Analyst Presentation 1Q03 GROWTH AND CONSOLIDATION

Transcription

1 BancoSabadell Analyst Presentation 1Q03 GROWTH AND CONSOLIDATION 15th April

2 DISCLAIMER Banco Sabadell cautions that this presentation may contain forward looking statements with respect to the business, financial condition, results of operations, strategy, plans and objectives of the Banco Sabadell Group. While these forward looking statements represent our judgement and future expectations concerning the development of our business, a certain number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, (1) general market, macroeconomic, governmental, political and regulatory trends, (2) movements in local and international securities markets, currency exchange rates, and interest rates, (3) competitive pressures, (4) technical developments, (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties. The risk factors and other key factors that we have indicated could adversely affect our business and financial performance contained in our past and future filings and reports, including those with the Spanish Securities and Exchange Commission (Comisión Nacional del Mercado de Valores). The distribution of this presentation in certain jurisdictions may be restricted by law. Persons into whose possession this Presentation comes are required by Banco Sabadell to inform themselves about and to observe any such restriction. These slides do not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities nor shall they or any one of them form the basis of or be relied on in connection with any contract or commitment whatsoever. 2

3 AGENDA 1. MAIN FINANCIAL HIGHLIGHTS 2. ANALYSIS 1Q03 FINANCIAL RESULTS 3. BUSINESS EVOLUTION 3

4 MAIN FINANCIAL HIGHLIGHTS m % growth mar-02 mar-03 mar-03/mar-02 Total Assets , ,0 6,4% Gross loans to customers , ,2 17,6% On-balance sheet customer funds , ,6 7,1% Funds under management , ,7 8,8% GROUP NET PROFIT 64,4 68,8 6,7% 4

5 GROUP NET PROFIT m % growth 1Q02 1Q03 1Q03/1Q02 NET INTEREST INCOME 175,5 187,9 7,0% Gross operating income 249,6 268,0 7,4% NET OPERATING INCOME 101,0 122,1 20,8% INCOME BEFORE TAXES 103,7 117,8 13,6% Corporate tax 36,4 46,3 27,4% Minority interests 2,9 2,7-6,3% GROUP NET PROFIT 64,4 68,8 6,7% 5

6 AGENDA 1. MAIN FINANCIAL HIGHLIGHTS 2. ANALYSIS 1Q03 FINANCIAL RESULTS 3. BUSINESS EVOLUTION 6

7 NET INTEREST INCOME (I) m 1Q03 Net Int. Inc. 187,9 Net comms 69,4 ROF 10,7 Gross Oper.Inc. 268,0 0,4 13,4 5,5 6,1 7,7 Other op.inc 2,2 Personnel exp. -88,8 Admin. exp. -44,7 175,2 169,4 171,5 173,0 180,1 Deprec.& amort. -12,6 Other Op.costs -2,0 Net Oper. Inc. 122,1 Equity-acc hold. 10,2 Goodwill amort. -3,2 Group transac. 2,6 1Q02 2Q02 3Q02 4Q02 1Q03 Adjusted net interest income Dividends and others B&DD's provis. -31,9 Other income 18,0 Inc. before tax. 117,8 Corporate tax -46,3 Minority interes. -2,7 Group net prof 68,8 7

8 NET INTEREST INCOME (II). INTEREST RATE RISK MANAGEMENT LIABILITIES Reducing duration: Structured term deposits swaped to floating ASSETS Increasing duration: Government Bonds Floors on the commercial loan book 8

9 NET INTEREST INCOME (III). FLOORS ACTIVE POLICY SINCE 1999 Loan portfolio breakdown as of 31/03/03 Fix rate 10,3% Floating rate without floor 43,1% Floating rate with floor 46,6% Total portfolio with floor Active floors as of 31/03/03 Floors at 3,75% 45,0% 30,2% Floors at 4,00% 41,3% 30,9% Other floor levels 13,7% 39,7% Adjust. rate with floor 100,0% 14,8% of total loan portfolio (28/2/03 12,9%) 9

10 NET INTEREST INCOME (IV). EVOLUTION Adjusted net interest income 1 2,71% 2,63% 2,54% 2,51% 2,53% 1Q02 2Q02 3Q02 4Q02 1Q03 Customer spread - 0,06% 3,75% 3,56% 3,45% 3,42% 3,36% 1Q02 2Q02 3Q02 4Q02 1Q03 1 Adjusted for dividends and others 10

11 COMMISSIONS m 1Q03 Net Int. Inc. 187,9 Net comms 69,4 Lending Services Ass.Mgm 1 68,9 70,7 69,7 20,9 75,8 69,4 21,5 21,5 22,3 20,9 28,1 29,0 28,8 34,1 29,1 19,8 20,1 19,5 19,4 19,4 1Q02 2Q02 3Q02 4Q02 1Q03 Recurrent but seasonal ROF 10,7 Gross Oper.Inc. 268,0 Other op.inc 2,2 Personnel exp. -88,8 Admin. exp. -44,7 Deprec.& amort. -12,6 Other Op.costs -2,0 Net Oper. Inc. 122,1 Equity-acc hold. 10,2 Goodwill amort. -3,2 Group transac. 2,6 B&DD's provis. -31,9 Other income 18,0 Inc. before tax. 117,8 Corporate tax -46,3 Minority interes. -2,7 Group net prof 68,8 1 Include commissions of mutual funds, pension funds and life insurance commissions. 11

12 RESULTS ON FINANCIAL TRANSACTIONS m Foreign exchange Other 1Q03 Net Int. Inc. 187,9 Net comms 69,4 ROF 10,7 10,7 Gross Oper.Inc. 268,0 Other op.inc 2,2 5,1 5,0 Personnel exp. -88,8 Admin. exp. -44,7 Deprec.& amort. -12,6 Other Op.costs -2,0 6,5 5,7 Recurrent Net Oper. Inc. 122,1 Equity-acc hold. 10,2 Goodwill amort. -3,2 Group transac. 2,6-1,4 1Q02 1Q03 B&DD's provis. -31,9 Other income 18,0 Inc. before tax. 117,8 Corporate tax -46,3 Minority interes. -2,7 Group net prof 68,8 12

13 PERSONNEL EXPENSES (I) m 1Q03 Net Int. Inc. 187,9 Net comms 69,4 ROF 10,7 Gross Oper.Inc. 268,0 Other op.inc 2,2 Personnel exp. -88,8 Admin. exp. -44,7-1,5% Deprec.& amort. -12,6 Other Op.costs -2,0 Net Oper. Inc. 122,1 90,2 88,8 385,2 Equity-acc hold. 10,2 Goodwill amort. -3,2 Group transac. 2,6 B&DD's provis. -31,9 Other income 18,0 Inc. before tax. 117,8 1Q02 1Q03 Forecast 2003e FY02 Results Presentation (27/1/03) Corporate tax -46,3 Minority interes. -2,7 Group net prof 68,8 13

14 PERSONNEL EXPENSES (II) m 90,2 0,9 1,1 2,2 86,0 1Q02 88,8 0,3 1,6 0,7 86,2 1Q03 Sibis/Euro/B.Herrero integration ActivoBank Staff severance costs Recurrent personnel expenses 1Q03 Net Int. Inc. 187,9 Net comms 69,4 ROF 10,7 Gross Oper.Inc. 268,0 Other op.inc 2,2 Personnel exp. -88,8 Admin. exp. -44,7 Deprec.& amort. -12,6 Other Op.costs -2,0 Net Oper. Inc. 122,1 Equity-acc hold. 10,2 Goodwill amort. -3,2 Group transac. 2,6 B&DD's provis. -31,9 Other income 18,0 Inc. before tax. 117,8 Corporate tax -46,3 Minority interes. -2,7 Group net prof 68,8 14

15 ADMINISTRATIVE EXPENSES (I) m 1Q03 Net Int. Inc. 187,9 Net comms 69,4 ROF 10,7 Gross Oper.Inc. 268,0 Other op.inc 2,2-4,0% Personnel exp. -88,8 Admin. exp. -44,7 Deprec.& amort. -12,6 Other Op.costs -2,0 Net Oper. Inc. 122,1 46,5 44,7 204,3 Equity-acc hold. 10,2 Goodwill amort. -3,2 Group transac. 2,6 B&DD's provis. -31,9 Other income 18,0 Inc. before tax. 117,8 1Q02 1Q03 Forecast 2003e FY02 Results Presentation (27/1/03) Corporate tax -46,3 Minority interes. -2,7 Group net prof 68,8 15

16 ADMINISTRATIVE EXPENSES (II) m 46,5 44,7 6,0 5,1 2,7 1,7 0,3 0,0 1Q03 Net Int. Inc. 187,9 Net comms 69,4 ROF 10,7 Gross Oper.Inc. 268,0 Other op.inc 2,2 Personnel exp. -88,8 Admin. exp. -44,7 Deprec.& amort. -12,6 37,6 37,9 1Q02 1Q03 Recurrent costs Euro SIBIS B. Herrero/Activobank integration Other Op.costs -2,0 Net Oper. Inc. 122,1 Equity-acc hold. 10,2 Goodwill amort. -3,2 Group transac. 2,6 B&DD's provis. -31,9 Other income 18,0 Inc. before tax. 117,8 Corporate tax -46,3 Minority interes. -2,7 Group net prof 68,8 16

17 COST/INCOME RATIO 1Q Q03 Base 54,80% 66,20% 49,80% Inc Depreciation 59,90% 71,90% 54,50% 17

18 DEPRECIATION AND AMORTISATION m 1Q03 Net Int. Inc. 187,9 Net comms 69,4 ROF 10,7 Gross Oper.Inc. 268,0 Other op.inc 2,2 Personnel exp. -88,8 Admin. exp. -44,7 Deprec.& amort. -12,6 12,9 12,6 Recurrent Other Op.costs -2,0 Net Oper. Inc. 122,1 Equity-acc hold. 10,2 Goodwill amort. -3,2 Group transac. 2,6 B&DD's provis. -31,9 Other income 18,0 1Q02 1Q03 Inc. before tax. 117,8 Corporate tax -46,3 Minority interes. -2,7 Group net prof 68,8 18

19 EQUITY-ACCOUNTED HOLDINGS m 11,6 10,2 1Q03 Net Int. Inc. 187,9 Net comms 69,4 3,8 ROF 10,7 Gross Oper.Inc. 268,0 5,3 Other op.inc 2,2 Personnel exp. -88,8 Admin. exp. -44,7 5,2 Deprec.& amort. -12,6 Other Op.costs -2,0 Net Oper. Inc. 122,1 4,5 Equity-acc hold. 10,2 2,5 5,0 Goodwill amort. -3,2 Group transac. 2,6-0,7-3,8 B&DD's provis. -31,9 Other income 18,0 Inc. before tax. 117,8 Corporate tax -46,3 Minority interes. -2,7 1Q02 1Q03 Others Bs Vida Real Estate BCP Payment of dividends to net interest income Group net prof 68,8 19

20 NON-PERFOMING LOAN PROVISIONS (I) m Non specific provision charge 1Q03 (As a % of gross income) Generic provision 7,1% Statistical provisions 17,5% Total generic provisions 24,6% % NPL coverage forecast (dec-05e 1 ) NPL ratio ( ) % loan growth (CAGR) 5% 10% 15% 20% 0,50% 459,7% 435,0% 421,1% 398,9% 0,65% 354,0% 339,1% 322,7% 308,5% 0,80% 287,8% 272,5% 262,5% 250,8% 1,00% 230,3% 218,6% 209,2% 201,2% 1Q03 Net Int. Inc. 187,9 Net comms 69,4 ROF 10,7 Gross Oper.Inc. 268,0 Other op.inc 2,2 Personnel exp. -88,8 Admin. exp. -44,7 Deprec.& amort. -12,6 Other Op.costs -2,0 Net Oper. Inc. 122,1 Equity-acc hold. 10,2 Goodwill amort. -3,2 Group transac. 2,6 B&DD's provis. -31,9 Other income 18,0 Inc. before tax. 117,8 Corporate tax -46,3 Minority interes. -2,7 Group net prof 68,8 1 In all scenarios, constant statistical and generic coefficients and constant amortisations and recoveries. 750m securitisation on

21 NON-PERFORMING LOAN PROVISIONS (II). STATISTICAL PROVISION m % statistical provisions coverage forecast (dec-05e 1 ) 1Q03 Net Int. Inc. 187,9 Net comms 69,4 ROF 10,7 Gross Oper.Inc. 268,0 NPL ratio ( ) % loan growth (CAGR) 5% 10% 15% 20% 0,50% 100,0% 100,0% 95,2% 88,4% 0,65% 100,0% 100,0% 93,5% 86,7% 0,80% 100,0% 99,4% 91,8% 85,0% 1,00% 100,0% 97,2% 89,4% 82,8% Other op.inc 2,2 Personnel exp. -88,8 Admin. exp. -44,7 Deprec.& amort. -12,6 Other Op.costs -2,0 Net Oper. Inc. 122,1 Equity-acc hold. 10,2 Goodwill amort. -3,2 Group transac. 2,6 B&DD's provis. -31,9 Other income 18,0 Inc. before tax. 117,8 Corporate tax -46,3 Minority interes. -2,7 Group net prof 68,8 1 In all scenarios, constant statistical and generic coefficients and constant amortisations and recoveries. 750m securitisation on

22 CORPORATE TAXES m 1Q03 Inc. before tax. 117,8 Corporate tax -46,3 4,4 3,2 6,6 Minority interes. -2,7 Group net prof 68,8 132,0 117,8 35% 39,3% Effective tax rate 46,3 Income Before Taxes 31/3/03 Nondeductible provisions Goodwill amort Other 31/03/03 fiscal profit Taxes 22

23 AGENDA 1. MAIN FINANCIAL HIGHLIGHTS 2. ANALYSIS 1Q03 FINANCIAL RESULTS 3. BUSINESS EVOLUTION 23

24 NUMBER OF PRODUCTS PER CLIENT We are increasing our market penetration... Commercial Banking SMEs Banking Banco Herrero Solbank Sabadell Banca Privada TOTAL GROUP mar-02 jun-02 sep-02 dec-02 4,38 4,44 4,46 4,54 5,92 6,01 6,32 6,36 2,14 2,08 2,09 2,12 3,34 3,35 3,33 3,35 4,40 4,47 4,51 4,57 3,61 3,63 3,66 3,73 mar-03 4,64 6,64 2,14 3,39 4,58 3,80 3,61 3,63 3,66 3,73 3,80 m ar-02 jun-02 sep-02 dec-02 m ar-03 24

25 GROSS LOANS TO CUSTOMERS with a diversified business structure 40% Of which to SMEs... 19% 63% 27% 14% 32% Bill discounting Leasing Mortgages Others Of which to individuals... 5% 1% 20% Individuals SMEs Others Public Adm Individuals includes shops and self.employed people Mortgages 80% Customer lending 25

26 GROSS LOANS TO CUSTOMERS m ,5 +17,6% ,2 Mortgages 7.877,4 +21,3% 9.553,9 163,0 497,1 Others , ,8 11,6% 200,6 276,4 1Q02 1Q03 Other securitised loans Securitised mortgages 26

27 MORTGAGE EVOLUTION m Other secured loans Mortgages 7.877,4 236, ,9 +21,3% 9.553,9 288, ,9 1Q02 1Q03 Secured loans 41,5% 44,2% Other 58,5% 55,8% 1Q02 1Q03 27

28 MORTGAGE MARKET SHARE 5,89% 6,11% 3,80% 4,03% 4,40% 1,90% 2,00% 2,14% 2,78% 2,81% Spanish Banking System Spanish Banks Source: Boletín Estadístico, Bank of Spain. 28

29 MORTGAGE PORTFOLIO Breakdown for type of property 14% 59% 92% 8% 8% 19% Developers Commercial Housing Others 1st Home Others Mortgage average amount Debt service cost/net family income 1 22,7% Average LTV 55,8% B & DD mortgages 0,27% B & DD Residential mortgages 0,23% 1 Data on mortgages granted for the last 9 months Interest rate +1% +2% Debt service cost/net family inc. 24,8% 26,8% 29

30 LTV BREAKDOWN LTV average 55,78% 12% 15% 31% <= 30% >30% & <= 60% >60% & <= 80% >80% 42% Mortgage with a LTV > 80% Additional personnel guarantees Old building valuations ( i.e. subrogation of mortgages, ) 30

31 MORTGAGES PORTFOLIO DISTRIBUTION Mortgages distribution by remaining life Average remaining life: 16,8 years 17% 23% 19% 13% 22% Mortgages distribution by original term 22% 20% 20% 30% 6% 3% 5% <= 5 yrs <= 10 yrs <= 15 yrs <= 20 yrs <= 25 yrs > 25 yrs <= 5 yrs <= 10 yrs <= 15 yrs <= 20 yrs <= 25 yrs > 25 yrs Mortgage penetration rate by age 11,3% 10,9% 10,4% 8,7% 7,2% 6,7% 4,7% 2,5% 2,1% 0,9%

32 SMEs (I) SMEs are our priority market... Market share: 30,5% Number of customer SMEs as of dec-02: % of SMEs being customers for more than 5 years: 58% Geographical breakdown Breakdown by sectors 4% 31% Primary sector 29% Industrial sector 55% Catalonia Madrid Rest of Spain 57% Construction sector Service sector 14% 10% 32

33 SMEs (II) SMEs are our priority market... 15% 16% 10% 21% 19% 19% % PENETRATION BY PRODUCTS Bill discount 38% Credit lines 27% Mortgages 6% Other loans 13% Leasing 22% Guarantees 17% Bill discount Credit lines Mortgages Other loans Leasing Other % of SMEs with foreign trade transactions: 35% 33

34 ON-BALANCE SHEET CUSTOMER FUNDS m ,9 +7,1% ,6 Debt securities Repo s 3.154, , , ,4 Customer deposits (ex repo s) , ,5 1Q02 1Q03 34

35 AUM (OFF BALANCE SHEET ITEMS) m 8.062, ,5 Insurance 2.035,8 +8,7% 2.212,8 Pension funds 1.371,5 +9,9% 1.507,6 Mutual funds 4.654,9-2,4% 4.545,2 1Q02 1Q03 35

36 ASSET MANAGEMENT (I) Market share evolution 2,34% 2,30% 2,28% 2,30% 2,36% 2,37% 2,31% 2,23% 2,20% Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 Feb-03 AuM evolution m Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 36

37 ASSET MANAGEMENT (II) Mutual funds: Breakdown by fund category 46% 35% FIXED-INCOME FUNDS BALANCED FUNDS EQUITY FUNDS FIXED-INCOME GUARANTEED RETURN FUNDS 4% 15% FIXED- INCOME MUTUAL FUNDS: MARKET SHARE BY FUND CATEGORY 1 BALANCED EQUITY FIXED-INCOME GUARANTEED TOTAL MUTUAL FUNDS feb-02 1,62% 3,43% 1,27% 3,38% 2,31% feb-03 1,45% 2,74% 1,18% 4,57% 2,31% 1 Source: Inverco 37

38 BANCASSURANCE (I) Technical reserves evolution m 2.035,8 357,3 310,0 +8,7% 2.212,8 503,9 227, , ,0 mar-02 mar-03 Market share evolution Guaranteed interest Unit Linked Annuities mar-02 jun-02 sep-02 dec % 2.09% 2.12% 2.11% 2.12% 2.17% Source: ICEA (Investigación cooperativa entre entidades Aseguradoras y Fondos de Pensiones) and DGS 38

39 BANCASSURANCE (II) Life risk insurance: Premium evolution m + 7,2% % Penetration 13,7% 6,64 7,11 1Q02 1Q03 39

40 BANCASSURANCE (III) Pension Funds: assets under management m +9,9% 1.507, ,5 668,5 790,8 703,1 716,9 mar-02 Individuals mar-03 Companies Market share evolution mar-02 jun-02 sep-02 dec % 3.07% 3.11% 3.05% 2.98% 3.16% Source: INVERCO 40

41 BASIC MARGIN Mar-03 Mar-02 % growth NET INTEREST INCOME 187,9 175,5 7,0 COMMISSIONS 69,4 68,9 0,7 OTHER COMMISSIONS 51,8 50,4 2,7 MUTUAL FUND COMMISSIONS 13,7 14,5-5,5 PENSION FUND COMMISSIONS 3,9 3,9-1,1 BASIC MARGIN 257,2 244,4 5,2 41

42 COMMISSIONS m Mar-02 Mar-03 % growth Related to assets 14,6 13,9-5,2% Guarantees 9,0 9,3 2,9% Lending commissions 20,9 20,9-0,1% Cards 13,0 13,9 7,1% Payment orders 8,9 9,3 5,0% Securities 3,5 3,8 6,1% Customer accounts 3,2 3,7 18,1% Currency exchange 1,4 1,1-24,0% Service commissions 28,1 29,1 3,3% Life insurance 1,4 1,8 31,6% Mutual funds 14,5 13,7-5,5% Pension funds 3,9 3,9-1,1% Asset mgm commissions 19,8 19,4-2,0% TOTAL 68,9 69,4 0,7% 42

43 NETWORK BASIC MARGIN Network basic margin by business units 52,6% 24,5% 10,7% 4,7% 4,2% 2,3% 0,2% 0,9% BS SMEs BH SMEs BS Commercial Solbank BH Commercial B. Asturias Activobank SBP Net interest income Commissions 43

44 NPL RATIO AND COVERAGE % 351, ,55 2 0,58 0,52 0,53 0,47 0,49 1Q 2Q 3Q 4Q 1Q Including off-balance sheet risks and their provisions 1 As of 31/12/02 2 As of 31/03/03 44

45 CHANNELS (I) Branch expansion NETWORK 31/12/02 OPENINGS CLOSURES NETWORK REAL 31/03/03 Forecast 31/12/03 REAL 31/03/03 Forecast 31/12/03 Forecast 31/12/03 REAL 31/03/03 Banco Sabadell Banco Sabadell (SME Banking) Solbank Banco Herrero+Banco Asturias Sabadell Banca Privada Activobank TOTAL Areas of Banco Sabadell expansion: Madrid, Barcelona, Valencia and coastal areas for Solbank branches * includes 2002 outstanding expansion = 6 and 2002 outstanding closings = -5 45

46 CHANNELS (II) Remote and on-line contracts: companies mar-01 jun-01 sep-01 dec-01 mar-02 jun-02 sep-02 dec-02 mar-03 INFOBANC MANAGERLAND Total companies 46

47 CHANNELS (III) Remote and on-line clients: individuals % YoY change on active clients 60% mar-01 jun-01 sep-01 dec-01 mar-02 jun-02 sep-02 dec-02 mar-03 On-line contracts Active: Clients with at least one transaction made during last quarter 47

48 CHANNELS (IV) ATMs installed 1Q03/1Q02 5,94% Q02 2Q02 3Q02 4Q02 1Q03 Market share evolution (over 4B system) (without BH) Q02 2Q02 3Q02 4Q02 1Q03 6.3% 6.2% 6.1% 6.1% 6.2% 6.5% 6.4% 48

49 CHANNELS (V) Issued cards ,1% Credit cards ,4% Debit cards mar-02 mar-03 Market share evolution (4B system) Debit % 1Q02 6.6% 2Q02 6.7% 3Q02 7.3% 4Q02 7.6% Credit 6.8% 6.8% 6.8% 7.4% 7.1% 1Q03 7.4% 6.9% 49

50 ACTIVOBANK Incorporated into the Group as a new Business unit Single IT Platform encompasses the savings in dual development costs No. accounts +20.8% dec-01 mar-02 jun-02 sep-02 dec-02 mar-03 50

51 IBERSECURITIES Strengthening as a reference broker in the Spanish market. Value added into BS group activities such as: Asset Management, Private Banking and Personal Banking. Market share march-2003: 2,25% First class research team Spain, Portugal & Eurostoxx 50 coverage Independent position since 1989 (freedom of action) Leadership and innovation: On-line brokerage since jul-98 First on-line broker in derivate products and in offering leverage facilities Madrid & Barcelona Stock Exchange member 51

52 BancoSabadell ANNEXES

53 HIGHLIGHTS m 1Q02 4Q02 1Q03 % growth 1Q03/1Q02 % growth 1Q03/4Q02 Total Assets , , ,1 6,4 2,9 Loans to customers , , ,2 17,6 4,4 On-balance sheet customer deposits , , ,6 7,1 3,3 Mutual funds 4.654, , ,2-2,4-0,5 Pension funds 1.371, , ,6 9,9-1,0 Technical reserves (bancassurance) 2.035, , ,8 8,7-1,8 Funds under management , , ,1 5,8 2,1 Shareholders' equity 2.334, , ,2-12,7-0,6 Employees ,8-0,1 Domestic Branches ,9 0,3 ATM's ,9-0,4 GROUP NET PROFIT 64,4 49,6 68,8 6,8 38,7 1 On balance-sheet deposits + Mutual Funds + Pension funds + Technical Reserves 53

54 PROFIT AND LOSS ACCOUNT % growth % growth m 1Q02 2Q02 3Q02 4Q02 1Q03 1Q03/1Q02 1Q03/4Q02 NET INTEREST INCOME 175,5 182,8 177,0 179,1 187,9 7,0 4,9 Net commissions 68,9 70,7 69,7 75,8 69,4 0,7-8,5 BASIC REVENUE 244,4 253,4 246,7 254,9 257,2 5,2 0,9 Results on financial transactions 5,1-8,8-14,3 26,6 10,7 109,0-59,7 GROSS OPERATING INCOME 249,6 244,7 232,4 281,5 268,0 7,4-4,8 Personnel expenses -90,2-97,9-95,7-97,1-88,8-1,5-8,5 General expenses -46,5-62,5-73,2-104,0-44,7-4,0-57,0 PERSONNEL + GENERAL -136,7-160,4-168,9-201,1-133,5-2,3-33,6 Depreciation and amortisation -12,9-12,9-17,6-13,9-12,6-2,4-9,3 Other operating costs 1,0 1,9 0,7 4,7 0,2-82,5-96,1 NET OPERATING INCOME 101,0 73,2 46,6 71,2 122,1 20,8 71,4 Equity-acc holdings (net) 11,6 14,4 7,0 12,5 10,2-12,5-18,4 Group transactions -1,0-2,6-5,5-17,5 2,6-378,0-115,1 Provisions for loan-losses -22,4-26,5-29,7-22,5-31,9 42,5 41,6 Goodwill amortisation -2,5-2,5-128,6 6,5-3,2 26,9-148,7 Other income 16,9 24,6 121,9 14,8 18,0 6,5 21,8 INCOME BEFORE TAXES 103,7 80,6 11,7 64,2 117,8 13,6 83,5 Corporate tax -36,4-27,1 37,1-2,8-46,3 27,4 1581,9 Minority interests -2,9 2,4 1,6-11,9-2,7-6,3-77,3 GROUP NET PROFIT 64,4 56,0 50,4 49,6 68,8 6,7 38,7 54

55 NET INTEREST INCOME % growth % growth m 1Q02 2Q02 3Q02 4Q02 1Q03 1Q03/1Q02 1Q03/4Q02 Net interest income 175,5 182,8 177,0 179,1 187,9 7,0 4,9 Dividends and others -0,4-13,4-5,5-6,1-7,7-26,8 ADJUSTED NET INTEREST INCOME 175,2 169,4 171,5 172,9 180,1 2,8 4,2 55

56 EQUITY-ACCOUNTED HOLDING % growth % growth m 1Q02 2Q02 3Q02 4Q02 1Q03 1Q03/1Q02 1Q03/4Q02 Equity-acc holdings 11,6 14,4 7,0 12,5 10,2-12,5-18,4 Dividends (net interest income) 0,4 13,4 5,5 6,1 7,7-26,8 Adjusted Equity-acc holdings 12,0 27,8 12,5 18,5 17,9 49,1-3,6 56

57 GOODWILL AMORTISATION Bal. Amortisation 2002 Amortisation m Q02 2Q02 3Q02 4Q02 Var. Acc.Bal 1Q03 BCP 250,4-1,7-1,7-127,6 8,0-18,7 108,7-1,6 Grupo ActivoBank 30,9-0,4-0,4-0,4-0,9 39,1 67,8-0,9 Others 392,7-0,4-0,4-0,6-0,6-349,6 41,1-0,6 GOODWILL 674,0-2,5-2,5-128,6 6,5-329,2 217,7-3,2 BCP: Goodwill arosen in BCP transaction has been partly written-off against generic provisions ( 126,2 million) 57

58 NON-PERFORMING LOAN PROVISIONS m 1Q02 2Q02 3Q02 4Q02 1Q03 Provisions -14,9-12,5-18,1-40,5-16,0 Generic provisions -1,2-4,8-7,1-12,7-8,4 Specific provisions -13,8-7,7-11,0-27,8-7,6 Amortisations -1,0-1,4-0,4-1,9-1,5 Recoveries 3,7 5,4 3,0 3,1 4,3 Country risk -0,2 0,7 0,2 12,8 1,9 Provisions for bad and doubtful debts -12,5-8,0-15,4-26,4-11,3 Statistical provisions -9,9-18,5-14,3 3,9-20,6 TOTAL -22,4-26,5-29,7-22,5-31,9 58

59 EXTRAORDINARY ITEMS m 1Q02 2Q02 3Q02 4Q02 1Q03 Extraordinary profits 22,3 30,7-1,1 19,1 25,0 Extraordinary losses -5,6-6,1-3,0-4,4-7,0 TOTAL 16,7 24,6-4,1 14,8 18,0 59

60 MINORITY INTERESTS BREAKDOWN m 1Q02 2Q02 3Q02 4Q02 1Q03 Preference shares -2,9-2,8-2,8-2,8-2,8 SIM's Banco Herrero -0,2 5,1 4,3-9,1 0,0 Others 0,2 0,1 0,2 0,0 0,1 Minority interests -2,9 2,4 1,6-11,9-2,7 60

61 CONSOLIDATED BALANCE SHEET - ASSETS % growth %growth m 1Q02 4Q02 1Q03 1Q03/1Q02 1Q03/4Q02 Cash and deposits with Central Banks 452,1 356,3 346,1-23,4-2,9 Government securities 483,5 883, ,8 107,6 13,6 Financial institutions 3.292, , ,8-32,8-9,0 Total net loans and advances to customers , , ,9 13,9 4,3 Bonds and other fixed-income securities 704,3 737,1 685,5-2,7-7,0 Shares and equity investments 509,7 551,1 548,9 7,7-0,4 Goodwill on consolidation 545,4 217,7 214,5-60,7-1,4 Tangible assets 446,5 454,9 451,2 1,0-0,8 Losses of Group companies 108,3 99,9 153,5 41,7 53,6 Accrued income and other assets 821,1 766,3 780,9-4,9 1,9 TOTAL ASSETS , , ,0 6,4 2,9 61

62 CONSOLIDATED BALANCE SHEET - LIABILITIES % growth %Var m 1Q02 4Q02 1Q03 1Q03/1Q02 1Q03/4Q02 Financial institutions 2.112, , ,3 31,3-0,8 Deposits and temporary asset sales , , ,9 0,1-1,0 Liabilities on negotiable securities Accrued expenses and other liabilities General reserve and other provisions 2.859, , ,4 39,3 27,4 950,3 796,7 951,2 0,1 19,4 235,4 138,3 99,8-57,6-27,8 Subordinated liabilities 295,2 595,2 595,2 101,6 0,0 Shareholders' equity 2.447, , ,8-9,8 8,0 Minority interests 308,4 262,5 261,9-15,1-0,2 Consolidated profits for the year 67,3 231,2 71,5 6,2-69,1 TOTAL LIABILITIES , , ,0 6,4 2,9 62

63 LENDING BREAKDOWN % growth % growth m 1Q02 4Q02 1Q03 1Q03/1Q02 1Q03/4Q02 Loans to the public sector 126,4 114,9 132,0 4,4 14,8 Loans to the private sector , , ,4 14,2 4,4 Commercial loans 2.163, , ,6 7,0 0,7 Mortgage loans 7.640, , ,9 21,3 6,5 Personal loans 3.368, , ,5-0,3 1,4 Loan and credit accounts 2.998, , ,6 27,2 11,2 Other secured loans 236,5 308,4 288,0 21,8-6,6 Overdrafts and sundry accounts 372,1 348,6 353,6-5,0 1,4 Repo's 348,0 218,4 130,1-62,6-40,4 Leasing 1.580, , ,6 16,8 4,7 Factoring 337,4 461,8 378,5 12,2-18,0 Pro-memoria: Loans to the resident sector , , ,9 15,6 4,5 Loans to the non-resident sector 1.238, , ,5-5,3 2,7 Doubtful assets 103,5 102,5 104,3 0,7 1,7 TOTAL GROSS LOANS AND ADVANCES TO CUSTOMERS , , ,7 14,1 4,4 Provisions for bad and doubtful debts -304,3-333,5-370,8 21,9 11,2 TOTAL NET LOANS AND ADVANCES TO CUSTOMERS , , ,9 13,9 4,3 Securitised loans 363,5 819,3 773,6 112,8-5,6 TOTAL NET LENDING TO CUSTOMERS , , ,4 15,8 3,9 63

64 DEPOSITS AND ISSUES SECURITIES %growth %growth m 1Q02 4Q02 1Q03 1Q03/1Q02 1Q03/4Q02 Creditors, public sector 115,2 151,0 145,3 26,2-3,7 Current accounts 6.312, , ,8 7,7 2,4 Savings accounts 1.264, , ,2 0,9 0,4 Fixed-term deposits 7.298, , ,2 2,1 0,9 Temporary asset sales 2.067, , ,4-32,4-21,7 Creditors, private sector , , ,6-0,1-0,9 Promemoria Resident sector , , ,2-0,3-2,0 Non-resident sector 1.709, , ,4-4,8 10,7 Senior debt issuance 2.859, , ,4 39,3 27,4 Subordinated liabilities 295,2 595,2 595,2 101,6 0,0 TOTAL ON-BALANCE SHEET DEPOSITS AND ISSUED SEC , , ,6 7,1 3,3 64

65 MUTUTAL AND PENSION FUNDS %growth % growth m 1Q02 4Q02 1Q03 1Q03/1Q02 1Q03/4Q02 Equity funds 333,9 210,1 164,4-50,8-21,7 Balanced funds 1.106,4 821,8 628,1-43,2-23,6 Fixed-income funds 1.394, , ,8 8,4 2,1 Guaranteed return funds 1.424, , ,0 30,7 10,8 Open-end and closed-end inv 395,9 377,7 379,9-4,0 0,6 Mutual funds 4.654, , ,2-2,4-0,5 Individual 691,2 698,8 697,1 0,9-0,2 Company 668,5 804,6 790,8 18,3-1,7 Group 11,9 19,5 19,7 65,6 1,5 Pension funds 1.371, , ,6 9,9-1,0 TOTAL FUNDS 6.026, , ,8 0,4-0,7 65

66 BAD AND DOUBTFUL DEBTS % growth % growth m 1Q02 4Q02 1Q03 1Q03/1Q02 1Q03/4Q02 Opening balance 100,9 100,9 114,6 13,6 13,6 Increase due to new loan defaults 44,6 172,5 42,5-4,6-75,3 Recoveries -22,2-97,0-22,9 3,1-76,4 Amounts written off -7,7-61,7-10,9 42,1-82,4 Total bad and doubtful debts 115,6 114,6 123,4 6,7 7,6 Total gross loans and advances to cust , , ,7 14,1 4,4 Contingent liabilities 2.915, , ,1 12,3 1,7 Total risks , , ,7 13,8 4,0 Total provisions BAD AND DOUBTFUL DEBTS AS % OF TOTAL LENDING TOTAL PROVISIONS AS % OF BAD AND DOUBTFUL DEBTS TOTAL PROVISIONS AS % OF BAD AND DOUBTFUL DEBTS Pro-memoria: NPL Ratio including securitised loans 355,6 402,4 428,6 20,5 6,5 0,52% 0,47% 0,49% 307,6% 351,1% 347,6% 328,0% 373,7% 371,3% 0,51% 0,46% 0,47% 66

67 SHAREHOLDERS EQUITY % growth % growth m 1Q02 4Q02 1Q03 1Q03/1Q02 1Q03/4Q02 Issued capital 102,0 102,0 102,0 0,00 0,00 Reserves 2.108, , ,7-10,89 7,75 Consolidation reserves 237,8 199,3 227,1-4,49 13,95 Losses of Group companies -108,3-99,9-153,5 41,70 53,62 Treasury shares -5,4-13,0-16,1 197,70 23,61 Net attributable profit 220,4 Less: dividends -102,0 TOTAL SHAREHOLDERS' EQUITY 2.334, , ,2-12,7-0,6 67

68 RATIO BIS % growth % growth m 1Q02 4Q02 1Q03 1Q03/1Q02 1Q03/4Q02 Issued capital 102,0 102,0 102,0 0,0 0,0 Reserves 2.308, , ,7-10,4 2,2 Minority interests 308,4 262,5 261,9-15,1-0,2 Other capital accounts 6,2 6,4 6,6 5,0 2,1 Deductions -712,8-344,0-404,4-43,3 17,5 Primary capital 2.012, , ,8 1,1-0,8 TIER I (%) 8,63% 8,16% 7,83% -9,3-4,1 Revaluation reserves 37,0 37,0 37,0 0,0 0,0 Generic provisions 296,0 348,0 376,6 27,3 8,2 Subordinated liabilities 291,0 591,0 591,0 103,1 0,0 Deductions -58,6-49,7-46,1-21,4-7,4 Secondary capital 565,5 926,3 958,6 69,5 3,5 Tier II (%) 2,42% 3,69% 3,69% 52,2 0,1 Capital base 2.578, , ,5 16,1 0,6 Minimum capital requirement 1.866, , ,4 11,4 3,5 Capital surplus 711,8 967,0 914,1 28,4-5,5 BIS RATIO (%) 11,05% 11,85% 11,52% 4,2-2,8 Risk weighted assets , , ,2 11,9 3,6 68