank senior to the Guarantor's ordinary shares.

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Beneficial owner Identification Requirements under Spanish Tax Law ..........Under Spanish Law 13/1985 (as amended by Law 19/2003 and

Law 23/2005) and Royal Decree 2281/1998, as amended by Royal Decree 1778/2004, the Issuer and the Guarantor are required to provide to the Spanish tax authorities certain information relating to Beneficial Owners obtaining income on the Series 5 Preferred Securities. This information includes the identity and country of residence of Beneficial Owners and the amount of income received by such Beneficial Owners, and with respect to each Distribution Payment Date, must be collected on or prior to each Distribution Record Date and filed by the Issuer and the Guarantor with the Spanish tax authorities on an annual basis.

The delivery of such information, while the Series 5 Preferred Securities are in global form, shall generally be made through the relevant participants in DTC. The Issuer will withhold at the then-applicable rate (currently 18%) from any Distribution payment or imputed income derived from the exchange of the Series 5 Preferred Securities for Exchange Series 5 Preferred Securities as to which the required information has not been provided or the required procedures have not been followed. See "Taxation — Spanish Tax Considerations — Evidencing of Beneficial Owner Residency in Connection with Distributions and Income Obtained from the Exchange of Series 5 Preferred Securities for Exchange Series 5 Preferred Securities".

Voting Rights.................................................Holders of the Series 5 Preferred Securities do not have any voting rights unless either the Issuer or the Bank, under the Guarantee, fails to pay Distributions in full on the Series 5 Preferred Securities for 4 consecutive distribution periods. In such an event, the holders of outstanding Series 5 Preferred Securities will have limited rights to vote. For more information see "Description of the Series 5 Preferred Securities – Voting Rights" below.

Listing ...........................................................Application has been made for the Series 5 Preferred Securities to be admitted to the Official List and to be admitted to trading on the London Stock Exchange's Professional Securities Market.

Provided that the Series 5 Preferred Securities meet the minimum listing requirements of the New York Stock Exchange, the Issuer and the Guarantor will use their reasonable best efforts to list the Series 5 Preferred Securities on the New York Stock Exchange within 30 days following an Exchange Offer Registration Statement being declared effective.

Fees and Commissions ..................................The Fees of the FSA and the London Stock Exchange in relation to such application amount to £6,925. The estimated total expenses relating to the issue of the Series 5 Preferred Securities are approximately U.S.$ 500,000 (excluding the fees of the FSA and the LSE). The total commissions paid in relation to the issue of the Series 5 Preferred Securities were U.S.$12,000,000.

Net Proceeds..................................................U.S.$ 600,000,000 (commissions paid separately) Date of Purchase Agreement ........................January 16, 2007

ISIN and CUSIP: ...........................................US80281R5081 80281R508

Credit Ratings................................................The Series 5 Preferred Shares have been rated A2 by Moody's Investors Service Inc., A by Standard and Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., and A+ by Fitch Ratings.

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Use of Proceeds .............................................The net proceeds of the issue of the Series 5 Preferred Securities have been deposited on a subordinated, permanent basis with the Guarantor, and will be used for general corporate purposes and to further strengthen the capital base of the Group.

Governing Law..............................................The Guarantee is governed by, and shall be construed in accordance with, the laws of the State of New York. The ranking of the Guarantee is governed by Spanish law.

The Series 5 Preferred Securities were authorised by the resolutions adopted by the shareholders and the board of directors on January 15, 2007 and are governed by Spanish law.

Transfer Restrictions…………………………….. The Series 5 Preferred Securities have not been registered under the Securities Act or the laws of any state securities commission and, therefore, the Series 5 Preferred Securities may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Series 5 Preferred Securities have only been offered and sold to QIBs, (as defined below and in Rule 144A under the Securities Act) in compliance with Rule 144A under the Securities Act.

For a description of certain restrictions on transfers of the Series 5 Preferred Securities see "Transfer Restrictions" below.

Risk Factors ...................................................Investing in the Series 5 Preferred Securities involves risks. The following summary does not purport to be complete and is taken from, and is qualified in its entirety by the "Risk Factors" section below.

Risks Relating to the Group's Operations

Geographical Risk. Adverse changes affecting the economies of the countries in Europe or Latin America where the Group operates would likely have a significant adverse impact on the Group's financial condition.

Cyclical Risk. Market trends and the strength of the economy in the regions where the Group operates affect the income derived from certain of the products and services offered by the Group.

Short Term Risk. Since the Group's principal source of funds is short term deposits, a sudden shortage of these funds could increase the Group's cost of funding. Inherent Risk. Risks concerning borrower credit quality and general economic conditions are inherent in the Group's business. Real Estate Risk. Real estate mortgages are one of the Group's main assets. A strong increase in interest rates might have a significant negative impact in mortgage payment delinquency rates, which could have an adverse effect on the Group's business, financial condition and results of operation.

Market Risk. A market downturn that reduces the value of the Group's clients' portfolios, or increases in the amount of withdrawals, would reduce revenues received from asset management, private banking and custody businesses.

Market Fluctuation Risk. Protracted adverse market movements can reduce the level of activity in the market or reduce market liquidity, which can lead to material losses if deteriorating positions cannot be closed out in a timely way, especially if the market was not very liquid.

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Unidentified or Unanticipated Risks. Despite the Group's risk management policies, procedures and methods, the Group may nonetheless be exposed to unidentified or unanticipated risks.

Acquisition Risk. There can be no assurances that the Group will be successful in its plans regarding the operation of past or future acquisitions and strategic partnerships.

Competition Risk. Increased competition in the countries where the Group operates may adversely affect the Group's growth prospects and operations.

Interest Rate Risk. Interest rates are highly sensitive to factors outside the Group's control and changes in market interest rates could affect the interest rates charged on interest-earning assets differently than the interest rates paid on interest-bearing liabilities, which could result in an increase in interest expense relative to interest income, resulting in a reduction in net interest income.

Foreign Exchange Risk. Fluctuations in the value of the Euro against other currencies may adversely affect the Group's profitability and no assurance can be given that the governments of the countries in which the Group operates will not institute restrictive exchange controls.

Regulatory Framework Risk. Changes in the regulatory framework in the jurisdictions where the Group operates could adversely affect its business.

Operational Risk. Losses can result from inadequate personnel, inadequate or failed internal control processes and systems, or from external events that interrupt normal business operations.

Accounting Risk. The Group's financial statements prepared in accordance with IFRS differ from the Group's earlier financial statements prepared in accordance with Spanish GAAP, which could affect the methods used by the financial community to assess the Group's financial performance and value its publicly-traded securities.

Sarbanes-Oxley Act Implementation Risk. If the Group is not able to adequately implement the requirements of Section 404 of the Sarbanes-Oxley Act and is the subject of sanctions or investigation, the Group's results of operations and its ability to provide timely and reliable financial information may be adversely affected.

Legal and Regulatory Proceedings Risk. The Group is exposed to risk of loss from legal and regulatory proceedings.

Risks Relating to Latin America

The Group operates in nine Latin American countries, which have all experienced volatility in recent decades resulting in fluctuations in the level of deposits and in the relative economic strength of various segments of the economies to which the Group lends.

Risk Relating to the Series 5 Preferred Securities

Tax Risks. The Issuer and the Guarantor will withhold Spanish withholding tax from any payment in respect of the Series 5 Preferred Securities as to which the Beneficial Owner information has not been provided. If such withholding does occur the Beneficial Owner will have to apply for any refund to which they may be entitled.

If the Series 5 Preferred Securities are not listed on an organized market in an OECD country on any Distribution Record Date,

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distributions to Beneficial Owners not resident in Spain for tax purposes may be subject to withholding tax.

Limited Transferability Risk. The transferability of the Series 5 Preferred Securities may be limited by the absence of an active trading market and restrictions on transfer under applicable securities law.

Payment Risk. Distributions on the Series 5 Preferred Securities are not cumulative.

The Bank's obligations under the Guarantee are limited to the amounts of the payments due under the Series 5 Preferred Securities.

The Series 5 Preferred Securities and the Guarantee rank junior to any of the Issuer's and the Guarantor's present and future senior and subordinated indebtedness.

Non-payment of distributions may adversely affect the trading price of the Series 5 Preferred Securities.

Redemption Risk. The Series 5 Preferred Securities have no fixed redemption date and investors have no right to call for their redemption.

Enforcement Risk. An investor may be unable to enforce judgements obtained in U.S. courts against the Issuer and the Guarantor.

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RISK FACTORS Risk relating to the Guarantor

The risk factors set out below also relate to the Issuer, as a member of the Group.

Risks in relation to Group operations

Since the Group's loan portfolio is concentrated in Continental Europe, the United Kingdom and Latin America, adverse changes affecting the Continental European, the United Kingdom or certain Latin American economies could adversely affect the Group's financial condition.

The Group's loan portfolio is mainly concentrated in Continental Europe (in particular, Spain), the United Kingdom and Latin America. At December 31, 2005, Continental Europe accounted for approximately 49% of the Group's total loan portfolio (Spain accounted for 36% of the Group's total loan portfolio), while the United Kingdom and Latin America accounted for 39% and 12%, respectively. Therefore, adverse changes affecting the economies of Continental Europe (in particular Spain), the United Kingdom or the Latin American countries where the Group operates would likely have a significant adverse impact on the Group's loan portfolio and, as a result, on its financial condition, cash flows and results of operations.

Some of the Group's business is cyclical and the Group's income may decrease when demand for certain products or services is in a down cycle.

The level of income the Group derives from certain of its products and services depends on the strength of the economies in the regions where the Group operates and certain market trends prevailing in those areas. While the Group attempts to diversify its businesses, negative cycles may adversely affect the Group's income in the future.

Since the Group's principal source of funds is short term deposits, a sudden shortage of these funds could increase the Group's cost of funding.

Historically, the Group's principal source of funds has been customer deposits (demand, time and notice deposits). At December 31, 2005, 17.2% of these customer deposits are time deposits in amounts greater than $100,000. Time deposits have represented 51.7% (under previous Spanish GAAP) and 46.9% of total customer deposits at the end of 2003 and 2004, respectively, and 43.5% at the end of 2005. Large-denomination time deposits may be a less stable source of deposits than other type of deposits. In addition, since the Group relies heavily on short-term deposits for its funding, there can be no assurance that the Group will be able to maintain its levels of funding without incurring higher funding costs or liquidating certain assets.

Risks concerning borrower credit quality and general economic conditions are inherent in the Group's business.

Risks arising from changes in credit quality and the recoverability of loans and amounts due from counterparties are inherent in a wide range of the Group's businesses. Adverse changes in the credit quality of the Group's borrowers and counterparties or a general deterioration in Spanish, UK, Latin American or global economic conditions, or arising from systemic risks in the financial systems, could reduce the recoverability and value of the Group's assets and require an increase in the Group's level of provisions for credit losses. Deterioration in the economies in which the Group operates could reduce the profit margins for the Group's banking and financial services businesses.

Increased exposure to real estate makes the Group more vulnerable to developments in this market.

The decrease in interest rates globally has caused an increase in the demand of mortgage loans in the last few years. This has had repercussions in housing prices, which have also risen significantly. As real estate mortgages are one of the Group's main assets, comprising 53% of the Group's loan portfolio at December 31, 2005, the Group is currently highly exposed to developments in real estate markets. A strong increase in interest rates might have a significant negative impact in mortgage payment delinquency rates. An increase in such delinquency rates could have an adverse effect on the Group's business, financial condition and results of operations.

The Group may generate lower revenues from brokerage and other commission- and fee-based businesses.

Market downturns are likely to lead to declines in the volume of transactions that the Group executes for its customers and, therefore, to declines in the Group's non-interest revenues. In addition, because the fees that the Group charges for managing its clients' portfolios are in many cases based on the value or performance of those portfolios, a market downturn that reduces the value of the Group's clients' portfolios or increases the amount of withdrawals would reduce the revenues the Group receives from its asset management and private banking and custody businesses.

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Even the absence of a market downturn, below-market performance by the Group's mutual funds may result in increased withdrawals and reduced inflows, which would reduce the revenue the Group receives from its asset management business.

Market risks associated with fluctuations in bond and equity prices and other market factors are inherent in the Group's business. Protracted market declines can reduce liquidity in the markets, making it harder to sell assets and leading to material losses.

The performance of financial markets may cause changes in the value of the Group's investment and trading portfolios. In some of the Group's business, protracted adverse market movements, particularly asset price decline, can reduce the level of activity in the market or reduce market liquidity. These developments can lead to material losses if the Group cannot close out deteriorating positions in a timely way. This may especially be the case for assets of the Group for which there are not very liquid markets to begin with. Assets that are not traded on stock exchanges or other public trading markets, such as derivative contracts between banks, may have values that the Group calculates using models other than publicly quoted prices. Monitoring the deterioration of prices of assets like these is difficult and could lead to losses that the Group did not anticipate.

Despite the Group's risk management policies, procedures and methods, the Group may nonetheless be exposed to unidentified or unanticipated risks.

The Group has devoted significant resources to developing its risk management policies, procedures and assessment methods and intends to continue to do so in the future. Nonetheless, the Group's risk management techniques and strategies may not be fully effective in mitigating the Group's risk exposure in all economic market environments or against all types of risk, including risks that the Group fails to identify or anticipate. Some of the Group's qualitative tools and metrics for managing risk are based upon the Group's use of observed historical market behavior. The Group applies statistical and other tools to these observations to arrive at quantifications of its risk exposures. These tools and metrics may fail to predict future risk exposures. These risk exposures could, for example, arise from factors the Group did not anticipate or correctly evaluate in its statistical models. This would limit the Group's ability to manage its risks. The Group's losses thus could be significantly greater than the historical measures indicate. In addition, the Group's quantified modeling does not take all risks into account. The Group's more qualitative approach to managing those risks could prove insufficient, exposing it to material unanticipated losses. If existing or potential customers believe the Group's risk management is inadequate, they could take their business elsewhere. This could harm the Group's reputation as well as its revenues and profits.

The Group's acquisition of Abbey, and any future acquisitions may not be successful and may be disruptive to the Group's business.

The Group has acquired controlling interests in various companies, and more recently, the Group completed the acquisition of Abbey. Although the Group expects to realize strategic, operational and financial benefits as a result of the Abbey acquisition, the Group cannot predict whether and to what extent such benefits will be achieved. In particular, the success of the Abbey acquisition will depend, in part, on the Group's ability to realize the anticipated cost savings from assuming the control of Abbey's business. In addition, the Group will face certain challenges as the Group works to integrate Abbey's operations into its businesses. Moreover, the Abbey acquisition increased the Group's total assets by 51.7% (under previous Spanish GAAP) as of December 31, 2004, thereby presenting the Group with significant challenges as the Group works to manage the increases in scale resulting from the acquisition. The Group's failure to successfully integrate and operate Abbey, and to realize the anticipated benefits of the acquisition, could adversely affect the Group's operating, performing and financial results. Additionally, the Group may consider other strategic acquisitions and partnerships from time to time. There can be no assurances that the Group will be successful in its plans regarding the operation of past or future acquisitions and strategic partnerships.

The Group can give you no assurance that its acquisition and partnership activities will perform in accordance with the Group's expectations. Despite the Group's due diligence efforts, the Group must necessarily base any assessment of potential acquisitions and partnerships on inexact and incomplete information and assumptions with respect to operations, profitability and other matters that may prove to be incorrect. The Group can give no assurance that the Group's expectations with regards to integration and synergies will materialize.

Increased competition in the countries where the Group operates may adversely affect the Group's growth prospects and operations.

Most of the financial systems in which the Group operates are highly competitive. Recent financial sector reforms in the markets in which the Group operates has increased competition among both local and foreign financial institutions, and the Group believes that this trend will continue. In particular, price competition in Europe and Latin America has increased recently. The Group's success in the European and Latin American

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markets will depend on the Group ability to remain competitive with other financial institutions. In addition, there has been a trend towards consolidation in the banking industry, which has created larger and stronger banks with which the Group must now compete. There can be no assurance that this increased competition will not adversely affect the Group's growth prospects, and therefore its operations. The Group also faces competition from non-bank competitors, such as brokerage companies, department stores (for some credit products), leasing companies and factoring companies, mutual fund and pension fund management companies and insurance companies.

Volatility in interest rates may negatively affect the Group's net interest income and increase the Group's non-performing loan portfolio.

Changes in market interest rates could affect the interest rates charged on interest-earning assets differently than the interest rates paid on interest-bearing liabilities. This difference could result in an increase in interest expense relative to interest income leading to a reduction in the Group's net interest income. Income from treasury operations is particularly vulnerable to interest rate volatility. Since the majority of the Group's loan portfolio reprices in less than one year, rising interest rates may also bring about an increasing non-performing loan portfolio. Interest rates are highly sensitive to many factors beyond the Group's control, including deregulation of the financial sector, monetary policies, domestic and international economic and political conditions and other factors.

Foreign exchange rate fluctuations may negatively affect the Group's earnings and the value of its assets and shares.

In the ordinary course of the Group's business, we have a percentage of the Group's assets and liabilities denominated in currencies other than the euro. Fluctuations in the value of the euro against other currencies may adversely affect the Group's profitability. For example, the appreciation of the euro against some Latin American currencies and the U.S. dollar will depress earnings from the Group's Latin American operations, and the appreciation of the euro against the sterling will depress earnings from the Group's UK operations. Additionally, while most of the governments of the countries in which the Group operates have not imposed prohibitions on the repatriation of dividends, capital investment or other distributions, no assurance can be given that these governments will not institute restrictive exchange control policies in the future.

Changes in the regulatory framework in the jurisdictions where the Group operates could adversely affect its business.

A number of banking regulations designed to maintain the safety and soundness of banks and limit their exposure to risk apply in the different jurisdictions in which the Group's subsidiaries operate. Changes in regulations, which are beyond the Group's control, may have a material effect on the Group's business and operations. As some of the banking laws and regulations have been recently adopted, the manner in which those laws and related regulations are applied to the operations of financial institutions is still evolving. Moreover, no assurance can be given generally that laws or regulations will be adopted, enforced or interpreted in a manner that will not have an adverse affect on the Group's business.

Operational risks are inherent in the Group's business.

The Group's businesses depend on the ability to process a large number of transactions efficiently and accurately. Losses can result from inadequate personnel, inadequate or failed internal control processes and systems, or from external events that interrupt normal business operations.

In 2005, the Group adopted IFRS, which has affected the manner in which the Group reports its financial results, as IFRS differs in significant respects from previous Spanish GAAP.

Until December 31, 2004, the Group prepared its financial statements in accordance with previous Spanish GAAP. In June 2002, the Council of Ministers of the EU adopted new regulations requiring all listed EU companies, including Santander, to apply IFRS (previously known as "International Accounting Standards" or "IAS") in preparing their consolidated financial statements beginning January 1, 2005. Because IFRS emphasizes the measure of the fair value of certain assets and liabilities, applying these standards to our financial statements has had a considerable impact on a number of important areas, including, among others, goodwill and intangible assets, employee benefits and financial instruments, and accounting for share-based payments, long-term assets and business combinations. Because the Group's financial statements prepared in accordance with IFRS differ from the Group's financial statements prepared in accordance with previous Spanish GAAP, the methods used by the financial community to assess our financial performance and value our publicly-traded securities could be affected.

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If the Group is not able to adequately implement the requirements of Section 404 of the Sarbanes-Oxley Act and is the subject of sanctions or investigation, the Group's results of operations and its ability to provide timely and reliable financial information may be adversely affected.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the United States Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") and related regulations implemented by the SEC are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. The Group is evaluating the Group's internal control over financial reporting to allow management to report on, and the Group's registered independent public accounting firm to attest to, the Group's internal controls over financial reporting. The Group will be performing the system and process evaluation and testing (and any necessary remediation) required to comply with the management certification and auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, which the Group is required to comply with in its annual report which it will file in 2007 for the Group's 2006 fiscal year. As a result, the Group expects to incur substantial additional expenses and diversion of management's time. While the Group anticipates being able to fully implement the requirements relating to internal controls and all other aspects of Section 404 by the Group's deadline, it cannot be certain as to the timing of completion of the Group's evaluation, testing and any remediation actions or the impact of the same on its operations since there is presently no precedent available by which to measure compliance adequacy. If the Group is not able to implement the requirements of Section 404 in a timely manner or with adequate compliance, the Group might be subject to sanctions or investigation by regulatory authorities such as the SEC. Any such action could adversely affect the Group's financial results or investors' confidence in our company and could cause the price of our securities to fall. In addition, if the Group fails to develop and maintain effective controls and procedures, the Group may be unable to provide the financial information in a timely and reliable manner.

The Group is exposed to risk of loss from legal and regulatory proceedings.

The Group and its subsidiaries are the subject of a number of legal proceedings and regulatory actions. An adverse result in one or more of these proceedings could have a material adverse effect on the Group's operating results for any particular period.

Risks relating to Latin America

The Group's Latin American subsidiaries' growth, asset quality and profitability may be adversely affected by volatile macroeconomic conditions.

The economies of the 9 Latin American countries where the Group operates have experienced significant volatility in recent decades, characterized, in some cases, by slow or regressive growth, declining investment and hyperinflation. This volatility has resulted in fluctuations in the levels of deposits and in the relative economic strength of various segments of the economies to which the Group lends. Latin American banking activities (including Retail Banking, Asset Management and Private Banking and Global Wholesale Banking) accounted for €1,776 million of the Group's net attributable income for the year ended December 31, 2005 (an increase of 21% from €1,470 million for the year ended December 31, 2004). Negative and fluctuating economic conditions, such as a changing interest rate environment, impact the Group's profitability by causing lending margins to decrease and leading to decreased demand for higher margin products and services.

Additionally, the recent economic and political crisis in Argentina which led to the conversion by the Argentine government of all the U.S. dollar-denominated debt which was subject to Argentine laws and jurisdictions into Argentine peso-denominated debt had a negative impact on the Group's Argentine banking subsidiaries. The negative effects on the Group's operations in Argentina included losses generated by this forced conversion of U.S. dollar-denominated debt to Argentine pesos at below market rates, lower lending and deposit-making activities, increased restrictions on the transferability of funds and a larger number of defaults by Argentine customers. Although Argentina's economy continued to recover in 2005, and the results of operations of the Group's Argentine banking subsidiaries have also improved, it is possible that, despite its recent economic growth, Argentina could return to a period of economic and political instability. If this were to occur, the financial condition and results of operations of the Group's Argentine subsidiaries could be materially and adversely affected.

Risks Relating to the Series 5 Preferred Securities

The Issuer and the Guarantor are required to provide certain information relating to Beneficial Owners to the Spanish tax authorities. The Issuer and the Guarantor, as the case may be, will withhold Spanish withholding tax from any payment in respect of the Series 5 Preferred Securities as to which the required Beneficial Owner information has not been provided, including in connection with any imputed income arising from an exchange of the Series 5 Preferred Securities for other securities under an exchange offer.

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Under Spanish Law 13/1985 (as amended by Law 19/2003 and Law 23/2005) and Royal Decree 2281/1998 (as amended by Royal Decree 1778/2004) the Issuer and the Guarantor are required to provide certain information relating to Beneficial Owners to the Spanish tax authorities. This information includes the identity and country of residence of each Beneficial Owner that receives a payment on the Series 5 Preferred Securities or obtains imputed income deriving from the exchange of the Series 5 Preferred Securities for other securities under an exchange offer and the distribution received or the imputed income obtained by such Beneficial Owner, and must be obtained with respect to each distribution record date or the exchange offer expiration date, as the case may be, by the fourth New York business day before the relevant distribution record date or the exchange offer expiration date, as the case may be, or, under certain circumstances, by 9:45 a.m. (New York time) on the fourth New York business day following the relevant distribution record date or the exchange offer expiration date, as the case may be, and filed by the Issuer and the Guarantor with the Spanish tax authorities on an annual basis. If DTC or the direct or indirect participants in DTC fail for any reason to provide the Issuer and the Guarantor (through Acupay) with the required information described under "Taxation — Spanish Tax Considerations — Evidencing of Beneficial Owner Residency in Connection with Distributions and Income Obtained from the Exchange of Series 5 Preferred Securities for Exchange Series 5 Preferred Securities" in respect of the Beneficial Owner of any of the Series 5 Preferred Securities, the Issuer or the Guarantor, as the case may be, will be required to withhold tax and will pay distributions in respect of such Series 5 Preferred Securities net of the withholding tax applicable to such payments and any income imputed in connection with any exchange of the Series 5 Preferred Securities (currently at the rate of 18%). In the event that the amount of the withholding tax to be collected in connection with an exchange of the Series 5 Preferred Securities for substantially identical SEC-registered Preferred Securities as contemplated under "Exchange Offer and Registration Rights" exceeds the amount of the distribution (net of withholding applicable to that distribution) immediately following such exchange, the securities issued in the exchange may be withheld from delivery by the Issuer or an agent on its behalf and, to the extent necessary, sold in order to generate proceeds sufficient to satisfy such withholding tax. See Annex A. The proceeds realized from such a sale may be less than the proceeds that you would realize were you to sell the Series 5 Preferred Securities yourself or were such Series 5 Preferred Securities to be sold at another time. If withholding occurs due to failure to provide the required tax information through Acupay, affected Beneficial Owners would have to either follow the quick refund procedure or apply directly to the Spanish tax authorities for any refund to which they may be entitled. See "Taxation—Spanish Tax Considerations—Evidencing of Beneficial Owner Residency in Connection with Distributions and Income Obtained from the Exchange of Series 5 Preferred Securities for Exchange Series 5 Preferred Securities". The Issuer and the Guarantor will not pay any additional amounts with respect to any such withholding.

The Issuer and the Guarantor have agreed to provide certain procedures arranged by Acupay and DTC to facilitate the collection of information concerning the identity and residence of Beneficial Owners through the relevant participants in DTC. If the agreed procedures prove ineffective or if the relevant participants in DTC fail to provide and verify the required information as of each distribution record date, the Issuer or the Guarantor, as the case may be, will withhold at the then-applicable rate (currently at the rate of 18%) from any payment in respect of the Series 5 Preferred Securities as to which the agreed procedures prove ineffective or have not been followed, and neither the Issuer nor the Guarantor will pay any additional amounts with respect to any such withholding.

The delivery of the required Beneficial Owner identity and country of residence information must be made through the relevant direct or indirect participants in DTC in accordance with the procedures set forth under "Taxation — Spanish Tax Considerations — Evidencing of Beneficial Owner Residency in Connection with Distributions and Income Obtained from the Exchange of Series 5 Preferred Securities for Exchange Series 5 Preferred Securities". Each such DTC participant must provide the required information in respect of all of the Beneficial Owners holding interests through such participant as of each distribution record date, and neither the Issuer nor the Guarantor shall be responsible for any DTC participant's failure to do so. Such failure may arise as a result of the failure of an indirect DTC participant holding through a direct DTC participant to provide the necessary information in a timely manner. In the event of any error in a direct DTC participant's compliance with these procedures, Acupay will seek to notify such direct DTC participant of any deficiencies in the information provided by such direct DTC participant, and in the event such direct DTC participant fails to correct such deficiencies in a timely manner, the Issuer or the Guarantor, as the case may be, will withhold at the then-applicable rate from any payment in respect of the Series 5 Preferred Securities held through such direct DTC participant. Neither the Issuer nor the Guarantor will pay any additional amounts with respect to any such withholding. In order to obtain a refund of any amounts withheld, affected Beneficial Owners will have to either follow the quick refund procedure or apply directly to the Spanish tax authorities for any refund to which they may be entitled, as described under "Taxation—Spanish Tax Considerations—Evidencing of Beneficial Owner Residency in Connection with Distributions and Income Obtained from the Exchange of Series 5 Preferred

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Securities for Exchange Series 5 Preferred Securities", and neither the Issuer nor the Guarantor shall be responsible for any damage or loss incurred by Beneficial Owners in connection with such procedures.

The Series 5 Preferred Securities may be subject to certain Spanish taxation if they are not listed on an Organized Market in an OECD Country

If the Series 5 Preferred Securities are not listed on an organized market in an OECD country on any Distribution Record Date, distributions to Beneficial Owners not resident in Spain for tax purposes in respect of the Series 5 Preferred Securities may be subject to withholding tax, and if the Series 5 Preferred Securities are not so listed at any year end, Spanish Net Wealth Tax may apply. See "Taxation—Spanish Tax Considerations—Tax Rules for Series 5 Preferred Securities not Listed on an Organized Market in an OECD Country." The Issuer intends to apply for the Series 5 Preferred Securities to be traded on the London Stock Exchange's Professional Securities Market but no assurances can be given that such listing will be completed by any Distribution Record Date or year end.

The transferability of the Series 5 Preferred Securities may be limited by the absence of an active trading market and restrictions on transfer under applicable securities law.

The Series 5 Preferred Securities have not been registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. See "Plan of Distribution" and "Transfer Restrictions." Pursuant to the registration rights agreement, we have agreed to file a registration statement with respect to an offer to exchange the Series 5 Preferred Securities offered by this Listing Prospectus for registered Series 5 Preferred Securities with substantially identical terms to the Series 5 Preferred Securities offered by this Listing Prospectus and to use our reasonable best efforts to cause the registration statement to become effective. However, there can be no assurance that the SEC will declare any such registration statement effective. See "Exchange Offer and Registration Rights."

There is currently no market for the Series 5 Preferred Securities. Although we have been advised by the initial purchaser that it currently intends to make a market in the Series 5 Preferred Securities following completion of the offering, it is not obligated to do so, and any such market-making activities may be discontinued at any time without notice. There can be no assurance that any active trading market will develop for the Series 5 Preferred Securities, nor about the liquidity of any such market, the ability of holders to sell the Series 5 Preferred Securities or the prices at which the Series 5 Preferred Securities could be sold. If a market for the Series 5 Preferred Securities were to develop, the Series 5 Preferred Securities could trade at prices that may be higher or lower than their initial offering prices depending on many factors, including our results of operations, the markets for similar securities and other factors beyond our control, including general economic and market conditions.

Distributions on the Series 5 Preferred Securities are not cumulative.

Distributions on the Series 5 Preferred Securities are not cumulative. Distributions may not be paid in full, or at all, if the Bank does not have sufficient Distributable Profits or if the Bank is limited in making payments on its ordinary shares or on other Preferred Securities issued by it in accordance with limitations contemplated in the Spanish banking capital adequacy regulations. If Distributions for any distribution period are not paid by reason of the above limitations, investors will not be entitled to receive such Distributions (or any payment under the Guarantee in respect of such Distributions) whether or not funds are or subsequently become available.

The Series 5 Preferred Securities have no fixed redemption date and investors have no rights to call for redemption of the Series 5 Preferred Securities.

The Series 5 Preferred Securities have no fixed final redemption date and holders have no rights to call for the redemption of the Series 5 Preferred Securities. Although the Series 5 Preferred Securities may be redeemed at the option of the Issuer on or after January 31, 2017, there are limitations on redemption of the Series 5 Preferred Securities, including Bank of Spain consent and the availability of sufficient funds to effect redemption.

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The Bank's obligations under the Guarantee are limited to the amounts of the payments due under the Series 5 Preferred Securities.

The Bank's obligation to make payments under the Guarantee is limited to the extent of the amounts due under the Series 5 Preferred Securities. A distribution will not be paid under the Series 5 Preferred Securities if the aggregate of such distribution, together with any other distributions previously paid during the then-current fiscal year and proposed to be paid during the then-current distribution period, in each case on or in respect of the Series 5 Preferred Securities, any Preferred Securities of the Bank, or any other Preferred Securities issued by the Issuer or by any other subsidiary of the Bank with the benefit of a guarantee of the Bank, in each case ranking equally as to participation in profits with the Bank's obligations under the Guarantee, would exceed the Bank's Distributable Profits of the immediately preceding fiscal year. Even if Distributable Profits are sufficient, the Bank will not be obligated to make any payment under the Guarantee if under the applicable Spanish banking regulations relating to capital adequacy requirements affecting financial institutions which fail to meet their required capital ratios on a parent company basis only or on a consolidated basis, the Bank would be prevented at such time from making payments on its ordinary shares or on Preferred Securities issued by the Bank. In the event of the liquidation, dissolution or winding-up of the Bank or a reduction in the shareholder's equity of the Bank pursuant to article 169 of the Spanish Corporations Law, the Issuer shall be liquidated by the Guarantor, and investors will have no right to seek payment of amounts under the Guarantee that would exceed the amount investors would have been able to receive had investors been investors in directly issued Preferred Securities of the Bank and had all other Preferred Securities of the Issuer or of any other subsidiary of the Bank been issued by the Bank. Under no circumstances does the Guarantee provide for acceleration of any payments on, or repayment of, the Series 5 Preferred Securities.

The Bank is not required to pay investors under the Guarantee unless it first makes other required payments.

The Bank's obligations under the Guarantee will rank junior to all of its liabilities to creditors and claims of holders of senior and subordinated ranking securities. In the event of the winding-up, liquidation or dissolution of the Bank, its assets would be available to pay obligations under the Guarantee only after the Bank has made all payments on such liabilities and claims.

Your right to receive distributions under the Series 5 Preferred Securities and the Guarantee is junior to certain other obligations of the Issuer and the Guarantor.

The Series 5 Preferred Securities and the Guarantee will be, respectively, the Issuer's and the Guarantor's unsecured obligations, and will rank junior to any of the Issuer's and the Guarantor's present and future senior and subordinated indebtedness.

As of December 31, 2006, the Guarantor had approximately €73,498 million of outstanding unconsolidated indebtedness (including guarantees of subsidiary indebtedness) to which its obligations under the Guarantee of the Series 5 Preferred Securities will rank junior, and €4,304 million of preferred securities issued by subsidiaries guaranteed by the Guarantor, with which its obligations under the Guarantee of the Series 5 Preferred Securities will rank pari passu. In addition, the Guarantee is structurally subordinated to all indebtedness of subsidiaries of the Guarantor insofar as any right of the Guarantor, as a shareholder of such subsidiaries, to receive any assets of any of its subsidiaries upon the insolvency, liquidation, dissolution or winding-up or other similar proceeding of any of them will, subject to applicable law, be effectively subordinated to the claims of any such subsidiary's creditors (including trade creditors and holders of debt or guarantees issued by such subsidiary). As of December 31, 2006, subsidiaries of the Guarantor had an aggregate total of €154,157 million of outstanding indebtedness and €3,201 million of preferred shares not guaranteed by the Guarantor and €44,060 million outstanding indebtedness and €4,304 million of preferred securities guaranteed by the Guarantor.

As of the date of this Listing Prospectus, the Issuer did not have any senior or subordinated indebtedness and has issued and outstanding $190 million Series 1 Preferred Securities, €300 million Series 2 Preferred Securities, €200 million Series 3 Preferred Securities, $500 million Series 4 Preferred Securities and $350 million Series 6 Preferred Securities which will rank pari passu to the Issuer's obligations under the Series 5 Preferred Securities.

Non-payment of distributions may adversely affect the trading price of the Series 5 Preferred Securities.

If in the future, payments are limited on the Series 5 Preferred Securities because the Bank has insufficient Distributable Profits, the Series 5 Preferred Securities may trade at a lower price. If investors sell the

21

Series 5 Preferred Securities during such a period, investors may not receive the same price as an investor who does not sell its Series 5 Preferred Securities until sufficient Distributable Profits are available to resume distribution payments. In addition, because the Bank's obligation to make payments under the Guarantee is limited to the extent of the underlying payment obligations on the Series 5 Preferred Securities which may be limited due to insufficient Distributable Profits, the market price for the Series 5 Preferred Securities may be more volatile than other securities that do not reflect these limitations.

You may be unable to enforce judgments obtained in U.S. courts against the Issuer or the Guarantor.

All of the Issuer's directors and substantially all the directors and executive officers of the Guarantor are not residents of the United States, and substantially all the assets of these companies are located outside of the United States. As a consequence, you may not be able to effect service of process on these non-U.S. resident directors and executive officers in the United States or to enforce judgments against them outside of the United States. The Issuer and the Guarantor have been advised by their Spanish counsel that there is doubt as to whether a Spanish court would enforce a judgment of liability obtained in the United States against the Issuer or the Guarantor predicated solely upon the securities laws of the United States. See "Enforceability of Certain Civil Liabilities".

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THE ISSUER

The Issuer, which is a wholly owned subsidiary of the Guarantor, was incorporated by a public deed executed on February 27, 2004, and registered in the Mercantile Registry of Madrid on March 2, 2004, in Volume 19.747, book O, Folio 171, Section 8, Sheet M -347560 as a company with unlimited duration and with limited liability under the laws of Spain (sociedad anónima). The Issuer was formed to issue preferred securities in various markets (including the United States, Luxembourg and the Netherlands) and deposit the net proceeds with the Bank. As of the date of this Listing Prospectus, the share capital of the Issuer is €150,500 divided into 1,505 ordinary shares of par value €100.00 each, all of them issued and fully paid and each of a single class. The Issuer is a financing vehicle for the Group and has no subsidiary companies. The Issuer has no material assets other than inter-company debt with affiliates. For so long as any preferred securities remain outstanding, the Issuer's exclusive activities shall be the issuance of preferred securities, the deposit of proceeds of such issuances with the Bank and other activities incidental thereto. The Issuer's objects and purposes can be found in Article 2 of its By-laws. The Issuer complies with the corporate governance regime of Spain. With the exception of Spanish reserve requirements which must be met prior to the payment of dividends and provided that dividends may only be distributed out of income for the previous year or out of unrestricted reserves and provided further that the net worth of the Issuer must not, as a result of the distribution, fall below its paid-in share capital (capital social), there are no restrictions on the Guarantor's ability to obtain funds from the Issuer through dividends, loans or otherwise. Spanish Law 13/1985 requires that the proceeds of the offering of the Series 5 Preferred Securities be deposited on a permanent basis with the Guarantor or one of its consolidated subsidiaries.

As of the date of this Listing Prospectus, the Issuer did not have any senior or subordinated indebtedness and has issued and has outstanding $190 million Series 1 Preferred Securities, €300 million Series 2 Preferred Securities, €200 million Series 3 Preferred Securities, $500 million Series 4 Preferred Securities and $350 million Series 6 Preferred Securities which will rank pari passu to the Issuer's obligations under the Series 5 Preferred Securities.

There has been no material adverse change in the prospects of the Issuer since December 31, 2005. There has been no significant change in the financial or trading position of the Issuer which has occurred since December 31, 2005.

Save for the above referred issues and for the Series 5 Preferred Securities and matters incidental thereto, the Issuer has not carried on any business since the date of its incorporation. As of the date of this Listing Prospectus, the Issuer has prepared its audited financial statements for the year ended December 31, 2005. Save for the issue of the Series 4 Preferred Securities, the Series 6 Preferred Securities and the Series 5 Preferred Securities, and matters incidental thereto, there have been no other main changes to the financial statements of the Issuer since December 31, 2005.

The registered office of the Issuer is located in the Guarantor's principal executive offices at Ciudad Grupo Santander, Avenida de Cantabria s/n, 28660 Boadilla del Monte, Madrid, Spain, and its telephone number is +34-91-257-2057.

The names, business addresses, positions and other positions in the Group of each of the directors of the Issuer are as follows:

Name Business Address Position Other Position in the Group

José Antonio Soler Ciudad Grupo Santander Edificio Encinar Avenida de Cantabria, s/n 28660 Boadilla del Monte Madrid, Spain

Chairman Senior Vice-president of the Guarantor

Javier Antón San Pablo Ciudad Grupo Santander Edificio Encinar Avenida de Cantabria, s/n 28660 Boadilla del Monte

Director Vice-president of the Guarantor

Madrid, Spain

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Antonio Torío Martín Ciudad Grupo Santander Director Edificio Encinar Avenida de Cantabria, s/n 28660 Boadilla del Monte Madrid, Spain

Vice-president of the Guarantor

Pablo Roig García Bernalt

Ciudad Grupo Santander Edificio Encinar Avenida de Cantabria, s/n 28660 Boadilla del Monte Madrid, Spain

Director Vice-president of the Guarantor

Save as specified in the above table, there are no activities performed by any of the above directors outside of the Issuer which are significant with respect to the Issuer.

The above members of the Board of Directors have no potential conflicts of interests between any duties to the Issuer and their private interests and/or other duties.

Since the Issuer's date of incorporation, the Issuer has not been involved in any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Issuer is aware) which may have, or have had in the recent past, significant effects on the Issuer's financial position or profitability.

The financial statements (excluding the management report) of the Issuer incorporated into this Listing Prospectus by reference for the year ended December 31, 2005, has been audited by Deloitte, S.L. (formerly DELOITTE & TOUCHE ESPAÑA, S.L.), the Issuer's independent auditors, of Plaza Pablo Ruiz Picasso, 1, Madrid, and registered under number S-0692 in the Official Register of Auditors (Registro Oficial de Auditores de Cuentas). DELOITTE, S.L. are members of the Instituto de Censores Jurados de Cuentas de España.

UNAUDITED BALANCE SHEETS AND INCOME STATEMENT AT DECEMBER 31, 2006

The following information for the period ended December 31, 2006 has been extracted from the internal accounting records of the Issuer and is unaudited.

(Thousands of Euros)

ASSETS December 31, 2006 December 31, 2005 Variation Incorporation and start-up expenses 2 3 -1 Long term time deposits 1,003,976 648,718 355,258 Expenses to distribute in several years 13,583 8,376 5,207 Loans and advances to Group companies 1 0 1 Other time deposits 9,677 6,120 3,557 Cash and cash equivalents 6,400 3,761 2,639 TOTAL ASSETS 1,033,639 666,978 366,661 Contingent liabilities: Financial guarantees 1,053,669 678,439 375,230

LIABILITIES December 31, 2006 December 31, 2005 Variation Issued capital 150 150 0Reserves 10 3 7Net profit 7 7 0 Gains to distribute in several years 580 0 580

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Tax provisions 4 4 0 Preferred securities 1,023,918 661,058 362,860 Long term debt with Group companies 4 0 4 Tax liabilities 83 110 -27 Accrued expenses and deferred income 8,883 5,646 3,237 TOTAL LIABILITIES 1,033,639 666,978 366,661

PROFIT AND LOSS December 31, 2006 December 31, 2005 Variation Finance income 38,336 35,345 2,991 Finance expenses -2,800 -2,563 -237 External professional services -30 -31 1Other external services -54 -136 82 Taxes -4 -4 0

Other extraordinary expenses: Minority interests of preferred shares -35,440

-32,603 -2,837 Depreciation and amortization -1 -1 0 Net profit 7 7 0

SELECTED FINANCIAL INFORMATION FOR THE ISSUER

Thousands of Euros

December 31, 2006

December 31, 2005

February 27, 2004 to December 31, 2004

Unaudited Audited AuditedConsolidated Income Statement Data: Net interest income 35,536 32,782 14,634Commercial revenue 35,536 32,782 14,603Gross operating income 35,536 32,782 31Operating Costs -84 -167 31Depreciation and amortization -1 -1 31Net operating income 35,451 32,614 -25Income before taxes 35,451 32,614 -1Corporate income tax -4 -4 5Net consolidated income 35,447 32,610 5Minority interests of preferred securities -35,440 -32,603 -2Attributable income 7 7 3

February 27, 2004 to December 31, 2004December 31, 2006 December 31, 2005

AuditedUnaudited Audited Consolidated Balance Sheet Data:

Total assets 1,033,639 666,978 646,370Long term time deposits (1) 1,003,976 648,718 627,627Other time deposits 9,677 6,120 6,807

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Liabilities Preferred securities (2) 1,023,918 661,058 639,490Capitalization Capital and reserves 160 153 60Total capitalization 167 160 63

(1) Long term deposits are deposited in Banco Santander as a guarantee of the securities.

(2) The preferred securities issued are:

• On March 11, 2004, Santander Finance Preferred, S.A. (Unipersonal) issued 7,600,000 preferred securities, at $25 par value.

• On September 30, 2004, Santander Finance Preferred, S.A. (Unipersonal) issued 300,000 preferred securities, at €1,000 par value.

• On October 8, 2004, Santander Finance Preferred, S.A. (Unipersonal) issued 200,000 preferred securities, at €1,000 par value.

• On November 21, 2006, Santander Finance Preferred, S.A. (Unipersonal) issued 20,000,000 preferred securities, at $25 par value.

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BANCO SANTANDER CENTRAL HISPANO, S.A. AS GUARANTOR

INFORMATION ABOUT THE GUARANTOR

The name of the Bank is BANCO SANTANDER CENTRAL HISPANO, S.A. and it operates under the trading name "Santander" or "Grupo Santander".

The Bank is registered in the Santander Commercial Registry in book 83, folio 1, sheet 9, entry 5519, and it adapted its Articles of Association to the current Companies Act by document executed in Santander on 8 June 1992 before the Public Notary Mr José María de Prada Díez, and numbered 1316 in his records, and registered in the Santander Commercial Registry in volume 448 of the Archive, folio 1, sheet number 1960, Adaptation entry one.

The Bank is also registered in the Special Register of Banks and Bankers under code number 0049.

The Bank was founded in the city of Santander by notarised document executed on 3 March 1856 before court official Mr José Dou Martínez, ratified and partially amended by a further document dated 21 March 1857 before the court official of Santander Mr José María Olarán, and commenced trading on 20 August 1857. The Bank was transformed to a Credit Company ("Sociedad Anónima de Crédito") by a public deed executed on January 14, 1875 which was recorded with the Mercantile Registry of the Government of the Province of Santander.

The Bank commenced trading at the time of its formation and according to Article 3 of the Articles of Association it will remain in existence for an indefinite period.

The Bank is domiciled in Spain and has the legal form of a Joint Stock Company (Sociedad Anónima) and its activities are subject to special Spanish legislation governing credit institutions in general and the supervision, control and regulation of the BANK OF SPAIN in particular.

BANCO SANTANDER CENTRAL HISPANO, S.A. was incorporated in Spain and has its registered office at Paseo de Pereda, numbers 9 to 12, Santander. The principal operating headquarters of the Bank is located at Ciudad Grupo Santander, Avda. de Cantabria s/n, 28660 Boadilla del Monte, in the province of Madrid. The telephone number of the principal operating headquarters of the Bank is +34 91 259 65 20.

The non-consolidated and consolidated annual financial statements of BANCO SANTANDER CENTRAL HISPANO, S.A. for the years ended 31 December 2004 and 2005 were audited by the external auditors, DELOITTE, S.L. (formerly DELOITTE & TOUCHE ESPAÑA, S.L.) of Plaza Pablo Ruiz Picasso, 1, Madrid, and registered under number S-0692 in the Official Register of Auditors (Registro Oficial de Auditores de Cuentas). DELOITTE, S.L. are members of the Instituto de Censores Jurados de Cuentas de España.

The Guarantor's auditors have not resigned nor removed, and were last re-appointed by the Bank on 17 June 2006 to audit the annual financial statements for the financial year ending 31 December 2006.

BUSINESS OVERVIEW

The Group is a financial group operating principally in Spain, the United Kingdom, other European countries and Latin America, offering a wide range of financial products. At December 31, 2005, the Group was one of the ten largest banking groups in the world by market capitalization and the largest banking group in the euro zone with a stock market capitalization of €69.7 billion, stockholders' equity of €39.8 billion and total assets of €809.1 billion. The Group had an additional €152.8 billion in mutual funds, pension funds and other assets under management at that date. As of December 31, 2005, the Group had 45,207 employees and 5,389 branch offices in Continental Europe, 21,080 employees and 712 branches in the United Kingdom, 62,161 employees and 4,100 branches in Latin America and 748 employees in other geographic areas.

The Group's principal operations are in Spain, the United Kingdom, Portugal, Germany, Italy and Latin America. The Group also has significant operations in New York as well as financial investments in San Paolo IMI, Attijariwafa Bank Société Anonyme (formerly, Banque Commerciale du Maroc) ("Attijariwafa Bank"). In Latin America, the Group has majority shareholdings in banks in Argentina, Brazil, Chile, Colombia, Mexico, Puerto Rico, Uruguay and Venezuela.

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Recent Reorganization of Business Areas

As a result of the entry into force of the IFRS in 2005, the Group has redefined its business areas for 2004 and 2005 for financial reporting purposes. These areas are defined by management and reflect, in the case of the secondary level (or business), the way business is conducted.

The new areas reflect the incorporation of Abbey, following the consolidation of its balance sheet at the end of 2004. In addition to applying the general accounting changes set out in Note 2 to the Bank's consolidated financial statements for the year ended December 31, 2005 to the different business areas, some internal criteria have been changed, in accordance with IFRS principles, to better identify the risks and returns of each business. The main changes are as follows:

• Centralized costs. Although the principle of applying to each unit the costs of central services incurred by it for support and control is maintained, corporate and institutional expenses related to the Group are excluded. These are now recorded in Financial Management and Equity Stakes. On the other hand, the non-corporate costs related to projects underway, primarily spending on IT systems, have been applied to the corresponding business.

• Provisions and allowances for country-risk. Both country-risk, as well as its provisions, are applied to the business area responsible for its management and where the net revenues of these operations are reflected. Only those intra-group operations which maintain the provisions, where risk disappears on an accounting basis, continue to be recorded, as before, in Financial Management and Equity Stakes.

• Pension provisions. Each business generally assumes the cost for pensions, including both the normal allocation as well as that of possible deficits. The only exception relates to amortization derived from the initial deficit that surpasses the "corridor". In these cases, as the aforementioned amortization occurred because of a corporate decision by the Group, and provided it happens within five years and with the limit of the initial deficit, its cost will be assumed by Financial Management and Equity Stakes.

• Shareholders' equity. In line with the development in the Group of processes for calculating and managing economic capital, the adjustment for regulatory capital maintained has been eliminated. Each business maintains the shareholders' equity it manages. Use above this level will be penalized only in those cases where this figure is higher than the economic capital. Otherwise no payment will be made to the business.

In accordance with the criteria established by the IFRS, the structure of the operating business areas has been segmented into two levels:

Principal level (or geographic). The activity of our operating units is segmented by geographical areas. This coincides with our first level of management and reflects our positioning in the world's three main currency areas. The reported segments are:

• Continental Europe. This covers all retail banking business (including Banco Banif, S.A. ("Banif"), our specialized private bank), asset management and insurance and wholesale banking conducted in Europe, with the exception of Abbey. This segment includes the following units: Santander Network, Banco Español de Crédito, S.A. ("Banesto"), Santander Consumer Finance and Portugal.

In addition, small units outside the three geographic areas, whose relative importance to our total business is not significant and which are extensions of the main areas, are included in Continental Europe.

• United Kingdom (Abbey). This covers only Abbey's business, mainly focused on retail banking and insurance in the UK.

• Latin America. This embraces all the financial activities conducted via our subsidiary banks and other subsidiaries. It also includes the specialized units in International Private Banking, as an independent globally managed unit.

Secondary level (or business). This segments the activity of our operating units by type of business. The reported segments are:

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• Retail Banking. This covers all customer banking businesses (except those of Corporate Banking, which are managed globally throughout the world).

• Asset Management and Insurance. This includes our units that design and manage mutual and pension funds and insurance.

• Global Wholesale Banking. This business reflects the returns from Global Corporate Banking, Investment Banking and Markets worldwide, including all treasuries with global management, as well as our equities business.

In addition to these operating units, which cover everything by geographic area and business, the Group continues to maintain a separate Financial Management and Equity Stakes area. This area incorporates the centralized activities relating to equity stakes in industrial and financial companies, financial management of the structural exchange rate position and of the parent Bank's structural interest rate risk, as well as management of liquidity and of shareholders' equity through issues and securitizations. As the Group's holding entity, it manages all capital and reserves and allocations of capital and liquidity.

Principal level (or geographic):

Continental Europe

This area covers the banking activities of the different networks and specialized units in Europe, principally with individual clients and small and medium sized companies ("SMEs"), as well as private and public institutions. During 2005 there were four units within this area: Santander Network, Banesto, Santander Consumer Finance and Portugal including retail banking, asset management, insurance and global wholesale banking.

Continental Europe is the largest business area of Grupo Santander. At the end of 2005, it accounted for 43% of total customer funds under management, 49% of total loans and credits and 54% of net attributable income of the Group's main business areas.

The area had 5,389 branches and 43,867 employees (direct and assigned) at the end of 2005.

The area experienced a 19.8% increase in net operating income, primarily due to increased revenue from commissions, contained costs, improved efficiency and growth in net interest income.

In 2005, the efficiency ratio improved by 3.1% to 42.9% (from 46.8% in 2004). Net attributable income increased 38.2% to €2,984.3 million. Return on equity, "ROE", in 2005 was 22.1%, a 3.8% increase from 2004.

Santander Network

The retail banking activity is carried out through the branch network of Santander, with support from an increasing number of automated cash dispensers, savings books updaters, telephone banking services, electronic and internet banking.

At the end of 2005, the Bank had 2,669 branches and a total of 19,092 employees (direct and assigned), of which 827 employees were temporary, dedicated to retail banking in Spain. Compared to 2004, there was a net increase of 98 branches and a net reduction of 88 employees.

In 2005, the Santander Network grew by approximately 17.1% in lending, 17.2% in net operating income and 44.1% in net attributable income. It also improved its efficiency ratio from 48.3% in 2004 to 44.0% in 2005 and continued high standards of quality in credit risk.

Gross income from the Santander Network was €3,826 million in 2005, an 8.3% increase from 2004.

In 2005, net attributable income from the Santander Network was €1,285 million, 44.1% higher than net attributable income in 2004, while the ROE reached 22.8% (as compared to 17.8% in 2004).

The 17.1% growth in lending in 2005 versus 2004 came from mortgages (16% increase as compared to 2004, mainly for individual customers) as well as other loans and credits (19% increase as compared to 2004), leasing and renting (14% increase as compared to 2004) and commercial bills (1% increase as compared to 2004).

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Customer deposits increased by 2.7%, while mutual and pension funds increased by 13.8% and 5.9%, respectively.

Banesto

At the end of 2005, Banesto had 1,703 branches and 10,577 employees (direct and assigned), of which 514 employees were temporary (an increase of 20 branches and a reduction of 507 employees as compared to the end of 2004).

For purposes of the Group's financial statements we have calculated Banesto's results of operations using the criteria described on pages 89 and 90 of the 2005 Annual Report. As a result, the data set forth herein may not coincide with the data published independently by Banesto.

In 2005, Banesto grew by approximately 26.7% in lending, 24.4% in customer deposits and 14.8% in off-balance sheet customer funds.

In 2005, gross income from Banesto was €1,794 million, an 8.4% increase from 2004. Net attributable income from Banesto was €498 million, a 24.0% increase from 2004, while the ROE reached 19.4% (as compared to 16.9% in 2004) and the efficiency ratio improved to 42.6% (as compared to 46.6% in 2004).

Santander Consumer Finance

Our consumer financing activities are conducted through our subsidiary Santander Consumer Finance S.A. and its group of companies. Most of the activity is in the business of auto financing, personal loans, credit cards, insurance and customer deposits. These consumer financing activities are mainly focused on Spain, Portugal, Germany and Italy (through Santander Consumer Bank S.p.A.). Santander Consumer Finance also conducts this business in the UK, Austria, Hungary, the Czech Republic, the Netherlands, Norway, Poland and Sweden.

At the end of 2005, this unit had 267 branches (as compared to 256 at the end of 2004) and 5,118 employees (direct and assigned) (as compared to 5,245 employees at the end of 2004), of which 310 employees were temporary.

In 2005, this unit generated gross income of €1,604 million, a 25.9% increase from 2004. Net attributable income was €487 million, a 46.3% increase from 2004, while the ROE reached 46.1% (as compared to 47.6% in 2004) and the efficiency ratio improved to 33.9% (as compared to 37.6% in 2004).

At the end of 2005 total managed assets equalled €31,849 million. New lending increased 24% to €18,999 million (17% increase as compared to 2004, excluding the new incorporations of Bankia in Norway and Interbanco in Portugal). Of note was the 22% rise in auto finance, which outpaced the sale of cars in Europe producing a further gain in market share. The three large traditional markets, which account for 88% of total business, also registered strong growth: Spain and Portugal grew 15% as compared to 2004, Germany grew 9% as compared to 2004 and Italy grew 30% as compared to 2004.

Portugal

Our main Portuguese operations are conducted by Banco Santander Totta, S.A., and our Portuguese investment banking operations are conducted by Banco Santander de Negocios Portugal, S.A.

At the end of 2005, Portugal operated 693 branches (as compared to 670 branches at the end of 2004) and had 6,308 employees (direct and assigned) (as compared to 6,478 employees at the end of 2004), of which 170 employees were temporary.

In 2005, gross income from our activities in Portugal was €995 million, a 7.2% increase from 2004. Net attributable income was €345 million, 35.7% higher than in 2004, while the ROE reached 20.8% (16.5% in 2004) and the efficiency ratio improved to 49.4% (from 52.4% in 2004).

Others

The rest of our businesses (Banif, Asset Management, Insurance and Global Wholesale Banking) generated attributable income of €368 million, 32.1% more than in 2004.

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United Kingdom (Abbey)

Abbey became part of Grupo Santander on November 12, 2004 and only its balance sheet was consolidated with the Group as of December 31, 2004. Its results were consolidated with the Group's for the first time in 2005.

Abbey is a significant financial services provider in the United Kingdom, being the second largest residential mortgage lender, third largest savings brand, and operates across the full range of personal financial services serving approximately 18 million customers.

At the end of 2005, Abbey had 712 branches and a total of 21,121 employees (direct and assigned) of which 244 employees were temporary. Compared to 2004, there was a net decrease of 18 branches and a net reduction of 4,210 employees.

For purposes of the Group's financial statements, we have calculated Abbey's results of operations using the criteria described on pages 89 and 90 of the 2005 Annual Report. As a result, the data set forth herein may not coincide with the data published independently by Abbey.

In 2005, Abbey contributed net operating income of €1,408 million and €811 million of attributable income (14% of the Group's total operating areas). Loans and advances experienced growth of approximately 9.6% and customer funds under management increased by 4.3% during the same period. ROE was 35.7% and the efficiency ratio was 63.2%.

Gross income was €3,787 million for 2005.

Operating costs were €2,416 million, excluding restructuring costs of €219 million.

The 9.6% increase in loans and credits was accompanied by good credit risk quality. The non-performing loans ratio was 0.67% at the end of 2005, 0.03% less than in 2004. For mortgage loans, Abbey's credit quality indices (0.65% in arrears of more than three months) are better than the market's average.

Latin America

At December 31, 2005, the Group had 4,100 offices and 62,746 employees (direct and assigned) in Latin America (as compared to 4,011 offices and 60,503 employees, respectively, at December 31, 2004), of which 1,267 were temporary employees.

Net attributable income from Latin America was €1,776 million, a 20.8% increase from 2004, while the ROE reached 23.1% (as compared to 24.0% in 2004) and the efficiency ratio improved to 52.2% (as compared to 54.9% in 2004). Our Latin American banking business is principally conducted by the following banking subsidiaries:

Percentage held at December 31, 2005

Percentage held at December 31, 2005

Banco Río De La Plata, S.A. (Argentina)

99.30 Banco Santander Colombia, S.A.

97.64

Banco Santa Cruz, S.A. (Bolivia) (*)

96.33 Banco Santander Serfin, S.A.

74.92

Banco Santander Brasil, S.A. (Brazil)

97.93 Banco Santander Puerto Rico

90.77

Banco Santander Meridional, S.A. (Brazil)

98.18 Banco Santander, S.A. (Uruguay)

100.00

Banco do Estado de Sao Paulo, S.A. (Brazil)

98.06 Banco de Venezuela, S.A. Banco Universal

98.42

Banco Santander Chile 83.94

_____________________

(*) As of April 18, 2006, the Group sold its stake in Banco Santa Cruz, S.A.

The Group engage in a full range of retail banking activities in Latin America, although the range of the Group's activities varies from country to country. The Group seeks to take advantage of whatever particular business opportunities local conditions present. The Group engages in a wide array of deposit taking activities

31

throughout Latin America, and other retail banking activities in Argentina, Brazil, Chile and Mexico. The Group's primary lending operations are in Chile, Mexico, Brazil and Puerto Rico. The Group's principal mutual fund operations are in Brazil, Mexico, Chile and Puerto Rico, and the Group's main pension fund operations are in Chile, Mexico, Argentina, Peru and Colombia.

The Group's significant position in Latin America is attributable to our financial strength, high degree of diversification (by countries, businesses, products, etc.), and breadth and depth of our franchise.

Detailed below are the performance highlights of the main Latin American countries in which the Group operates:

Brazil. Santander Banespa is one of the main financial franchises in Brazil. The Group has 1,897 branches and 7.1 million individual customers.

Santander Banespa focused in 2005 on growing its retail businesses and on gaining market share. Lending rose 42%, in local currency, with strong growth to individual customers (credit cards, loans linked to payrolls, auto financing, etc.), SMEs and companies. Our market share in total loans reached 5.8%. Deposits (excluding REPOs) and mutual funds increased 24% (market share of deposits and mutual funds equalled approximately 4.4%). The emphasis on growth in retail savings pushed up this segment's market share in mutual funds to 8.0%.

Net attributable income from Brazil in 2005 was €591 million (a 14% decrease in local currency). The efficiency ratio was 52.5%, ROE was 23.1%, the ratio of non-performing loans ("NPL") was 2.9% at the end of 2005 and the NPL coverage was 138.5%.

Mexico. Banco Santander Serfin, S.A. is one of the leading financial services companies in Mexico. It heads the third largest banking group in Mexico in terms of business volume, with a market share in total loans of 15.2%, 15.8% in deposits and mutual funds and 7.8% in pensions. The Group has a network of 1,005 branches and 6.3 million banking customers in Mexico.

Net attributable income from Mexico increased 16.0% to €376 million (an increase of 12.1% in local currency). The efficiency ratio was 54.1%, ROE was 20.4%, the ratio of non-performing loans was 0.9% at the end of 2005 and the NPL coverage was 273.4%.

Chile. Banco Santander Chile heads the largest financial group in the country with substantial business in loans, deposits and mutual funds and pension funds. The Group has 401 branches and 2.2 million banking customers.

In 2005, lending increased 19% (including a 25% increase to individuals), while deposits (without REPOs) and mutual funds grew 16% (in local currency).

Net attributable income from Chile increased 45.2% to €338 million (a 33.2% increase in local currency). The efficiency ratio stood at 45.4%, ROE was 25.0%, the ratio of non-performing loans was 2.3% and the NPL coverage was 165.6%.

Puerto Rico. Banco Santander Puerto Rico is one of the largest financial institutions in Puerto Rico. The Group has 73 branches and market shares of 10.9% in total loans, 12.9% in deposits and 21.3% in mutual funds.

In 2005, Santander Puerto Rico focused on growth in consumer loans and mortgages and loans to medium-sized companies. Lending increased 9% and deposits (excluding REPOs) and mutual funds rose 13%, representing a gain of 0.5 points in market share to 15.3%.

Net attributable income from Puerto Rico was €49 million, 2.5% higher than in 2004 (a 2.7% increase in local currency). The efficiency ratio was 65.8%, ROE was 12.5%, the ratio of non-performing loans stood at 1.8% and the NPL coverage was 168%.

Venezuela. Banco de Venezuela, S.A. Banco Universal is one of the country's largest banks with market shares of 13.6% in total loans and 11.6% in deposits. It has 252 branches and 2.2 million banking customers.

32

Management's main focus in 2005 was growth in the profitability of business and increasing recurrent revenues. Lending, after eliminating the exchange rate impact, increased 46% (including a 75% increase to individual customers) and the aggregate of deposits (excluding REPOs) and mutual funds rose 27%.

Net attributable income from Venezuela grew to €133 million (a 55.4% increase in local currency). The efficiency ratio was 48.4%, ROE stood at 42.2%, the ratio of non-performing loans was 1.5% and the NPL coverage was 400%.

Colombia. The Colombian economy grew by approximately 5% in 2005. The Group concentrated on selective growth on business and efficient management of costs. Lending increased 11% and deposits (excluding REPOs) and mutual funds rose 22%.

Net attributable income from Colombia was €40 million, 60.90% higher than in 2004 in local currency.

Others

Argentina consolidated its economic recovery during 2005 and made a positive contribution to Group earnings (net attributable income was €78 million in 2005). Lending to the private sector rose 73% and was very focused on SMEs and individuals, while deposits (excluding REPOs) and mutual funds increased 33%.

Uruguay improved notably, generating net attributable income of €29 million in 2005, 28.2% higher than 2004 in local currency.

Peru, where the Group focuses on pension funds, generated net attributable income of €16 million in 2005 (13.9% increase in local currency).

Net attributable income from Bolivia during 2005 grew to €10 million in 2005 (159% increase as compared to 2004). On April 18, 2006 the Group sold its entire stake in the capital stock of our subsidiary in Bolivia, Banco Santa Cruz.

Santander Private Banking performed well with attributable income up 25% (in dollars) during 2005.

Secondary level (or business):

Retail Banking

Retail Banking generated 84% of total gross income and 78% of income before taxes of the operating areas. This segment had 117,655 employees at the end of 2005.

Retail Banking in Continental Europe continued its growth in volume and earnings. Net interest income increased 14.3%, net operating income increased 21.3% and income before taxes increased 39.1%. All units (Santander Network, Banesto Retail, Santander Consumer Finance, Portugal Retail and Banif) grew at double digit rates in net operating income and income before taxes.

There were four main drivers of these results: business growth, better price management in a more stable interest rate environment, cost control and the lower needs for loan-loss provisions.

In its first year as part of Grupo Santander, Abbey's Retail Banking operations generated gross income of €3,232 million, net operating income of €1,228 million and income before taxes of €986 million.

The strong earnings from Retail Banking in Latin America was based on growth in customer business, the excellent results in net interest income and net fees and costs. These were reflected in a 22.9% rise in commercial revenue, 38.2% in net operating income and 36.2% in income before taxes.

Asset Management and Insurance

This segment comprises all of our companies whose activity is the management of mutual and pension funds and insurance.

33

In 2005, Asset Management and Insurance generated gross income of €1,367 million, 113.4% higher than in 2004. Income before taxes was €688 million, 85.6% higher than in 2004. This segment had 7,902 employees at the end of 2005.

This segment accounted for 7% of the Group's gross income in 2005 and 9% of income before taxes which, at €688 million, was 85.6% higher than in 2004 (37.2% increase excluding Abbey).

Total revenues from mutual and pension funds and insurance activity, including those recorded by the distribution networks, amounted to €3,696 million, 62.9% more than in 2004 (20.3% increase excluding Abbey). These revenues are of high quality and recurrence and represented 20% of our commercial revenue.

Managed assets in mutual and pension funds increased 16% to more than €138,000 million and the liabilities from insurance contracts totalled €45,000 million (5% increase from 2004).

Asset Management. The global business of mutual and pension funds integrated in Santander Asset Management generated total fees of €1,956 million, 23.5% higher than in 2004 (15.9% increase without Abbey). Income before taxes, after deducting the fees paid to the distribution networks and operating costs, was €349 million (29.0% increase from 2004).

In Spain, Santander Asset Management managed more than €75,000 million in funds and investment companies, making it the sector's leader (with a market share of 25% in mutual and real estate funds, according to Inverco).

In Portugal, mutual and pension funds managed by Asset Management increased 17% and 7%, respectively, to a total of €7,000 million.

In Latin America, Santander Asset Management had €22,500 million under management in its mutual funds, 24% more than in 2004 excluding the exchange rate effect. Mexico, Brazil and Chile, which account for more than 90% of assets, registered strong growth. Knowledge of the markets and of local needs combined with exploiting the Group's global capacities in managing and developing high value-added products resulted in higher growth than the markets. Mexico's managed mutual funds increased 36% (excluding the exchange rate effect) to €6,700 million and increased its market share by almost 1% to 17%. Brazil, whose managed assets increased 21% (excluding the exchange rate impact) to €11,100 million, focused on the retail segment where its market share reached 8% (a 0.3% increase). Chile's managed assets rose 11% to €2,700 million (excluding the exchange rate impact) and market share increased by close to 1%.

Insurance. Total revenues generated by our insurance companies, including fees paid to branch networks, amounted to €1,740 million (increases of 153.8% and 30.4% excluding Abbey from 2004). Income before taxes rose three fold to €340 million due to the incorporation of Abbey, which contributed €179 million, and the good performance of other insurance activity (59.2% increase in income before taxes).

In Spain, Santander Seguros y Reaseguros, Compañía Aseguradora, S.A. consolidated its bancassurance business, developing new businesses and boosting its sales capacity (two new channels, Hispamer and Unión de Crédito Inmobiliario S.A. (UCI), joined Santander Branch Network). Their total contribution to the Group, including net fees and income before taxes, was €205 million, 25% more than in 2004. Premium income increased 28%.

In Portugal, the distribution of risk insurance, largely linked to credit operations and capitalization-savings products, was expanded to include new and unlinked life-risk products. Premium income increased 49% and the total contribution to the Group rose 36%.

In the rest of Continental Europe, the various units of Santander Consumer Finance, which mainly sells products linked to consumer lending, generated €263 million of fees, 30% more than in 2004.

In the United Kingdom, Abbey's insurance business continued to be strong. At the end of 2005, Abbey's insurance activity balance stood at €36,500 million, and its total contribution to the Group (fees plus income before taxes) was €437 million, following a significant reduction in the area's costs. On September 1, 2006 Abbey confirmed that it had completed the sale of its entire life insurance business to Resolution.

34

In Latin America, the Group continued to develop its strategy of growth in the distribution of insurance via local banks. Further progress was made in selling bancassurance products through personalized offers (life, auto and household products).

Global Wholesale Banking

This area covers our corporate banking, treasury and investment banking activities throughout the world.

This segment contributed 9% of gross income and 13% of income before taxes. Income before taxes amounted to €1,069 million, a 21.9% increase from 2004. This segment had 2,177 employees at the end of 2005.

Gross operating revenue increased 9.2%. Revenue from value-added businesses (transactional banking, trade finance, custody, investment banking, equities and treasury for customers) rose 22%.

Operating costs grew 11.9%, due to business expansion and new project launches in Europe, such as Santander Global Connect (SGC) and Santander Global Markets (SGM).

In 2005, the new Global Wholesale Banking model based on a double vector (product-customer) system was consolidated. In the customer vector, the Global Customer Relation Model, established in 2003 to foster global management by product and country, consists of global teams comprising an executive responsible at the global level, local executives in the markets where customers operate and product specialists. The model generated gross income of €501 million, after six straight quarters of sustained growth.

The product vector consists of three large areas:

• Corporate products. This covers transactional banking, trade finance, custody and basic financing. Their gross income increased 8.8% from 2004.

• Investment Banking. This embraces financing solutions and corporate finance. Gross income increased 16.0%, strongly backed by corporate finance. Project finance operations formalized in 2005 amounted to €1,074 million. In financing of acquisitions, operations amounted to €962 million. Syndicated loans amounted to €3,700 million.

• Markets. This integrates equities and treasuries. Gross income rose 6.3%, supported by customer related revenues and a lower contribution from own-account activity.

By businesses, the gross income from equities was 28.0% higher, consolidating leadership in brokerage in Spain (13% market share including Banesto Bolsa, S.A., S.V.B.) and in Portugal (9% market share).

Global Treasury performed well in 2005 with SGC and SGM driving growth in Spain. SGM develops the distribution capacities for corporate and institutional clients in target markets and supports the production and distribution of structured products in the main Latin American countries, while obtaining synergies in products, books and organization.

In Spain, sales revenues attributed to both projects – SGC for retail clients and SGM for wholesale clients – increased 34.7%. Portugal's growth was 33.3% following the extension of SGC and the good performance of the wholesale sector.

Treasury in New York consolidated its structure in order to help the Latin American treasuries sell structured derivatives and increase the range of value-added products on offer.

Our treasury operations manage money, foreign exchange and fixed-income trading, using conventional instruments and derivatives, for own account and for the accounts of customers. The Group also participates in fixed income capital market activities.

In Latin America, the Group's treasury operations continued to be pre-eminent in the region. The increasing coordination of local treasuries with Madrid and New York is enabling more global solutions to be offered to clients and greater cross-selling of products. This is producing notable growth in revenues (+22.2%) and is enhancing our presence in the professional markets.

35

Financial Management and Equity Stakes

This area is responsible for a series of centralized activities and acts as our holding entity, managing all capital and reserves and assigning capital and liquidity to the other businesses. It also incorporates centrally managed business, which can be divided into the following sub areas:

• Equity Stakes: this area centralizes the management of equity stakes in financial and industrial companies.

Net attributable income from industrial stakes was €1,739 million, up from €492 million in 2004. The much higher figure was mainly due to the larger capital gains and the greater contribution from companies accounted for by the equity method, principally Cepsa.

• Financial management: this area carries out the global functions of managing our structural exchange rate position, the structural interest rate risk of the parent Bank and the liquidity risk. The latter is conducted through securities issuances and securitizations. It also manages shareholders' equity.

The cost of hedging the capital of our non euro-denominated investments is another activity managed by this sub-area. The hedging policy is aimed at protecting the capital invested and the year's results through various instruments that are deemed to be the most appropriate for their management. The main units with exchange risk, except for Brazil, were hedged during 2005.

This sub-area also manages shareholders' equity, the allocation of capital to each business unit, and the cost of financing investments.

Gross income from Financial Management and Equity Stakes was €-222 million in 2005, compared with €112 million in 2004. Net attributable income was €650 million in 2005 compared with a net attributable loss of €24 million in 2004.

At the end of 2005, this area had 1,462 employees (direct and assigned) (1,433 employees at the end of 2004), of which 404 were temporary.

Equity Stakes

Alliances and Financial Investments

The Group has financial investments in a number of banking companies, principally in Europe. The following summarizes the Group's most important financial investments:

San Paolo IMI. At December 31, 2005, the Group owned 8.5% of the capital stock of San Paolo IMI, one of the largest banking groups in Italy in terms of assets. San Paolo IMI controls Intereuropa Bank, a Hungarian bank in which the Group owns a 10% stake.

Attijariwafa Bank. At December 31, 2005, the Group had a 14.5% interest in Attijariwafa Bank, which engages mainly in trade finance and foreign investment activities. Together with Attijariwafa Bank the Group has a 50% joint venture in Attijari International Bank Société Anonyme, which specializes in trade finance in Tangier's free trade zone.

Industrial Portfolio

The majority of our industrial holdings portfolio consists of investments in strategic sectors related to the growth of the Spanish economy. Through our investments in these areas, we aim to contribute to the Group's consolidated results.

The following table summarizes our main industrial holdings at December 31, 2005:

36

Company Business Percentage Held At December 31, 2005

Antena 3 de Televisión, S.A. Mass Media 10.01

Cepsa (*) Oil and Petrochemicals 32.27

Grupo Corporativo ONO, S.A. Cable 15.91

Inmobiliaria Urbis, S.A. (**) Real Estate 45.34

_______________

(*) 12.35% is held directly and 19.92% is held indirectly by the Group through Somaen Dos, S.L. The latter figure represents the Group's indirect economic participation in Cepsa since Santander only controls the percentage of shares of Somaen Dos, S.L. that it owns, which in turn corresponds to 19.92% of Cepsa's capital stock.

(**) As of December 31, 2005, Santander held 51.11% of the voting rights.

In 2005, the Group realized capital gains of more than €1,650 million with divestments in Unión Fenosa, S.A. (22.02%), Auna (27.07%), MRBS Capital Partners (31.03%), Técnicas Reunidas, S.A. (38.02%) and Probitas Pharma, S.A. (11.62%), among others.

As of December 31, 2005, our unrealized capital gains in listed industrial and financial stakes were approximately €2,500 million.

The summarized balance sheets and income statements of the various geographical segments (principal level) are as follows:

Millions of Euros 2005 2004

(Summarized) Balance Sheet

Continental Europe Abbey

Latin America

Financial Management and Equity

Stakes Total Continental Europe Abbey

Latin America


Stakes Total

Loans and advances to customers 212,455 171,796 50,762 816 435,829 177,772 156,790 34,593 196 369,351

Financial assets held for trading (excluding loans and advances) 26,996 64,014 25,163 1,276 117,449 14,657 51,060 14,463 1,190 81,370

Available-for-sale financial 13,306 18 15,607 45,014 73,945 12,008 14 13,924 18,576 44,522

Loans and advances to credit institutions 71,900 13,070 22,158 15,718 122,846 71,819 21,240 21,245 9,955 124,259

Non-current assets 4,229 5,197 1,382 1,396 12,204 3,932 5,164 1,163 738 10,997

Other asset accounts 15,770 47,420 17,132 94,343 174,665 22,105 39,903 10,078 81,795 153,881 Total assets 344,656 301,515 132,204 158,563 936,938 302,293 274,171 95,466 112,450 784,380

Customer deposits 127,975 110,776 65,087 1,927 305,765 122,635 113,353 45,718 1,505 283,211

Debt securities 27,593 62,462 5,631 53,154 148,840 21,595 52,333 5,201 34,709 113,838

Subordinated liabilities 2,241 11,428 1,130 13,965 28,764 2,120 10,622 709 14,018 27,469

Liabilities under insurance Contracts 6,414 36,521 1,737 - 44,672 4,844 36,446 1,054 - 42,344

Deposits from credit institutions 94,233 40,761 38,314 38,386 211,694 78,942 27,162 27,975 15,549 149,628

37

Other liability accounts 71,119 37,260 12,443 18,906 139,728 59,926 31,990 9,026 16,327 117,269

Own funds 15,081 2,307 7,862 32,225 57,475 12,231 2,265 5,783 30,342 50,621 Off-balance-sheet customer funds 97,141 5,999 49,705 - 152,845 89,567 5,059 33,889 - 128,515 Total funds under management 441,797 307,514 181,909 158,563 1,089,783 391,860 279,230 129,355 112,450 912,895

38


(Summarized) Income Statement

Continental Europe Abbey

Latin America


Stakes Total Continental

Europe Abbey Latin

America


Stakes Total

NET INTEREST INCOME 5,398 1,891 3,946 (742) 10,493 4,770 - 3,328 (522) 7,576 Share of results of entities accounted for using the equity method 26 2 7 584 619 33 - 4 412 449 Net fee and commission income 3,331 958 2,043 (18) 6,314 3,142 - 1,639 (12) 4,769

Insurance activity income 116 589 109 2 816 87 - 78 (4) 161 Gains/losses on financial assets and liabilities and Exchange differences 512 347 755 (49) 1,565 404 - 458 239 1,101

GROSS INCOME 9,383 3,787 6,860 (223) 19,807 8,436 - 5,507 113 14,056

Sales and income from the provision of non- financial services (net) and Other operating income/expense 351 52 (91) 10 322 313 - (44) 16 285

Non-financial personnel expenses (47) (8) - (19) (74) (72) - (1) (16) (89) Non-financial general expenses (24) (8) - (16) (48) (34) - (4) (18) (56) General administrative expenses:

Personnel expenses (2,563) (1,228) (1,770) (183) (5,744) (2,502) - (1,541) (193) (4,236) Other administrative expenses (1,171) (1,071) (1,545) (171) (3,958) (1,097) - (1,256) (106) (2,459) Depreciation and amortization (499) (117) (330) (74) (1,020) (514) - (287) (38) (839) NET OPERATING INCOME 5,430 1,407 3,124 (676) 9,285 4,530 - 2,374 (242) 6,662 Net impairment losses (973) (318) (442) (74) (1,807) (1,265) - (397) (181) (1,843)

Other gains/losses (43) 76 (214) 857 676 (47) - (112) (79) (238)

PROFIT BEFORE TAX 4,414 1,165 2,468 107 8,154 3,218 - 1,865 (502) 4,581

PROFIT FROM CONTINUING OPERATIONS 3,148 811 2,006 798 6,763 2,272 - 1,650 63 3,985 CONSOLIDATED PROFIT FOR THE YEAR 3,135 811 2,006 798 6,750 2,272 - 1,661 63 3,996

Profit attributed to the Group 2,983 811 1,776 650 6,220 2,159 - 1,470 (23) 3,606

Business Segments (secondary level): SUMMARIZED INCOME STATEMENTS AND OTHER SIGNIFICANT DATA:


(Summarized) Income

Statement Retail

Banking

Asset Management

and Insurance



Stakes Total Retail

Banking

Asset Management

and Insurance


Financial Manageme

nt and Equity Stakes Total

39

NET INTEREST INCOME 10,766 (146) 615 (742) 10,493 7,404 17 677 (522) 7,576 Share of results of entities Accounted for using the equity method 35 - - 584 619 42 (5) - 412 449 Net fee and commission income 5,191 668 473 (18) 6,314 3,937 452 392 (12) 4,769 Insurance activity income - 814 - 2 816 - 165 - (4) 161

Gains/losses on financial assets and liabilities and Exchange differences 927 32 655 (49) 1,565 323 11 528 239 1,101 GROSS INCOME 16,919 1,368 1,743 (223) 19,807 11,706 640 1,597 113 14,056 Sales and income from the provision of non- financial services (net) and Other operating income/expense 335 - (23) 10 322 292 1 (24) 16 285

Non-financial personnel expenses (55) - - (19) (74) (73) - - (16) (89)

Non-financial general Expenses (32) - - (16) (48) (38) - - (18) (56)

General administrative expenses:

Personnel expenses (4,914) (308) (339) (183) (5,744) (3,593) (151) (299) (193) (4,236)

Other administrative expenses (3,228) (355) (204) (171) (3,958) (2,067) (99) (187) (106) (2,459)

Depreciation and amortization (870) (20) (56) (74) (1,020) (735) (16) (50) (38) (839)

NET OPERATING INCOME 8,155 685 1,121 (676) 9,285 5,492 375 1,037 (242) 6,662 Net impairment losses (1,669) - (64) (74) (1,807) (1,502) 2 (162) (181) (1,843) Other gains/losses (196) 3 12 857 676 (156) (6) 3 (79) (238)

PROFIT BEFORE TAX 6,290 688 1,069 107 8,154 3,834 371 878 (502) 4,581 Other business aggregates:

Total assets 627,954 9,172 141,249 158,563 936,938 531,345 6,959 133,627 112,449 784,380

Loans and advances to customer 407,660 194 816

435,829 344,544 27,159 477 24,134 196

369,351

Customer deposits 269,146 21 1,927

305,765 244,397 37,273 1,505

283,211 34,671 36

Significant New Products and/or Activities

The Group is continuously incorporating new financial products in an attempt to satisfy its customers' needs and to maintain its competitive position within the financial services market.

In this regard, the Global Committee on New Group Products held 13 meetings in 2005 during which it analysed 126 products or product families. A total of 75 products were submitted for approval subject to the Financial Products Procedure Manual, 25 of which were analysed by the Global Committee and the remaining 50 of which were analysed by the Manual's Office.

Some of the more significant products from among those launched by the Bank in 2005 include: the "Super Revolución" mortgage or the campaign for the direct deposit of payrolls to accounts with advantages for

40

the payment of telephone, gas and electricity bills. This loan, designed to help young people get a foot on the housing ladder, is distinguished by its long maturities and a fixed interest rate during the first five years.

The Banesto products which performed the best during 2005 were value-added products for companies and individual customers, such as Banesto Selección, a new service for managing portfolios and e-billing.

The Bank's products that were most successful outside of Spain this year include in Santander Totta the "Crédito Habitação Super Tranquilo", the "Crédito Automóvil Super Tranquilo" and the "Cartão Premium Travel"; in Abbey the "Flexible Plus Mortgage Deal for Life", that provides flexibility in payments as they can be increased, reduced or postponed and the "No Fee Mortgage" that enables customers to change the mortgage to Abbey free of charges and fees; in Brazil the "Crédito Prestamista" and the "Tarjeta Platinum" and in Chile the "Titanio" and "Superexpress" cards.

Principal Markets in which the Guarantor competes.

The Santander Group is one of the principal financial groups in the Spanish banking sector. At 31 December 2005 it was the leading Spanish banking group in terms of total assets, customer lending, on balance sheet customer funds, net worth and profits.

The information sourced from the Annual Report of BBVA contained in this section "BUSINESS OVERVIEW – Principal Markets in which the Guarantor competes" has been accurately reproduced and, as far as the Issuer or the Bank is aware and is able to ascertain from information published by BBVA, no facts have been omitted which would render the reproduced information inaccurate or misleading.

SANTANDER (*) GROUP

Millions of euros

BBVA

Millions of euros TOTAL ASSETS..................................................................... 809,107 392,389 GROSS CUSTOMER LENDING........................................... 443,439 221,995 ON BALANCE SHEET CUSTOMER FUNDS (1) ................ 528,041 259,200 BOOK NET WORTH (2)........................................................ 36,701 13,036 PROFIT FOR YEAR............................................................... 6,750 4,071 - Net profit attributed to the Group.......................................... 6,220 3,806

(*) SANTANDER GROUP(**)

BBVA

BANKING BRANCH NETWORK (3) ...................................... 10,201 7,410 WORKFORCE ........................................................................... 129,196 94,681

RATIOS: - ROE.......................................................................................... 19.86 37.0 - EFFICIENCY ............................................................................... 52.55 43.2 - LEVEL OF DEFAULT ................................................................... 0.89 0.94 - COVERAGE FOR DEFAULT.......................................................... 182.02 252.5 (*) According to data published by Santander Group or BBVA, as the case may be, in their respective

annual reports.

(**) The amounts contained in this column are unaudited

(1) On Balance Sheet Customer Funds = Customer Deposits + Debt Securities + Subordinated Debt + Insurance Liabilities.

(2) Net of own shares and after applying profit and loss for the year. Does not include minority interests nor valuation adjustments.

(3) In Spain and abroad.

The following charts illustrates the Group's attributable income broken down by operative geographical segments for the 2005 financial year:

41

ORGANISATIONAL STRUCTURE

BANCO SANTANDER CENTRAL HISPANO, S.A. is the parent company of the Santander Group. At 31 December 2005 the Group was made up of 664 companies which were consolidated by the global integration method. Additionally, 99 companies were accounted for using the equity method or proportionally consolidated.

The Guarantor is not dependent upon any other entity within the Group.

TREND INFORMATION

There has been no material adverse change in the prospects of the Guarantor and its subsidiaries taken as a whole since 31 December 2005.

The European financial services sector will probably continue to be competitive and the number of financial service providers and alternative distribution channels will increase. It is also anticipated that there will be a process of consolidation in the sector (by mergers, acquisitions or alliances) since other large banks wish to increase their market share or combine with complementary businesses. It is foreseeable that regulatory changes will take place in the future which will reduce market barriers.

The principal trends, uncertainties and events are summarised below which could reasonably have an adverse material effect on the Bank or which could mean that the published financial information is not indicative of the operating results of the Group in the future or of its financial situation are summarised below:

• A fall in the property market and the consequent increase in mortgage repayment defaults.

• The recent increases in interest rates in the United States.

• Uncertainties relating to economic growth expectations, principally in the United States of America, Spain, United Kingdom, other European countries and Latin America, and the impact which they could have on interest and exchange rates.

• The effect which an economic slow-down could have on Latin America and fluctuations in interest and exchange rates.

• The possibility that changes in the macroeconomic environment may deteriorate credit quality of our customers.

• A possible downward trend in capital markets.

• A fall in the value of the euro against the US dollar, sterling or Latin American currencies.

• Inflationary pressure as a result of the effect which it could have in relation to increases in interest rates and reduction in growth.

• An increase in the consolidation of financial services in Europe.

42

• Although it is anticipated that entry barriers to local markets in Europe will be reduced, possible expansion plans of the Bank into other markets could be affected by regulatory requirements imposed by the national authorities of these countries.

ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES

The Articles of Association of the Bank (Article 30) provide that the maximum number of Directors is 22 and the minimum number 14.

The Board of the Bank is presently made up of 19 directors.

The following table displays the composition, position and structure of the Board and its Committees.

For this sole purpose, the business address of each of the persons listed below is: Ciudad Grupo Santander, Avenida de Cantabria s/n, 28660 Boadilla del Monte, Madrid.

Board of Directors

Exec

utiv

e C

omm

ittee

Ris

k

Com

mitt

ee

Aud

it an

d C

ompl

ianc

e C

omm

ittee

App

oint

men

ts a

nd R

emun

erat

ion

Com

mitt

ee

Inte

rnat

iona

l Com

mitt

ee

Tech

nolo

gy, P

rodu

ctiv

ity a

nd

Qua

lity

Com

mitt

ee

Exec

utiv

e

Exte

rnal

Chairman Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos

C C C

First Deputy Chairman Mr. Fernando de Asúa Álvarez (3)

V C I

Second Deputy Chairman and Managing Director Mr. Alfredo Sáenz Abad

Third Deputy Chairman Mr. Matías Rodríguez Inciarte

C

Fourth Deputy Chairman Mr. Manuel Soto Serrano (3)

I

Members

Assicurazioni Generali S.p.A. (represented by Mr. Antoine Bernheim)

P

Mr. Antonio Basagoiti García-Tuñón

Ms. Ana Patricia Botín-Sanz de Sautuola y O'Shea

Mr. Javier Botín-Sanz de Sautuola y O'Shea (1) P

Lord Burns (Terence)

Mr. Guillermo de la Dehesa Romero I

Mr. Rodrigo Echenique Gordillo

Mr. Antonio Escámez Torres

Mr. Francisco Luzón López

Mr. Abel Matutes Juan (3) I

Mutua Madrileña Automovilista (represented by Mr. Luis Rodríguez Durón)

P

Mr. Luis Ángel Rojo Duque (3) C I

Mr. Luis Alberto Salazar-Simpson Bos (3) I

M s I s ab e l Tocino B i sca ro l a sag a ( 4 )

General Secretary and of the Board Mr. Ignacio Benjumea Cabeza de Vaca (2) (3)

Deputy General Secretary and of the Board Mr. Juan Guitard Marín (2)

C: Chairman, V: Vice Chairman, P: Proprietary, I: Independent

43

(1) External proprietary Director who represents in the Board of Directors the capital stock corresponding to the Marcelino Botín Foundation, Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos, Ms. Ana Patricia Botín-Sanz de Sautuola y O'Shea, Mr. Emilio Botín-Sanz de Sautuola y O'Shea, Mr. Jaime Botín-Sanz de Sautuola y García de los Ríos, Ms. Paloma O'Shea Artiñano and his own

(2) Not Directors.

(3) The members of the Audit and Compliance Committee are Fernando de Asúa Álvarez, Manuel Soto Serrano, Abel Matutes Juan, Luis Alberto Salazar-Simpson Bos, and its chairman is Luis Ángel Rojo Duque. The secretary is Ignacio Benjumea Cabeza de Vaca.

(4) Appointed by Co-option by the Board at its meeting held on March 26, 2007.

Principal Activities outside the Guarantor

The current Directors of the Bank at the date hereof carry out among others the following functions in other companies:

Directors Company Name Functions

Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos

SHINSEI BANK, LIMITED Director

Mr. Fernando de Asúa Álvarez IBM ESPAÑA, S.A.

COMPAÑÍA ESPAÑOLA DE PETRÓLEOS, S.A. (CEPSA) Honorary Chairman

Director AIR LIQUIDE ESPAÑA, S.A. Director TÉCNICAS REUNIDAS, S.A. Director CONSTRUCTORA INMOBILIARIA URBANIZADORA VASCO-

ARAGONESA, S.A. Director

Mr. Alfredo Sáenz Abad COMPAÑÍA ESPAÑOLA DE PETRÓLEOS, S.A. (CEPSA) Vice Chairman FRANCE TELECOM ESPAÑA, S.A. Director Mr. Matías Rodríguez Inciarte BANCO ESPAÑOL DE CRÉDITO, S.A.

UCI, S.A. FINANCIERA PONFERRADA, S.A. GRUPO CORPORATIVO ONO, S.A. OPERADOR DEL MERCADO IBERICO DE ENERGIA POLO ESPAÑOL, S.A.

Director Chairman Director

Second Vice Chairman Director

Mr. Manuel Soto Serrano INDRA SISTEMAS, S.A.

INVERSIONES INMOBILIARIAS LAR, S.A. CORPORACIÓN FINANCIERA ALBA, S.A. MERCAPITAL, S.L. OCCIDENTAL HOTELES MANAGEMENT, S.A.

Vice Chairman Director Director

Chairman of the Advisory Committee

Member of the Consultive Committee

Mr. Antoine Bernheim (1) ASSICURAZIONI GENERALI, S.p.A.

INTESA SAN PAOLO S.p.A. Chairman

Deputy Chairman of the Supervisory Board

MEDIOBANCA – BANCA DI CREDITO FINANZIARIO S.p.A Director BSI SA Director Mr. Antonio Basagoiti García-Tuñón FAES FARMA, S.A.

PESCANOVA, S.A. Vice Chairman

Director Ms. Ana Patricia Botín-Sanz de Sautuola y O'Shea

BANCO ESPAÑOL DE CRÉDITO, S.A. ASSICURAZIONI GENERALI, S.p.A.

Chairwoman Director

44

Directors Company Name Functions Mr. Javier Botín-Sanz de Sautuola y O'Shea

M&B CAPITAL ADVISERS, SOCIEDAD DE VALORES, S.A. Executive Director

Chairman Chairman Director

Lord Burns (Terence) ABBEY NATIONAL PLC GLAS CYMRU (WELSH WATER) PEARSON GROUP PLC

Chairman MARKS AND SPENCER GROUP PLC Mr. Guillermo de la Dehesa Romero AVIVA VIDA Y PENSIONES, S.A. DE SEGUROS Y

REASEGUROS CAMPOFRÍO ALIMENTACIÓN, S.A.

Chairman

Director G O L D M A N S A C H S E U R O PE L T D Director AVIVA PLC Director

CENTRE FOR ECONOMIC POLICY RESEARCH (CEPR) IN LONDON

Chairman

GROUP OF THIRTY OF WASHINGTON Member

INSTITUTO DE EMPRESA Chairman of the Board of Trustees

Mr. Rodrigo Echenique Gordillo RECOLETOS GRUPO COMUNICACIÓN, S.A.

ECONOMIC AND SOCIAL COUNCIL OF CARLOS III UNIVERSITY (MADRID) INVERSIONES INMOBILIARIAS LAR, S.A

Director Chairman

Director

Mr. Antonio Escámez Torres SANTANDER CONSUMER FINANCE, S.A

OPEN BANK SANTANDER CONSUMER, S.A. ATTIJARIWAFA BANK, SOCIÉTÉ ANONYME

Chairman Chairman

Vice Chairman Chairman ARENA MEDIA COMMUNICATIONS ESPAÑA, S.A.

Mr. Francisco Luzón López INDUSTRIA DE DISEÑO TEXTIL, S.A. (Inditex) Director

SOCIAL COUNCIL OF THE UNIVERSITY OF CASTILLA-LA MANCHA

Chairman

Chairman Mr. Abel Matutes Juan FIESTA HOTELS & RESPORTS, S.L. Director EURIZON FINANCIAL GROUP Director FCC CONSTRUCCIÓN, S.A. Director TUI AG

Mr. Luis Rodriguez Durón (2) MUTUA MADRILEÑA AUTOMOVILISTA SOCIEDAD DE SEGUROS A PRIMA FIJA

First Vice Chairman

IBÉRICA DE MADERAS Y AGLOMERADOS S.A. Chairman MUTUACTIVOS SA, SGIIC Chairman ARESA SEGUROS GENERALES, S.A. Vice Chairman Mr. Luis Ángel Rojo Duque CORPORACIÓN FINANCIERA ALBA, S.A. Director

UNIVERSIDAD COMPLUTENSE DE MADRID Professor emeritus GROUP OF WISE MEN (ECOFIN) (3) Member ROYAL ACADEMY OF MORAL AND POLITICAL SCIENCES Member

ROYAL ACADEMY OF THE SPANISH LANGUAGE Member Mr. Luis Alberto Salazar-Simpson Bos FRANCE TELECOM ESPAÑA, S.A. Chairman

CONSTRUCTORA INMOBILIARIA URBANIZADORA VASCO-ARAGONESA, S.A.

Chairman

MUTUA MADRILEÑA AUTOMOVILÍSTA, SOCIEDAD DE SEGUROS A PRIMA FIJA

Director

SAINT GOBAIN CRISTALERÍA, S.A. Director

45

Directors Company Name Functions P r o f e s s o r M s Isabel T o c ino

B i s c a ro l a s ag a UNIVERSITY COMPLUTENSE DE MADRID

D i r e c to r CLIMATE CHANGE CAPITAL V i c e - Ch a i r wo ma n INTERNATIONAL ASSOCIATION OF WOMEN LAWYERS V i c e - Ch a i r wo ma n FEDERAL CONGRESS OF THE EUROPEAN MOVEMENT

M e mb e r ROYAL ACADEMY OF DOCTORS

(1) Mr. Antoine Bernheim is the representative at the Bank's board of the company Director Assicurazioni Generali, S.p.A.

(2) Mr. Luis Rodriguez Durón is the representative at the Bank's board of the company Director Mutua Madrileña Automovilista, Sociedad de Seguros a Prima Fija.

(3) Mr Luis Angel Rojo Duque is a member of the Group of Wise Men appointed by the ECOFIN Council for the study of integration of European financial markets.

There are no potential conflicts of interests between any duties owed to the Guarantor by the Directors and their private interests and/or other duties.

MAJOR SHAREHOLDERS

The bank is not aware of any person which exerts or may exert control over the Bank within the terms of Article 4 of Ley 24/1988, de 28 de Julio, del Mercado de Valores (Law 24/1988 of 28 July of Securities Market).

The Bank is not aware of any arrangements the operation of which may at a date subsequent to that of the date hereof result in a change in control of the Guarantor.

FINANCIAL INFORMATION CONCERNING THE GUARANTOR'S ASSETS AND LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES

See paragraph 1 of "Documents Incorporated by Reference".

The Guarantor prepares audited consolidated and non-consolidated annual financial statements, which are incorporated by reference under paragraph 1 of "Documents Incorporated by Reference".

The individual and consolidated annual financial statements of BANCO SANTANDER CENTRAL HISPANO, S.A. for the 2004 and 2005 financial years were audited by the external audit firm DELOITTE, S.L. (formerly DELOITTE & TOUCHE ESPAÑA, S.L.).

The report of Deloitte, S.L. in relation to the financial statements of the Group for the year ended 31 December 2004 contains a reservation to the following effect: in 2003 and 2002, the Bank and other Group entities entered into early retirement agreements with certain employees and recorded these commitments, after receiving the related authorizations from the Bank of Spain pursuant to Rule 13 of Bank of Spain Circular 4/1991, with a charge to unrestricted reserves and simultaneously recorded the related deferred tax asset (€336 million and €181 million, respectively, in 2003, and €856 million and €461 million respectively, in 2002). In 2004, the Bank of Spain did not grant such authorization to credit institutions and, accordingly, also in accordance with rule 13 of Bank of Spain Circular 4/1991, the Bank and other Group entities recorded net provisions of €527 million with a charge to the consolidated statement of income to meet their commitments to the employees who took early retirement in that year (€810 million were charged to the "Extraordinary Loss" caption in the 2004 consolidated statement of income referred to above, and simultaneously the related deferred tax asset was recorded for €283 million).

There are no other reservations or qualifications of the auditors in relation to the 2004 and 2005 Financial Statements referred to above.

The information contained in "BUSINESS OVERVIEW" above is not audited and was obtained from the internal accounting records of the Bank, save for the summarized balance sheets and income statements of the various geographical segments (principal level) and the summarized income statements and other significant data of the Business Segments (Secondary Level), which has been audited.

The information contained in "SELECTED CONSOLIDATED FINANCIAL INFORMATION" was extracted as follows:

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The consolidated income statement data for the years ended December 31, 2004 and 2005 contained in pages 60 to 62 and the consolidated balance sheet data for the years ended December, 31, 2004 and 2005 contained in pages 60 to 62 were extracted or derived from our audited consolidated financial statements for the years ended December 31, 2005 and 2004 prepared in accordance with IFRS. The consolidated income statement data for the years ended December 31, 2004, 2005 and 2006 contained in pages 63 to 65 and the consolidated balance sheet data for the year ended December 31, 2006 contained in pages 63 to 65 were extracted from unaudited consolidated financial information as of and for the years ended December 31, 2006, 2005 and 2004 that forms part of the consolidated financial statements that have been prepared in accordance with IFRS, except that such unaudited consolidated financial information omit certain disclosures required under IFRS to be included in the full consolidated financial statements prepared in accordance with IFRS.

No other information relating to the Guarantor in this Listing Prospectus has been audited by Deloitte, S.L.

The information relating to the Santander Group contained in the second table of "BUSINESS OVERVIEW – Principal Markets in which the Guarantor competes" above is not audited and was obtained from the Bank's annual report.

The financial statements referred to in paragraph 2 of "Documents Incorporated by Reference" are not audited. Such financial statements were extracted from the internal accounting records of the Bank.

The date of the most recent audited financial information of the Bank is 31 December 2005.

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LITIGATION AND GENERAL INFORMATION

LEGAL PROCEEDINGS

There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened or which the Guarantor is aware) which may have, or have had in the previous twelve months, significant effects on the Guarantor and/or the Group's financial position or profitability.

The following is a summary of certain legal proceedings affecting the Group. The Guarantor believes that it has made adequate reserves related to the costs anticipated to be incurred in connection with these and other legal proceedings and believes that liabilities related to such proceedings should not have a significant effect on the Guarantor and/or the Group's financial position or profitability.

Wherever possible the proceedings listed below are quantified. However, in view of the inherent difficulty of predicting the outcome of contentious matters, particularly in cases such as claims challenging the Banks' shareholders' resolutions referred to below, the Bank is unable to quantify the potential loss or practical consequences if a judgement were ordered against it and accordingly no specific amount is attributed to such claims.

Banco Santander Central Hispano, S.A.

Since fiscal year 1992, the Madrid Central Pre-Trial Investigation Court No. 3 had maintained pre-trial investigative proceedings — subsequently Summary Proceedings — in order to determine the liabilities of the Bank, its Chairman and three of its officers with respect to certain credit assignment transactions (operaciones de cesión de crédito) carried out by Banco Santander, S.A. between fiscal years 1987 and 1989. On July 16, 1996, the Madrid Central Pre-Trial Investigation Court No. 3, pursuant to a request made to such effect by the Attorney General after having consulted the Spanish Tax Authority, dismissed certain but not all the claims against the Bank, its Chairman and three of its officers. Thereafter, the Attorney General — as representative of the Tax Authority —, and the Office of the Public Prosecutor repeatedly requested the dismissal of the remaining claims and the removal of the case from the docket. However, on June 27, 2002, the court changed the cited proceedings into a Summary Proceeding. This decision was appealed by the Office of the Public Prosecutor, the Bank, its Chairman and the three officers.

On June 23, 2003, the Panel Two of the Criminal Division of the National Criminal and Administrative Court (Audiencia Nacional) partially admitted such appeals, explicitly acknowledging that the marketing of the credit assignment transactions with clients had been legal, and reducing the number of transactions under scrutiny — and with respect to which the Bank's possible involvement is still being alleged — from 138 to 38. With respect to the remaining 38 transactions under scrutiny, the Attorney General and the Office of the Public Prosecutor have generally requested the dismissal of the claims and their removal from the docket on the grounds that no crime had been committed.

Following the conclusion of the indictment proceedings — with repeated requests by the Office of the Public Prosecutor and the Attorney General for the dismissal of the proceedings and their removal from the docket, — and based on the complaint filed by the citizen complainant, Asociación para la Defensa de Inversores y Clientes (Investor and Customer Defense Association), the Court, in an order dated October 6, 2004, decreed the commencement of oral evidentiary proceedings against the Chairman of the Bank and three of its officers for one crime of falsification of an official document, three crimes of falsification of a commercial document, and thirty crimes against the public finance, ordering that a bond be jointly posted for €67.8 million, which amount was later reduced to €40.1 million, as a fine and for costs. The order designated Panel One of the Criminal Division of the National Criminal and Administrative Court as the competent court to hear the oral evidentiary proceedings.

The oral evidentiary hearing was undertaken with the initial stage of the proceeding taking place at the end of November 2006. The Office of the Public Prosecutor again reiterated its request for the dismissal of the claims and their removal from the docket. On December 20, 2006, the Court dismissed the claim against the Chairman of the Bank and three of its officers. An appeal to the Supreme Court has already been prepared seeking to overturn the dismissal.

In December 1995, the Spanish tax authorities issued an "Acta" (writ) requiring Banco Santander, S.A. to pay €26.2 million in back withholding taxes, interest and penalties relating to the Bank's alleged failure to comply with a purported obligation to withhold income tax on payments to clients with respect to certain credit

48

assignment transactions held by such clients. The Bank's appeal against this writ was rejected. The Bank filed a second appeal which was partially admitted by the court on October 30, 2003. Both the Bank and the Attorney General have appealed such decision before the Supreme Court and are awaiting the Court's decision with respect to the appeals.

Inversión Hogar, S.A. filed in 2001 a suit against the Bank, carried out before the Court of 1st Instance No. 19 of Madrid, seeking the termination of a transactional agreement dated December 11, 1992 between the Bank and the plaintiff. On May 19, 2006, a judgment was rendered whereby the agreement was deemed terminated and the Bank was ordered: (i) to pay €1.8 million plus interest accrued since February 1997; (ii) to return a property which had been assigned to the Bank pursuant to the agreement; (iii) to pay an additional amount of €72.9 million as restoration of goods which had been sold by the Bank after foreclosure; and (iv) to bear the legal costs of the proceeding. The Bank has filed an appeal against such judgment.

The Bank is presently subject to a claim made by the Instituto Nacional de Vías de Colombia (INVIAS) in connection with the execution of an order declaring the expiration of a concession to build and operate a toll motorway in Colombia. The Bank formed part of the consortium (COMMSA) who was awarded that concession. Apart from certain injunctive measures, INVIAS is requesting from COMMSA and its shareholders (jointly and severally) the payment of US$ 137.1 million. There is an undertaking by some of the shareholders of COMMSA to indemnify the Bank in full in connection with losses it may incur as a result of the claim. On September 20, 2006, COMMSA and INVIAS – in the presence of representatives of the Colombian and Spanish Governments – entered into an agreement in principle to settle the dispute, pursuant to which the parties agreed to desist from the litigation in exchange for a cash indemnity. The amount of the cash indemnity is pending determination.

Lanetro, S.A. filed a suit against the Bank, carried out before the Court of 1st Instance No. 34 of Madrid, principally alleging that the Bank breached its alleged obligation to subscribe to the increase in capital stock of the plaintiff in the amount of €30.05 million. The court rejected the claim on December 16, 2003. The plaintiff appealed that decision. On October 27, 2006 the Court handed down a judgment in favor of the plaintiff. The Bank has already prepared an appeal to the Supreme Court against such judgment.

In May 2004, Chadia Limited, S.A. filed a suit against the Bank, carried out before the Court of 1st Instance No. 48 of Madrid, alleging that the Bank breached an agreement for the sale to the plaintiff of certain buildings and seeking damages in the amount of €133 million. The Court rejected the claim, and then Chadia Limited, S.A. appealed that decision. The Court then rejected their appeal. Subsequently, Chadia Limited, S.L. has appealed to the Supreme Court.

For informational purposes, it is also mentioned that several persons, who allegedly have funds deposited in Banco Río de la Plata, S.A., filed an application for conciliation before the courts of the city of Madrid against the Bank, the persons who were members of the Board of Directors of the Bank during 2001 and 2002 and certain others. According to Spanish Law, this application did not start proper judicial proceedings against the Bank. The claimants only intended that the defendants acknowledge the facts alleged in their application, regarding the Bank and its Directors' alleged obligation to reimburse the funds deposited by the claimants in Banco Río de la Plata, S.A. The conciliation hearing was held on July 16, 2002. The Bank and the members of the Board of Directors of the Bank refused to accept the facts and allegations of the application. As a result, the conciliation was terminated. In January 2004, there was a preliminary hearing in connection with a similar case, in which a person who allegedly deposited funds in Banco Río de la Plata, S.A. is claiming US$ 8,365.71. The Court has not determined the date for the next hearing yet.

Abbey National Treasury Services Plc

In October 1996 Abbey National Treasury Services plc received a demand from a foreign Tax Authority relating to the repayment of certain tax credits and related charges. Following certain modifications to the demand its nominal amount now stands at 56 million Pounds sterling. As of December 31, 2006, additional interest in relation to the demand could amount to 21 million Pounds sterling. Abbey National Treasury Services plc received legal advice that it had strong grounds to challenge the validity of the demand and in that sense a judgment has been rendered in the first instance in favor of Abbey, although such judgment has been appealed. Regardless of that, on December 29, 2006 a resolution of a proceeding in connection with a different tax payer but which might affect this case has been made public with an unfavorable outcome for that tax payer.

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Banco do Estado de Sao Paulo (Banespa)

Pursuant to the Brazilian labour regulations applicable to Banespa, Banespa had recorded as of December 31, 2000, the pension allowances arising from the commitments to certain employees, which amounted to approximately 4,000 million Brazilian reais. Since 1987, the Directors of Banespa, as advised by their tax advisers, treated these expenses as deductible expenses in calculating the Brazilian corporate income tax. However, in September 1999, the "Secretaria de Receita Federal" issued a decision under which these expenses, in an amount of approximately Brazilian reais 2,867 million would not be tax deductible. In October 1999, the Board of Directors of Banespa filed an appeal challenging this decision together with an "acción cautelar" regarding fiscal years 1999 and 2000, posted a deposit of Brazilian reais 1,297 million and recorded a provision of Brazilian reais 2,600 million for this contingency. This provision was recorded in 1999 with a charge to income, after recording the related deferred tax asset of Brazilian reais 1,200 million.

In this respect, the Board of Directors of Banespa has decided to accept the Medida Provisória No. 66 of the Secretaria da Receita Federal dated August 29, 2002 and to pay Brazilian reais 2,110 million in order to settle the proceedings. The company disputes any liability with respect to an additional amount of Brazilian reais 103 million relating to costs and surcharges imposed in connection with the dispute relating to the principal amount. The company has asked for an "Mandado de Segurança" and posting a deposit which at December 31, 2006 amounts to reais 174 million.

Several lawsuits are underway in Brazil with respect to the acquisition of Banco Noroeste and its subsequent amalgamation into Banco Santander Brasil.

Lawsuits relating to the acquisition of Banco Noroeste

Two cases have been filed that seek to nullify Banco Santander Brasil's General Shareholders' Meeting that approved the capital increase through which the initial stake in Banco Noroeste was acquired. In addition, one of these cases also seeks compensation for damages. These two cases are based on a series of alleged defects in the holding of the aforementioned General Shareholders' Meeting. The Court has rendered judgment against Banco Santander Brasil in both cases, but Banco Santander Brasil is appealing the Court' decisions.

In addition, a case has been filed by nine minority shareholders of former Banco Santander Noroeste (now Banco Santander Brasil) against Banco Santander Brasil seeking compensation to Banco Santander Brasil for not having received sufficient compensation following to a fraudulent diversion of funds from the Cayman Islands. Prior to the acquisition of Banco Noroeste by Grupo Santander, a diversion of funds occurred from Noroeste's branch in the Cayman Islands. Santander sought and obtained from the previous majority shareholders compensation for the diverted funds to Noroeste's net worth, together with interest calculated at the rate applicable to assets in dollars, since such funds had been invested for a long time in assets denominated in that currency. The case filed by the shareholders demands instead that interest be calculated using the rate applicable to Brazilian financial assets. After a first judgment against Banco Santander Brasil, the appeal was won, followed by a second judgment against Banco Santander Brasil. An appeal has since been filed with stay of execution. The judgment demands payment of the difference between both rates (established at 743 million reais at source, 2,100 million reais with monetary correction to date). However, the recipient of the compensation and the payer are the same legal entity (i.e. Banco Santander Brasil); therefore, if the payment obligation materializes, both amounts would be offset. However, judgment has also been passed demanding 20% as fees and 5% as a "reward" for defending corporate interests, in both cases on the aforementioned amount of 2,100 million reais.

Lawsuits relating to the acquisition and merger of Banco Noroeste by Banco Santander Brasil

There are three actions requesting annulment of the General Shareholders' Meeting of Banco Santander Noroeste held on June 30, 1999 that approved the merger or compensation for damages. In the three cases, sentence has been passed in the first instance, two against Banco Santander Brasil (ordering Banco Santander Brasil to pay an indemnity, but not declaring void the General Shareholders' Meeting) and one in its favor, and appeals have been filed (by all parties), with stay of execution in all cases.

Santander Distribuidora de Títulos e Valores Mobiliarios, Ltda. (Formerly Known As Santander Brasil DTVM, Ltda.) and Banco Santander Brasil, S.A.

On May 19, 2003, the Secretaria de Receita Federal issued an "Auto de Infração" requiring from our Brazilian affiliate Santander Distribuidora de Títulos e Valores Mobiliarios, Ltda. the payment of Brazilian reais 284 million in taxes allegedly incurred in connection with certain cash management services rendered by such

50

company to its clients which the company had treated during 2000, 2001 and the two first months of 2002 as exempt from the Tax on Financial Transactions, following the advice of its tax advisers. The Board of Directors of Santander Distribuidora de Títulos e Valores Mobiliarios, Ltda. appealed this decision in June 2003. The Tax Authorities confirmed the "Auto de Infrançao" and the Board of Directors appealed to "Conselho de Contribuintes" (the final administrative court). The Court decision is pending. On December 31, 2006, the amount involved in the action was equivalent to reais 460 million.

Also on May 29, 2003, the Secretaria de Receita Federal issued another "Auto de Infração" requiring from our Brazilian affiliate Banco Santander Brasil, S.A. the payment of Brazilian reais 284 million in taxes allegedly incurred in connection with certain clearing services rendered by such company to Santander Distribuidora de Títulos e Valores Mobiliarios, Ltda. pursuant to an agreement between these two companies. Following the advice of its tax advisers, Banco Santander Brasil, S.A. had treated during 2000, 2001 and the two first months of 2002 such services as exempt from the Tax on Financial Transactions. The Board of Directors of Banco Santander Brasil, S.A. appealed this decision in June 2003. The Tax Authorities confirmed the "Auto de Infrançao" and the Board of Directors appealed to "Conselho de Contribuintes" (the final administrative court). The Court decision is pending. On December 31, 2006, the amount involved in the action was equivalent to reais 460 million.

Casa de Bolsa Santander Serfin, S.A. de C.V. (Grupo Financiero Santander Serfin)

In 1997 Casa de Bolsa Santander Serfin, S.A. de C.V. ("Casa de Bolsa") was sued for an alleged breach of various stock brokerage contracts. On July 6, 1999, Civil Court number thirty-one of the Federal District handed down a judgment ordering Casa de Bolsa to return to the plaintiff 2,401,588 shares of the investment vehicle México 1 and 11,219,730 shares of the investment vehicle México 4 at their market value and to pay MXP 15 million, plus interest calculated at the average percentage cost of deposit-taking (C.P.P.) multiplied by four.

After several appeals concerning the way of calculating such interest, it has finally been ruled that the interest should not be capitalized. The total indemnity to be paid, including the capital of the deposit, interest without capitalization and the value of the shares to be returned is estimated at US$ 26.7 million.

Shareholder Litigation

A claim was filed by a shareholder before the Madrid Pre-Trial Investigation Court No. 47 against the Chairman, the Chief Executive Office of the Bank and others, as well as against the Bank and Banco Español de Crédito, S.A. ("Banesto") for accessory civil liability, accusing them of offenses of misrepresentation, refusal of the right to information, disloyal management and misappropriation, with respect to the sale by Banesto of the building known as Edificio Castellana, 7 – Madrid - and the acquisition of a shareholding in Aguas de Fuensanta, S.A.

On November 27, 2004, the claim was admitted for processing. Banesto is also present in these proceedings. The proceedings are carried out jointly with another claim, with the same content, brought by another shareholder, which was also admitted for processing by the aforementioned Court of Madrid.

A claim was filed by a shareholder and subsequently joined by another shareholder before the Móstoles (Madrid) Pre-Trial Investigation Court No. 3 against the Chairman and the Chief Executive Officer of the Bank and also against the Bank for accessory civil liability, accusing them of an offense against natural resources. On May 12, 2005, the Provincial Court of Madrid confirmed the admission of this claim.

In addition, a claim was filed by certain shareholders before the Madrid Central Pre-Trial Investigation Court No. 6 against Mr. Alfredo Sáenz Abad, the Bank's legal representative, and others, accusing them of offenses of bribery, misappropriation, embezzlement of public funds and false testimony in a lawsuit, with respect to the award of Banesto in 1994. The proceedings has been admitted for processing and is now at the stage of statement presentation.

A claim has been filed by a shareholder before the Madrid Pre-Trial Investigation Court No. 11 against the Chairman of the Bank and others, as well as the Bank's subsidiaries Santusa Holding, S.L. and Santander Holding Gestión, S.L. as parties with civil liability, accusing them of offenses of misrepresentation, misappropriation and disloyal management. This claim was partially admitted for processing on May 23, 2006. The Bank is present at the proceedings. The Bank challenged the complaint.

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On February 7, 2007, the Court dismissed the claim and decreed its removal from the docket, on the grounds that no crime whatsoever had been made. An appeal can be filed against the decision of the Court.

A claim has been filed by a shareholder before the Contentious-Administrative section of the High Court of Justice of Madrid (Section Nine) against the resolutions of the National Securities Market Commission (Comisión Nacional del Mercado de Valores or CNMV) of March 4, and 6, 1998 concerning the the tender offer launched by the former Banco Santander, S.A. of Banesto's shares. On March 22, 2004, the appeal was rejected. Subsequently, the plaintiff has prepared and filed an appeal before the Supreme Court, which is now being processed.

A claim has been filed by a shareholder before Section Six of the Contentious-Administrative section of the National Criminal and Administrative Court against the resolution of the Vice Chairman of the Board of the National Securities Market Commission of December 18, 2001, by which it was resolved to record in the respective Official Registers the respective Prospectus and the document evidencing the "December 2001 Capital increase of BANCO SANTANDER CENTRAL HISPANO, S.A.". Following the respective process, on October 13, 2005 the appeal was rejected. Subsequently, the plaintiff has prepared an appeal before the Supreme Court.

In addition, four shareholders owning among all of them 1,537 shares (less than 0.000025% of the Bank's share capital) as of October 23, 2006 have been contesting certain corporate resolutions adopted at the eight General Shareholders' Meetings of Banco Santander Central Hispano, S.A. held on: (i) January 18, 2000; (ii) March 4, 2000; (iii) March 10, 2001; (iv) February 9, 2002; (v) June 24, 2002; (vi) June 21, 2003; (vii) June 19, 2004; and (viii) June 18, 2005. In all cases, the objections were dismissed in the first instance and upon appeal (except those relating to the 2003 General Meetings, where the proceedings have been suspended on a first penal ruling procedure and are now processed in the first instance; 2004, which were dismissed in the first instance and are being appealed; and 2005, still pending sentence in the first instance), with costs being imposed on the plaintiffs in the majority of cases. In most cases the plaintiffs have filed appeals to the Supreme Court, which, except for the cases where such appeals were not admitted, are being processed. The same occurred with the General Shareholders' Meetings of Banesto held on March 26, 1994 and February 15, 1995, which were dismissed in the first instance and upon appeal, with imposition of costs on the plaintiffs and with respect to which appeals have been filed before the Supreme Court.

Other Litigation

In addition to the above described matters, the Bank and its subsidiaries are from time to time subject to certain claims and parties to certain legal proceedings incidental to the normal course of our business, including in connection with the Group's lending activities, relationships with the Group's employees and other commercial or tax matters. In view of the inherent difficulty of predicting the outcome of legal matters, particularly where the claimants seek very large or indeterminate damages, or where the cases present novel legal theories, involve a large number of parties or are in early stages of discovery, the Bank cannot state with confidence what the eventual outcome of these pending matters will be, what the timing of the ultimate resolution of these matters will be or what the eventual loss, fines or penalties related to each pending matter may be. The Bank believes that it has made adequate reserves related to the costs anticipated to be incurred in connection with these various claims and legal proceedings and believes that liabilities related to such claims and proceedings should not have, in the aggregate, a material adverse effect on the Group's business, financial condition, or results of operations. However, in light of the uncertainties involved in such claims and proceedings, there is no assurance that the ultimate resolution of these matters will not significantly exceed the reserves currently accrued by the Bank; as a result, the outcome of a particular matter may be material to the Bank's operating results for a particular period, depending upon, among other factors, the size of the loss or liability imposed and the level of the Bank's income for that period.

SIGNIFICANT CHANGE

There has been no significant change in the financial or trading position of the Group since December 31, 2006, being the date of the most recently published unaudited consolidated interim financial statements of the Bank.

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MATERIAL CONTRACTS

During the past two years, the Bank has not been a party to any contracts that were not entered into in the ordinary course of business of the Bank and which was material to the Group as a whole, except for the investment in Sovereign as disclosed in "RECENT DEVELOPMENTS" below.

DOCUMENTS ON DISPLAY

Copies and, where appropriate, English translations of the following documents may be inspected during normal business hours at the office of the Registrar, Transfer Agent and Paying Agent at 1 Canada Square, London E14 5AE, at the registered office of the Issuer and the head office of the Guarantor (being Ciudad Grupo Santander, Avenida de Cantabria s/n, 28660 Boadilla del Monte, Madrid, Spain):

1. the estatutos (articles of association) of each of the Issuer and of the Guarantor;

2. this Listing Prospectus, together with any supplements thereto;

3. the Registrar and Transfer and Paying Agency Agreement dated January 31, 2007 between the Issuer and the Bank of New York;

4. the Tax Certification and Exchange Processing Agency Agreement between the Issuer, the Guarantor and Acupay System LLC, dated 21 November, 2006 and the Letter of Appointment dated January 31, 2007 among the Issuer and Acupay System LLC;

5. all the documents incorporated by reference herein and listed on page 2 of this Listing Prospectus;

6. the Public Deed of Issuance relating to the Series 5 Preferred Securities;

7. the Payment and Guarantee Agreement dated January 31, 2007 entered into between the Guarantor, the Issuer and the Bank of New York; and

8. The Registration Rights Agreement dated January 31, 2007 entered into between the Guarantor, the Issuer and Lehman Brothers Inc.

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RECENT DEVELOPMENTS

Interbanco, S.A. ("Interbanco")

In September 2005, the Group and the Portuguese company SAG (Soluções Automóvel Globlais) reached an agreement to jointly provide consumer finance and vehicle financing services in Portugal and operate the vehicle "renting" business in Spain and Portugal. Interbanco had assets amounting to €700 million at 2004 year-end.

In January 2006 the Group paid €118 million for a 50.001% interest in the share capital of Interbanco.

Following this acquisition, the Group and SAG will concentrate, in a single company, their consumer finance and vehicle financing services, which will entail the merger of Interbanco and Hispamer Portugal. The Group will own 60% of the share capital of the post-merger company and SAG the remaining 40%. The Bank expects that the new company will be the automobile financing market leader in Portugal.

Investment in Sovereign Bancorp, Inc.

On May 31, 2006, Banco Santander acquired shares of common stock equal to 19.8% of Sovereign Bancorp, Inc.'s ("Sovereign") outstanding shares after giving effect to such purchase. The purchase price was $27 per share, for an aggregate purchase price of $2.4 billion. The proceeds of the sale were used by Sovereign to finance a portion of the $3.6 billion cash purchase price that Sovereign paid to acquire Independence Community Bank Corp. ("Independence").

Sovereign's board of directors has elected three Banco Santander designees to its board of directors, and Banco Santander's Annual General Meeting of Shareholders held on June 17, 2006 elected the chief executive officer of Sovereign at that time to Banco Santander's board of directors. Mr. Jay Sidhu ceased to hold office as a Director of the Bank with effect from 31st December 2006, as a result of his resignation as Chairman and Chief Executive Officer of Sovereign. Sovereign and Independence together constitute the 18th largest bank in the United States as measured by assets and deposits with a significant presence in the Northeastern United States.

Under the Investment Agreement dated October 24, 2005 between Banco Santander and Sovereign, as amended (the "Investment Agreement"), Banco Santander has the right to increase its stake to 24.99% of Sovereign's outstanding shares at market prices. Unless otherwise approved by Sovereign's shareholders, shares so purchased will be held in a voting trust and voted in direct proportion to the votes of Sovereign's shareholders other than Banco Santander and its affiliates. In addition, following the second anniversary of the closing and until the end of the fifth year after the closing, Banco Santander will have the option to make an offer to acquire all of Sovereign, subject to certain conditions and limitations agreed between the parties. If such an offer is made by Banco Santander and the offer is either the highest offer resulting from an auction of Sovereign or at least equal to a full and fair price for Sovereign as determined pursuant to a competitive valuation procedure agreed by the parties, the Sovereign board must accept the offer; provided that, during the third year after the closing, any offer made by Banco Santander must be at a price of at least $40 per share. Even if the Sovereign board accepts the offer, Banco Santander will not be permitted to complete an acquisition of Sovereign unless a majority of the shareholders other then Banco Santander and its affiliates who vote at the relevant Sovereign shareholder meeting approve the acquisition. In addition, for five years following the closing, Banco Santander will have a right of first negotiation and a matching right with respect to third party offers to acquire Sovereign. Finally, with certain exceptions, Banco Santander has agreed that, during this five year period, it will not sell or otherwise dispose of its Sovereign shares.

Banco Santander has several options with respect to its investment. Banco Santander can hold its investment in Sovereign indefinitely, after two years seek to acquire 100% of Sovereign or, subject to the terms of the Investment Agreement, sell or otherwise dispose of its investment. Banco Santander currently expects to seek to increase its interest in Sovereign to 24.99% through open market purchases. As of December 31, 2006 Banco Santander has acquired 24.8% of Sovereign's outstanding shares at a cost of €2,300 million.

Island Finance

On January 23, 2006, our subsidiary in Puerto Rico, Santander BanCorp, and Wells Fargo & Company reached an agreement through which it would acquire the assets and business operations in Puerto Rico of Island Finance, a consumer finance company, from Wells Fargo for $742 million. The transaction was closed in the first quarter of 2006 and generated goodwill of $114 million.

54

Island Finance is the second largest consumer finance company in Puerto Rico and provides consumer financing and mortgages to 205,000 customers through its 70 branches.

Compañía Española de Petróleos, S.A. ("CEPSA")

On October 13, 2006, Elf received a notice from the EU Commission communicating clearance of the concentration arising from the acquisition by Elf of shares representing 4.35% of the share capital of CEPSA. Consequently, Santander sold to Elf 11,650,893 shares of CEPSA for a price of €53 million. This transaction generated capital losses of €158 million.

At December 31, 2006 Santander holds a 29.99% of CEPSA.

Abbey Life Insurance Business

On June, 7, 2006 Santander announced that Abbey had entered into an agreement with Resolution plc ("Resolution") under which Abbey would sell its entire life insurance business to Resolution for a fixed cash consideration of €5.3 billion (£3.6 billion). This represents 97% of the embedded value of the businesses being sold as reported by Abbey as of December 31, 2005, and would not generate capital gains for Grupo Santander. The transaction was completed on September 1, 2006.

The life insurance businesses sold were Scottish Mutual Assurance plc, Scottish Provident Limited and Abbey National Life plc, as well as the two offshore life insurance companies, Scottish Mutual International plc and Scottish Provident International Life Assurance Limited. Abbey retained its entire branch based investment and asset management business and James Hay, its self-invested personal pension company, and its Wrap business.

Separately, in order to provide continuity of product supply and service to its customers, Abbey entered into two distribution agreements with Resolution under which (i) Abbey would distribute through its retail network Abbey-branded life and pensions products manufactured by Resolution; and (ii) Abbey would continue to be the exclusive distributor of Scottish Provident protection products to intermediaries.

In addition, Abbey secured exclusive access to provide retail banking products to Resolution's five million policyholders.

Some 2,000 Abbey employees were transferred to Resolution as part of the transaction. Resolution continues to operate the life operations from the Abbey premises in Glasgow and also maintains the operations in Dublin, the Isle of Man and Hong Kong.

Banco Santa Cruz S.A. ("Banco Santa Cruz")

On April 18, 2006 Santander sold its entire stake in the capital stock of its subsidiary in Bolivia, Banco Santa Cruz.

AFP Unión Vida

On July 25, 2006, Grupo Santander reached an agreement with Banco de Crédito Perú to sell to the latter the Peruvian pension company AFP Unión Vida for an amount, subject to adjustment, of $142 million. The transaction was completed on August 25, 2006 and generated for Santander capital gains of around $100 million.

Inmobiliaria Urbis, S.A ("URBIS")

In July 2006, Banco Español de Crédito, S.A. ("Banesto", 88.49% owned by Santander) reached an agreement with Construcciones Reyal, S.A. ("Reyal") whereby Banesto would sell its 50.267% stake in Urbis to Reyal at a price of €26 per share, under a public tender offer over 100% of URBIS capital.

Both Reyal and URBIS are among the biggest real state companies in Spain. The transaction was completed in the second half of the year and Santander recognized gross capital gains of €1,218 million.

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Drive Consumer USA Inc. (formerly, Drive Financial Services LP) ("Drive")

On September 25, 2006, Santander Consumer reached an agreement to acquire 90% of Drive in the U.S.A. for $636 million in cash, representing a multiple of 6.8 times the estimated earnings for 2006. The operation was closed during 2006 and generated goodwill of $544 million.

Under the agreement, the price paid by Santander could increase by a maximum of $175 million, if the company achieves certain earning targets set for years 2007 and 2008.

Drive is one of the leading auto financing companies in "subprime" customer segment in the United States. Based in Dallas, Texas, it is present in 35 states, with approximately 50% of its activity concentrated in Texas, California, Florida and Georgia. Drive has around 600 employees and its products are distributed through more than 10,000 auto dealer partnerships.

Until our acquisition, 64.5% of Drive was owned by HBOS plc and 35.5% by its management team. Following the acquisition by Santander, the present Chairman and COO of Drive will act as Chief Executive Officer, maintaining ownership of 10% of the company, a percentage on which the parties have signed a series of options which could enable Grupo Santander to buy the additional 10% between 2009 and 2013 at prices linked to the company's earnings performance.

Antena 3 de Televisión, S.A. ("A3TV")

On October 25, 2006 A3TV announced a transaction by which it would acquire a 10% holding in such company presently held directly or indirectly by Grupo Santander. The transaction, approved on a shareholders general meeting held in November 2006 by A3TV, meant the acquisition by A3TV of shares representing a 5% of its share capital and the capital reduction through amortization of another 5%, in both cases at a price of €18 per share.

The acquisition was completed before the year end and generated a capital gain of approximately €294 million for Santander.

Fumagalli Soldan

On November 8, 2006, Santander reached an agreement with KBL Group to acquire via its specialized subsidiary, Banif, the Italian private bank, KBL Fumagalli Soldan, a subsidiary of the KBL Group. The deal is valued at €44 million. Fumagalli Soldan has offices in Rome and Milan and has assets under management of €400 million. Santander plans to develop its new acquisition on the Banif model and offer its Italian customers a wider range of banking products and services. Santander already has a consumer credit activity in Italy via Santander Consumer.

San Paolo - IMI

On December 29, 2006 Banco Santander announced that it had sold shares representing 4.8% of the share capital of the Italian financial entity San Paolo - IMI, for a total consideration of €1,585 million this transaction generated for Santander a capital gain of approximately €705 million. After the transaction, Banco Santander now holds a 3.6% stake in San Paolo - IMI, equivalent to a 1.7% in the entity resulting from the merger with Intesa.

Banco Santander-Chile

On November 27, 2006 Santander Group announced its intention to offer up to 7.23% of Banco Santander Chile's common stock through a public offering registered with the SEC in the United States.

The Santander Group's current policy is to maintain ownership of at least 75% of Banco Santander-Chile's common stock as part of its long term investment in Latin America.

The public offering was completed in December 2006 and generated capital gains for the Group of €270 million.

Merger of Banco Santander Central Hispano, S.A. and Riyal, S.L. ("Riyal"), Lodares Inversiones, S.L. Sociedad Unipersonal ("Lodares"), Somaen-Dos, S.L. Sociedad Unipersonal ("Somaen"), Gessinest

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Consulting, S.A. Sociedad Unipersonal ("Gessinest") and Carvasa Inversiones, S.L. Sociedad Unipersonal ("Carvasa")

On October 23, 2006, the Bank held an Extraordinary General Shareholders Meeting that approved the merger by absorption of Riyal, Lodares, Somaen, Gessinest and Carvasa, into Banco Santander. As a result, Banco Santander absorbed all of the other five companies mentioned above, which were wholly-owned, directly or indirectly, by Banco Santander. The absorbed companies have been terminated and all of their net corporate assets have been transferred en bloc to Banco Santander which has acquired, as universal successor, all of the rights and obligations making up the net assets of the absorbed companies.

Banco BPI, S.A. ("BPI")

On January 29, 2007 Santander Group reached an agreement with Banco Comercial Português ("BCP") for the sale to the latter institution of 44.6 million shares of the Portuguese bank BPI, representing 5.87% of BPI's capital, at a price of 5.70 euros per share, the bid BCP has made in its pending public offer over BPI, or higher should BCP revise its public offer bid upwards.

The sale may be executed in one or several tranches. When completed, which is expected to take place in the next few months, it will generate for Santander Group a net capital gain of euros 88 million approximately.

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USE OF PROCEEDS

We intend to use the net proceeds from the sale of the Series 5 Preferred Securities for general corporate purposes and to further strengthen the capital base of the Group. The net proceeds from the sale of the Series 5 Preferred Securities will be deposited on a subordinated and permanent basis with us by the Issuer, and we intend to use those monies for general corporate purposes with any specific allocation of such proceeds to depend on the amount of proceeds then needed, on whether other funds are then available and on how much those funds cost. If the net proceeds are not used immediately, they will be temporarily invested by us to reduce the Group's short-term indebtedness.

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SELECTED CONSOLIDATED FINANCIAL INFORMATION

The selected consolidated financial information presented below has been extracted or derived from our:

• audited consolidated financial statements as of and for the years ended December 31, 2005 and 2004 prepared in accordance with IFRS (as defined below); and

• unaudited consolidated income statement as of and for the years ended December 31, 2006, 2005 and 2004 that forms part of the consolidated financial statements and the consolidated balance sheet data for the year ended December 31, 2006 that have been prepared in accordance with IFRS, except that such unaudited consolidated financial information omit certain disclosures required under IFRS to be included in the full consolidated financial statements prepared in accordance with IFRS.

The selected unaudited consolidated financial information as of and for the years ended December 31, 2004 and 2005 differ from the selected audited consolidated financial information for such periods due to the reclassification of amounts relating to operations that were discontinued in 2006, such as the sale of the life insurance business of Abbey, which was sold in 2006. Under IFRS revenues and expenses of discontinued businesses must be reclassified from each income statement line item to the "Profit from discontinued operations" line item. This presentation requirement came into effect in fiscal year 2006. Prior year financial statements are required to be reclassified for comparison purposes to present the same business as discontinued operations. This change in presentation does not affect "Profit attributed to the Group."

You should read this selected information in conjunction with, and it is qualified in its entirety by reference to, the above-listed consolidated financial statements, all of which are included in our 2005 Annual Report and December 2006 Interim Report incorporated by reference herein to the extent described under "Documents Incorporated by Reference".

Effective January 1, 2005, we have adopted the new international financial reporting standards as adopted by the European Union ("IFRS") for the preparation of our consolidated financial statements and no longer prepare financial statements in accordance with generally accepted accounting principles in Spain as set forth in Bank of Spain Circular 4/91 ("previous Spanish GAAP"). Accordingly, our audited consolidated financial statements for the years ended December 31, 2005 and 2004 and unaudited consolidated financial statements for the year ended December 31, 2006 were prepared in accordance with IFRS, which differs in some significant respects from generally accepted accounting principles in the United States ("U.S. GAAP") and previous Spanish GAAP. Financial information prepared according to previous Spanish GAAP is not comparable with that prepared under IFRS. Accordingly, we have not selected such financial information for inclusion in the following tables.

The IFRS data for 2004 included in our 2005 Annual Report differ from those contained in the statutory consolidated financial statements for that year, as approved at the annual general meeting on June 18, 2005, which were presented in accordance with previous Spanish GAAP.

In November 2004, we acquired 100% of the capital of Abbey. Our acquisition of Abbey has been reflected on our audited financial statements as of and for the year ended December 31, 2004 as if the acquisition had occurred on December 31, 2004. Accordingly, Abbey's assets and liabilities were consolidated into our audited balance sheet as of December 31, 2004, but Abbey's results of operations had no impact on our audited income statement for the year ended December 31, 2004. Abbey's results of operations are reflected in our audited income statement for the year ended December 31, 2005 and unaudited income statement data for the year ended December 31, 2006.

Income statement information for the years ended December 31, 2006 and 2005 includes the consolidation of Abbey's results of operations line by line beginning January 1, 2005 and renders such income statement items incomparable to the analogous income statement data for the year ended December 31, 2004.

Results for past periods are not necessarily indicative of results that may be expected for any future period.

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Year Ended December 31, 2004 2005 (Audited)

(prepared in accordance with IFRS)

Consolidated Income Statement Data (thousands of euros, except percentages and per

share data)

Interest and similar income ........................................................................ 17,461,238 32,958,556 Interest expense and similar charges.......................................................... (10,274,776) (22,800,696) Income from equity instruments ................................................................ 389,038 335,610 Net interest income ................................................................................... 7,575,500 10,493,470 Share of results of entities accounted for using the equity method ........... 449,011 619,166Net fees and commissions (1) .................................................................... 4,768,637 6,313,849Insurance activity income........................................................................... 161,374 815,519Gains (losses) on financial transactions (2) ............................................... 1,100,725 1,565,281 Gross income ............................................................................................. 14,055,247 19,807,285 Net income from non-financial activities (3)............................................. 347,811 426,032Other operating income (4) ........................................................................ (62,941) (103,745)General administrative expenses................................................................ (6,839,867) (9,823,438) Personnel expenses ............................................................................. (4,324,662) (5,817,397) Other general administrative expenses................................................ (2,515,205) (4,006,041)Depreciation and amortization ................................................................... (838,674) (1,021,211) Net operating income ............................................................................... 6,661,576 9,284,923 Impairment losses (net) .............................................................................. (1,843,415) (1,806,983)Net gains on disposal of investments in associates (5) .............................. 30,891 1,299,046Net results on other disposals, provisions and other income (6) ............... (267,749) (622,517) Profit before tax........................................................................................ 4,581,303 8,154,469 Income tax .................................................................................................. (596,792) (1,391,176) Profit from continuing operations .......................................................... 3,984,511 6,763,293 Profit from discontinued operations (net) .................................................. 11,723 (13,523) Consolidated profit for the year.............................................................. 3,996,234 6,749,770 Profit attributed to minority interests ......................................................... 390,364 529,666 Profit attributed to the Group ..................................................................... 3,605,870 6,220,104 Per Share Information: Average number of shares (thousands) (7) .............................................. 4,950,498 6,240,611 Profit attributed to the Group per average share ...................................... 0.7284 0.9967Diluted earnings per share (in euros) ....................................................... 0.7271 0.9930Dividends paid (in euros) ......................................................................... 0.33 0.42Dividends paid (in US$) ........................................................................... 0.39 0.49

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Consolidated Balance Sheet Data: Year Ended December 31, 2004 2005 (Audited)

(prepared in accordance with IFRS)

Consolidated Balance Sheet Data: (thousands of euros, except

percentages and per share data) Total assets ........................................................................................................ 664,486,300 809,106,914 Loans and advances to credit institutions (8)..................................................... 58,379,774 59,773,022 Loans and advances to customers (net) (8) ........................................................ 369,350,064 435,828,795 Investment Securities (9).................................................................................... 138,753,764 203,938,360 Investments: Associates ..................................................................................... 3,747,564 3,031,482 Liabilities Deposits from central banks and credit institutions (10) ................................... 83,750,339 148,622,407 Customer deposits (10)....................................................................................... 283,211,616 305,765,280 Debt securities (10) ............................................................................................ 113,838,603 148,840,346 Capitalization Guaranteed Subordinated debt excluding preferred securities (11) .................. 9,369,939 8,973,699 Secured Subordinated debt................................................................................. 508,039 - Other Subordinated debt..................................................................................... 12,300,179 13,016,989 Preferred securities (11) ..................................................................................... 5,292,016 6,772,768 Preferred shares (11) .......................................................................................... 2,124,222 1,308,847 Minority interests (including profit attributed to minority interests) ................ 2,085,316 2,848,223 Stockholders' equity (12).................................................................................... 34,414,942 39,778,476 Total capitalization ............................................................................................. 66,094,652 72,699,002 Stockholders' Equity per Share (12)................................................................... 6.95 6.37 Other managed funds Mutual funds....................................................................................................... 97,837,724 109,480,095 Pension funds...................................................................................................... 21,678,522 28,619,183 Managed portfolio .............................................................................................. 8,998,388 14,746,329 Total other managed funds................................................................................. 128,514,634 152,845,607

Consolidated Ratios Profitability Ratios Net Yield (13).................................................................................................... 2.20% 1.57%Efficiency ratio (14) ........................................................................................... 52.00% 52.55%Return on average total assets (ROA)................................................................ 1.01% 0.91%Return on average stockholders' equity (ROE).................................................. 19.74% 19.86%Capital Ratio: Average stockholders' equity to average total assets ......................................... 4.62% 4.24%Ratio of earnings to fixed charges (15) Excluding interest on deposits ........................................................................... 1.89% 1.82%Including interest on deposits............................................................................. 1.39% 1.32%

Credit Quality Data Allowances for impaired assets (excluding country-risk) ................................ 6,813,354 7,902,225 Allowances for impaired assets as a percentage of total loans.......................... 1.81% 1.78%Impaired assets (16)........................................................................................... 4,114,691 4,341,500 Impaired assets as a percentage of total loans.................................................... 1.09% 0.98%Allowances for impaired assets as a percentage of impaired assets.................. 165.59% 182.02%Net loan charge-offs as a percentage of total loans ........................................... 0.16% 0.23%

(1) Equals "Fee and commission income" less "Fee and commission expense" as stated in our consolidated

financial statements incorporated by reference herein.

(2) Equals the sum of "Gains/losses on financial assets and liabilities (net)" and "Exchange differences (net)" as stated in our consolidated financial statements incorporated by reference herein.

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(3) Equals the sum of "Sales and income from the provision of non-financial services" and "Cost of sales" as stated in our consolidated financial statements incorporated by reference herein.

(4) Equals the sum of "Other operating income" and "Other operating expenses" as stated in our consolidated financial statements incorporated by reference herein.

(5) Equals the sum of "Other gains: Gains on disposal of investments in associates" and "Other losses: Losses on disposal of investments in associates" as stated in our consolidated financial statements incorporated by reference herein.

(6) Includes "Provisions (net)", "Finance income from non-financial activities", "Finance expense from non-financial activities", "Other gains: Gains on disposal of tangible assets", "Other gains: Other", "Other losses: Losses on disposal of tangible assets" and "Other losses: Other" as stated in our consolidated financial statements incorporated by reference herein.

(7) Average number of shares have been calculated on the basis of the weighted average number of shares outstanding in the relevant year, net of treasury stock.

(8) Equals the sum of the amounts included under the headings "Financial assets held for trading", "Other financial assets at fair value through profit or loss" and "Loans and receivables" as stated in our consolidated financial statements incorporated by reference herein.

(9) Equals the amounts included as "Debt instruments" and "Other equity instruments" under the headings "Financial assets held for trading", "Other financial assets at fair value through profit or loss", "Available-for-sale financial assets" and "Loans and receivables" as stated in our consolidated financial statements incorporated by reference herein.

(10) Equals the sum of the amounts included under the headings "Financial liabilities held for trading", "Other financial liabilities at fair value through profit or loss" and "Financial liabilities at amortized cost" included in Notes 20, 21 and 22 to our consolidated financial statements incorporated by reference herein.

(11) In our consolidated financial statements preferred securities are included under "Subordinated liabilities" and preferred shares are stated as "Equity having the substance of a financial liability". For regulatory purposes both preferred securities and preferred shares are included as part of Tier I Capital. "Guaranteed Subordinated debt excluding preferred securities" includes issuances of subordinated debt (excluding preferred securities) guaranteed by Banco Santander Central Hispano, S.A.

(12) Equals the sum of the amounts included at the end of each year as "Own funds" and "Valuation adjustments" as stated in our consolidated financial statements incorporated by reference herein. We have deducted the book value of treasury stock from stockholders' equity.

(13) Net yield is the total of net interest income (including dividends on equity securities) divided by average earning assets.

(14) Efficiency ratio equals the sum of "General administrative expenses from financial activities", "Depreciation and amortization costs" less "Offsetting fees" (see Note 48 to our consolidated financial statements incorporated by reference herein), divided by the sum of "Gross income" and "Net income from non-financial activities" less "General administrative expenses from non-financial activities".

(15) For the purpose of calculating the ratio of earnings to fixed charges, earnings consist of income from continuing operations before taxation, and minority interests, plus fixed charges and after deduction of the unremitted pre-tax income of companies accounted for by the equity method. Fixed charges consist of total interest expense, including or excluding interest on deposits as appropriate, and the proportion of rental expense deemed representative of the interest factor. Fixed charges include dividends and interest paid on preferred shares.

(16) Impaired assets reflect Bank of Spain classifications. Such classifications differ from the classifications applied by U.S. banks in reporting loans as non-accrual, past due, restructured and potential problem loans. The Bank of Spain requires Spanish banks to classify any loan, fixed-income security, guarantee and certain other extensions of credit as impaired if these credits have any payment of principal or interest 90 days or more past due or if the banks have a reasonable doubt that these credits will be collected, even if any past due payments have been outstanding for less than 90 days or the asset is otherwise performing.

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The unaudited consolidated income statement data as of and for the years ended December 31, 2004 and 2005 presented below differ from the audited consolidated income statement data for such periods presented above due to the reclassification of amounts relating to operations that were discontinued in 2006, such as the life insurance business of Abbey, which was sold in 2006. Under IFRS, revenues and expenses of discontinued businesses must be reclassified from each income statement line item to the "Profit from discontinued operations" line item. This presentation requirement came into effect in fiscal year 2006. Prior year income statements are required to be reclassified for comparison purposes to present the same businesses as discontinued operations. This change in presentation does not affect "Profit attributed to the Group."

Consolidated Income Statement Data: Year Ended as of December 31,

2004 2005 2006

(unaudited)

(forms part of the consolidated financial

statements prepared in accordance with IFRS) (thousands of Euros, except per share data)

Interest income 17,444,350 33,098,866 36,840,896 Interest expenses (10,271,884) (22,764,963) (24,757,133) Income from equity instruments 389,038 335,576 404,038Net interest income 7,561,504 10,669,479 12,487,801Income from companies accounted for by the equity method 449,036 619,157 426,921Net fees and commissions (1) 4,727,232 6,256,312 7,223,264Insurance activity income 161,374 226,677 297,851Gains (losses) on financial transactions (2) 1,099,795 1,561,510 2,179,537Gross income 13,998,941 19,333,135 22,615,374Net income from non-financial activities (3) 118,308 156,178 118,913Other operating income (4) (61,974) (89,540) (119,352) General administrative expenses (6,790,485) (9,473,116) (10,095,417)

Personnel (4,296,171) (5,675,740) (6,045,447) Other administrative expenses (2,494,314) (3,797,376) (4,049,970)

Depreciation and amortization (834,112) (1,017,335) (1,150,770) Net operating income 6,430,678 8,909,322 11,368,748Impairment losses (net) (1,847,294) (1,801,964) (2,550,459) Net gains on disposal of investments in associates (5) 30,891 1,298,935 271,961 Net results on other disposals, provisions, and other income (6) (227,002) (606,618) 59,767 Profit before tax 4,387,273 7,799,675 9,150,017Income tax (525,824) (1,274,738) (2,293,638) Profit from continuing operations 3,861,449 6,524,937 6,856,379Profit from discontinued operations 134,785 224,833 1,389,374Consolidated profit for the year 3,996,234 6,749,770 8,245,753Profit attributed to minority interests 390,364 529,666 649,806Profit attributed to the Group 3,605,870 6,220,104 7,595,947 Per Share Information: Average number of shares (thousands) (7) 4,950,498 6,240,611 6,248,376 Profit attributed to the Group per average share 0.7284 0.9967 1.2157Diluted earnings per share (in euros) 0.7271 0.9930 1.2091Dividends paid (in euros) 0.33 0.42 0.52Dividends paid (in US$) 0.39 0.49 0.65

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Year Ended as of December 31,

2004 2005 2006

(audited) (audited) (unaudited)

(forms part of the consolidated financial statements

prepared in accordance with IFRS) (thousands of Euros, except per share data)

Consolidated Balance Sheet Data: Total assets 664,486,300 809,106,914 833,872,715 Loans and advances to credit insititutions (8) 58,379,774 59,773,022 60,174,538 Loans and advances to customers (net) (8) 369,350,064 435,828,795 523,345,864 Investment Securities (9) 138,753,764 203,938,360 136,760,433 Investments: Associates 3,747,564 3,031,482 5,006,109 Liabilities Deposits from central banks and credit institutions (10) 83,750,339 148,622,407 113,035,937 Customer deposits (10) 283,211,616 305,765,280 331,222,601 Debt securities (10) 113,838,603 148,840,346 204,069,390 Capitalization Guaranteed Subordinated debt excluding preferred securities (11) 9,369,939 8,973,699 11,186,480 Secured Subordinated debt 508,039 - - Other Subordinated debt 12,300,178 13,016,989 12,399,771 Preferred securities (11) 5,292,016 6,772,768 6,836,570 Preferred shares (11) 2,124,222 1,308,847 668,328 Minority interest (including net income of the period) 2,085,316 2,848,223 2,220,743 Stockholders' equity (12) 34,414,942 39,778,476 44,851,559 Total capitalization 66,094,652 72,699,002 78,163,451 Stockholders' Equity per Share (12) 6.95 6.37 7.18 Other managed funds Mutual funds 97,837,724 109,480,095 119,838,418 Pension funds 21,678,522 28,619,183 29,450,103 Managed portfolio 8,998,388 14,746,329 17,835,031 Total other managed funds 128,514,634 152,845,607 167,123,552 Consolidated Ratios Profitability Ratios: Efficiency ratio (13) 52.76% 52.82% 48.53%Return on average total assets (ROA) 1.01% 0.91% 1.00%Return on average stockholders' equity (ROE) 19.74% 19.86% 21.39%Capital Ratio: Average stockholders' equity to average total assets 4.62% 4.24% 4.36%Ratio of earnings to fixed charges (14) Excluding interest on deposits 1.89% 1.82% 1.60%Including interest on deposits 1.39% 1.32% 1.27%

Credit Quality Data Allowances for impaired assets (excluding country risk) 6,813,354 7,902,225 8,626,937 Allowances for impaired assets as a percentage of total loans 1.81% 1.78% 1.62%Impaired assets (15) 4,114,691 4,341,500 4,607,547 Impaired assets as a percentage of total loans 1.09% 0.98% 0.87%Allowances for impaired assets as a percentage of impaired assets 165.59% 182.02% 187.23%Net loan charge-offs as a percentage of total loans 0.16% 0.23% 0.34%

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(1) Equals "Fee and commission income" less "Fee and commission expense" as stated in our consolidated financial statements incorporated by reference herein.

(2) Equals the sum of "Gains/losses on financial assets and liabilities (net)" and "Exchange differences (net)" as stated in our consolidated financial statements incorporated by reference herein.

(3) Equals the sum of "Sales and income from the provision of non-financial services" and "Cost of sales" as stated in our consolidated financial statements incorporated by reference herein.

(4) Equals the sum of "Other operating income" and "Other operating expenses" as stated in our consolidated financial statements incorporated by reference herein.

(5) Equals the sum of "Other gains: Gains on disposal of investments in associates" and "Other losses: Losses on disposal of investments in associates" as stated in our consolidated financial statements incorporated by reference herein.

(6) Includes "Provisions (net)", "Finance income from non-financial activities", "Finance expense from non-financial activities", "Other gains: Gains on disposal of tangible assets", "Other gains: Other", "Other losses: Losses on disposal of tangible assets" and "Other losses: Other" as stated in our consolidated financial statements incorporated by reference herein.

(7) Average number of shares have been calculated on the basis of the weighted average number of shares outstanding in the relevant year, net of treasury stock.

(8) Equals the sum of the amounts included under the headings "Financial assets held for trading", "Other financial assets at fair value through profit or loss" and "Loans and receivables" as stated in our consolidated financial statements incorporated by reference herein.

(9) Equals the amounts included as "Debt instruments" and "Other equity instruments" under the headings "Financial assets held for trading", "Other financial assets at fair value through profit or loss", "Available-for-sale financial assets" and "Loans and receivables" as stated in our consolidated financial statements incorporated by reference herein.

(10) Equals the sum of the amounts included under the headings "Financial liabilities held for trading", "Other financial liabilities at fair value through profit or loss" and "Financial liabilities at amortized cost" included in Notes 20, 21 and 22 to our consolidated financial statements incorporated by reference herein.

(11) In our consolidated financial statements preferred securities are included under "Subordinated liabilities" and preferred shares are stated as "Equity having the substance of a financial liability". For regulatory purposes both preferred securities and preferred shares are included as part of Tier I Capital. "Guaranteed Subordinated debt excluding preferred securities" includes issuances of subordinated debt (excluding preferred securities) guaranteed by Banco Santander Central Hispano, S.A.

(12) Equals the sum of the amounts included at the end of each year as "Own funds" and "Valuation adjustments" as stated in our consolidated financial statements incorporated by reference herein. We have deducted the book value of treasury stock from stockholders' equity.

(13) Efficiency ratio equals the sum of "General administrative expenses from financial activities", "Depreciation and amortization costs" less "Offsetting fees" (see Note 48 to our consolidated financial statements incorporated by reference herein), divided by the sum of "Gross income" and "Net income from non-financial activities" less "General administrative expenses from non-financial activities".

(14) For the purpose of calculating the ratio of earnings to fixed charges, earnings consist of income from continuing operations before taxation, and minority interests, plus fixed charges and after deduction of the unremitted pre-tax income of companies accounted for by the equity method. Fixed charges consist of total interest expense, including or excluding interest on deposits as appropriate, and the proportion of rental expense deemed representative of the interest factor. Fixed charges include dividends and interest paid on preferred shares.

(15) Impaired assets reflect Bank of Spain classifications. Such classifications differ from the classifications applied by U.S. banks in reporting loans as non-accrual, past due, restructured and potential problem loans. The Bank of Spain requires Spanish banks to classify any loan, fixed-income security, guarantee and certain other extensions of credit as impaired if these credits have any payment of principal or interest 90 days or more past due or if the banks have a reasonable doubt that these credits will be collected, even if any past due payments have been outstanding for less than 90 days or the asset is otherwise performing.

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DESCRIPTION OF THE SERIES 5 PREFERRED SECURITIES

The following is a summary of certain terms and provisions of the Series 5 Preferred Securities. The summary set forth below does not purport to be complete and is subject to, and qualified in its entirety by reference to a public deed of issuance dated January 26, 2007 and the resolutions adopted by the shareholders and the board of directors of the Issuer establishing the Series 5 Preferred Securities. A summary of certain terms and provisions of the Guarantee of the Series 5 Preferred Securities by the Bank is set forth later in this Listing Prospectus under the heading "Description of the Guarantee".

Distributions

Non-cumulative cash distributions on the Series 5 Preferred Securities (the "Distributions") will accrue from the date of original issuance and are payable quarterly in arrears on January 31, April 30, July 31 and October 31 in each year, commencing on April 30, 2007.

Payment of cash distributions in any year on the Series 5 Preferred Securities and on all other series of Preferred Securities, as defined below (both issued and which may, in the future, be issued or guaranteed by the Bank) is limited by the amount of the Distributable Profits of the Bank for the previous year as defined below under section entitled "Description of the Guarantee—Distributions", and to any limitations that may be imposed by Spanish banking regulations on capital adequacy for credit institutions, as determined in accordance with guidelines and requirements of the Bank of Spain and other Spanish law as in effect from time to time. Distributions shall not be payable to the extent that:

• the aggregate of such Distributions, together with (a) any other distributions previously paid during the then-current fiscal year (defined as the accounting year of the Bank) and (b) any distributions proposed to be paid during the then-current Distribution Period, in each case on or in respect of Preferred Securities (including the Series 5 Preferred Securities) would exceed the Distributable Profits of the immediately preceding fiscal year; or

• even if Distributable Profits are sufficient, if under applicable Spanish banking regulations relating to capital adequacy requirements affecting financial institutions which fail to meet their required capital ratios on a parent company only basis or on a consolidated basis, the Bank would be prevented at such time from making payments on its ordinary shares or on Preferred Securities issued by the Bank.

''Preferred Securities'' means (as the case may be) any preferred securities (participaciones preferentes) issued under Spanish Law 13/1985, or other securities or instruments equivalent to preferred securities issued by the Issuer, or by any other subsidiary of the Bank which are entitled to the benefit of a guarantee ranking pari passu with the Bank's obligations under the Guarantee, or any such securities or instruments issued by the Bank and ranking pari passu with the Bank's obligations under the Guarantee.

In this Listing Prospectus, "distribution" refers to any distributions paid or to be paid on the Preferred Securities.

If Distributions are not paid in full on the Series 5 Preferred Securities, all distributions paid upon the Series 5 Preferred Securities and all other Preferred Securities will be paid pro rata among the Series 5 Preferred Securities and all such other Preferred Securities, so that the amount of the distribution payment per security will have the same relationship to each other that the nominal or par value per security of the Series 5 Preferred Securities and all other Preferred Securities bear to each other.

If Distributions are not paid on the Series 5 Preferred Securities on the Distribution Payment Date in respect of the relevant Distribution Period as a consequence of the above limitations on Distributions or are paid partially, then the right of the holders of the Series 5 Preferred Securities to receive a Distribution or an unpaid part thereof in respect of the relevant Distribution Period will be lost and neither the Issuer nor the Guarantor will have any obligation to pay the Distribution accrued or part thereof for such Distribution Period or to pay any interest thereon, whether or not Distributions on the Series 5 Preferred Securities are paid for any future Distribution Period.

The Distributions payable on the Series 5 Preferred Securities are fixed at 6.50% per annum of their par value. The Distribution payable in respect of any Distribution Period (defined as the period from and including one Distribution payment date (or, in the case of the first Distribution Period, the issuance date) to but excluding the next Distribution payment date) will be computed on the basis of twelve 30-day months and a 360-day year.

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Distributions on the Series 5 Preferred Securities will be payable to the record holders thereof as they appear on the register for the Series 5 Preferred Securities on record dates, which will be on the 15th calendar day preceding the relevant payment dates. We have been informed by DTC that distributions on Global Preferred Securities Certificates (as defined below) will be paid over to DTC participants in respect of their record holdings on the record date. In the event that any date on which Distributions are payable on the Series 5 Preferred Securities is not a day on which banks in the city of Madrid (Spain) and The City of New York are open for business and on which foreign exchange dealings may be conducted in the city of Madrid (Spain) and The City of New York (a "business day"), then payment of the Distribution payable on such date will be made on the next day which is a business day (and without any interest or other payment in respect of any such delay).

Except as hereinabove provided, holders of the Issuer's Series 5 Preferred Securities will have no right to participate in the profits of the Issuer.

Optional Redemption

The Series 5 Preferred Securities are redeemable, at the option of the Issuer, subject to the prior consent of the Bank of Spain, in whole but not in part, on or after January 31, 2017, upon not less than 30 nor more than 60 days' notice prior to the relevant redemption date by mail to each record holder, at the redemption price of $25.00 per Series 5 Preferred Security, plus the accrued and unpaid Distribution for the then-current Distribution Period to the date fixed for redemption.

If the Issuer gives notice of redemption of the Series 5 Preferred Securities, then by 12:00 Noon, New York time on the relevant redemption date, the Issuer will:

• irrevocably deposit with the paying agent funds sufficient to pay the foregoing redemption price, including the amount of accrued and unpaid Distribution for the then-current Distribution Period to the date fixed for redemption; and

• give the paying agent irrevocable instructions and authority to pay the redemption price to the holders of the Series 5 Preferred Securities.

If the notice of redemption has been given, and the funds deposited as required, then on the date of such deposit:

• Distributions on the Series 5 Preferred Securities called for redemption shall cease;

• such Series 5 Preferred Securities will no longer be considered outstanding; and

• the holders will no longer have any rights as holders except the right to receive the redemption price.

If either the notice of redemption has been given and the funds are not deposited as required on the date of such deposit or if the Issuer or the Bank improperly withholds or refuses to pay the redemption price of the Series 5 Preferred Securities, Distributions will continue to accrue at the rate specified from the redemption date to the date of actual payment of the redemption price.

In order to comply with certain Spanish capital adequacy regulations in force at the date of this Listing Prospectus, neither the Issuer nor the Bank nor any of their respective subsidiaries shall at any time purchase Series 5 Preferred Securities, without the prior consent of the Bank of Spain, and in any event not earlier than January 31, 2017. Notwithstanding the foregoing, if Spanish law were to change and such purchases are permitted before January 31, 2017, then, subject to applicable law, the Issuer, the Bank and any of their respective subsidiaries may at any time and from time to time purchase outstanding Series 5 Preferred Securities by tender, in the open market or by private agreement.

Any Series 5 Preferred Securities so purchased by the Issuer shall be immediately cancelled. For so long as the Series 5 Preferred Securities are restricted securities (within the meaning of Rule 144(a)(3) under the Securities Act), neither the Guarantor nor any affiliate will purchase or agree to purchase or otherwise acquire any Series 5 Preferred Securities, whether as beneficial owner or otherwise.

Rights upon Liquidation

If the Issuer is voluntarily or involuntarily liquidated, dissolved or wound-up, the holders of outstanding Series 5 Preferred Securities will be entitled to receive out of the assets that are available to be

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distributed to holders, and before any assets are distributed to holders of ordinary shares or any other class of shares of the Issuer ranking junior to the Series 5 Preferred Securities as to participation in assets, but together with holders of any other Preferred Securities of the Issuer ranking equally with the Series 5 Preferred Securities as to participation in assets, the following liquidation distribution:

• $25.00 per Series 5 Preferred Security, plus

• an amount equal to the accrued and unpaid Distributions for the then-current Distribution Period up to the date of payment.

If at the time that any liquidation distribution is to be paid, proceedings are also pending or have been commenced for the voluntary or involuntary liquidation, dissolution or winding-up of the Bank or for a reduction in the Bank's shareholders' equity pursuant to Article 169 of the Spanish Corporations Act (Ley de Sociedades Anónimas), then the liquidation distribution to be paid to the holders:

• of all Preferred Securities of the Issuer;

• of all Preferred Securities of other subsidiaries of the Bank; and

• of Preferred Securities issued by the Bank,

will be limited to and not exceed the amount that would have been paid as the liquidation distribution from the assets of the Bank (after payment in full in accordance with Spanish law of all creditors of the Bank, including holders of subordinated debt but excluding holders of any guarantee or any other contractual right expressed to rank equally with or junior to the Guarantee), had all such Preferred Securities been issued by the Bank, and

• ranked junior to all liabilities of the Bank;

• ranked pari passu with the most senior Preferred Securities which could have been issued by the Bank (if any); and

• ranked senior to the Bank's ordinary shares.

The above limitation will apply even if the Issuer has at the time sufficient assets to pay the liquidation distribution to the holders of all Preferred Securities issued by it, including the Series 5 Preferred Securities.

If the foregoing liquidation distribution relating to the Series 5 Preferred Securities and other Preferred Securities cannot be made in full due to the limitation described above, then all payments will be made pro rata in the proportion that the amount available for payment bears to the full amount that would have been payable had there been no such limitation.

Upon receipt of payment of the liquidation distribution, holders of Series 5 Preferred Securities will have no right or claim on any of the remaining assets of either the Issuer or the Bank. See the section entitled "Description of the Guarantee–Status."

Except as provided in the second paragraph above with respect to any liquidation or winding up of the Bank or a reduction in its shareholders equity, the Bank will not permit, and will not take any action to cause, the liquidation, dissolution or winding-up of the Issuer.

Voting Rights

The holders of Series 5 Preferred Securities do not have any voting rights unless either the Issuer or the Bank, under the Guarantee, fails to pay Distributions in full on the Series 5 Preferred Securities for four consecutive Distribution Periods. In such event, the holders of outstanding Series 5 Preferred Securities, together with the holders of any other series of Preferred Securities of the Issuer then also having the right to vote for the election of directors, acting as a single class without regard to series, will be entitled to:

• appoint two additional members of the board of directors of the Issuer;

• remove any such board member from office; and

• appoint another person(s) in place of such member(s).

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This can be accomplished by either:

• written notice given to the Issuer by the holders of a majority in liquidation preference; or

• an ordinary resolution passed by the holders of a majority in liquidation preference of the securities present in person or by proxy at a special general meeting of the holders convened for that purpose.

If the written notice of the holders is not given as provided in the preceding paragraph, the board of directors of the Issuer, or a duly authorized committee of the board of directors, is required to convene a special general meeting for the above purpose, no later than 30 days after this entitlement arises.

If the board of directors of the Issuer, or its duly authorized committee, fails to convene this meeting within the required 30-day period, the holders of 10% in liquidation preference of the outstanding Series 5 Preferred Securities and other Preferred Securities of the Issuer are entitled to convene the meeting. The Issuer will determine the place where the separate general meeting will be held.

Immediately following a resolution for the appointment or the removal of additional members to the board of directors, the special general meeting of holders shall give notice of such to:

(1) the board of directors of the Issuer so that it may, where necessary, call a general meeting of the shareholders of the Issuer; and

(2) the shareholder of the Issuer, so that they may hold a general meeting of shareholders.

The shareholder of the Issuer has undertaken to vote in favor of the appointment or removal of the directors so named by the special general meeting of the holders and to take all necessary measures in such regard.

Once distributions have been paid in full in respect of the Series 5 Preferred Securities for four consecutive Distribution Periods and any other Preferred Securities of the Issuer in respect of such distribution periods as set out in their own terms and conditions, any member of the board of directors of the Issuer that has been appointed in the manner described in the preceding paragraphs is required to vacate office.

Under the Articles of the Issuer, its board of directors must have a minimum of three members and a maximum of eleven members. At the date of this Listing Prospectus, the board of directors of the Issuer has four directors.

Any amendments or abrogation of the rights, preferences and privileges of the Series 5 Preferred Securities will not be effective, unless otherwise required by applicable law and except:

• with the consent in writing of the holders of at least two-thirds of the outstanding Series 5 Preferred Securities; or

• with the sanction of a special resolution passed at a separate general meeting by the holders of at least two-thirds of the outstanding Series 5 Preferred Securities.

If the Issuer, or the Bank under any guarantee, has paid in full the most recent distribution payable on each series of the Issuer's Preferred Securities, the Issuer, the holders of its ordinary shares, or its board of directors may, without the consent or sanction of the holders of its Preferred Securities:

• take any action required to issue additional Preferred Securities or authorize, create and issue one or more other series of Preferred Securities of the Issuer ranking equally with the Series 5 Preferred Securities, as to the participation in the profits and assets of the Issuer, without limit as to the amount; or

• take any action required to authorize, create and issue one or more other classes or series of shares of the Issuer ranking junior to the Preferred Securities, as to the participation in the profits or assets of the Issuer.

However, if the Issuer, or the Bank under any guarantee, has not paid in full the most recent distribution payable on each series of Preferred Securities, then the prior consent of the holders of at least two thirds in liquidation preference of the outstanding Preferred Securities of the Issuer will be required to carry out

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such actions. Such consent may be granted in writing by the holders, or with the sanction of a special resolution passed at a separate general meeting of holders.

The vote of the holders of Series 5 Preferred Securities is not required to redeem and cancel the Series 5 Preferred Securities. Spanish law does not impose any restrictions on the ability of holders of Preferred Securities who are not residents or citizens of Spain to hold or vote such Preferred Securities.

If the shareholders of the Issuer propose a resolution providing for the liquidation, dissolution or winding-up of the Issuer, the holders of all the outstanding Preferred Securities of the Issuer:

• will be entitled to receive notice of and to attend the general meeting of shareholders called to adopt this resolution; and

• will be entitled to hold a separate and previous general meeting of holders and vote together as a single class without regard to series on such resolution, but not on any other resolution.

The above resolution will not be effective unless approved by the holders of a majority in liquidation preference of all outstanding Preferred Securities of the Issuer.

The result of the above mentioned vote shall be disclosed at the general shareholders meeting as well as the fact that the shareholder of the Issuer has undertaken to vote in the correspondent general shareholders meeting in conformity with the vote of the separate general meeting of holders.

Notice, attendance, or approval is not required if the liquidation, dissolution and winding-up of the Issuer is initiated due to:

• the liquidation, dissolution or, winding up of the Bank; or

• a reduction in shareholders equity of the Bank under Article 169 of the Corporations Law of Spain.

The Issuer shall cause a notice of any meeting at which the holders of Series 5 Preferred Securities are entitled to vote, to be mailed to each record holder of Series 5 Preferred Securities. This notice will include a statement regarding:

• the date, time and place of the meeting;

• a description of any resolution to be proposed for adoption at the meeting at which the holders are entitled to vote; and

• instructions for the delivery of proxies.

Special General Meetings

A Special General Meeting, which will be constituted by all holders of Preferred Securities of the Issuer, will be called by the board of directors of the Issuer.

The quorum shall be the holders of such Preferred Securities holding one-quarter of the liquidation preference of all Preferred Securities of the Issuer issued and outstanding. If the attendance of one-quarter of the holders of such Preferred Securities issued and outstanding cannot be obtained, such Special General Meeting may be re-convened one day after the first meeting and such meeting shall be validly convened irrespective of the number of preferred securities present or represented.

In a Special General Meeting all resolutions shall be made by the majority set out in "Voting Rights" above, and will be binding on all of the holders of such Preferred Securities, including those not in attendance and dissenters.

All holders of such Preferred Securities who are able to show that they held their securities five days prior to the date of the Special General Meeting shall be entitled to attend with the right to speak and vote. Holders of such Preferred Securities shall prove that they held such Preferred Securities in the manner and subject to the requirements set out in the announcement published when convening such Special General Meeting. Holders of such Preferred Securities may delegate their representation to another person, by an individual signed letter for each meeting.

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The convening of a Special General Meeting will be carried out in accordance with the rules governing the calling and holding of meetings of holders of each series of Preferred Securities.

A Special General Meeting of holders of the Issuer's Preferred Securities will be convened (i) so long as any Series 5 Preferred Security is listed on the London Stock Exchange and the London Stock Exchange so requires by publication in an English language newspaper in London (which is expected to be the Financial Times) or, if such publication is not practicable but is required by the rules of the London Stock Exchange, in a leading daily newspaper in English and having general circulation in Europe, (ii) in accordance with the requirements of any security exchange on which the Series 5 Preferred Securities are listed and (iii) by mail to DTC (in each case not less that 30 nor more than 60 days prior to the date of the act or event to which such notice, request or communication relates).

Registrar, Transfer Agent and Paying Agent

The Bank of New York, presently located at 101 Barclay Street, New York, New York 10286, will act as registrar, transfer agent and paying agent for the Series 5 Preferred Securities, which together with its successors and assigns, we will refer to as "the Paying Agent."

Ranking of the Series 5 Preferred Securities

The Series 5 Preferred Securities will rank (a) junior to all liabilities of the Issuer including subordinated liabilities, (b) pari passu with each other and with any other series of Preferred Securities of the Issuer and (c) senior to the Issuer's ordinary shares.

The holders of Series 5 Preferred Securities by their subscription or acquisition waive any different priority that Spanish law or regulations could grant at any time, and particularly those arising from articles 92 and 158 of Law 22/2003 (Ley Concursal), if any.

Form of Series 5 Preferred Securities; Book-entry System

The Series 5 Preferred Securities have been issued in registered form to Qualified Institutional Buyers pursuant to Rule 144A who will have a beneficial interest in the Series 5 Preferred Securities represented by a single global Preferred Security Certificate (the "Global Preferred Security Certificate") with the legend as provided under "Transfer Restrictions" set forth thereon, and deposited with, or on behalf of, DTC and such Series 5 Preferred Securities is registered in the name of DTC or its nominee.

For so long as Series 5 Preferred Securities are represented by the Global Preferred Security Certificate, beneficial interests in such Series 5 Preferred Securities will be transferable only in accordance with the rules and procedures of DTC in effect at such time. Interests in Series 5 Preferred Securities represented by the Global Preferred Security Certificate are subject to the transfer restrictions as described above under "Transfer Restrictions" and the Global Preferred Security Certificate bears a legend to such effect. Beneficial interests in the Series 5 Preferred Securities represented by the Global Preferred Security Certificate have been transferred to Qualified Institutional Buyers who took delivery in the form of a beneficial interest in the Series 5 Preferred Securities represented by the Global Preferred Security Certificate, without any written certification from the transferor or the transferee.

Because DTC can only act on behalf of direct participants, who in turn act on behalf of indirect participants and certain banks, the ability of a person having a beneficial interest in the Series 5 Preferred Securities represented by the Global Preferred Security Certificate to pledge such interest to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such interest, may be affected by the lack of a physical certificate.

The Paying Agent is not required to register the transfer of any Series 5 Preferred Security that has been called for redemption.

So long as DTC or its nominee is the holder of the Global Preferred Security Certificate, DTC or its nominee will be considered the sole holder of such Global Preferred Security Certificate for all purposes. No direct participant, indirect participant or other person is entitled to have Series 5 Preferred Securities registered in its name, receive or be entitled to receive physical delivery of Series 5 Preferred Securities in definitive form or be considered the owner or holder of the Series 5 Preferred Securities. Each person having an ownership or other interest in Series 5 Preferred Securities must rely on the procedures of DTC, and, if a person is not a

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participant in DTC, must rely on the procedures of the participant or other securities intermediary through which that person owns its interest to exercise any rights and obligations of a holder of the Series 5 Preferred Securities.

Payments of any amounts in respect of the Global Preferred Security Certificate will be made by the Paying Agent to DTC. Payments will be made to beneficial owners of the Series 5 Preferred Securities in accordance with the rules and procedures of DTC or its direct and indirect participants, as applicable. Neither the Issuer, the Bank nor the Paying Agent nor any of their respective agents will have any responsibility or liability for any aspect of the records of any securities intermediary in the chain of intermediaries between DTC and any beneficial owner of an interest in a Global Preferred Security Certificate, or the failure of DTC or any intermediary to pass through to any beneficial owner any payments that the Paying Agent makes to DTC.

DTC has advised us that it is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities of its participants and to facilitate the clearance and settlement of transactions among its participants in those securities through electronic securities certificates. DTC participants include securities brokers and dealers, including parties that may act as underwriters, dealers or agents with respect to the securities, banks, trust companies, clearing corporations and certain other organizations, some of which, along with certain of their representatives and others, own DTC. Access to the DTC book-entry system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly.

The address of DTC is 55 Water Street, New York, New York 10041, USA.

Transfer

The transfer of a Series 5 Preferred Security, and the benefit of the Guarantee, may be registered by surrendering the certificate evidencing the Series 5 Preferred Security to be transferred together with the form of transfer endorsed on it duly completed and executed, at the office of the registrar.

The Issuer has registered the transfers of Series 5 Preferred Securities without charge but with payment (or the giving of such indemnity for the benefit of the Issuer as the registrar may require) for any tax or other governmental charges, which may be imposed in relation to the transfer.

The Issuer will not register the transfer of any Series 5 Preferred Securities after such securities have been called for redemption.

Replacement of Lost Certificates

If any certificate for Series 5 Preferred Securities is mutilated or alleged to have been lost, stolen or destroyed, a new certificate representing the same security may be issued to the record holder upon request but subject to either delivery of the old certificate or (if alleged to have been lost, stolen or destroyed) compliance with such pre-conditions of indemnity and payment of the Issuer's and Paying Agent's out-of-pocket expenses related to such request as the board of directors of the Issuer may then determine.

Miscellaneous

Series 5 Preferred Securities are not subject to any mandatory redemption or sinking fund provisions. Holders of Series 5 Preferred Securities have no pre-emptive rights.

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DESCRIPTION OF THE GUARANTEE

This section describes the general terms and conditions of the Payment and Guarantee Agreement, which is referred to as the "Guarantee", that the Bank has executed and delivered for the benefit of the holders from time to time of the Series 5 Preferred Securities.

Because this is only a summary, it does not contain all the details found in the full text of the Guarantee. If you would like additional information, you should read the full text of the Guarantee, a copy of which will be provided upon request.

General

Subject to the restrictions specified in this Listing Prospectus, and unless paid by the Issuer, the Bank will pay, in full, to the holders of Series 5 Preferred Securities, the Guarantee payments, as defined below, as and when due, regardless of any defense, right of set-off or counterclaim which the Issuer may have or assert.

The following payments, if not paid by the Issuer, which we will refer to as Guarantee payments, will be subject to the Guarantee, without duplication:

• any accrued and unpaid Distributions;

• the redemption price for any Series 5 Preferred Securities redeemed by the Issuer; and

• the liquidation distribution per Series 5 Preferred Security described under "Description of the Series 5 Preferred Securities – Rights upon Liquidation."

A holder of Series 5 Preferred Securities may enforce the Guarantee directly against the Bank, and the Bank will waive any right or remedy to require that any action be brought against the Issuer or any other person or entity before proceeding against the Bank. The Guarantee will not be discharged except by payment of the Guarantee payments in full and by complete performance of all obligations of the Bank under the Guarantee.

The Guarantee constitutes a guarantee of payment and not of collection only.

The Issuer is a wholly-owned subsidiary of the Bank. Under the Guarantee, as long as any Series 5 Preferred Securities are outstanding, the Bank has agreed to maintain 100% ownership in the ordinary shares of the Issuer.

Distributions

The Bank will not be obligated to make any guarantee payment in respect of Distributions (including accrued and unpaid Distributions relating to any payment upon redemption or liquidation distribution) on any Series 5 Preferred Securities, if the aggregate of such Distribution together with (a) any other distributions previously paid during the then-current fiscal year (defined as the accounting year of the Guarantor) and (b) any distributions proposed to be paid during the then-current Distribution Period, in each case on or in respect of Preferred Securities (including the Series 5 Preferred Securities) would exceed Distributable Profits, as defined below, of the immediately preceding fiscal year.

Even if Distributable Profits are sufficient, the Bank will not be obligated to make any payment under the Guarantee, if under applicable Spanish Banking regulations relating to capital adequacy requirements affecting financial institutions which fail to meet their required capital ratios on a parent company only basis or on a consolidated basis, the Bank would be prevented at such time from making payments on its ordinary shares or on Preferred Securities issued by the Bank.

If the Guarantee payments cannot be made in full due to such limitations, the payments in respect of the Series 5 Preferred Securities and all other Preferred Securities will be made pro rata among all holders of Preferred Securities in the proportion that the amount available for payment bears to the full amount that would have been payable, had there been no limitation.

"Distributable Profits" means, for any fiscal year, the reported net profit (calculated in compliance with the regulations of the Bank of Spain) of the Bank, determined after tax and extraordinary items for such year, as derived from the non-consolidated audited profit and loss account of the Bank, irrespective of whether shareholders' meeting approval is still pending, prepared in accordance with generally applicable accounting standards in Spain and Bank of Spain requirements and guidelines, each as in effect at the time of such

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preparation. In the event that on any Distribution payment date, the audit of the non-consolidated profit and loss account has not been completed, the reference to be used to calculate the Distributable Profits will be the balance of the unaudited non-consolidated profit and loss account of the Bank as reported in the financial statements delivered to the Bank of Spain in respect of December 31st of the preceding fiscal year.

Redemption Price

Under the Guarantee, the Bank will guarantee the payment of the full amount of the redemption price on the Series 5 Preferred Securities that the Issuer may redeem. However, if this redemption price includes accrued and unpaid Distributions from the current Distribution payment period to the date of redemption, the Bank's obligation to pay this portion of the redemption price will be subject to the limitation described above under the section entitled "—Distributions."

Liquidating Distributions

If at the time that any liquidation distributions are to be paid pursuant to the Guarantee in respect of the Series 5 Preferred Securities, proceedings are pending or have been commenced for the voluntary or involuntary liquidation, dissolution or winding-up of the Bank or for a reduction in the Bank's shareholders' equity pursuant to Article 169 of the Spanish Corporations Act, then payments for such liquidation distributions and any liquidation distributions payable with respect to all other Preferred Securities will not exceed the liquidation distributions that would have been payable from the assets of the Bank (after payment in full in accordance with Spanish law of all creditors of the Bank, including holders of its subordinated debt, but excluding holders of any guarantee or other contractual right expressly ranking equally with or junior to the Guarantee) had all the Preferred Securities been issued by the Bank and ranked:

• junior to all liabilities of the Bank;

• pari passu with the most senior Preferred Securities which could have been issued by the Bank (if any); and

• senior to the Bank's ordinary shares.

In the event of any liquidation or winding-up of the Bank or a reduction in its shareholders' equity pursuant to Article 169 of the Spanish Corporations Law, the Bank will exercise its voting rights in order to wind-up the Issuer, subject to the prior consent of the Bank of Spain. In this case, holders of the Series 5 Preferred Securities right to receive liquidation distributions will be limited as described above.

If the payments described above cannot be made in full due to this limitation, the payments will be made pro rata in the proportion that the amount available for payment bears to the full amount that would have been payable, had there been no such limitation.

Status

The Guarantee constitutes an unsecured obligation of the Bank which:

• ranks junior to all liabilities of the Bank, including subordinated liabilities (other than any guarantee or contractual right expressly ranking equally with or junior to the Guarantee);

• ranks pari passu with the most senior Preferred Securities which could have been issued by the Bank, if any, and any obligations of the Bank under any guarantee issued by it relating to any Preferred Securities issued by any subsidiary; and

• ranks senior to the Bank's ordinary shares.

Each holder of Series 5 Preferred Securities by its acquisition of Series 5 Preferred Securities will be deemed to waive all other priorities that Spanish law or regulations may confer at any time including those arising from articles 92 and 158 of Law 22/2003 of 9 July 2003 (Ley Concursal), if any.

If any amount required to be paid pursuant to the Guarantee in respect of a Distribution payable during the most recent Distribution Period has not been paid, due to the limitation on Distributable Profits described above under the section entitled "–Distributions" above or otherwise, then:

• no dividends (other than in the form of Bank's ordinary shares or other shares of the Bank ranking junior to the obligations of the Bank under the Guarantee) will be declared or paid or

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set apart for payment, or other distribution made, upon the Bank's ordinary shares or any other shares of the Bank ranking junior to the Guarantee; and

• the Bank will not redeem, repurchase or otherwise acquire for any consideration (including any amounts to be paid or made available for a sinking fund for redemption of any Bank ordinary shares), the Bank's ordinary shares or any other shares of the Bank ranking junior to the obligations of the Bank under the Guarantee (except by conversion into or exchange for shares of the Bank ranking junior to the Guarantee),

until such time as either the Issuer, or the Bank, in accordance with the Guarantee, shall have resumed the payment of, or set aside payment with respect to, full Distributions on the Series 5 Preferred Securities for four consecutive Distribution Periods.

The obligations of the Bank ranking equally with the Guarantee are the Bank's guarantees with respect to the following issues of Preferred Securities:

Santander Finance Preferred, S.A. Unipersonal: Series 1 $190,000,000 6.41% Preferred Securities issued on March 11, 2004; Series 2 € 300,000,000 CMS – Linked Preferred Securities issued on September 30, 2004, Series 3 € 200,000,000 5.75% Preferred Securities issued on October 8, 2004, Series 4 $500,000,000 6.80% Preferred Securities issued on November 21, 2006 and Series 6 $350,000,000 Floating Rate Preferred Securities issued on March 5, 2007; and

Santander Finance Capital, S.A. Unipersonal: Series I € 450,000,000 Fixed (the first two periods) and Floating Rate Preferred Securities issued on October 7, 2003; Series II € 400,000,000 Fixed (the first two periods) and Floating Rate Preferred Securities issued on February 18, 2004; Series III € 750,000,000 Fixed (the first two periods) and Floating Rate Preferred Securities issued on July 30, 2004; Series IV € 680,000,000 Fixed (the first two periods) and Floating Rate Preferred Securities issued on September 30, 2004 and Series V € 1,000,000,000 Fixed (the first four periods) and Floating Rate Preferred Securities issued on December 4, 2005.

Other Guarantees

The Bank will not issue any preferred securities or other securities equivalent to preferred securities ranking senior to its obligations under the Guarantee and will not guarantee payments on preferred securities of any direct or indirect subsidiary if that guarantee would rank senior to the Guarantee (including, without limitation, any guarantee that would provide a priority of payment with respect to Distributable Profits) unless the Guarantee is amended to give to the holders of Series 5 Preferred Securities the rights and entitlements as are contained in or attached to such preferred securities or securities equivalent to preferred securities or such other guarantee, so that the Guarantee ranks equally with, and contains substantially equivalent rights of priority on payment of Distributable Profits, if any, as such preferred securities or securities equivalent to preferred securities or other guarantee. "Subsidiary" means an entity in which the Bank owns, directly or indirectly, a majority of the voting shares.

General

The Bank shall not assign its obligations under the Guarantee without the prior approval of the holders of not less than two-thirds in liquidation preference of the outstanding Series 5 Preferred Securities of the Issuer or by resolution adopted at a special general meeting of the holders (Junta General Especial de Partícipes) and approved by holders of at least two-thirds of the liquidation preference of the Series 5 Preferred Securities of the Issuer; provided, however, that the foregoing shall not preclude the Bank from merging or consolidating with, or transferring or otherwise assigning all or substantially all of its assets to, a banking organization or any other entity permitted by applicable laws without obtaining any approval of such holders.

Under the terms of the Guarantee, the Bank will undertake to maintain the ownership of 100% of the ordinary shares of the Issuer, directly or indirectly, as long as any Series 5 Preferred Securities are outstanding, and not to permit or take any action to cause the liquidation, dissolution or winding up of the Issuer except as described above in "Description of the Series 5 Preferred Securities — Rights upon Liquidation."

Amendments

Except as described in "–Other Guarantees" above, except for any changes which do not adversely affect the rights of holders, or except for those changes necessary or desirable to give effect to any one or more transactions referred to in "General" above, in which case no vote will be required, the Guarantee may be

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changed only by agreement in writing with the prior approval of the holders of not less than two-thirds in liquidation preference of all Series 5 Preferred Securities, or by a resolution adopted at a special general meeting of holders (Junta General Especial de Partícipes) and approved by the holders of not less than two-thirds in liquidation preference of the Series 5 Preferred Securities.

Subrogation

Under the Guarantee, the Bank will be subrogated to all rights that the holders of Series 5 Preferred Securities may have against the Issuer for amounts that the Bank paid to those holders under the Guarantee and the Bank will have the right to waive payment of any amount of Distributions that it has made to those holders.

The Bank will not, except as required by mandatory provisions of law, exercise any rights that it may acquire by subrogation, indemnity, reimbursement or other agreement, as a result of a payment under the Guarantee, if, at the time of that payment, any amounts are due and unpaid under the Guarantee.

If any amount on the Series 5 Preferred Securities is paid to the Bank in violation of the preceding paragraph, the Bank will pay that amount to the holders of the Series 5 Preferred Securities.

Termination of the Guarantee

The Guarantee will terminate upon:

• payment of the redemption price of all outstanding Series 5 Preferred Securities covered by the Guarantee;

• purchase and cancellation of all Series 5 Preferred Securities; or

• payment of the Series 5 Preferred Securities liquidation distribution.

The Guarantee will continue to be effective, or will be reinstated, if at any time a holder of a Series 5 Preferred Security is required to restore payment of any sums paid on such Series 5 Preferred Security or under the Guarantee.

Governing Law

The Guarantee will be governed by, and construed in accordance with, the laws of the State of New York. The ranking of the Guarantee will be governed by Spanish Law.

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EXCHANGE OFFER AND REGISTRATION RIGHTS

The summary set forth below of provisions of the registration rights agreement dated January 31, 2007 entered into by and among the Issuer, the Bank and the initial purchaser (the "Registration Rights Agreement") does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Registration Rights Agreement, a copy of which is available to purchasers of the Series 5 Preferred Securities upon request to the Issuer or the Bank. In addition, the information set forth below concerning certain interpretations of and positions taken by the staff of the Securities and Exchange Commission (the "SEC") is not intended to constitute legal advice, and prospective investors should consult their own legal advisors with respect to such matters. An exchange of Series 5 Preferred Securities for registered securities is a taxable event under Spanish law. Beneficial owners of the Series 5 Preferred Securities will be subject to Spanish tax certification requirements and, in limited circumstances, subject to Spanish tax withholding. See "Taxation—Spanish Tax Considerations—Evidencing of Beneficial Owner Residency in Connection with Distributions and Income Obtained from the Exchange of Series 5 Preferred Securities for Exchange Series 5 Preferred Securities."

Pursuant to the Registration Rights Agreement, the Issuer and Bank agree, for the benefit of the holders of the Series 5 Preferred Securities, at the Issuer's and Bank's cost, to:

• use the Issuer's and the Bank's reasonable best efforts to prepare and, as soon as practicable within 180 days following the Closing Date for the Series 5 Preferred Securities, file with the SEC an exchange offer registration statement (the "Exchange Offer Registration Statement") with respect to a proposed exchange offer and the issuance and delivery to the holders, in exchange for the Series 5 Preferred Securities, of Series 5 Preferred Securities which will have terms identical in all material respects to the Series 5 Preferred Securities (including the full, unconditional and irrevocable guarantee by the Bank), except that the exchange Series 5 Preferred Securities (the "Exchange Series 5 Preferred Securities") will not contain terms with respect to transfer restrictions and will not provide for liquidated damages under the circumstances described below;

• use the Issuer's and the Bank's reasonable best efforts to cause the Exchange Offer Registration Statement to be declared effective under the Securities Act within 270 days of the Closing Date;

• use the Issuer's and the Bank's reasonable best efforts to keep the Exchange Offer Registration Statement effective until the closing of the exchange offer;

• use the Issuer's and the Bank's reasonable best efforts to cause the exchange offer to be completed no later than 300 days following the Closing Date; and

• provided that the Series 5 Preferred Securities meet the minimum listing requirements of the New York Stock Exchange at the time an Exchange Offer Registration Statement is declared effective, use the Issuer's and the Bank's reasonable best efforts to list the Series 5 Preferred Securities on the New York Stock Exchange within 30 days following an Exchange Offer Registration Statement being declared effective.

No assurances can be given that the Issuer and the Bank will be able to complete the exchange offer. See "Risk Factors―The transferability of the Series 5 Preferred Securities may be limited by the absence of an active trading market and restrictions on transfer under applicable securities law.''

Upon the effectiveness of the Exchange Offer Registration Statement, the Issuer and the Bank will offer the Exchange Series 5 Preferred Securities in exchange for surrender of the Series 5 Preferred Securities. The Issuer will keep the exchange offer open for not less than 20 business days after the date on which notice of the exchange offer is mailed to the holders of the Series 5 Preferred Securities (or longer if required by applicable law). Distributions on the Series 5 Preferred Securities will accrue from the last date on which distributions were paid on the Series 5 Preferred Securities surrendered in exchange or, if no distributions have been paid on the Series 5 Preferred Securities, from the original issue date of the Series 5 Preferred Securities.

Based on existing interpretations of the Securities Act by the staff of the SEC in several no-action letters to third parties, and subject to the immediately following sentence, the Issuer believes that the exchange Series 5 Preferred Securities issued pursuant to the exchange offer may be offered for resale, resold or otherwise transferred by the holders, other than holders who are broker-dealers, without further compliance with the registration and prospectus delivery provisions of the Securities Act. However, any purchaser of Series 5

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Preferred Securities who is an affiliate of the Issuer or the Bank or who intends to participate in the exchange offer for the purpose of distributing the Exchange Series 5 Preferred Securities, or any participating broker-dealer who purchased the Series 5 Preferred Securities for its own account, other than as a result of market-making activities or other trading activities, in order to resell pursuant to Rule 144A or any other available exemption under the Securities Act:

• will not be able to rely on the interpretations by the staff of the SEC;

• will not be able to tender its Series 5 Preferred Securities in the exchange offer; and

• must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or transfer of the Exchange Series 5 Preferred Securities, unless such sale or transfer is made pursuant to an exemption from such requirements.

The Issuer does not intend to seek its own interpretation from the SEC regarding the exchange offer, and there can be no assurance that the staff of the SEC would make a similar determination with respect to the Exchange Series 5 Preferred Securities as it has in other interpretations to third parties.

Each holder of Series 5 Preferred Securities, other than certain specified holders, who wishes to exchange the Series 5 Preferred Securities for the Exchange Series 5 Preferred Securities in the exchange offer will be required to make representations that:

• it is not an affiliate of the Issuer or the Bank;

• it is not a broker-dealer tendering Series 5 Preferred Securities acquired directly from the Issuer or the Bank for its own account;

• any Exchange Series 5 Preferred Securities to be received by it will be acquired in the ordinary course of its business; and

• it has no arrangement with any person to participate in a distribution, within the meaning of the Securities Act, of the Exchange Series 5 Preferred Securities.

In addition, in connection with resales of Exchange Series 5 Preferred Securities, any participating broker-dealer must deliver a prospectus meeting the requirements of the Securities Act. The staff of the SEC has taken the position that participating broker-dealers may fulfill their Prospectus delivery requirements with respect to the Exchange Series 5 Preferred Securities, other than a resale of an unsold allotment from the original sale of the Series 5 Preferred Securities, with the Prospectus contained in the Exchange Offer Registration Statement. Under the Registration Rights Agreement, the Issuer and the Bank have agreed, for a period of 90 days following the consummation of the exchange offer, to make available a Prospectus meeting the requirements of the Securities Act to any such participating broker-dealer for use in connection with any resale of any Exchange Series 5 Preferred Securities acquired in the exchange offer.

If:

(1) the Issuer is not permitted to file the Exchange Offer Registration Statement or to complete the exchange offer because the exchange offer is not permitted by applicable law or SEC policy;

(2) for any reason, the Exchange Offer Registration Statement is not declared effective within 270 days following the Closing Date or the exchange offer is not completed within 365 days following the Closing Date;

(3) upon the request of the initial purchaser in certain circumstances; or

(4) in certain circumstances, when a Holder is not permitted to participate in the exchange offer or does not receive fully tradable Exchange Series 5 Preferred Securities pursuant to the exchange offer;

the Issuer will, in lieu of effecting the registration of the Exchange Series 5 Preferred Securities pursuant to the Exchange Offer Registration Statement:

(1) as promptly as practicable, file with the SEC a Shelf Registration Statement (the "Shelf Registration Statement") covering resales of the Series 5 Preferred Securities;

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(2) use the Issuer's and the Bank's reasonable best efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act no later than 270 days after the Closing Date; and

(3) use the Issuer's and the Bank's reasonable best efforts to keep the Shelf Registration Statement effective until the earlier of (a) two years after the date the Shelf Registration Statement is declared effective by the SEC or, (b) the date on which the Series 5 Preferred Securities become eligible for resale pursuant to Rule 144(k) or any successor provision.

During any 365-day period, the Issuer will have the ability to suspend the availability of such Shelf Registration Statement for up to two periods of up to 45 consecutive days (except for the consecutive 45-day period immediately prior to the maturity of the Series 5 Preferred Securities), but no more than an aggregate of 60 days during any 365-day period, if such action is required by law or taken by the Issuer in good faith and for valid business reasons or the Bank's board of directors determines in good faith to amend the Shelf Registration Statement or any related Prospectus or Prospectus Supplement so that it will not include an untrue statement of material fact or omit to state a material fact necessary to make the statements in such documents not misleading. In the event of such suspension, the Issuer and the Bank have agreed to extend the effective period described above by the amount of time equal to the suspension period.

The Issuer and the Bank will, in the event of the filing of a Shelf Registration Statement, provide to each Holder of Series 5 Preferred Securities that are covered by the Shelf Registration Statement copies of the Prospectus which is a part of the Shelf Registration Statement and notify each such holder when the Shelf Registration Statement has become effective. A Holder of Series 5 Preferred Securities that sells the Series 5 Preferred Securities pursuant to the Shelf Registration Statement generally will be required to be named as a selling security holder in the related Prospectus and to deliver an Prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with the sales and will be bound by the provisions of the Registration Rights Agreement which are applicable to the Holder (including certain indemnification obligations).

Each Series 5 Preferred Security contains a legend to the effect that the Holder of the Series 5 Preferred Security, by its acceptance thereof, agrees to be bound by the provisions of the Registration Rights Agreement. In that regard, if a Holder receives notice from the Issuer and the Bank that any event which:

(1) makes a statement in the Prospectus which is part of the Shelf Registration Statement (or, in the case of participating broker-dealers, the Prospectus which is a part of the Exchange Offer Registration Statement) untrue in any material respect; or

(2) requires the making of any changes in the Prospectus to make the statements therein not misleading; or

(3) is specified in the Registration Rights Agreement occurs, the holder (or participating broker-dealer, as the case may be) will suspend the sale of Series 5 Preferred Securities pursuant to that Prospectus until the Issuer and the Bank have either:

• amended or supplemented the Prospectus to correct the misstatement or omission; and

• furnished copies of the amended or supplemented Prospectus to the Holder (or participating broker-dealer, as the case may be); or

• given notice that the sale of the Series 5 Preferred Securities may be resumed, as the case may be.

If a registration default, which means one of the following events, occurs:

• the Exchange Offer Registration Statement is not declared effective on or prior to the 270th calendar day following the Closing Date;

• the exchange offer is not completed on or prior to the 365th calendar day following the Closing Date and a Shelf Registration Statement with respect to the Series 5 Preferred Securities is not declared effective on or prior to the 365th calendar day following the Closing Date; or

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• provided that the Series 5 Preferred Securities meet the minimum listing requirements of the New York Stock Exchange at the time a registration statement is declared effective, the Series 5 Preferred Securities are not listed on the New York Stock Exchange on or prior to the 30th calendar day after a registration statement has been declared effective,

liquidated damages shall be payable in respect of outstanding Series 5 Preferred Securities at the rate of (x) one-quarter of one percent (0.25%) per annum upon the occurrence of any registration default on or after the 270th calendar day following the Closing Date and (y) one-half of one percent (0.50%) per annum upon the occurrence of any registration default on or after the 365th calendar day following the Closing Date; provided, however, that the maximum aggregate amount of such liquidated damages will in no event exceed one-half of one percent (0.50%) per annum in respect of all registration defaults occurring at any one time. To the extent that liquidated damages have become payable due to the occurrence of one of the registration defaults, then immediately following (1) the exchange offer, or (2) the effectiveness of a shelf registration, or (3) the listing of the Series 5 Preferred Securities, as the case may be (such event referred to in clauses (1) through (3) above, a "registration remedy"), then the accrual of liquidated damages with respect to that particular registration default will cease. Upon the earlier of the implementation of all necessary registration remedies or the date on which the exchange securities are eligible for sale pursuant to Rule 144(k) under the Securities Act or any successor provision, the accrual of liquidated damages will cease.

If the Shelf Registration Statement is unusable by the Holders for any reason for more than 60 days in the aggregate in any 365-day period, then liquidated damages shall be payable in respect of outstanding the Series 5 Preferred Securities at the rate of 0.50% per annum, beginning on the 61st day that the Shelf Registration Statement ceased to be usable; provided, however, the maximum aggregate amount of such liquidated damages payable (inclusive of any liquidated damages that are payable in respect of registration defaults) will in no event exceed one-half of one percent (0.50%) per annum. Upon the Shelf Registration Statement once again becoming available for use, liquidated damages will cease to be payable. Liquidated damages shall be computed based on the actual number of days elapsed in each period for which liquidated damages are payable.

The Issuer and the Bank will notify the Registrar and Paying Agent within five New York Business Days of an event date, which is each and every date on which an event occurs in respect of which liquidated damages are required to be paid. Liquidated damages shall be paid in the same manner as distributions pursuant to the registrar and transfer and paying agency agreement. Liquidated damages due shall be payable on each distribution payment date to the record Holder of Series 5 Preferred Securities entitled to receive the distribution payment, if any, to be paid on such date. Each obligation to pay liquidated damages shall be deemed to accrue from and including the day following the applicable event date and shall be a joint and several obligation of the Issuer and the Bank. The joint and several obligations of the Issuer and the Bank to pay liquidated damages are not subordinated obligations; liquidated damages will be payable regardless of whether the Bank (a) has Distributable Profits or (b) fails to meet its required capital ratios.

The registration rights agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

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TAXATION

Spanish Tax Considerations

The information provided below does not purport to be a complete analysis of the tax law and practice currently applicable in Spain and does not purport to address the tax consequences applicable to all categories of investors, some of which may be subject to special rules.

Purchasers of the Series 5 Preferred Securities are advised to consult their own tax advisers as to the tax consequences, including those under the tax laws of the country of which they are resident, of purchasing, owning and disposing of Series 5 Preferred Securities.

The summary set out below is based upon Spanish law as in effect on the date of this Listing Prospectus and is subject to any change in such law that may take effect after such date.

References in this section to securityholders include the Beneficial Owners of the Series 5 Preferred Securities. The statements regarding Spanish law and practice set forth below assume that the Series 5 Preferred Securities will be issued, and transfers thereof will be made, in accordance with the Spanish law.

This information has been prepared in accordance with the following Spanish tax legislation in force at the date of this Listing Prospectus:

(a) of general application, Additional Provision Two of Law 13/1985, of 25th May on investment ratios, own funds and information obligations of financial intermediaries, as amended by Law 19/2003, of 4th July on legal rules governing foreign financial transactions and capital movements and various money laundering prevention measures and Law 23/2005, of 18th November on certain tax measures to promote the productivity, as well as Royal Decree 2281/1998, of 23rd October developing certain disclosure obligations to the tax authorities, as amended by Royal Decree 1778/2004, of 30th July establishing information obligations in relation to preferred securities and other debt instruments and certain income obtained by individuals resident in the European Union and other tax rules;

(b) for individuals resident for tax purposes in Spain which are subject to the Individual Income Tax ("IIT"), Law 35/2006 of November 28, on the Individuals Income Tax and on the Partial Amendment of the Corporate Income Tax Law, the Non-Residents Income Tax Law and the Net Wealth Tax Law, and Royal Decree 1775/2004, of 30th July promulgating the IIT Regulations, along with Law 19/1991, of 6th June on Net Wealth Tax and Law 29/1987, of 18th December on Inheritance and Gift Tax;

(c) for legal entities resident for tax purposes in Spain which are subject to the Corporate Income Tax ("CIT"), Royal Legislative Decree 4/2004, of 5th March promulgating the Consolidated Text of the CIT Law, and Royal Decree 1777/2004, of 30th July promulgating the CIT Regulations; and

(d) for individuals and entities who are not resident for tax purposes in Spain which are subject to the Non-Resident Income Tax ("NRIT"), Royal Legislative Decree 5/2004, of 5th March promulgating the Consolidated Text of the NRIT Law, and Royal Decree 1776/2004, of 30th July promulgating the NRIT Regulations, along with Law 19/1991, of 6th June on Net Wealth Tax and Law 29/1987, of 18th December on Inheritance and Gift Tax.

Whatever the nature and residence of the securityholder, the acquisition and transfer of Series 5 Preferred Securities will be exempt from indirect taxes in Spain, i.e., exempt from Transfer Tax and Stamp Duty, in accordance with the Consolidated Text of such tax promulgated by Royal Legislative Decree 1/1993, of 24th September and exempt from Value Added Tax, in accordance with Law 37/1992, of 28th December regulating such tax.

Individuals with Tax Residency in Spain

Individual Income Tax (Impuesto sobre la Renta de las Personas Físicas)

Both distributions periodically received and income derived from the transfer, redemption or repayment of the Series 5 Preferred Securities (including imputed income deriving from the exchange of the Series 5 Preferred Securities in relation to an exchange offer) constitute a return on investment obtained from

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the transfer of a person's own capital to third parties in accordance with the provisions of Section 25.2 of the IIT Law, and must be included in the investor's IIT savings taxable base and taxed at a flat rate of 18%.

Both types of income are subject to a withholding on account of IIT at the rate of 18%. The individual holder may credit the withholding against his or her final IIT liability for the relevant tax year.

Net Wealth Tax (Impuesto sobre el Patrimonio)

Individuals who are resident in Spain for tax purposes and hold Series 5 Preferred Securities on the last day of any year will be subject to the Spanish Net Wealth Tax for such year at marginal rates currently varying between 0.2% and 2.5% of the quoted average value of the Series 5 Preferred Securities during the last quarter of the year during which such Series 5 Preferred Securities were held, with an exempt amount established by the competent autonomous community (comunidad autónoma), or €108,182.18 if no exempt amount is established.

Inheritance and Gift Tax (Impuesto sobre Sucesiones y Donaciones)

Individuals resident in Spain for tax purposes who acquire ownership or other rights over any Series 5 Preferred Securities by inheritance, gift or legacy will be subject to the Spanish Inheritance and Gift Tax in accordance with the applicable Spanish regional and State rules. The applicable tax rates currently range between 7.65% and 81.6%, depending on relevant factors.

Legal Entities with Tax Residency in Spain

Corporate Income Tax (Impuesto sobre Sociedades)

Both distributions periodically received and income derived from the transfer, redemption or repayment of the Series 5 Preferred Securities (including imputed income deriving from the exchange of the Series 5 Preferred Securities in relation to an exchange offer) are subject to CIT (at the current general tax rate of 32.5%, which will be reduced to 30% on January 1, 2008) in accordance with the rules for this tax.

In accordance with Section 59.s) of the CIT Regulations, there is no obligation to withhold on income payable to Spanish CIT taxpayers (which for the sake of clarity, include Spanish tax resident investment funds and Spanish tax resident pension funds) from financial assets traded on organized markets in OECD countries. The Issuer has made an application for the Series 5 Preferred Securities to be traded on the London Stock Exchange's Professional Securities Market prior to the First Distribution Date.

The Directorate General for Taxation (Dirección General de Tributos — "DGT"), on 27th July 2004, issued a ruling indicating that in the case of issues made by entities resident in Spain, as in the case of the Issuer, application of the exemption requires that the Series 5 Preferred Securities be placed outside Spain in another OECD country. The Issuer considers that the issue of the Series 5 Preferred Securities will fall within this exemption as the Series 5 Preferred Securities are to be sold outside Spain and in the international capital markets and none of the entities initially placing the Series 5 Preferred Securities is resident in Spain. Consequently, the Issuer will not withhold on distributions to Spanish CIT taxpayers that provide relevant information to qualify as such. If the Spanish tax authorities maintain a different opinion on this matter, however, the Issuer will be bound by that opinion and, with immediate effect, will make the appropriate withholding and the Issuer and the Guarantor will not, as a result, pay additional amounts.

In order to implement the exemption from withholding, the procedures laid down in the Order of 22nd December 1999 will be followed. No reduction percentage will be applied. See "—Evidencing of Beneficial Owner Residency in Connection with Distributions".


Spanish legal entities are not subject to the Spanish Net Wealth Tax.


Legal entities resident in Spain for tax purposes which acquire ownership or other rights over the Series 5 Preferred Securities by inheritance, gift or legacy are not subject to the Spanish Inheritance and Gift Tax but

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must include the market value of the Series 5 Preferred Securities in their taxable income for Spanish CIT purposes.

Individuals and Legal Entities with no Tax Residency in Spain

Non-Resident Income Tax (Impuesto sobre la Renta de no Residentes)

(a) Non-resident investors acting through a permanent establishment in Spain

If the Series 5 Preferred Securities form part of the assets of a permanent establishment in Spain of a person or legal entity who is not resident in Spain for tax purposes, the tax rules applicable to income deriving from such Series 5 Preferred Securities are, generally, the same as those previously set out for Spanish CIT taxpayers. See "—Legal Entities with Tax Residency in Spain—Corporate Income Tax (Impuesto sobre Sociedades)". Ownership of the Series 5 Preferred Securities by investors who are not resident for tax purposes in Spain will not in itself create the existence of a permanent establishment in Spain.

(b) Non-resident investors not acting through a permanent establishment in Spain

Both distributions periodically received and income derived from the transfer, redemption or repayment of the Series 5 Preferred Securities (including imputed income deriving from the exchange of the Series 5 Preferred Securities in relation to an exchange offer), obtained by individuals or entities who are not resident in Spain for tax purposes and who do not act, with respect to the Series 5 Preferred Securities, through a permanent establishment in Spain, are exempt from NRIT.

This exemption is not applicable if such income is obtained through countries or territories classified as tax havens, as listed below (being those included in Royal Decree 1080/1991, of 5th July, as amended), in which case such income will be subject to NRIT in Spain at the rate of 18% which the Issuer will withhold.

In order to be eligible for the exemption from NRIT, it is necessary to comply with certain information obligations relating to the identity and residence of the Beneficial Owners entitled to receive distributions on the Series 5 Preferred Securities, in the manner detailed under "— Evidencing of Beneficial Owner Residency in Connection with Distributions and Income Obtained from the Exchange of Series 5 Preferred Securities for Exchange Series 5 Preferred Securities" as laid down in section 12 of Royal Decree 2281/1998, as promulgated by Royal Decree 1778/2004. If these information obligations are not complied with in the manner indicated, the Issuer will withhold 18% and the Issuer will not pay additional amounts.

Regarding imputed income derived from the exchange of the Series 5 Preferred Securities under an exchange offer, the Issuer will be required to withhold tax (currently at the rate of 18%) on the difference between the then-current market value of the securities received and the issuance price of the Series 5 Preferred Securities delivered by such beneficial owners in exchange. In order to withhold such amount, the Issuer will deduct the amount from any net distribution payment made to beneficial owners of the Series 5 Preferred Securities in the exchange offer on or immediately following the settlement date of such an exchange offer (in addition to the withholding tax corresponding to such distribution payment) or in the event that the amount of the withholding tax to be collected pursuant to an exchange operation exceeds the amount of such net distribution payment, the procedure described in section E of Article II of Annex A to this Listing Prospectus will be followed. According to this procedure, the Issuer will arrange for the sale in the secondary market of an appropriate quantity of securities received upon an exchange of the Series 5 Preferred Securities under an exchange offer (the "Exchange Preferred Securities") as may be necessary to provide cash in sufficient amounts to meet the relevant beneficial owner's withholding tax liability with respect to the exchange of Series 5 Preferred Securities to Exchange Preferred Securities. Beneficial Owners (and DTC Participants acting on their behalf) are advised that any transfer or sale of the Exchange Preferred Securities pursuant to the above mentioned procedure may give rise to a taxable income equal to the positive difference between the transfer value of the Exchange Preferred Securities and their acquisition value. Such income will not be subject to withholding tax in Spain unless the relevant transfer or sale is channelled through a Spanish financial entity acting on behalf of the transferor. The above notwithstanding, the non-Spanish resident beneficial owner will have to pay the relevant tax quota, if any, on the income deriving from the transfer or sale of the Exchange Preferred Securities unless the exemption described in the preceding paragraphs applies.

The Issuer believes that the filing with the SEC of a shelf registration statement in order to allow public sales of the Series 5 Preferred Securities in the United States and to U.S. persons will not entail the existence of

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a taxable event (i.e., exchange) under Spanish tax law, either at the time of filing the shelf registration statement or at the time of any resale of the Series 5 Preferred Securities. Nevertheless, the resale of the Series 5 Preferred Securities under a shelf registration statement will be treated for Spanish tax purposes as any other transfer of such securities, with the tax consequences described in the preceding paragraphs.

Payments of liquidated damages as provided under "Exchange Offer And Registration Rights" of this Listing Prospectus may be characterized as an indemnity under Spanish law and therefore should be made free of withholding or deduction on account of Spanish taxes. This notwithstanding, non-Spanish resident beneficial owners that receive payments of liquidated damages will have to pay the corresponding tax on the gross amount of income obtained unless an exemption from Spanish tax or a reduced tax rate is provided by the Spanish law or by an applicable convention for the avoidance of double taxation entered into by Spain and such beneficial owner's country of residence. The Issuer believes that under the convention for the avoidance of double taxation entered into between the United States and Spain, income in respect of liquidated damages payments obtained by beneficial owner that are resident in the US for the purposes of such convention and entitled to its benefits may be treated as "Other Income" and therefore may only be subject to tax in the US.

Beneficial Owners not resident in Spain for tax purposes and entitled to exemption from NRIT who do not timely provide evidence of their tax residency in accordance with the procedure described in detail below, may obtain a refund of the amount withheld from the Issuer by following a quick refund procedure or, otherwise, directly from the Spanish tax authorities by following the standard refund procedure described below under "—Evidencing of Beneficial Owner Residency in Connection with Distributions and Income Obtained from the Exchange of Series 5 Preferred Securities for Exchange Series 5 Preferred Securities". Beneficial Owners who have been subject to Spanish withholding tax on income derived from (i) the repayment of principal at the Maturity Date or any earlier date of redemption of Series 5 Preferred Securities issued with OID or (ii) the exchange of the Series 5 Preferred Securities in relation to an exchange offer may obtain a refund of the amount withheld directly from the Spanish tax authorities. Beneficial Owners are advised to consult their own tax advisers regarding their eligibility to claim a refund from the Spanish tax authorities and the procedures to be followed in such circumstances.


To the extent that income derived from Series 5 Preferred Securities is exempt from NRIT, individual Beneficial Owners not resident in Spain for tax purposes who own interests in such Series 5 Preferred Securities on the last day of any year will be exempt from Net Wealth Tax. Furthermore, individual Beneficial Owners resident in a country with which Spain has entered into a double tax treaty in relation to Wealth Tax that provides for taxation in such Beneficial Owner's country of residence will not be subject to such tax.

If the provisions of the foregoing two sentences do not apply, individuals not resident in Spain for tax purposes who own interests in Series 5 Preferred Securities on the last day of any year will be subject to the Spanish Net Wealth Tax at marginal rates currently varying between 0.2% and 2.5% of the quoted average value of the Series 5 Preferred Securities during the last quarter of the year during which such Series 5 Preferred Securities were held.

Non-Spanish resident legal entities are not subject to the Spanish Net Wealth Tax.


Individuals not resident in Spain for tax purposes who acquire ownership or other rights over Series 5 Preferred Securities by inheritance, gift or legacy, will be subject to the Spanish Inheritance and Gift Tax in accordance with the applicable Spanish regional and state rules, unless they reside in a country for tax purposes with which Spain has entered into a double tax treaty in relation to Inheritance Tax. In such case, the provisions of the relevant double tax treaty will apply.

Non-resident legal entities which acquire ownership or other rights over the Series 5 Preferred Securities by inheritance, gift or legacy are not subject to the Spanish Inheritance and Gift Tax. Such acquisitions will be subject to NRIT (as described above), without prejudice to the provisions of any applicable double tax treaty entered into by Spain. In general, double tax treaties provide for the taxation of this type of income in the country of residence of the beneficiary.

Tax Rules for Series 5 Preferred Securities not Listed on an Organized Market in an OECD Country

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Withholding on Account of IIT, CIT and NRIT

If the Series 5 Preferred Securities are not listed on an organized market in an OECD country on any distribution record date, distributions to Beneficial Owners in respect of the Series 5 Preferred Securities will be subject to withholding tax at the current rate of 18%, except if an exemption from Spanish tax or a reduced withholding tax rate is provided by the Spanish law or by an applicable convention for the avoidance of double taxation entered into between Spain and the country of residence of the relevant Beneficial Owner . Individuals and entities that may benefit from such exemptions or reduced tax rates would have to follow either the "—Quick Refund Procedures" or the "—Standard Refund Procedure" described below under "—Evidencing of Beneficial Owner Residency in Connection with Distributions and Income Obtained from the Exchange of Series 5 Preferred Securities for Exchange Series 5 Preferred Securities" in order to obtain a refund of the amounts withheld.


If the Series 5 Preferred Securities are not listed on an organized market in an OECD country on the last day of any year, individuals (whether or not resident in Spain for tax purposes) holding Series 5 Preferred Securities on the last day of any such year will be subject to the Spanish Net Wealth Tax for such year, unless in the case of investors not resident in Spain a double tax treaty applies, at marginal rates currently varying between 0.2% and 2.5% of the face value of the Series 5 Preferred Securities held, with an exempt amount (for individuals resident in Spain for tax purposes) established by the competent autonomous community (comunidad autónoma), or €108,182.18 if no exempt amount is established.

Tax Rules for Payments Made by the Guarantor

Payments made by the Guarantor to securityholders will be subject to the same tax rules previously set out for payments made by the Issuer.

Tax Havens

Pursuant to Royal Decree 1080/1991, of 5th July, as amended, the following are each considered to be a tax haven:

Aruba, Jamaica, Republic of Singapore, British Virgin Islands, Kingdom of Bahrain, Republic of Trinidad and Tobago, Cayman Islands, Macao, Republic of Vanuatu, Channel Islands (Jersey and Guernsey), Marianas Islands, Saint Lucia, Falkland Islands, Mauritius, Saint Vincent & the Grenadines Fiji Islands, Montserrat, Solomon Islands, Gibraltar, Netherlands Antilles, Sultanate of Brunei, Grand Duchy of Luxembourg Area (only as regards the income received by the Companies referred to in paragraph 1 of the Protocol annexed to the Avoidance of Double Taxation Treaty, dated 3rd June 1986 entered into by Spain and Luxembourg),

Principality of Andorra, Sultanate of Oman,

Principality of Liechtenstein, The Bahamas, Principality of Monaco, The Bermuda Islands, Republic of Cyprus, The Cook Islands, Republic of Lebanon, The Island of Anguila,

Grenada, Republic of Liberia, The Island of Barbados, Hashemite Kingdom of Jordan, Republic of Nauru, The Republic of Dominica, Hong-Kong, Republic of Panama, Turks and Caicos Islands, Islands of Antigua and Barbuda, Republic of San Marino, United Arab Emirates, and Virgin Islands Isle of Man, Republic of Seychelles, (of the United States).

Evidencing of Beneficial Owner Residency in Connection with Distributions and Income Obtained from the Exchange of Series 5 Preferred Securities for Exchange Series 5 Preferred Securities

As described under "Taxation — Spanish Tax Considerations—Individual and Legal Entities with no Tax Residency in Spain", interest and other financial income (such as imputed income derived from the exchange of Series 5 Preferred Securities for Exchange Series 5 Preferred Securities) paid with respect to the Series 5 Preferred Securities for the benefit of non-resident investors not acting, with respect to the Series 5 Preferred Securities, through a permanent establishment in Spain will not be subject to Spanish withholding tax unless such non-resident investor is resident in, or obtains income through, a "tax haven" territory (as defined in

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Royal Decree 1080/1991, of 5 July, as amended) or fails to comply with the relevant tax information procedures.

The information obligations to be complied with in order to apply the exemption are those laid down in Section 12 of the Spanish Royal Decree 2281/1998 ("Section 12"), as amended by Royal Decree 1778/2004, being the following:

In accordance with sub-section 1 of Section 12, an annual return must be made to the Spanish tax authorities, by the Guarantor, specifying the following information with respect to the Series 5 Preferred Securities:

(A) the identity and country of residence of the recipient of the income on the Series 5 Preferred Securities (when the income is received on behalf of a third party (i.e., a beneficial owner), the identity and country of residence of that third party);

(B) the amount of income received; and

(C) details identifying the Series 5 Preferred Securities.

In accordance with sub-section 3 of Section 12, for the purpose of preparing the annual return referred to in sub-section 1 of Section 12, certain documentation regarding the identity and country of residence of the beneficial owners obtaining income on the Series 5 Preferred Securities must be submitted to the Issuer and the Guarantor in advance of each distribution record date, as specified in more detail in Annexes A and B to this Listing Prospectus.

In addition to the above, as described under "Taxation—Spanish Tax Considerations—Legal Entities with Tax Residency in Spain—Corporate Income Tax (Impuesto sobre Sociedades)", Spanish CIT taxpayers will not be subject to withholding tax on income derived from the Series 5 Preferred Securities, provided that such CIT taxpayers provide relevant information to qualify as such in advance of each distribution record date.

In light of the above, the Issuer, the Guarantor, the Paying Agent, DTC and Acupay have arranged certain procedures to facilitate the collection and verification of information concerning the identity and country of residence of beneficial owners (either non-resident or CIT taxpayers) holding through a Qualified Institution (as defined below) through and including each relevant distribution record date. The delivery of such information, while the Series 5 Preferred Securities are in global form, will be made through the relevant direct or indirect participants in DTC. The Issuer will withhold at the then-applicable rate (currently 18%) from any distribution payment or imputed income derived from the exchange of Series 5 Preferred Securities for Exchange Series 5 Preferred Securities as to which the required information has not been provided or the required procedures have not been followed.

The procedures set forth under "—Tax Relief at Source Procedure" (see Article I and II of Annex A to this Listing Prospectus) are intended to identify beneficial owners who are (i) corporations resident in Spain for tax purposes, or (ii) individuals or entities not resident in Spain for tax purposes, that do not act with respect to the Series 5 Preferred Securities through a permanent establishment in Spain and that are not resident in, and do not obtain income deriving from the Series 5 Preferred Securities through, a country or territory defined as a tax haven jurisdiction by Royal Decree 1080/1991, of 5 July, as amended.

These procedures are designed to facilitate the collection of certain information concerning the identity and country of residence of the beneficial owners mentioned in the preceding paragraph (who therefore are entitled to receive income in respect of the Series 5 Preferred Securities free and clear of Spanish withholding taxes) who are participants in DTC or hold their interests through participants in DTC, provided in each case, that the relevant DTC participant is a central bank, other public institution, international organization, bank, credit institution or financial entity, including collective investment institutions, pension fund or insurance entity, resident either in an OECD country (including the United States) or in a country with which Spain has entered into a double taxation treaty subject to a specific administrative registration or supervision scheme (each, a "Qualified Institution").

Beneficial owners who are entitled to receive income in respect of the Series 5 Preferred Securities free of any Spanish withholding taxes but who do not hold their Series 5 Preferred Securities through a Qualified Institution will have Spanish withholding tax withheld from distribution payments and other financial income

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paid with respect to their Series 5 Preferred Securities at the then-applicable rate. Beneficial owners who do not hold their Series 5 Preferred Securities through a Qualified Institution can follow the "—Quick Refund Procedure" set forth in Article III of Annex A or the "—Direct Refund from Spanish Tax Authorities Procedure" set forth in Article II of Annex B, in order to have such withheld amounts refunded.

A detailed description of these procedures is set forth in Annex A and Annex B to this Listing Prospectus.

Beneficial Owners, their custodians or DTC participants with questions about these Spanish tax information reporting and withholding procedures, including the submission of tax certification information and a certificate of tax residence issued by the relevant tax authority of the Beneficial Owner's country of residence, may contact Acupay at one of the following locations. Please mention the CUSIP and ISIN for the Series 5 Preferred Securities when contacting Acupay (which are set forth under "Plan of Distribution"). There is no cost for this assistance.

Via email: [email protected] By post, telephone or fax:

IN LONDON: IN NEW YORK: Acupay System LLC Acupay System LLC

Attention: Nina Santa-Maria Attention: Sabrina Cruz First Floor 30 Broad Street — 46th Floor

28 Throgmorton Street New York, N.Y. 10004 London EC2N 2AN USA

United Kingdom Tel. 1-212-422-1222 Tel. 44-(0)-207-382-0340 Fax. 1-212-422-0790 Fax. 44-(0)-207-256-7571

EU Savings Directive

Under the European Union Council Directive 2003/48/EU on the taxation of savings income, Member States are required to provide to the tax authorities of another Member State details of payments of interest (or similar income) paid by a person within its jurisdiction to an individual resident in that other Member State. However, for a transitional period, Belgium, Luxembourg and Austria are instead required (unless during that period they elect otherwise) to operate a withholding system in relation to such payments (the ending of such transitional period being dependent upon the conclusion of certain other agreements relating to information exchange with certain other countries). A number of non-European Union countries and territories, including Switzerland, have agreed to adopt similar measures (a withholding system in the case of Switzerland).

U.S. Federal Income Tax Considerations

This disclosure is limited to the U.S. federal tax issues addressed herein. Additional issues may exist that are not addressed in this disclosure and that could affect the U.S. federal tax treatment of the Series 5 Preferred Securities. This tax disclosure was written in connection with the promotion or marketing of the Series 5 Preferred Securities by the Issuer and the Guarantor, and it cannot be used by any holder for the purpose of avoiding penalties that may be asserted against the holder under the Internal Revenue Code of 1986, as amended (the "Code"). Holders should seek their own advice based on their particular circumstances from an independent tax advisor.

The following is a discussion of certain U.S. federal income tax consequences of purchasing, owning and disposing of Series 5 Preferred Securities to the U.S. Holders described below, but it does not purport to be a comprehensive description of all the tax considerations that may be relevant to a particular person's decision to acquire such securities. This discussion does not address U.S. state, local and non-U.S. tax consequences. The discussion applies only to U.S. Holders who hold Series 5 Preferred Securities as capital assets for U.S. federal income tax purposes and it does not address special classes of holders, such as:

• certain financial institutions;

• insurance companies;

• regulated investment companies;

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• real estate investment trusts;

• dealers and certain traders in securities or foreign currencies;

• persons holding Series 5 Preferred Securities as part of a hedge, straddle, conversion or other integrated transaction;

• persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;

• partnerships or other entities classified as partnerships for U.S. federal income tax purposes;

• persons liable for the alternative minimum tax;

• tax-exempt organizations; or

• persons that own or are deemed to own 25% or more of the Issuer's capital.

This discussion is based on the Code, administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations, all as of the date hereof. These laws are subject to change, possibly on a retroactive basis. Prospective investors should consult their own tax advisors concerning the U.S. federal, state, local and non-U.S. tax consequences of purchasing, owning and disposing of Series 5 Preferred Securities in their particular circumstances.

As used herein, a ''U.S. Holder'' is a beneficial owner of Series 5 Preferred Securities that is, for U.S. federal income tax purposes: (i) a citizen or resident of the United States; (ii) a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or any political subdivision thereof; or (iii) an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.

Taxation of Distributions

Subject to the discussion under "Passive Foreign Investment Company Rules" below, distributions received by a U.S. Holder on Series 5 Preferred Securities will constitute dividend income to the extent paid out of the Issuer's current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). Corporate U.S. Holders will not be entitled to claim the dividends-received deduction with respect to dividends paid by the Issuer. Subject to applicable limitations, prior to the exchange offer and listing of the Exchange Series 5 Preferred Securities on the New York Stock Exchange, favorable rates of tax, up to a maximum of 15%, will apply to dividends paid on the Series 5 Preferred Securities received by certain non-corporate U.S. Holders only if 50% of each class of the Issuer's stock, including the Series 5 Preferred Stock, is directly or indirectly owned by certain residents of Spain and the United States that are eligible for the benefits of the U.S./Spain income tax treaty, and citizens of the United States. Subject to applicable limitations, dividends paid on the Exchange Series 5 Preferred Securities that are listed on the New York Stock Exchange received by certain non-corporate U.S. Holders in taxable years beginning before January 1, 2011 will be taxable at the favorable rates. Non-corporate U.S. Holders should consult their own tax advisors to determine whether they are subject to any special rules that limit their ability to be taxed at these favorable rates.

Distributions with respect to the Series 5 Preferred Securities will generally constitute foreign-source income, which may be relevant to a U.S. Holder in calculating the holder's foreign tax credit limitation. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income.

Sale and Other Disposition of the Shares

Subject to the discussion under "Passive Foreign Investment Company Rules" below, a U.S. Holder will generally recognize capital gain or loss on the sale or other disposition of Series 5 Preferred Securities, which will be long-term capital gain or loss if the holder has held such Series 5 Preferred Securities for more than one year. The amount of the U.S. Holder's gain or loss will be equal to the difference between the amount realized on the sale or other disposition and such holder's tax basis in such Series 5 Preferred Securities, and will generally be U.S. source income for purposes of computing the holder's foreign tax credit limitation.

Passive Foreign Investment Company Rules

Based upon certain look-through rules applicable to related parties and proposed Treasury regulations which are not yet in effect but are proposed to become effective for taxable years beginning after December 31, 1994 (the "Proposed Regulations"), the Issuer believes that it was not a passive foreign investment company (a

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"PFIC") for U.S. federal income tax purposes for its most recent taxable year and does not expect to be considered a PFIC in the foreseeable future. However, since there can be no assurance that the Proposed Regulations will be finalized in their current form and since PFIC status depends upon the composition of a company's income and assets and the market value of its assets from time to time, there can be no assurance that the Issuer will not be considered a PFIC for any taxable year. If the Issuer were a PFIC for any year in which a U.S. Holder held Series 5 Preferred Securities, certain adverse U.S. federal income tax consequences could apply to the U.S. Holder, which may be mitigated if the holder makes certain U.S. federal income tax elections. The Issuer and the Bank will use reasonable efforts to operate the Issuer in such a manner that the Issuer does not become a PFIC. If the Issuer concludes that it is a PFIC for any taxable year, it will promptly inform U.S. Holders of such conclusion and provide such information as is reasonably required in order to enable the holders to satisfy relevant U.S. federal income tax reporting requirements arising as a result of the Issuer's PFIC status and to make available certain U.S. federal income tax elections.

If a U.S. Holder owns Series 5 Preferred Securities during any year in which the Issuer is a PFIC, the holder must file an IRS Form 8621. In addition, if the Issuer were a PFIC for a taxable year in which it pays a dividend or for the prior taxable year, the favorable tax rates discussed above with respect to tax paid to certain non-corporate U.S. Holders would not apply.

Information Reporting and Backup Withholding

Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries may be subject to information reporting and to backup withholding unless the U.S. Holder is a corporation or other exempt recipient or, in the case of backup withholding, the holder provides a correct taxpayer identification number and certifies that no loss of exemption from backup withholding has occurred. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the holder's U.S. federal income tax liability and may entitle the holder to a refund, provided that the required information is furnished to the Internal Revenue Service.

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PLAN OF DISTRIBUTION

Lehman Brothers Inc., referred to as the initial purchaser, subject to the terms and conditions of the purchase agreement, dated as of January 16, 2007, among the initial purchaser, the Issuer and the Bank (the "Purchase Agreement"), purchased from the Issuer, and the Issuer sold to the initial purchaser, the Series 5 Preferred Securities. The CUSIP and ISIN numbers of the Series 5 Preferred Securities are 80281R508 and US8028IR5081, respectively.

The issue price was 100%.

The Purchase Agreement provides that the obligation of the initial purchaser to pay for and accept delivery of the Series 5 Preferred Securities is subject to certain conditions, including satisfactory completion of its diligence investigation, satisfactory completion of documentation, and delivery of certain legal opinions by legal counsel.

Under the terms and conditions of the Purchase Agreement, the initial purchaser is committed to take and pay for all of the Series 5 Preferred Securities if any are taken and has agreed to resell such Series 5 Preferred Securities to purchasers as described herein and under "Transfer Restrictions."

The initial purchaser purchased the Series 5 Preferred Securities at a discount from the applicable offering price and resold those Series 5 Preferred Securities at the offering price to "qualified institutional buyers" (as defined in Rule 144A) ("QIBs") in reliance upon Rule 144A. After the initial offering of the Series 5 Preferred Securities, the initial purchaser can from time to time vary the offering price and other selling terms.

The Issuer and the Bank have agreed to indemnify the initial purchaser against certain liabilities, including liabilities under the Securities Act, or to contribute to payments which the initial purchaser may be required to make in respect of any such liabilities.

The initial purchaser proposes to resell the Series 5 Preferred Securities purchased by it only (i) to QIBs in transactions meeting the requirements of Rule 144A under the Securities Act and (ii) in minimum resales of 4,000 Series 5 Preferred Securities.

None of the Series 5 Preferred Securities have been registered under the Securities Act or any state securities laws and, unless so registered, they may not be offered or sold, except pursuant to an exemption from, or in a transaction not subject to, the requirements of the Securities Act and applicable state securities laws. See "Transfer Restrictions."

There is no established trading market for the Series 5 Preferred Securities. The Issuer and the Bank do not intend to list the Series 5 Preferred Securities on any U.S. national securities exchange prior to registration under the Securities Act. The Issuer and the Bank have been advised by the initial purchaser that it currently intends to make a market in the Series 5 Preferred Securities. The initial purchaser is not obligated to do so, however, and market-making activities with respect to the Series 5 Preferred Securities may be discontinued at any time without notice in its sole discretion. In addition, any market-making activities will be subject to the limits imposed by the Securities Act and the Exchange Act, and may be limited during the exchange offer and the pendency of any Shelf Registration Statement. Accordingly, no assurance can be given that an active market will develop for the Series 5 Preferred Securities or as to the liquidity of the trading market for the Series 5 Preferred Securities.

In connection with the offering, the initial purchaser may engage in certain transactions that stabilize the price of the Series 5 Preferred Securities. These transactions may consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of the Series 5 Preferred Securities. If the initial purchaser creates a short position in the Series 5 Preferred Securities in connection with the offering, by selling more Series 5 Preferred Securities than are listed on the cover page of this Listing Prospectus, then the initial purchaser may reduce that short position by purchasing Series 5 Preferred Securities in the open market. In general, the purchase of a security for the purpose of stabilization or reducing a short position could cause the price of that security to be higher than it might otherwise be in the absence of these purchases.

None of the Issuer, the Bank or the initial purchaser makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the Series 5 Preferred Securities. These activities by the initial purchaser may stabilize, maintain or otherwise affect the

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market price of the Series 5 Preferred Securities. As a result, the price of the Series 5 Preferred Securities may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued by the initial purchaser at any time. These transactions may be effected in the over-the-counter market or otherwise. In addition, none of the Issuer, the Bank or the initial purchaser make any representation that anyone will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

In the ordinary course of its business, the initial purchaser and its affiliates have engaged, may currently be engaging in, and may in the future engage in commercial banking and/or investment banking transactions or perform advisory and other services for the Issuer and the Bank and their affiliates for which the initial purchaser and its affiliates may receive compensation.

TRANSFER RESTRICTIONS

Because the following restrictions will apply with respect to the Series 5 Preferred Securities, purchasers of the Series 5 Preferred Securities are advised to consult legal counsel prior to making an offer, resale, pledge or transfer of any of the Series 5 Preferred Securities.

UNITED STATES

We have not registered the Series 5 Preferred Securities under the Securities Act or the laws of any state securities commission and, therefore, the Series 5 Preferred Securities may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Accordingly, we are offering and selling the Series 5 Preferred Securities only to "qualified institutional buyers" commonly referred to as "QIBs", (as defined in Rule 144A under the Securities Act) in compliance with Rule 144A under the Securities Act.

If you purchase the Series 5 Preferred Securities, you will be deemed to have acknowledged, represented and agreed with the initial purchaser, the Issuer and the Guarantor as follows:

(1) You understand and acknowledge that the Series 5 Preferred Securities and the Guarantee have not been registered under the Securities Act or any other applicable securities law and that the Series 5 Preferred Securities are being offered for resale in transactions not requiring registration under the Securities Act or any other securities law, including sales pursuant to Rule 144A under the Securities Act, and, unless so registered, may not be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act or any other applicable securities law, or pursuant to an exemption therefrom or in a transaction not subject thereto, and in each case in compliance with the conditions for transfer set forth in paragraph (4) below.

(2) You are not an "affiliate" (as defined in Rule 144 under the Securities Act) of the Issuer or the Guarantor and you are not acting on our or their behalf and you are a QIB and are aware that any sale of Series 5 Preferred Securities to you will be made in reliance on Rule 144A and such acquisition will be for your own account or for the account of another QIB.

(3) You acknowledge that none of the Issuer, the Guarantor or the initial purchaser, or any person representing the Issuer, the Guarantor or the initial purchaser, has made any representation to you with respect to the Issuer, the Guarantor or the offer or sale of any of the Series 5 Preferred Securities, other than the information contained or incorporated by reference in this Listing Prospectus, which has been delivered to you and upon which you are relying in making your investment decision with respect to the Series 5 Preferred Securities. You acknowledge that the initial purchaser makes no representation or warranty as to the accuracy or completeness of this Listing Prospectus. You have had access to such financial and other information concerning the Issuer, the Guarantor, the Series 5 Preferred Securities and the Guarantee, including an opportunity to ask questions of and request information from the initial purchaser, the Issuer and the Guarantor.

(4) You are purchasing the Series 5 Preferred Securities for your own account, or for one or more investor accounts for which you are acting as a fiduciary or agent, in each case for investment, and not with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act. You agree on your own behalf and on behalf of any investor

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account for which you are purchasing Series 5 Preferred Securities, and each subsequent holder of the Series 5 Preferred Securities by its acceptance thereof will agree, to offer, sell or otherwise transfer such Series 5 Preferred Securities prior to (x) the date which is two years (or such shorter period of time as permitted by Rule 144(k) under the Securities Act or any successor provision thereunder) after the date of the original issue of the Series 5 Preferred Securities and the last date on which we or any affiliate of the Issuer was the owner of such Series 5 Preferred Securities (or any predecessor thereto) or (y) such later date, if any, as may be required by applicable law (the "Resale Restriction Termination Date"), only (a) to the Issuer or the Guarantor, (b) pursuant to a registration statement which has been declared effective under the Securities Act, (c) for so long as the Series 5 Preferred Securities are eligible for resale pursuant to Rule 144A, to a person you reasonably believe is a QIB that purchases for its own account or for the account of another QIB to whom you give notice that the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and sales to non-U.S. persons occurring outside the United States within the meaning of Regulation S, or (e) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. You acknowledge that we reserve the right prior to any offer, sale or other transfer of the Series 5 Preferred Securities pursuant to clauses (d) or (e) above, to require the delivery of an opinion of counsel, certifications and/or other information satisfactory to the Issuer.

Each purchaser acknowledges that each Series 5 Preferred Security will contain a legend substantially in the following form:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR OTHER SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2) AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(K) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE THEREOF (OR OF ANY PREDECESSOR OF THIS SERIES 5 PREFERRED SECURITY) OR THE LAST DAY ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WERE THE OWNERS OF THIS SERIES 5 PREFERRED SECURITY (OR ANY PREDECESSOR OF THIS SERIES 5 PREFERRED SECURITY) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE "RESALE RESTRICTION TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS SERIES 5 PREFERRED SECURITY EXCEPT (A) TO THE ISSUER OR THE GUARANTOR, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO

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WHOM THIS NOTICE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE ISSUER SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) ABOVE, TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO THE ISSUER. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT."

(5) If you purchase the Series 5 Preferred Securities, you will also be deemed to acknowledge that the foregoing restrictions apply to holders of beneficial interests in the Series 5 Preferred Securities as well as to holders of the Series 5 Preferred Securities.

(6) You acknowledge that the registrar will not be required to accept for registration of transfer any Series 5 Preferred Securities acquired by you, except upon presentation of evidence satisfactory to the Issuer that the restrictions set forth herein have been complied with.

(7) You acknowledge that:

(a) the Issuer, the Guarantor, the initial purchaser and others will rely upon the truth and accuracy of your acknowledgements, representations and agreements set forth herein and you agree that, if any of your acknowledgements, representations or agreements herein cease to be accurate and complete, you will notify the Issuer, the Guarantor and the initial purchaser promptly in writing; and

(b) if you are acquiring any Series 5 Preferred Securities as fiduciary or agent for one or more investor accounts, you represent with respect to each such account that:

(i) you have sole investment discretion; and

(ii) you have full power to make the foregoing acknowledgements, representations and agreements on behalf of each such account and that each such investment account is eligible to purchase the Series 5 Preferred Securities.

(8) You agree that you will give to each person to whom you transfer the Series 5 Preferred Securities notice of any restrictions on the transfer of the Series 5 Preferred Securities.

(9) You understand that no action has been taken in any jurisdiction (including the United States) by the Issuer, the Guarantor or the initial purchaser that would permit a public offering of the Series 5 Preferred Securities or the possession, circulation or distribution of this Listing Prospectus or any other material relating to the Issuer, the Guarantor or the Series 5 Preferred Securities in any jurisdiction where action for that purpose is required. Consequently, any transfer of the Series 5 Preferred Securities will be subject to the selling restrictions set forth under "Transfer Restrictions".

(10) Each purchaser and subsequent transferee of a Series 5 Preferred Security will be deemed to have represented and warranted that either (i) no portion of the assets used by such purchaser or transferee to acquire and hold the Series 5 Preferred Securities constitutes assets of any employee benefit plan subject to Title I of the U.S. Employee Retirement Income Security Act of 1974, as amended ("ERISA"), any plan, individual retirement account or other arrangement subject to section 4975 of the Code or provisions under any federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code, or any entity whose underlying assets are considered to include "plan assets" of any such plan, account or arrangement or (ii) the purchase and holding of the Series 5 Preferred Securities by such purchaser or transferee will not constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or a violation under any applicable similar law.

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ANNEX A

Procedures for Spanish Withholding Tax Documentation For Preferred Securities Held Through an Account at The Depository Trust Company

Capitalized terms used but not otherwise defined in this Annex A shall have the meaning ascribed to them elsewhere in this Listing Prospectus.

Article I

Tax Relief at Source Procedure (procedure that complies with Spanish Law 13/1985 (as amended by Law 19/2003 and Law 23/2005) and Royal Decree 2281/1998

(as amended by Royal Decree 1778/2004)) for Cash Distributions on Preferred Securities and Exchange Preferred Securities

References to "Preferred Securities" in this Article I of Annex A shall be deemed to include Series 5 Preferred Securities and Exchange Preferred Securities (as defined in Article II of this Annex A).

A. DTC Participant Submission and Maintenance of Beneficial Owner Information

1. At least seventeen but no more than twenty New York Business Days prior to each record date (each, a "Distribution Record Date") preceding a cash distribution payment date on the Preferred Securities (each, a "Distribution Payment Date"), the Issuer shall instruct Acupay System LLC, the tax certification agent ("Acupay") to, and Acupay shall, (i) provide The Depository Trust Company ("DTC") an issuer notice that will form the basis for a DTC "Important Notice" (the "Notice") regarding the relevant cash distribution and tax relief entitlement information for the Preferred Securities, (ii) request DTC to post such notices on its website as a means of notifying direct participants of DTC ("DTC Participants") of the requirements described in this Annex A and Annex B, (iii) transmit the relevant contents of such notices to the London Stock Exchange and, if required, any applicable self-regulatory organization in the United States, (iv) distribute the relevant contents of such notices via one or more recognized financial information services and (v) provide a copy of such notices to the Paying Agent. A "New York Business Day" means any day other than a Saturday or Sunday or a day on which banking institutions or trust companies in The City of New York are required or authorized by law, regulation or executive order to close.

2. Beginning at 8:00 a.m. New York time on the tenth New York Business Day prior to each Distribution Record Date and continuing until 8:00 p.m. New York time on the fourth New York Business Day prior to each Distribution Record Date (the "Standard Deadline"), each DTC Participant must, to the extent it has not previously done so, enter directly into the designated system established and maintained by Acupay (the "Acupay System") the beneficial owner identity and residence information required by Spanish tax law (as set forth in Annex B) in respect of the portion of such DTC Participant's position in the Preferred Securities that at such time is exempt from Spanish withholding tax (the "Beneficial Owner Information") and must update such Beneficial Owner Information as described in paragraph A.3 of this Article I of Annex A below.

3. Each DTC Participant must ensure the accuracy of the previously-submitted Beneficial Owner Information, irrespective of any changes in, or in beneficial ownership of, such DTC Participant's position in the Preferred Securities as of 8:00 p.m. New York time on each Distribution Record Date. The Acupay System will remain available for making such adjustments until 8:00 p.m. New York time on the third New York Business Day after such Distribution Record Date. All changes in beneficial ownership must be reflected, including those changes (via Acupay), which do not impact the DTC Participant's overall position at DTC or the portion of that position at DTC as to which no Spanish withholding tax is required.

4. Beginning at 9:00 a.m. on the first New York Business Day after the related Distribution Record Date and continuing until 8:00 p.m. on the third New York Business Day immediately following each Distribution Record Date (the "EDS Cut-off"), each DTC Participant that has submitted Beneficial Owner Information in accordance with paragraphs A.2 and A.3 of this Article I of Annex A must make an election via the DTC Elective Dividend Service ("EDS") certifying that such portion of Preferred Securities for which it submitted such Beneficial Owner Information is exempt from Spanish withholding tax (the "EDS Election").

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5. Beginning at 7:45 a.m. New York time on the fourth New York Business Day following the Distribution Record Date (the "Final Verification Date"), Acupay will perform the final review of each DTC Participant's Beneficial Owner Information, EDS Elections and changes in DTC position between the Standard Deadline and the Distribution Record Date through the Acupay Verification Procedures (as defined below). Based on these Acupay Verification Procedures, Acupay will (i) seek to notify any affected DTC Participant until 9:45 a.m. New York time on the Final Verification Date of any inconsistencies among these data, or erroneous or incomplete information provided by such DTC Participant and (ii) use its best efforts to obtain revised Beneficial Owner Information and/or EDS Elections from any such DTC Participant as necessary to correct any inconsistencies, erroneous or incomplete information. For this purpose, Acupay will accept revisions to beneficial owner tax information until 9:45 a.m. New York time and DTC will accept requests for changes to EDS elections at the request of DTC Participants until 9:45 a.m. New York time on the Final Verification Date. The failure to correct any such inconsistencies (including the failure to fax or send PDF copies of new or amended Tax Certificates (as defined below)) by 9:45 a.m. New York time on the Final Verification Date (or if Acupay, despite its best efforts to do so, does not confirm receipt of such correction by 9:45 a.m. New York time on the Final Verification Date) will result in the payments in respect of the entirety of such DTC Participant's position being made net of Spanish withholding tax. The EDS Elections received by DTC as of 9:45 a.m. New York time on the Final Verification Date shall determine the eligibility of each DTC Participant for the Quick Refund Procedures set out in Article III, Section A.1.

DTC will transmit a "Final Report to Paying Agent" to Acupay by 10:30 a.m. New York time on the Final Verification Date setting forth each DTC Participant's position in the Preferred Securities as of 8:00 p.m. New York time on the Distribution Record Date and the portion of each such DTC Participant's position in the Preferred Securities on which cash distributions should be made net of Spanish withholding tax and the portion that should be made without Spanish withholding tax being assessed, as applicable, based on the status of the EDS Elections for each DTC Participant as of 9:45 a.m. New York time on the Final Verification Date.

Acupay shall immediately, but no later than 11:00 a.m. New York time on the Final Verification Date, release (through a secure data upload/download facility) PDF copies of the Final Report to Paying Agent to the Paying Agent and the Issuer, along with PDF copies of the related signed Tax Certificates to the Issuer. Neither DTC nor Acupay will permit any amendments or changes to Beneficial Owner Information or EDS Elections (or any Tax Certificates related thereto) as reflected in the Final Report to Paying Agent. All such information shall remain unchanged after such time.

B. Tax Certificate Production and Execution

After entry of new or amended Beneficial Owner Information into the Acupay System by a DTC Participant at any time on or before the relevant Distribution Record Date or, under certain circumstances, before 9:45 a.m. of the Final Verification Date, the Acupay System will produce completed forms of Exhibit I, Exhibit II or Exhibit III to Annex B (as required by Spanish law) (the "Distribution Tax Certificates"), which shall summarize the Beneficial Owner Information introduced and maintained by such DTC Participant into the Acupay System. When any Distribution Payment Date is also the redemption date for the Preferred Securities, and if the Preferred Securities were initially issued below par with an original issue discount ("OID"), a separate set of Tax Certificates (the "OID Tax Certificates," and together with the Distribution Tax Certificates, the "Tax Certificates") will be generated by the Acupay System reporting income resulting from the payment of OID at redemption. Such DTC Participant will then be required to (i) print out, (ii) review, (iii) sign and (iv) fax or send by email a PDF copy of the duly signed Tax Certificates directly to Acupay. The original of each Tax Certificate must be sent to Acupay for receipt no later than the 15th calendar day of the month immediately following the Distribution Payment Date. All Tax Certificates will be dated as of the relevant Distribution Record Date and must refer to beneficial ownership positions existent at 8:00 p.m. New York time on the Distribution Record Date.

NOTE: A DTC Participant that obtains favorable tax treatment through the relief at source procedure and fails to submit to Acupay the original Tax Certificates as described above may be prohibited by the Issuer from using the procedure to obtain favorable rates for future payments. In such event, the DTC Participant will receive the cash distribution on their entire position net of the applicable withholding tax (currently at the rate of 18%) and relief will need to be

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obtained directly from the Spanish tax authorities by following the standard refund procedure established by Spanish tax law.

C. Additional Acupay and DTC Procedures

1. In addition to its other duties and obligations set forth herein, Acupay will be responsible for the following tasks (collectively, the "Acupay Verification Procedures"):

a. comparing the Beneficial Owner Information and Tax Certificates provided in respect of each DTC Participant's position with the EDS Elections provided by that DTC Participant in order to determine whether any discrepancies exist between such information, the corresponding EDS Elections and such DTC Participant's position in the Preferred Securities at DTC;

b. collecting and collating all original Tax Certificates received from DTC Participants;

c. reviewing the Beneficial Owner Information and the Tax Certificates using appropriate methodology in order to determine whether the requisite fields of Beneficial Owner Tax Information have been supplied and that such fields of information are responsive to the requirements of the Tax Certificates in order to receive payments without Spanish withholding tax being assessed; and

d. liaising with the relevant DTC Participants in order to request that such DTC Participants revise any Tax Certificates identified pursuant to the procedures set forth above as containing incomplete or inaccurate information.

2. By 9:30 a.m. New York time on the New York Business Day following the Standard Deadline, DTC will transmit to Acupay a report (the "Standard Deadline Cut-off Report") confirming DTC Participant positions as of Standard Deadline. By 12:00 p.m. New York time on the New York Business Day following the Standard Deadline, Acupay will transmit to DTC a provisional summary report of all Beneficial Owner Information which has been submitted through the Acupay System as of the Standard Deadline, provisionally confirmed, to the extent possible, against the information set forth in the Standard Deadline Cut-off report. The provisional summary report shall set forth (i) the position in the Preferred Securities held by each DTC Participant as of the Standard Deadline and (ii) the portion of each DTC Participant's position in the Preferred Securities in respect of which Tax Certificates have been provided to support the payment of cash distribution without Spanish withholding tax being assessed.

3. Acupay will forward original paper Tax Certificates it receives for receipt by the Issuer no later than the 18th calendar day of the month immediately following each Distribution Payment Date. Acupay shall maintain records of all Tax Certificates (and other information received through the Acupay System) for five years from each related Distribution Payment Date to which such information applies, and shall, during such period, make copies of such records available to the Issuer at all reasonable times upon request. In the event that the Issuer notifies Acupay in writing that it is the subject of a tax audit, Acupay shall maintain such duplicate back-up copies until the relevant statute of limitations applicable to any tax year subject to audit expires.

D. Distribution Payments

1. On or prior to each Distribution Payment Date, the Issuer will transmit to the Paying Agent an amount of funds sufficient to make cash distributions on the outstanding number of Preferred Securities without Spanish withholding tax being assessed.

2. By 1:00 p.m. New York time on each Distribution Payment Date, the Paying Agent will (i) pay the relevant DTC Participants (through DTC) for the benefit of the relevant beneficial owners the cash distribution gross or net of Spanish withholding tax, as set forth in the Final Report to Paying Agent and (ii) promptly return the remainder to the Issuer. The transmission of such amounts shall be contemporaneously confirmed by the Paying Agent to Acupay. The Issuer has authorized the Paying Agent to rely on the Final Report to Paying Agent in order to make the specified payments on each Distribution Payment Date. Notwithstanding anything herein to the contrary, the Issuer may direct the Paying Agent to make cash distributions on the Preferred Securities, as the case may be, in a manner different from that set forth in the Final Report to Paying Agent if the Issuer (i) determines that there are any inconsistencies

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with or errors in the Tax Certificates provided or any information set forth therein is, to the Issuer's knowledge, inaccurate, and (ii) provides notice of such determination in writing to DTC, Acupay and the Paying Agent prior to 11:30 a.m. New York time on the relevant Distribution Payment Date along with a list of the affected DTC Participants showing the amounts to be paid to each such DTC Participant.

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Article II

Tax Relief at Source Procedure (procedure that complies with Spanish Law 13/1985 (as amended by Law 19/2003 and Law 23/2005) and Royal Decree 2281/1998

(as amended by Royal Decree 1778/2004)) for Exchanges of Series 5 Preferred Securities

A. DTC Participant Submission and Maintenance of Beneficial Owner Information

1. In advance of the commencement of the period (the "Exchange Offer Period") during which holders of Series 5 Preferred Securities may exchange Series 5 Preferred Securities for preferred securities having terms identical in all material respects to the Series 5 Preferred Securities, except that the preferred securities for which the Series 5 Preferred Securities may be exchanged would be registered in accordance with the requirements of the United States Securities Act of 1933 (the "Exchange Preferred Securities"), the Issuer shall instruct Acupay to, and Acupay shall, (i) provide DTC an issuer notice that will form the basis for a DTC "Reorganization Notice" (the "Exchange Period Notice") regarding the Exchange Offer Period and tax relief entitlement information for exchanges of Series 5 Preferred Securities for Exchange Preferred Securities, (ii) request DTC to post such notices on its website as a means of notifying DTC Participants of the requirements described in this Annex A and Annex B, (iii) transmit such notices to the London Stock Exchange and, if required, any applicable self-regulatory organization in the United States, (iv) distribute the contents of such notices via one or more recognized financial information services and (v) provide a copy of such notices to the Paying Agent.

2. Beginning at 9:00 a.m. on the first day of the Exchange Offer Period and continuing until 5:00 p.m. on the final day of the Exchange Offer Period (the "Exchange Offer Deadline"), Acupay, on behalf of the Issuer, will receive from DTC Participants acceptances of offers for Exchange Preferred Securities by and on behalf of beneficial owners of Series 5 Preferred Securities (each such acceptance, a "DTC Participant Exchange Instruction"). Such acceptances will be transmitted through DTC by and on behalf of each tendering beneficial owner through the reorganization processing facilities of DTC (the "DTC Reorganization System").

It is anticipated that the Exchange Offer Expiry Date (as defined below) shall be the same day as the Distribution Record Date preceding the Distribution Payment Date immediately following the Exchange Offer Deadline.

3. In relation to each DTC Participant Exchange Instruction submitted in accordance with paragraph A.2 of this Article II of Annex A, each DTC Participant must, to the extent it has not previously done so, enter directly into the Acupay System the beneficial owner identity and residence information required by the Spanish tax law and set forth in Annex B (the "Beneficial Owner Exchange Information") in respect of any income that may be imputed to a beneficial owner of Series 5 Preferred Securities in connection with the exchange of Series 5 Preferred Securities for Exchange Preferred Securities.

4. Each DTC Participant must ensure the continuing accuracy of any previously-submitted Beneficial Owner Exchange Information, irrespective of any changes in, or in beneficial ownership of, such DTC Participant's position in the Series 5 Preferred Securities, or the identity of the beneficial owner of Series 5 Preferred Securities on whose behalf a DTC Participant Exchange Instruction is delivered, as of the Exchange Offer Deadline. The Acupay System will remain available for making such adjustments until 8:00 p.m. New York time on the third New York Business Day after the Exchange Offer Deadline. All changes in beneficial ownership of Series 5 Preferred Securities must be reflected, including changes that do not impact the DTC Participant's overall position at DTC as to which DTC Participant Exchange Instructions have been submitted, or the portion of such DTC Participant's positions at DTC as to which no Spanish withholding tax is required.

5. In no event shall the failure to submit timely Beneficial Owner Exchange Information affect the delivery of Exchange Preferred Securities to the relevant beneficial owner, except insofar as may be necessary in connection with the Withholding Tax Sale procedures specified in paragraph E.2 of this Article II to Annex A.

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B. Exchange Offer Tax Calculation and Tax Certificates

1. If any portion of the Series 5 Preferred Securities held through a DTC Participant has been tendered for Exchange Preferred Securities via the DTC Reorganization System by the Exchange Offer Deadline, a set of tax certificates (the "Exchange Income Tax Certificates") will be generated by the Acupay System if the exchange of Series 5 Preferred Securities for Exchange Preferred Securities is calculated by Acupay in accordance with paragraph B.3 of this Article II of Annex A to result in the imputation of taxable income (for Spanish tax law purposes) for the relevant beneficial owners. Such Exchange Income Tax Certificates will report the income arising from the exchange of Series 5 Preferred Securities for Exchange Preferred Securities. Such income must be imputed to the beneficial owner of the Series 5 Preferred Securities as of the Exchange Offer Deadline.

Exchange Income Tax Certificates will be dated as of the last day of the Exchange Offer Period (the "Exchange Offer Expiry Date") and must refer to beneficial ownership positions as of the Exchange Offer Deadline. Each DTC Participant will be required to (i) print out, (ii) review, (iii) sign and (iv) fax or send by email a PDF copy of the duly signed Exchange Income Tax Certificates directly to Acupay. The original of each Exchange Income Tax Certificate must be sent to Acupay for receipt no later than the 15th calendar day of the month immediately following the Exchange Offer Expiry Date.

2. In the event that the exchange of Series 5 Preferred Securities for Exchange Preferred Securities is not calculated by Acupay in accordance with paragraph B.3 of this Article II of Annex A to result in the imputation of taxable income (for Spanish tax law purposes) to the relevant beneficial owners, the Acupay System will not generate Exchange Income Tax Certificates.

3. As the exchange of Series 5 Preferred Securities for Exchange Preferred Securities is a taxable event under Spanish tax law and for the purposes of Spanish Law 13/1985 (as amended by Law 19/2003 and Law 23/2005), the income attributable to any such exchange will be calculated by Acupay using the following methodology:

a. Prior to 10:15 a.m. New York time on the first New York Business Day of the Exchange Offer Period (the "Initial Calculation Date"), Acupay will request Lehman Brothers Inc. (the "Reference Dealer") to provide a bid-side quotation (expressed to the nearest 1/8th of a U.S. dollar) as of 10:00 a.m. London time on the Initial Calculation Date, for a trade involving 1,000 shares of a hypothetical issuance of Exchange Preferred Securities. If the Reference Dealer is unable to provide such a quotation, then Acupay shall request a price evaluation for such preferred securities from a globally recognized securities price evaluation service.

b. The quotation obtained with respect to the Exchange Preferred Securities will be posted on the Acupay System no later than 11:00 a.m. on the Initial Calculation Date. The positive difference, if any, between the quotation for the hypothetical 1,000 share lot of Exchange Preferred Securities and the issue price of 1,000 Series 5 Preferred Securities will be employed by the Acupay System to calculate the income, if any, to be imputed to investors who exchange their Series 5 Preferred Securities for Exchange Preferred Securities. In the event that such difference results in a negative number, it shall be deemed to be "0" (zero) for the purpose of this paragraph. The amount of income arising out of any exchange of Series 5 Preferred Securities for Exchange Preferred Securities will be printed on each of the Exchange Income Tax Certificates produced by the Acupay System for use by the relevant DTC Participants, as described below. If the amount of such income is "0" (zero), however, no tax will be attributable to the relevant exchange and no Exchange Income Tax Certificates will be (i) produced by the Acupay System relating to the exchange of Series 5 Preferred Securities for Exchange Preferred Securities or (ii) required to be submitted by the relevant DTC Participant with respect to such exchange.

c. On the Exchange Offer Expiry Date, Acupay will repeat the price quotation and income computation procedures described within paragraphs B.3(a) and B.3(b) of this Article II of Annex A in order to determine whether such price and income amounts are materially different from the price and income amounts computed on the Initial Calculation Date. The price quotations or evaluations employed on such day

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will be obtained at the times-of-day and using the methods described above. If there is a positive or negative difference in the income as computed on the Exchange Offer Expiry Date as compared with that computed on the Initial Calculation Date equal to or less than $0.25 per $100.00 liquidation preference of Series 5 Preferred Securities so affected, such difference (if any, and whether positive or negative) will be deemed "non-material" and will be ignored for the purpose of these procedures. However, if such difference (whether positive or negative) is (1) greater than $0.25 per $100.00 liquidation preference of Series 5 Preferred Securities and (2) the income computation procedures described in paragraph B.3(b) of this Article II of Annex A result in a positive number, then:

i. At 1:00 p.m. New York time on the Exchange Offer Expiry Date, (A) all Exchange Income Tax Certificates previously received by Acupay will be cancelled in the Acupay System and (B) the Acupay System will produce replacement Exchange Income Tax Certificates to replace the relevant cancelled Exchange Income Tax Certificates.

ii. Acupay staff will transmit a request to all affected DTC Participants that they (i) print out, (ii) review, (iii) sign and (iv) fax or send by email a PDF copy of each duly signed replacement Exchange Income Tax Certificate directly to Acupay for receipt by 8:00 p.m. New York time on the third New York Business Day immediately following the Exchange Offer Expiry Date.

iii. The Acupay System will use the amount of exchange income computed on the Exchange Offer Expiry Date in place of the amount of such income computed on the Initial Calculation Date, for the replacement Exchange Income Tax Certificates described in paragraph B.3(c)(i) of this Article II of Annex A.

NOTE: A DTC Participant that obtains favorable tax treatment through this relief at source procedure and fails to submit to Acupay the original physical Exchange Income Tax Certificates as described above may be prohibited by the Issuer from using this procedure to obtain favorable tax treatment for future payments. In such event, the DTC Participant will receive any future cash distribution on their entire position net of applicable Spanish withholding tax (currently at the rate of 18%) and relief will need to be obtained directly from the Spanish tax authorities by following the direct refund procedure established by Spanish tax law.

C. Additional Acupay and DTC Procedures

1. In addition to its other duties and obligations set forth herein, Acupay will be responsible for the following tasks with respect to the exchange of Series 5 Preferred Securities for Exchange Preferred Securities (collectively, the "Exchange Verification Procedures"):

a. reviewing Exchange Income Tax Certificates using appropriate methodology in order to determine whether the requisite fields of Beneficial Owner Exchange Information have been supplied and that such fields of information are responsive to the requirements of such Exchange Income Tax Certificates and the circumstances related to the exchange of Series 5 Preferred Securities for Exchange Preferred Securities;

b. liaising with the relevant DTC Participants in order to request that such DTC Participants:

i. complete any missing or correct any erroneous Beneficial Owner Exchange Information, make any necessary revisions to the Exchange Income Tax Certificates identified pursuant to the procedures set forth above;

ii. confirm any non-exchange of Series 5 Preferred Securities; and

c. determine based on the procedures established for that purpose in paragraph B.3 of this Article II of Annex A whether or not the exchange of Series 5 Preferred Securities for Exchange Preferred Securities would result in income attributable to such exchange:

i. if no income would be attributable to such exchange, no further Exchange Verification Procedures would be required;

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ii. if the exchange of Series 5 Preferred Securities for Exchange Preferred Securities would result in income attributable to such exchange, Acupay shall determine through a review of DTC Participant Exchange Instructions whether any position in the Series 5 Preferred Securities will be exchanged for Exchange Preferred Securities, and:

1. if no such exchange of Series 5 Preferred Securities for Exchange Preferred Securities is to be undertaken, no further Exchange Verification Procedures will be required;

2. if any such exchanges are to be undertaken, Acupay shall determine for each DTC Participant submitting a DTC Participant Exchange Instruction whether (A) the number of Series 5 Preferred Securities to be exchanged for Exchange Preferred Securities through such DTC Participant's account as set forth in such DTC Participant Exchange Instruction is consistent with the total number of Series 5 Preferred Securities to be exchanged for Exchange Preferred Securities as set forth in the related Beneficial Owner Exchange Information (and reported on Exchange Income Tax Certificates) supplied by such DTC Participant via the Acupay System and (B) the data set forth in such Beneficial Owner Exchange Information (and reported on the Exchange Income Tax Certificates) is consistent with the Beneficial Owner Information provided as of the Distribution Record Date immediately preceding the Exchange Settlement Date (as defined below) (and reported on the Distribution Tax Certificates dated as of such Distribution Record Date). If any data in the Exchange Income Tax Certificates or Distribution Tax Certificates described above is not consistent at 9:45 a.m. on the Exchange Settlement Date, then such Exchange Income Tax Certificates as well as any Distribution Tax Certificates dated as of the Distribution Record Date immediately preceding the Exchange Settlement Date that have been submitted by or on the behalf of such DTC Participant will be disregarded by Acupay for all purposes. This would result in payments being made net of Spanish withholding tax in respect of (A) the cash distributions made on the Distribution Payment Date immediately following the Distribution Record Date immediately preceding the Exchange Settlement Date and (B) any income attributable to the exchange of Series 5 Preferred Securities for Exchange Preferred Securities in accordance with the procedures described in paragraph E of this Article II of Annex A.

2. Acupay will forward original paper Exchange Income Tax Certificates it receives for receipt by the Issuer no later than the 18th calendar day of the month immediately following the Exchange Offer Expiry Date. Acupay shall maintain records of all Exchange Income Tax Certificates (and other information received through the Acupay System) for five years from the Exchange Offer Expiry Date, and shall, during such period, make copies of such records available to the Issuer at all reasonable times upon request. In the event that the Issuer notifies Acupay in writing that it is the subject of a tax audit, Acupay shall maintain such duplicate back-up copies until the relevant statute of limitations applicable to any tax year subject to audit expires.

3. At 5:00 pm on the Exchange Offer Expiry Date, DTC and Acupay will confirm to each other the number of Preferred Securities for which exchange instructions have been received and accepted (the "DTC Reconciliation Report").

D. Exchange Settlement

1. On the Exchange Offer Expiry Date, the Issuer will announce the number of exchange offers accepted by the Exchange Offer Deadline, through notice to Acupay, the Paying Agent and DTC.

2. By 11:00 a.m. on the settlement date of the offer to exchange Series 5 Preferred Securities for Exchange Preferred Securities (the "Exchange Settlement Date"), Acupay will release

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through a secure data upload facility to the Issuer, DTC and the Paying Agent a copy of the DTC Reconciliation Report, as well as a detailed report of the final exchanges (the "Final Exchange Report"). Such report will indicate for each DTC Participant (i) the number of Series 5 Preferred Securities which should be exchanged for Exchange Preferred Securities, (ii) of such Series 5 Preferred Securities referred to in (i), (a) the number for which no Spanish withholding taxes will need to be assessed in relation to the exchange, (b) the number for which Spanish withholding taxes will need to be assessed in relation to the exchange and (c) the amount of such Spanish withholding taxes, if any. The Final Exchange Report will also state the tax liability attributable to each such exchange operation and the valuations employed in the computation of such tax liabilities.

3. No later than 12:00 p.m. on the Exchange Settlement Date, the Issuer shall send a notice (via secure means) to both DTC and to the Paying Agent (a "Share Issuance and Exchange Instruction") instructing (i) DTC to deliver to each relevant DTC Participant the relevant number of Exchange Preferred Securities in accordance with the Final Election Report, (ii) the Paying Agent to provide DTC with an initial transaction statement evidencing the issuance of such Exchange Preferred Securities as recorded on the Paying Agent's books and records in the name of Cede & Co., as nominee for DTC and (iii) the Paying Agent to approve a drawdown request from DTC to reduce DTC's position in the Series 5 Preferred Securities with respect to the aggregate number of Series 5 Preferred Securities exchanged for Exchange Preferred Securities. The Issuer has authorized the Paying Agent to rely on the Final Exchange Report to serve as its Share Issuance and Exchange Instruction.

4. Notwithstanding anything herein to the contrary, the Issuer may direct the Paying Agent to ignore the Final Exchange Report and to undertake exchanges of Series 5 Preferred Securities for Exchange Preferred Securities in a manner different from that set forth in the Final Exchange Report if the Issuer (i) determines that there are any inconsistencies with the exchange elections therein represented or any information set forth in the Final Exchange Report is, to the Issuer's knowledge, inaccurate, and (ii) provides notice of such determination in writing to the Paying Agent, DTC and Acupay prior to 11:30 a.m. on the Exchange Settlement Date along with a list of the affected DTC Participants showing the number of Series 5 Preferred Securities to be exchanged for Exchange Preferred Securities by each such DTC Participant.

5. On or prior to the Exchange Settlement Date, the Issuer will transmit (i) to the Paying Agent an Exchange Preferred Security for authentication and (ii) to DTC (or the Paying Agent as custodian for DTC) such Exchange Preferred Security, registered in the name of DTC's nominee, Cede & Co. for delivery in book-entry only form to the relevant beneficial owners of the Series 5 Preferred Securities. The exchange of Series 5 Preferred Securities for Exchange Preferred Securities shall be irrevocable and the Exchange Preferred Securities may not be converted to Series 5 Preferred Securities. The terms of the Exchange Preferred Securities shall be binding upon any subsequent holder of such Exchange Preferred Securities.

6. By 3:00 p.m. on the Exchange Settlement Date, DTC shall confirm to Acupay the delivery to each relevant DTC Participant of the relevant quantity of Exchange Preferred Securities, as adjusted for any Exchange Withholding Tax Sale (as defined below) procedures necessary in accordance with paragraph E.2 of this Article II of Annex A, in exchange for a comparable quantity of Series 5 Preferred Securities. Notice of the consummation of such exchange operations shall be promptly communicated to the Issuer and the Paying Agent via the Acupay System.

E. Exchange Withholding Tax

1. In the event that the amount of Spanish withholding tax to be collected from a DTC Participant pursuant to an exchange of Series 5 Preferred Securities for Exchange Preferred Securities, as calculated in accordance with paragraph B.3 of this Article II of Annex A, should not exceed the amount of cash distribution income payable to such DTC Participant on the Distribution Payment Date immediately succeeding the Exchange Settlement Date (after any necessary withholding with respect to such cash payment is made on such Distribution Payment Date), the Issuer's Share Issuance and Exchange Instruction will include an instruction to the Paying Agent, Acupay and DTC to deduct the amount of cash necessary to satisfy such Spanish withholding tax liability from such cash distribution on such immediately succeeding Distribution Payment Date. Any amounts so deducted by the Paying Agent to

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satisfy the relevant DTC Participant's withholding tax liability shall be promptly transmitted to the Issuer, and Acupay shall promptly confirm any such deduction to the relevant DTC Participant.

2. In the event that the amount of Spanish withholding tax to be collected from a DTC Participant pursuant to an exchange of Series 5 Preferred Securities for Exchange Preferred Securities, as calculated in accordance with paragraph B.3 of this Article II of Annex A, should exceed the cash distribution income payable to such DTC Participant on the Distribution Payment Date immediately succeeding the Exchange Settlement Date (after any necessary withholding with respect to such cash payment is made on such Distribution Payment Date), the Issuer will (i) instruct the Paying Agent to withhold from delivery on the Exchange Settlement Date and (ii) sell or arrange for the sale in the secondary market of an appropriate quantity of Exchange Preferred Securities, based on the valuations received by the Issuer (or Acupay on its behalf) on the Exchange Offer Expiry Date, as may be necessary to provide cash in sufficient amounts to meet such DTC Participant's withholding tax liability with respect to the exchange of Series 5 Preferred Securities to Exchange Preferred Securities (the "Exchange Withholding Tax Sale"). The Issuer's determination of the number of Exchange Preferred Securities that may be withheld from delivery and offered for sale to satisfy relevant DTC Participant's withholding tax liability (including the withholding from delivery of such number of Exchange Preferred Securities as may be deemed necessary, in the sole opinion of the Issuer, to provide a suitable margin to secure the results of the Exchange Withholding Tax Sale) shall be binding on all parties. Any amounts received from the Exchange Withholding Tax Sale necessary to satisfy the relevant DTC Participant's withholding tax liability shall be promptly transmitted to the Issuer.

3. Upon the completion of the Exchange Withholding Tax Sale, the Issuer shall promptly transmit to the Paying Agent, and direct the Paying Agent (in writing) to remit to the relevant DTC Participant, (i) any excess cash proceeds, net of selling agent's fees and expenses, from the Exchange Withholding Tax Sale (via Fed-Wire), (ii) any Exchange Preferred Securities that were previously-withheld but remain unsold as part of the Exchange Withholding Tax Sale (via free delivery through DTC) and (iii) a letter confirming the details of the Exchange Withholding Tax Sale and the related calculation of such amounts to be so remitted.

It is expected that the foregoing procedures in relation to Exchange Withholding Tax Sales will be completed by the tenth New York Business Day following the Exchange Settlement Date.

F. Quick Refund Procedures

1. Refunds made pursuant to the Quick Refund Procedures set forth in Article III of this Annex A, shall, in the case of income related to the exchange of Series 5 Preferred Securities for Exchange Preferred Securities, be limited to the amount of Spanish withholding tax liability; any excess cash proceeds, net of selling agent's fees and expenses, from the Exchange Withholding Tax Sale will be separately paid to the relevant DTC Participant in accordance with paragraph E.3 of this Article II of Annex A.

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Article III

Quick Refund Procedures

References to "Preferred Securities" in this Article III of Annex A shall be deemed to include Series 5 Preferred Securities and Exchange Preferred Securities (as defined in Article II of this Annex A).

A. Documentation Procedures

1. Beneficial Owners holding through a Qualified Institution on Whose Behalf an EDS Election was Requested by 9:45 a.m. New York time on the relevant Final Verification Date

a. Beginning at 9:00 a.m. New York time on the New York Business Day following each Distribution Payment Date or the Exchange Settlement Date until 5:00 p.m. New York time on the tenth calendar day of the month following the relevant Distribution Payment Date or the Exchange Settlement Date (or if either such day is not a New York Business Day, the first New York Business Day immediately preceding such day) (the "Quick Refund Deadline"), a DTC Participant (i) which is a Qualified Institution (as defined in Article I of Annex B) and holds Preferred Securities on behalf of beneficial owners entitled to exemption from Spanish withholding tax and (ii) which was paid net of Spanish withholding taxes due to a failure to comply with the "Relief at Source Procedures" set forth in Article I above, may submit through the Acupay System (x) Beneficial Owner Information with respect to beneficial ownership positions as to which such DTC Participant had, by 9:45 a.m. New York time on the relevant Final Verification Date, requested DTC to make an EDS election and/or (y) if relevant, Beneficial Owner Exchange Information corresponding to beneficial owners on whose behalf EDS Elections had been made as of such date and time, and for whose account Share Issuance and Exchange Instructions had been delivered by the Issuer for the Exchange Settlement Date. After entry of Beneficial Owner Information or Beneficial Owner Exchange Information into the Acupay System by such DTC Participant, the Acupay System will produce completed Tax Certificates or Exchange Income Tax Certificates, as the case may be. Such DTC Participant will then be required to (i) print out, (ii) review, (iii) sign and (iv) fax or send by email a PDF copy of the duly signed Tax Certificate or Exchange Income Tax Certificate, as the case may be, directly to Acupay for receipt by Acupay no later than the Quick Refund Deadline. Any such Tax Certificates will be dated as of the Distribution Record Date and any such Exchange Income Tax Certificates will be dated as of the Exchange Offer Expiry Date.

Notwithstanding anything contained herein, any DTC Participant whose request to DTC to make an EDS Election did not specify "gross treatment" with respect to at least the portion of its DTC position for which it is claiming a "quick refund" (with respect to cash distribution payments) as of 9:45 a.m. New York time on the relevant Final Verification Date will not be permitted to follow the Quick Refund Procedures set forth in this Article III, and any beneficial owner holding through such DTC Participant will instead need to rely on the Direct Refund Procedures set forth in Annex B below.

b. Acupay will then conduct the Acupay Verification Procedures with respect to the Beneficial Owner Information and, if relevant, the Exchange Verification Procedures with respect to Beneficial Owner Exchange Information, submitted by the DTC Participants pursuant to Articles I and II of this Annex A by comparing such Beneficial Owner Information or Beneficial Owner Exchange Information, as the case may be, with such DTC Participant's EDS Election or DTC Participant Exchange Instructions, as the case may be, and its position in the Preferred Securities as of the Distribution Record Date and/or the related Share Issuance and Exchange Instruction for the relevant Exchange Settlement Date, as the case may be. The information as to the EDS Election, the position in the Preferred Securities of each DTC Participant as of such time and, if applicable, the quantity of Series 5 Preferred Securities tendered for exchange shall be provided to Acupay by DTC. DTC Participants may, until the specified deadlines, revise such Beneficial Owner Information and Beneficial Owner Exchange Information, as the case may be, in the

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Acupay System in order to cure any inconsistency detected through the Acupay Verification Procedures or Exchange Verification Procedures, as relevant.

c. Acupay will reconcile Beneficial Owner Information or Beneficial Owner Exchange Information, as the case may be, to (i) reports of DTC positions as of the Distribution Record Date, (ii) EDS Elections as of 9:45 a.m. New York time on the relevant Final Verification Date (as certified by DTC) and (iii) if relevant, a Share Issuance and Exchange Instruction for the appropriate Exchange Settlement Date. Acupay will collect payment instructions from DTC Participants or their designees and, no later than 12:00 p.m. New York time on the third calendar day following the Quick Refund Deadline (or if such day is not a New York Business Day, the first New York Business Day immediately preceding such day), will forward PDF copies of the verified Tax Certificates or Exchange Income Tax Certificates, as the case may be, to the Issuer and the Guarantor and the payment instructions to the Issuer, the Guarantor and the Paying Agent.

2. Beneficial Owners not holding through a Qualified Institution

a. Beneficial Owners entitled to receive cash distribution payments, OID income or exchange income in respect of any Preferred Securities gross of any Spanish withholding taxes but who have been paid net of Spanish withholding taxes as a result of holding interests in such Preferred Securities through DTC Participants who are not Qualified Institutions will be entitled to utilize the Quick Refund Procedures set forth below.

b. Such Beneficial Owners may request from the Issuer the reimbursement of the amount withheld by providing Acupay, as an agent of the Issuer, with (i) documentation to confirm their securities entitlement in respect of the Preferred Securities on the relevant Distribution Record Date or Exchange Offer Expiry Date, as the case may be (which documentation must include statements from (A) DTC and (B) the relevant DTC Participant setting forth such DTC Participant's aggregate DTC position on the relevant Distribution Record Date or Exchange Offer Expiry Date, as the case may be) as well as the portion of such position that was paid net and gross of Spanish withholding taxes, together with an accounting record of the amounts of such position and payments which were attributable to the beneficial owner, including the number of Exchange Preferred Securities, if any, sold in order to provide sufficient amounts to satisfy any Spanish withholding tax liabilities that may be applicable to the exchange of Series 5 Preferred Securities for Exchange Preferred Securities) and (ii) a Government Tax Residency Certificate. Such Government Tax Residency Certificate (which will be valid for a period of one year after its date of issuance) together with the information regarding the securities entitlement in respect of the Preferred Securities must be submitted to Acupay on the behalf of the Issuer no later than the Quick Refund Deadline. Acupay will collect payment instructions from DTC Participants or their designees, as the case may be, and, no later than 12:00 p.m. New York time on the third calendar day following the Quick Refund Deadline (or if such day is not a New York Business Day, the first New York Business Day immediately preceding such day), will forward to the Issuer and the Guarantor PDF copies of the Government Tax Residency Certificates, and to the Issuer, the Guarantor and the Paying agent (x) the related payment instructions and (y) a reconciliation of such payment instructions to (1) the outstanding number of Preferred Securities owned through each DTC Participant as of the relevant Record Date or the number of Series 5 Preferred Securities exchanged for Exchange Preferred Securities on the Exchange Settlement Date and (2) the outstanding number of such securities on which cash distributions, OID income or exchange income was paid net of Spanish withholding tax on the relevant Payment Date or Exchange Settlement Date.

3. Early Redemption of the Preferred Securities

In the case of early redemption, Quick Refund Procedures substantially similar to those procedures set forth in this Article III of Annex A will be made available to investors. Detailed descriptions of such Quick Refund Procedures will be available upon request from Acupay in the event of such early redemption.

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B. Payment Procedures

1. Upon receipt of the relevant Tax Certificates, Exchange Income Tax Certificates and Government Tax Residency Certificates together with related documentation (if any) from Acupay pursuant to the procedures in part A. of this Article III, the Issuer will review Government Tax Residency Certificates together with related documentation (if any) and confirm the related payments no later than the 18th calendar day of the month following the relevant Distribution Payment Date or Exchange Settlement Date (or if such day is not a New York Business Day, the first New York Business Day immediately preceding such day).

2. On the 19th calendar day of the month following the relevant Distribution Payment Date or Exchange Settlement Date (or if such day is not a New York Business Day, the first New York Business Day immediately preceding such day), the Issuer will make payments equal to the amounts initially withheld from DTC Participants complying with the Quick Refund Procedure (net of the costs, if any associated with Exchange Withholding Tax Sales) to the Paying Agent, and the Paying Agent shall, within one New York Business Day of such date, transfer such payments to DTC Participants directly for the benefit of beneficial owners.

NOTE: For the avoidance of doubt, beneficial owners shall only be entitled to receive cash refunds in connection with these Quick Refund Procedures, and nothing contained in this Article III of Annex A shall be interpreted as entitling beneficial owners to receive Exchange Preferred Securities in connection therewith.

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ANNEX B

FORMS OF REQUIRED SPANISH WITHHOLDING TAX DOCUMENTATION AND PROCEDURES FOR DIRECT REFUND FROM SPANISH TAX AUTHORITIES

Article I

Documentation Required by Spanish Tax Law pursuant to the Relief at Source Procedure

1. If the holder of a certificated Series 5 Preferred Security or Exchange Preferred Security is not resident in Spain for tax purposes and acts for its own account and is a central bank, other public institution or international organization, a bank or credit institution or a financial entity, including collective investment institutions, pension funds and insurance entities, resident in an OECD country (including the United States) or in a country with which Spain has entered into a double tax treaty subject to a specific administrative registration or supervision scheme (each, a "Qualified Institution"), the entity in question must certify its name and tax residency substantially in the manner provided in Exhibit I to this Annex.

2. In the case of transactions in which a Qualified Institution which is a holder of certificated Series 5 Preferred Securities or Exchange Preferred Securities acts as intermediary, the entity in question must, in accordance with the information contained in its own records, certify the name and tax residency of each beneficial owner not resident in Spain for tax purposes nor in a tax haven as of the Distribution Record Date or the Exchange Offer Expiry Date, as the case may be, substantially in the manner provided in Exhibit II to this Annex.

3. In the case of transactions which are channeled through a securities clearing and deposit entity recognized for these purposes by Spanish law or by the law of another OECD member country, the entity in question (i.e., the clearing system participant) must, in accordance with the information contained in its own records, certify the name and tax residency of each beneficial owner not resident in Spain for tax purposes nor in a tax haven as of the Distribution Record Date or the Exchange Expiry Date, as the case may be, substantially in the manner provided in Exhibit II to this Annex.

4. If the beneficial owner is resident in Spain for tax purposes and is subject to Spanish Corporation Tax, the entities listed in paragraphs (2) or (3) above (such as DTC Participants which are Qualified Institutions) must submit a certification specifying the name, address, Tax Identification Number, the CUSIP or ISIN code of the Preferred Securities, the beneficial interest in the Series 5 Preferred Securities or Exchange Preferred Securities held at each Distribution Record Date or the Exchange Offer Expiry Date, as the case may be, gross income and amount withheld, substantially in the form set out in Exhibit III to this Annex.

5. In the case of beneficial owners who do not hold their interests in the Series 5 Preferred Securities or Exchange Preferred Securities through Qualified Institutions or whose holdings are not channeled through a securities clearing and deposit entity recognized for these purposes by Spanish law or by the law of another OECD member country, the beneficial owner must submit (i) proof of beneficial ownership and (ii) a certificate of residency issued by the tax authorities of the country of residency of such beneficial owner (a "Government Tax Residency Certificate").

B-1

Article II

Direct Refund from Spanish Tax Authorities Procedure

1. Beneficial owners entitled to exemption from Spanish withholding tax who have not timely followed either the "Relief at Source Procedure" procedure set forth in Article I or II of Annex A or the "Quick Refund Procedure" set forth in Article III of Annex A, and therefore have been subject to Spanish withholding tax, may request a full refund of the amount that has been withheld directly from the Spanish tax authorities.

2. Beneficial owners have up to the time period allowed pursuant to Spanish law (currently, a maximum of four years as of the relevant Distribution Record Date or the Exchange Offer Expiry Date, as the case may be) to claim the amount withheld from the Spanish Treasury by filing with the Spanish tax authorities (i) the relevant Spanish tax form, (ii) proof of beneficial ownership and (iii) a certificate of residence issued by the tax authorities of its country of residence (from the IRS in the case of U.S. resident beneficial owners).

B-2

EXHIBIT I

[English translation provided for informational purposes only]

Modelo de certificación en inversiones por cuenta propia

Form of Certificate for Own Account Investments

(nombre) (name)

(domicilio) (address)

(TIN) (tax identification number)

(en calidad de), en nombre y representación de la Entidad abajo señalada a los efectos previstos en el artículo 12.3.a) del Real Decreto 2281/1998,

(function), in the name and on behalf of the Entity indicated below, for the purposes of article 12.3.a) of Royal Decree 2281/1998,

CERTIFICO:

I CERTIFY:

1. Que el nombre o razón social de la Entidad que represento es:

that the name of the Entity I represent is:

2. Que su residencia fiscal es la siguiente:

that its residence for tax purposes is:

3. Que la Entidad que represento está inscrita en el Registro de

that the institution I represent is recorded in the Register of

(pais, estado, ciudad), con el número

(country, state, city), under number

4. Que la Entidad que represento está sometida a la supervisión de (Organo supervisor)

that the institution I represent is supervised by (Supervision body)

en virtud de(normativa que lo regula)

under (governing rules).

Todo ello en relación con:

All the above in relation to:

Identificación de los valores poseidos por cuenta propia

Identification of securities held on own account:

Importe de los rendimientos

Amount of income

B-3

Lo que certifico en a de de 20

I certify the above in [location] on the [day] of [month] of [year]

EXHIBIT II


Modelo de certificación en inversiones por cuenta ajena

Form of Certificate for Third Party Investments

(nombre) (name)



(en calidad de), en nombre y representación de la Entidad abajo señalada a los efectosprevistos en el artículo 12.3.b) y c) del Real Decreto 2281/1998,

(function), in the name and on behalf of the Entity indicated below, for the purposes of article 12.3.b) and c) of Royal Decree 2281/1998,

CERTIFICO:

I CERTIFY:











en virtud de (normativa que lo regula)


5. Que, de acuerdo con los Registros de la Entidad que represento, la relación de titulares adjunta a la presente certificación, comprensiva del nombre de cada uno de los titulares no residentes, su país de residencia y el importe de los correspondientes rendimientos, es exacta, y no incluye personas o Entidades residentes en España o en los países o territorios que tienen en España la consideración de paraíso fiscal de acuerdo con las normas reglamentarias en vigor.

That, according to the records of the Entity I represent, the list of beneficial owners hereby attached, including the names of all the non-resident holders, their country of residence and the amounts and the relevant

B-4

amounts is accurate, and does not include person(s) or institution(s) resident either in Spain or in tax haven countries or territories as defined under Spanish applicable regulations.



RELACIÓN ADJUNTA A CUMPLIMENTAR:

TO BE ATTACHED:

Identificación de los valores:

Identification of the securities

Listado de titulares:

List of beneficial owners:

Nombre/País de residencia/Importe de los rendimientos

Name/Country of residence/Amount of income

B-5

EXHIBIT III


Modelo de certificación para hacer efectiva la exclusión de retención a los sujetos pasivos del Impuesto sobre Sociedades y a los establecimientos permanentes sujetos pasivos del Impuesto sobre la Renta de No Residentes

Certificate for application of the exemption on withholding to Spanish corporate income taxpayers and to permanent establishments of non-resident income taxpayers

(nombre) (name)



(en calidad de), en nombre y representación de la Entidad abajo señalada a los efectos previstos en el artículo 59.s) del Real Decreto 1777/2004,

(function), in the name and on behalf of the Entity indicated below, for the purposes of article 59.s) of Royal Decree 1777/2004,

CERTIFICO:

I CERTIFY:











en virtud de (normativa que lo regula)


5. Que, a través de la Entidad que represento, los titulares incluidos en la relacion adjunta, sujetos pasivos del Impuesto sobre Sociedades y establecimientos permanentes en España de sujetos pasivos del Impuesto sobre la Renta de no Residentes, son perceptores de los rendimientos indicados.

That, through the Entity I represent, the list of holders hereby attached, are Spanish Corporate Income Tax payers and permanent establishments in Spain of Non-Resident Income Tax taxpayers, and are recipients of the referred income.

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6. Que la Entidad que represento conserva, a disposición del emisor, fotocopia de la tarjeta acreditativa del número de identificaciôn fiscal de los titulares incluidos en la relación.

That the Entity I represent keeps, at the disposal of the Issuer, a photocopy of the card evidencing the Fiscal Identification Number of the holders included in the attached list.



RELACION ADJUNTA:

TO BE ATTACHED:

Identificación de los valores:

Identification of the securities

Razón social/Domicilio/Número de identificación fiscal/Número de valores/Rendimientos brutos/ Retención al [●]%

Name/Domicile/Fiscal Identification Number/Number of securities/Gross income/Amount withheld at the applicable rate.

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$600,000,000

24,000,000 Series 5 Preferred Securities

Santander Finance Preferred, S.A. Unipersonal

(incorporated with limited liability under the laws of Spain)

6.50% Non-Cumulative Guaranteed Series 5 Preferred Securities

(par value $25.00 per security)

fully and unconditionally guaranteed as described herein by

Banco Santander Central Hispano, S.A.

(incorporated with limited liability under the laws of Spain)

__________________________________________

Listing Prospectus

January 24, 2007

__________________________________________

Lehman Brothers

UK1 1648700v.3